The House Always Wins: New York-New York Hotel & Casino, LLC v. Ronnie Katzin
The words New York, New York inspire various thoughts in people, from the classic song performed by Frank Sinatra, to the picturesque view of the Manhattan skyline. Few would associate those words with trademark litigation. However, on July 29, 2010, Nevada District Court Judge Lloyd George entered a default judgment for the Internet domain name newyorknewyork.com in favor of the New York-New York Hotel & Casino (NY-NY) in Las Vegas, Nevada. NY-NY is known for its awe-inspiring recreations of some of New York City’s most famous landmarks. Visitors to NY-NY—which is owned by MGM Resorts International—can dine while overlooking the Brooklyn Bridge or stay in hotel rooms located in the replica Empire State and Chrysler Buildings. Currently, one can reach NY-NY’s website by going to nynyhotelcasino.com. Recently, however, because of the default judgment issued by Judge George, NY-NY acquired the rights to the domain name newyorknewyork.com from the corporation NewYorkNewYork.com, Inc., which was created and is owned by Ronnie Katzin, a resident of Tarzana, California.
The story of newyorknewyork.com began in 1994 when MGM Grand, Inc., its predecessor in interest, announced that it was building the hotel. In September of the next year, NY-NY filed federal trademark applications—which were granted in 1998—for “New York New York” specifically for hotel and casino services. Three months after NY-NY filed the federal trademark applications, Katzin registered the domain newyorknewyork.com. According to an article in the Las Vegas Sun, Katzin’s intended purpose was to create a New York City site; it is something that he said he always had a “passion” for. Unfortunately for Katzin, health issues prevented him from fully developing his site and he had to take a hiatus from working for newyorknewyork.com. Between 2004 and 2006—and while he was taking time off from the site—Katzin claims that the domain name was “hijacked” by a corporation known as True Magic LLC. During this period, the website displayed various ads that related to Las Vegas and the hotels and casinos in the city. In its complaint, NY-NY alleges that they sent True Magic a letter expressing its concern that Internet users would confuse newyorknewyork.com with the Vegas hotel. According to NY-NY, it was shortly after this correspondence that the domain name switched to being registered in Katzin’s name and that infringing materials were removed. While NY-NY alleges that this letter was the driving force behind the removal of Vegas related materials, Katzin claims that he simply was able to recapture his domain and continue his plan of creating a New York based website. He also says that he never received any letter or other correspondence from the hotel. Recently, Katzin had updated his website and partnered with Expedia’s affiliate program to allow visitors to his website to book hotels through Expedia. While the site was clearly focused on New York City hotels and events, Katzin placed a banner—which was allegedly agreed to by an MGM official—displaying a picture of the NY-NY hotel. Through that banner visitors could book reservations for NY-NY and other Vegas hotels as part the Expedia affiliate program. Since Katzin said his idea was approved by the MGM employee—Katzin even states the he exchanged business cards with said employee—he believed that there was no issue with the banner and link displaying the picture of the hotel.
On November 11, 2009, however, NY-NY filed a complaint against Katzin seeking relief for Katzin’s use of NY-NY’s marks on newyorknewyork.com. NY-NY pled seven different counts in its complaint, and since Katzin—who is representing himself and is not a licensed attorney—cannot represent a corporation without a license, Judge George entered a default judgment against NewYorkNewYork.com, Inc. In his order the judge based his decision upon two of the counts, cybersquatting under 15 U.S.C. § 1125(d) and trademark infringement under 15 U.S.C. § 1114.
According to 15 U.S.C. § 1125(d), a person is liable for cybersquatting if “without regard to the goods or services of the parties” such person “has a bad faith intent to profit from that mark,” and “registers, traffics in, or uses a domain name that—in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark” or “in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark . . . .”\ The trademark infringement section, 15 U.S.C. 1114, states that:
[a]ny person who shall, without the consent of the registrant—use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or reproduce, counterfeit, copy, or colorably imitate a registered mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action by the registrant for remedies hereinafter provided. 15 U.S.C. § 1114.
In his order granting the motion for default judgment, Judge George ruled that NY-NY’s trademarks were distinctive, that Katzin acted in bad faith when he registered the domain, that Katzin made commercial use of trademark which was confusingly similar to NY-NY’s marks, that NY-NY and Katzin are competitors on the Internet, and that should Katzin’s use of the domain name continue, the use will likely cause confusion as to the source of Katzin’s services and cause irreparable harm to NY-NY’s goodwill and reputation. As a result of the default judgment, Katzin’s corporation was forced to turn over newyorknewyork.com to NY-NY and Judge George awarded the maximum statutory damages for cybersquatting, which is $100,000 dollars.
