## Facts

- Sportsman’s Market, Inc. operated a well-known aviation mail-order business and owned a federal registration for the distinctive trademark “Sporty’s.”
- Omega Engineering, Inc., a competitor in aviation-related catalog sales, registered the domain name “sportys.com” in 1995.
- Approximately nine months later, Omega transferred “sportys.com” to Sporty’s Farm L.L.C., a newly formed entity presented as a Christmas-tree business unrelated to aviation.
- The trial court found the asserted Christmas-tree justification not credible and concluded the arrangement was designed to keep the domain name from Sportsman’s.
- Sporty’s Farm sought declaratory relief concerning its use of “sportys.com”; Sportsman’s counterclaimed under federal dilution law and state unfair trade practices law.
- After a bench trial, the district court found no trademark infringement but found dilution and ordered Sporty’s Farm to stop using and to relinquish the domain name; it denied damages and rejected the state-law claim.
- While the appeal was pending, Congress enacted the Anticybersquatting Consumer Protection Act (ACPA), creating a specific cause of action for bad-faith domain-name registration and use.

## Issues

1. Whether the ACPA applied to a case on appeal when the domain name was registered before the ACPA’s enactment.
2. Whether “Sporty’s” was a distinctive mark and whether “sportys.com” was identical or confusingly similar to that mark under the ACPA.
3. Whether defendants acted with a “bad faith intent to profit” from the mark within the meaning of 15 U.S.C. § 1125(d)(1)(A).
4. What remedies were available, including whether transfer of the domain name was permissible and whether monetary damages could be awarded.

## Decision

- The Second Circuit applied the ACPA as the governing law on appeal.
- The court held that “Sporty’s” was distinctive and that “sportys.com” was identical or confusingly similar to the mark; the missing apostrophe and the addition of “.com” did not meaningfully distinguish the domain name.
- The court held that Sporty’s Farm (and Omega) acted with a bad faith intent to profit, including by registering and maintaining the domain name to block the trademark owner’s Internet use and by employing an implausible business pretext.
- The court affirmed injunctive relief requiring Sporty’s Farm to relinquish/transfer “sportys.com” to Sportsman’s, treating the remedy as prospective because defendants continued to hold and use the domain name after the ACPA’s effective date.
- The court affirmed denial of damages, holding that monetary relief under the ACPA could not be imposed for a domain name registered before the statute’s enactment and that the FTDA did not support damages absent willful dilution; it also affirmed rejection of the Connecticut unfair trade practices claim.

## Legal Principles

- An appellate court applies the law in effect at the time of decision, absent controlling limits, and may apply a new statute to provide prospective relief for ongoing conduct.
- Under the ACPA, liability requires (1) a distinctive or famous mark, (2) a domain name identical or confusingly similar to the mark, and (3) a bad faith intent to profit from the mark. 15 U.S.C. § 1125(d)(1)(A).
- In assessing “bad faith intent to profit,” courts evaluate the totality of statutory factors; a defendant’s implausible claimed use, competitive blocking, and corporate maneuvers to retain a domain name can support a bad-faith finding.
- The ACPA authorizes equitable remedies including forfeiture, cancellation, or transfer of a domain name; ordering transfer for continued post-enactment possession and use is prospective relief.
- Monetary damages under the ACPA are not awarded based on domain-name registrations completed before the ACPA’s effective date.
- Under the FTDA, damages require willful dilution; absent willfulness, injunctive relief may be available but damages are not.

## Conclusion

The Second Circuit held that defendants engaged in cybersquatting under the ACPA by maintaining “sportys.com” with a bad faith intent to profit from a competitor’s distinctive “Sporty’s” mark, affirmed an order transferring the domain name to the mark owner, and affirmed denial of damages because the registration predated the ACPA and the dilution claim lacked willfulness.


Sporty’s Farm L.L.C. v. Sportsman’s Mkt., Inc., 202 F.3d 489 (2d Cir. 2000)