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NFX LLC v. NFX.com

United States District Court, E.D. Virginia, Alexandria Division

November 15, 2016

NFX LLC, Plaintiff,
v.
NFX.COM, Defendant.

          REPORT AND RECOMMENDATION

          Theresa Carroll Buchanan, United States Magistrate Judge.

         This matter comes before the Court on plaintiffs' Motion for Default Judgment. (Dkt. 11.) After a representative for defendants failed to respond to plaintiffs' Motion or to appear at the hearing before the undersigned Magistrate Judge on October 28, 2016, the undersigned took plaintiff's Motion under advisement.[1]

         I. INTRODUCTION

         A. Background

         Plaintiff NFX is a California limited liability company having its principal place of business at 558 Hawthorne Avenue, Palo Alto, California 94301. (Compl. ¶ 1.) Plaintiff is an invite only guild for digital networks and marketplaces. (Id. at ¶ 9.) Plaintiff runs a three month program in the Bay Area twice per year which covers the unique challenges that face digital networks and marketplaces. (Id.) Plaintiff acquired all rights, title, and interest to the NFX.com domain name on November 15, 2014. (Id. at ¶ 10.) Plaintiff has used the distinctive NFX trademark in connection with its guild and programs since May 2013. (Id.) Between September 2015 and May 2016, an unauthorized and unknown third party hacked into the email account of co-founder of NFX Guild, James Currier, and fraudulently transferred a number of domain names, including NFX.com, to an account at another registrar without authorization. (Id. at ¶ 11.) Plaintiff believes defendant is in full control over the stolen domain and any changes to the NFX website could cause damage to NFX business. (Id. at ¶¶ 13-14.)

         NFX.com is a domain name that was owned by plaintiff but "has been stolen from plaintiff and is now in possession of Defendant 'Zhaoyuechao.'" (Id. at ¶ 2.)

         On August 18, 2016, plaintiff filed this action under the Anticybersquatting Consumer Protection Act ("ACPA") 15 U.S.C. § 1125(d) in an effort to regain control of the domain name. Plaintiff seeks the entry of an order directing defendant to transfer and register the NFX.com domain name to plaintiff and directing the domain name registry Verisign Inc. to change the registrar of record for NFX.com to a registrar selected by plaintiff. (Mot. Default J. 1; Dkt. 11.)

         B. Jurisdiction and Venue

         Before the Court can render default judgment, it must have both subject matter and personal jurisdiction over the defaulting party/parties.

         This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338, which provide that district courts shall have original jurisdiction over all civil actions arising under the Constitution, laws, or treaties of the United States, and over civil actions arising under any federal law relating to patents, plant variety protection, copyrights, and trademarks. Plaintiff's cyberpiracy claim arises under the Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d). The Court has in rem jurisdiction over defendant pursuant to 15 U.S.C. § 1125(d)(2)(A) which establishes jurisdiction over a domain name under the ACPA in the judicial district where either the domain name register or registry is located and Verisign, Inc.- the registry of the defendant- is located in this District. (Compl. ¶ 5.) Venue is proper under 15 U.S.C. § 1125(d)(2)(C) due to Verisign's presence in this District.

         C. Service of Process

         A plaintiff bringing an in rem action under the ACPA may serve process by 1) sending notice of the lawsuit to the listed email and physical addresses of the domain name registrant, and 2) publishing notice of the action as directed by the court. 15 U.S.C. § 1125(d)(2)(A)(ii). Plaintiff moved the Court to affirm service on September 1, 2016. (Dkt. 4.) Plaintiff demonstrated that notice of the lawsuit was sent by email and U.S. mail. Subsequently, plaintiff received a response by email from a person "who claimed ownership of the defendant NFX.com domain name." (Id. at ¶ 3, Ex. E.) The Court deemed service of process was accomplished as required by 15 U.S.C. § 1125. (Dkt. 6.)

         D. Grounds for Default Judgment

         Defendant has not answered or otherwise timely responded in this case. Seeking to proceed in rem against defendant pursuant to the ACPA, plaintiff filed a motion for an order affirming service and which the Court granted on September 2, 2016. (Dkt. 6.) The Court found plaintiff's email exchange with defendant demonstrated actual notice so that the requirement of service by publication may be waived. (Id.) Defendant filed a late opposition to the motion for order affirming service 11 days after the Court entered its order. (Dkt. 7.) Since that response, defendant has not appeared, answered, or otherwise filed any responsive pleadings in this case. On September 22, 2016, the Clerk of Court entered defendant's default. (Dkt. 9.) Plaintiff filed ...


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