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Central Source LLC v. Annalcreditreport. Co.

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

August 5, 2019

Central Source LLC, Plaintiff,
v.
Annalcreditreport.co, et al., Defendants.

          REPORT & RECOMMENDATION

          MICHAEL S. NACHMANOFF UNITED STATES MAGISTRATE JUDGE

         This matter comes before the Court on plaintiff Central Source LLC's (“plaintiff” or “Central Source”) Motion for Default Judgment (Dkt. No. 14).[1] Having reviewed the record and the pleadings, the undersigned Magistrate Judge recommends entering default judgment in plaintiff's favor for the reasons that follow.

         I. Procedural Background

         On October 19, 2018, plaintiff brought an in rem action against the following defendants: annalcreditreport.co; annualcrediitreport.com; annualcreditreport-transunion.com; and wwwwannualcreditreport.com (collectively, “Defendant Domain Names”) (Dkt. No. 1). Subsequently, plaintiff filed an Amended Complaint on February 5, 2019 removing defendant annualcrediitreport.com and adding defendants annualcreditreporeport.com; annualcreditreportg.com; and getfreeannualcreditreport.com (Dkt. No. 4).[2]

         The Amended Complaint alleges two counts against Defendant Domain Names: Count One alleges cybersquatting under the Federal Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d) (the “ACPA”); and Count Two alleges trademark infringement under the Lanham Act, 15 U.S.C. § 1114(1)(a) (the “Lanham Act”).[3] Amend. Compl. (Dkt. No. 4) ¶ 1. Plaintiff seeks a judgment entered in its favor on Counts One and Two; an order directing Defendant Domain Names be transferred to plaintiff through transfer by the relevant registries and/or registrars of Defendant Domain Names to plaintiff's domain name registrar of choice and by such registrar's change of registrant to plaintiff; an order directing that any other domain names registered by the registrant of Defendant Domain Names that resemble or include plaintiff's trademark be transferred to plaintiff; and an award of reasonable attorney's fees and costs incurred pursuant to 15 U.S.C. § 1117(a), among any other relief as the court may deem just and proper. Id. at pg. 14.

         On May 13, 2019, plaintiff moved for an entry of default judgment against Defendant Domain Names (Dkt. No. 10), supported by a declaration by Ari S. Meltzer stating that plaintiff effectively served process on Defendant Domain Names and that they failed to answer or otherwise respond to the Amended Complaint (Dkt. No. 11). The Clerk of Court entered default against Defendant Domain Names on May 14, 2019 (Dkt. No. 12). Pursuant to a Court Order (Dkt. No. 13), plaintiff filed a motion for a default judgment (Dkt. No. 14), along with a memorandum in support (Dkt. No. 15) and a notice of hearing for July 19, 2019 (Dkt. No. 16). The Court reset the hearing on plaintiff's motion to July 26, 2019. On that date, counsel for plaintiff appeared at the hearing on the motion for default judgment before the undersigned Magistrate Judge and no claimant appeared on behalf of Defendant Domain Names (Dkt. No. 28).

         II. Factual Background

         The following facts are established by plaintiff's Amended Complaint (Dkt. No. 4) as well as its memorandum in support of its motion for default judgment (Dkt. No. 15).

         Plaintiff is a corporation organized and existing under Delaware law with a principal place of business in Atlanta, Georgia. Amend. Compl. (Dkt. No. 4) ¶ 5. Based on records in the whois database of domain name registrations, the registrants for Defendant Domain Names are either a privacy service-which replaces a domain name owner's contact information with names such as “Private Registrant, ” “Registration Private, ” or “Domain Administrator” to conceal the identity of the true owner of the domain names-or a fictitious person or entity. Id. at ¶¶ 6-11. Defendant Domain Names were registered by the same person or entity and are under control of that same person or entity. Id. at ¶ 51.

         Plaintiff provides consumers with a secure means to request and obtain a free credit report once every twelve months in accordance with the Fair and Accurate Credit Transactions Act, 15 U.S.C. § 1681j. Id. at ¶ 18. Plaintiff provides this service through a website and service available at <www.AnnualCreditReport.com>, which is the only site authorized by the United States Federal Trade Commission (“FTC”) and the Consumer Financial Bureau (“CFB”) to provide such service. Id. at ¶ 19. Plaintiff registered the “AnnualCreditReport.com” domain name on June 25, 2004, id. at

         ¶ 20, and further registered over 600 additional related domain names that contain typographical errors of AnnualCreditReport as a defensive measure to limit potential cybersquatting of related domain name registrations, id. at ¶ 21.

