## Facts

- Newport News Holdings Corp. (NNHC) owned federally registered “Newport News” trademarks for women’s clothing and accessories and used the domain newport-news.com for online sales.
- Virtual City Vision, Inc. (VCV) registered newportnews.com and initially operated it as a city-information site about Newport News, Virginia; VCV operated similar geographic sites for other locations.
- In a 2000 UDRP proceeding, NNHC failed to obtain transfer of newportnews.com; the panel found no consumer confusion and no bad faith while the site provided city information unrelated to women’s fashion.
- From 2000 to roughly 2004, the site continued to provide local information, but later began displaying ads for women’s clothing and eventually shifted primarily to advertising other women’s clothing brands.
- NNHC attempted to buy the domain; VCV indicated it would only consider a “seven-figure” price or would sell NNHC’s products on the site for a commission.
- NNHC sued VCV and its president (Van James Bond Tran) under the Anticybersquatting Consumer Protection Act (ACPA), among other claims.
- A magistrate judge (by consent) granted summary judgment to NNHC on the ACPA claim, found personal jurisdiction over Tran, denied recusal and late counterclaims, awarded statutory damages and attorney’s fees, and sanctioned defense counsel.

## Issues

1. Whether VCV’s registration and use of newportnews.com violated the ACPA by using a confusingly similar domain name with a bad-faith intent to profit from NNHC’s distinctive mark.
2. Whether Virginia courts could exercise personal jurisdiction over Tran based on his control of VCV and the challenged conduct.
3. Whether denial of the recusal motion was an abuse of discretion.
4. Whether denial of leave to file untimely counterclaims was an abuse of discretion.
5. Whether statutory damages, attorney’s fees, costs, and sanctions were properly imposed.

## Decision

- The Fourth Circuit affirmed summary judgment for NNHC on the ACPA claim.
- The court held the domain was confusingly similar to NNHC’s distinctive, registered mark and that VCV’s later repurposing of the site for women’s-clothing advertising supported a finding of bad-faith intent to profit as a matter of law.
- The court affirmed personal jurisdiction over Tran based on his unity of interest and control with VCV and his direction of the relevant conduct.
- The court affirmed denial of recusal and denial of leave to add counterclaims as untimely and prejudicial.
- The court affirmed the statutory damages award, the “exceptional case” attorney’s fee award, and sanctions for bad-faith motion practice, and rejected VCV’s request for fees tied to an abandoned copyright claim.

## Legal Principles

- An ACPA plaintiff must show (1) a distinctive or famous mark, (2) defendant’s registration, trafficking in, or use of a domain name that is identical or confusingly similar to the mark, and (3) a bad-faith intent to profit.
- Bad faith may be inferred from the totality of circumstances, including repurposing a domain to target the trademark owner’s market and attempting to extract an excessive sale price or commission-based arrangement tied to the mark.
- A registrant’s earlier legitimate, geographically descriptive use of a domain does not preclude later ACPA liability when the registrant materially changes the site to trade on another’s trademark goodwill.
- Personal jurisdiction may extend to an individual who effectively acts as the corporation’s alter ego and purposefully directs the challenged conduct connected to the forum.
- Recusal is not required based on adverse rulings, and untimely recusal motions may be denied absent facts showing reasonable questioning of impartiality.
- Leave to amend to add counterclaims may be denied when sought late and when it would prejudice the opposing party; ACPA statutory damages and attorney’s fees may be awarded where infringement and litigation conduct make the case exceptional, and sanctions may be imposed for bad-faith filings.

## Conclusion

The Fourth Circuit upheld ACPA liability where a domain originally used for city information was later transformed into a women’s-clothing advertising site that capitalized on a registered “Newport News” mark, and it affirmed jurisdiction over the controlling individual along with damages, attorney’s fees, and sanctions based on the defendants’ conduct and litigation practices.


Newport News Holdings Corp. v. Virtual City Vision, Inc., 650 F.3d 423 (4th Cir. 2011)