In a case of apparent first impression, the U.S. District Court for the Eastern District of Virginia has recently held that foreign trademarks are entitled to protection under the Anticybersquatting Consumer Protection Action (“ACPA”). In Barcelona.com v. Excelentisimo Ayuntamiento, plaintiff, a U.S. corporation, sought a declaratory judgment determining that its use of the domain name barcelona.com was not unlawful. Defendant, the City Counsel of Barcelona, Spain, asserted multiple claims under the Lanham Act, including an ACPA claim. Neither party had a U.S. trademark registration for the name “Barcelona.” Defendant, however, had numerous Spanish registrations in which “Barcelona” was the predominant term, and, as the Court noted, under Spanish law, the first party to properly register a trademark has the exclusive right to use it in commerce.

Following a non-jury trial, the Court found that plaintiff had violated the ACPA by engaging in a bad faith attempt to profit from defendant’s mark by registering the barcelona.com domain name. Preliminarily, however, the Court had to determine whether the ACPA protected foreign marks. In holding that the ACPA protected foreign trademarks, the Court observed that the text of the statute, which applied to the “owner of a mark,” made no distinction between domestic and foreign marks “even though trademark law has historically been governed and regulated on a national scale.”

In addition, the Court emphasized that the Internet was international in scope and that, even though the domain name was registered in the United States, the impact of the registration was global. Lacking any legislative history addressing the issue, the Court, noting that the federal government had established ICANN, which had, in turn, authorized the World Intellectual Property Organization to resolve domain name disputes, determined that the Congress could not have intended that the ACPA protected only U.S. trademarks.

This interpretation of the ACPA is consistent with that adopted by the First Circuit in Sallen v. Corinthians Licenciamentos LTDA, a “reverse domain name hijacking” case involving a defendant who licensed registered foreign trademarks and argued unsuccessfully that, since it did not own a U.S. trademark, it was not a “mark owner” under 15 U.S.C. § 1114(2)(D)(v), which provides for declaratory relief in an ACPA action.

These cases suggest that the principle of trademark territoriality, which is “basic to trademark law,” is being further eroded by the Internet, a technological development that the U.S. Supreme Court could hardly have foreseen when it advanced trademark territorial principles in 1923.