Interestingly, what is not mentioned in the complaint, or in the default judgment for that matter, is that NY-NY’s trademarks were initially denied on the basis of descriptiveness, and it was only later allowed under 15 U.S.C. 1052(f), a provision allowing a person to trademark something that has “become distinctive” in commerce. Furthermore, NY-NY acknowledges that it did not start using the mark until 1997, which is the time it opened the hotel, so one is left to wonder how registering a domain name a year after the time that NY-NY’s mark could realistically become distinctive would make Katzin’s actions cybersquatting per 15 U.S.C. 1125(d).
What Ryan Gile, a trademark attorney in Las Vegas, describes as “more unbelievable” is the actual event that led to the complaint and the eventual default judgment. As discussed above, Katzin’s website was a travel website that mostly led visitors to New York City attractions. He did, however, create a banner link with a picture of NY-NY that could lead website visitors to make reservations for that hotel and others as part of Expedia’s affiliate program. The banner—which was removed once Katzin found out about the complaint—was probably the “hook,” as described by Gile, that the hotel was looking for to initiate the lawsuit. Gile certainly believes that this possibly could be trademark infringement, but disagrees completely with the outcome. In his blog, he stated that the damages awarded should have been minor and that an injunction from using NY-NY marks would have sufficed as a remedy. He believes the actions taken by Katzin were definitely “not deserving” of a court order turning over a domain name that can potentially have a decent amount of value. Gile is also skeptical of the cybersquatting outcome.
The main issue, and reason that the default judgment was entered, is that the domain name was registered to a corporation. As briefly mentioned above, while Katzin was able to represent himself in the case, he was not able to represent a corporation since he was not a licensed attorney. Katzin stated that the only reason that the domain name was listed under a corporation—one which he created—was for protection of his identity. Other than that listing, Katzin was for all purposes the owner of the domain name. He originally registered the website in 1995, he personally received royalty payments through Expedia’s affiliate program, and there was even evidence that Katzin may have created a written license agreement with the corporation to use the domain name. Essentially, as Gile notes, NY-NY was able to acquire newyorknewyork.com, and was also able to get the maximum statutory damage award of 100,000 dollars, for the cost of filing a district court action.
Recently, I was able to speak to Katzin regarding the case. He told me about the facts of the case, many of which I have already detailed above. Katzin said that he registered NY-NY back when he was the owner of an Internet Service Provider (ISP) in the mid-90’s. He stated that it was always his goal to create a New York related site. Additionally, Katzin mentioned that as an ISP he often received lucrative offers to register various domain names to potential cybersquatters, but never participated because he viewed it as a “disgusting” business practice and as something “immoral.” He also listed this as a main reason for why he did not accept a settlement offer from NY-NY. He said he did not want to be associated as a cybersquatter, and that he did not want to be forced to sign a confidentiality agreement where he could not tell his story. He fails to see how any of his actions constitute the requirement of bad faith needed to support a charge for cybersquatting. Moreover, he believes—and claims that NY-NY’s attorney told him personally—that an injunction was never a possibility; that NY-NY just wanted to acquire ownership of the domain name.
Additionally, Katzin said that he never received any communication from NY-NY and that he has documentation from FBI officials that documents the whole True Magic hijacking incident. Katzin is obviously upset about the $100,000 dollar judgment, and from his understanding statutory damages are usually given as a proportion of the income that a cybersquatter makes from his activities. While he maintains he is not a cybersquatter, he still believes the damage award is nonetheless absurd given that his corporation made $8,000 dollars at the most. Finally, Katzin is currently drafting an opposition to summary judgment, as part of the lawsuit against him personally, and despite financial constraints—the same constraints that made him represent himself—he plans to seek legal advice regarding the default judgment entered against the corporation.
For a copy of the order entered by the court (via Scribd) go to: http://www.scribd.com/doc/35246857/Default-Judgment-NewYorkNewYork-com.
To download a copy of the complaint (via the Las Vegas Sun) go to: http://media.lasvegassun.com/media/pdfs/blogs/documents/2009/11/09/nyny110609.pdf.
Background information was taken from the Complaint and Ryan Gile’s blog “Las Vegas Trademark Attorney” http://www.vegastrademarkattorney.com/2010/08/new-york-new-york-hotelcasino.html. Mr. Gile is a trademark and intellectual property attorney with Weide & Miller in Las Vegas, Nevada.
Las Vegas Sun Article – http://www.lasvegassun.com/news/2009/nov/11/web-site-owner-denies-new-york-new-york-allegation/
“Las Vegas Trademark Attorney” http://www.vegastrademarkattorney.com/2010/08/new-york-new-york-hotelcasino.html