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E. & J. GALLO WINERY, Plaintiff - Appellee, v. SPIDER WEBS LTD.; STEVE E.
THUMANN; PIERCE A. THUMANN; FRED H. THUMANN, Trustee, Defendants -
UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
; 2002 U.S. App. LEXIS 5928; 62 U.S.P.Q.2D (BNA) 1404
April 3, 2002, Decided
PRIOR HISTORY: [**1]
Appeal from the United States District Court for the Southern District of Texas.
H-00-CV-450. Marcia Crone, US Magistrate Judge.
Plaintiff trademark-holder sued defendants, a company and partners, under the
Anti-Cybersquatting Consumer Protection Act (ACPA), and federal and Texas anti-dilution, and trademark laws. The
United States District Court for the Southern District of Texas granted summary judgment to the trademark-holder on
the ACPA and Texas anti-dilution claims. The company appealed.
The trial court held that the ACPA was constitutional, that the company had registered the domain name
in bad faith under the ACPA's standard, that its use was not a fair use, and therefore it had violated the ACPA. It
ordered the company to transfer the domain name and entered a permanent injunction under the Texas Anti-Dilution
Statute (ADS). It also awarded $ 25,000 in ACPA statutory damages. On appeal, the company argued that it did not act
with a bad faith intent to profit, as required by the ACPA. The court found that seven of nine statutory factors strongly
supported a finding of bad faith, as did the circumstances. The company also argued that the $ 25,000 should not have
been awarded because the trademark-holder did not suffer any actual injury, but the court noted that the trial court found
that the company's actions put the trademark-holder at risk of losing business and of having its business reputation
tarnished, and the award was not clear error. The court agreed with the trial court that the company's use violated the
ADS because the trademark-holder showed a likelihood of dilution. The court affirmed the injunction, rejecting an
The judgment was affirmed.
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