         Plaintiff began promoting the AnnualCreditReport mark in November 2004. Id. at ¶ 22. Since opening for public use, AnnualCreditReport has received more than 675, 000, 000 visits to <www.AnnualCreditReport.com> through July 2017. Id. at ¶ 25. The FTC also engaged in a “wide ranging public service campaign” promoting the mark, which resulted in substantial media coverage. Id. at ¶ 26. Various federal statutes and regulations also required third parties that advertise or offer a free credit report to identify <www.AnnualCreditReport.com>. Id. at ¶¶ 28-31. See also 15 U.S.C. § 1681j(g); 12 C.F.R. § 1022.138(b).

         Due to promotions and mandatory disclosures, the AnnualCreditReport mark has become famous and/or distinctive throughout the United States and consumers associate the mark with plaintiff's services. Id. at ¶ 32. On June 5, 2012, the AnnualCreditReport mark was registered with the U.S. Patent and Trademark Office (“USPTO”) under registration number 4152650.[4] Id. at ¶ 35; see also Compl., Ex. 7 (Dkt. No. 4-7) 2. This registration serves as conclusive evidence of the validity of the mark, plaintiff's ownership of the mark, and plaintiff's exclusive right to use the mark in U.S. commerce. Amend. Compl. (Dkt. No. 22) ¶ 36.

         Defendant Domain Names represent typographical errors of the AnnualCreditReport mark, also known as “typosquatting, ” which “harms consumers by causing confusion with the legitimate sites being sought by the consumers and very often results in consumers' computers being infected with computer viruses, ‘bloatware' or other unwanted software, consumer's personal information being collected and misused, and/or consumers being presented with an endless stream of unwanted advertisements.” Id. at ¶ 3. Accordingly, plaintiff alleges that Defendant Domain Names were registered for the purpose of obtaining internet visitors when such visitors make a typographical error when attempting to reach <www.AnnualCreditReport.com>. Id. at ¶ 39. Defendant Domain Names receive compensation for “pay-per-click advertisements”-when consumers click on a link provided by a Defendant Domain Name to a third-party website-and when consumers are automatically redirected to third-party websites for sale solicitations. Id. at ¶¶ 41-42.

         Accordingly, plaintiff contends that Defendant Domain Names were registered with the intent to divert consumers away from plaintiff's online location at <www.AnnualCreditReport.com> for commercial gain by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of Defendant Domain Names and the sites displayed through the use of Defendant Domain Names, id. at ¶ 47, which use does not comply with the mandatory disclosure provisions set forth in 15 U.S.C. § 1681j(g) and 12 C.F.R. § 1022.138, id. at ¶ 48. Due to Defendant Domain Names' actions, plaintiff alleges that it suffers great and irreparable harm to the value and goodwill associated with the AnnualCreditReport mark. Id. at ¶¶ 58, 70.

         III. Jurisdiction, Venue, and Service of Process

         A court must have both subject matter and personal or in rem jurisdiction over a defaulting defendant before it can render a default judgment. The court has original subject matter jurisdiction under 15 U.S.C. § 1121(a) and 28 U.S.C. §§ 1331, 1338(a) because this action arises under federal law, the ACPA and the Lanham Act. There is in rem jurisdiction over Defendant Domain Names pursuant to 15 U.S.C. § 1225(d)(2)(A) because Defendant Domain Names have violated plaintiff's trademark, id. at § 1225(d)(2)(A)(i), and plaintiff cannot obtain personal jurisdiction of Defendant Domain Names because their listed registrant is “either a privacy service or a fictitious person/entity, ” id. at § 1225(d)(2)(A)(ii)(I). Venue is likewise proper pursuant to 15 U.S.C. § 1125(d)(2)(C) because the registry for Defendant Domain Names, VeriSign, Inc. (“VeriSign”), is located within this court's judicial district.[5]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The ACPA provides that for in rem actions, service of ...


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