Judge orders Lahoti to disclose lots of information about his current and prior domain names.
The judge hearing a lawsuit between a non-profit and the domain name Scratch.org has issued a big defeat to Ravi Lahoti, the owner of the Scratch.org.
Judge Michael S. Nachmanoff has ordered Lahoti to provide extensive data on his domain ownership, revenue, and previous trademark allegations. Perhaps most importantly, he has ruled the information should be public.
It is further ORDERED that the Defendant shall provide complete discovery responses as set forth in open court by Wednesday, October 9, at 12:00 p.m., including a comprehensive list of domain names presently and previously owned by Defendant; disclosure of all revenue derived therefrom, including from the sale of domain names and from advertisement revenue; and dates Defendant owned each domain name. Defendant shall also provide all requested underlying information, whether public or private, that Defendant received pertaining to allegations of trademark abuse against Defendant. To the extent Defendant has discarded, destroyed, or lost any information related to past allegations of trademark abuse, he must affirmatively so state.
Code-to-Learn Foundation, DBA Scratch Foundation, is trying to paint Lahoti as a serial cybersquatter. The judge has indicated that this matters. I still don’t understand how it should impact the instant case because public data indicates that Lahoti owned Scratch.org before the Plaintiff started its business. Hence, he could not have registered the domain in bad faith under the ACPA.
But publicly disclosing the information the judge has demanded will certainly put Lahoti at risk of future cybersquatting claims and potentially provide evidence of bad faith that can be used in those claims. It could also be bad for people who have purchased domains from Lahoti and don’t wish for the sale prices to be made public.
Lahoti may wish he had gone through with a settlement agreement in this case.
Ouch ! This is a very bad precedent to set and will likely open up issues in the future for many others.
Who is representing him ?
Do you still disclose if names were sold or deals made under NDAs ?
It’s definitely not good. The order also demands that Lahoti’s lawyer certify the accuracy of his submission, so that lawyer might not want to be involved.
I don’t know what you’d do about the NDA ones. I also don’t understand why the prices domains sold for would matter in a case like this. Just saying it was sold should be enough.
Judges overreaching their boundaries, what’s new? He should appeal.
Actually a writ of mandamus would be appropriate for this. Reviewing Courts routinely recite a multi factor approach in deciding whether to grant such discretionary relief, including weighing whether the complained-of order involves an important issue of first impression, the petitioner’s harm is irreparable, and the trial court’s abuse of discretion was pervasive or extreme. Here, the judge is not doing his job in creating a fair playing field and this would be an extreme abuse of his discretion but that would be for the higher courts to decide.
That sounds insane. Even if the guy used to be a squatter, the case should not be decided on the basis of any past wrongdoings.
Would be great if John Berryhill and Ari Goldberger chimed in!
Makes me wonder what Lahoti did to piss off the Judge, I think there is more to this story.
Scratch.org isn’t valuable enough for all this. Settle the case at this point or if not, get a new lawyer that can have another judge rule that that info is irrelevant to the case and could wrongfully damage the defendants business and future income.
Nachmanoff is a Virginia magistrate, one wouldn’t expect him to delight in parsing out the ACPA discovery materials from an infringement case discovery materials. He’s probably expecting Lahoti’s attorney to now push back and tell him exactly what is rightfully demanded in an infringement suit.
We’re so benumbed by the ACPA we forget that infringement issues exist and affect domain owners as well. Lahoti has at least 1933 other TM users of ‘Scratch’ to keep clear of, https://www.tmdn.org/tmview/bookmark?s=1blsbudr4dnjfgrb54n04etb10. What a hassle. He could have been spared this onslaught by just leaving the site blank.
Nachmanoff is going to be looking at the recent IMI.COM ACPA suit, in which the hijackers (Irving Materials) tried to bludgeon the domain owner into submission via abusive litigation. That’s $480K in legal fees the domain owner is getting rightfully reimbursed from Irving Materials Concrete—Nachmanoff knows these abusive force lawsuits have to be stopped cold. That is part of the reason the ACPA was implemented—not just to protect TM holders, but to protect citizens who hold domain assets, from life-destroying corporate hijacking strategems.
the existence of multiple unrelated third-parties claiming trademark rights to the term SCRATCH is a good thing, not a bad thing, for Lahoti.
In that paragraph I am addressing infringement, not the suit, and of a domainer’s safe use of a text string used by many.
Unlike the UDRP, I don’t think the bad-faith prong in ACPA cases is inextricably intertwined with the subjective motivation at the time of registration. Thus, the fact Lahoti owned Scratch.org before the Plaintiff started its business wouldn’t necessarily be dispositive. While I think the generic nature of the phrase “scratch.org” suggests the cybersquatting case is ultimately meritless, that’s an issue to be addressed in a 12(b)(6) motion to dismiss or motion for judgment on the pleadings. Until then, the weakness of the case on it’s face — alone –doesn’t foreclose the plaintiff’s right to discovery.
The ACPA specifically says the mark must be distinctive or famous at the time of registration
Yes, that’s his best argument; but, it looks like no one bothered to file a quick motion to dismiss arguing these substantive points so he is stuck in discovery hell until they get around to filing a motion for summary judgment on the merits.
Mr. Ferreiro, of course the trademark must be distinctive or famous at the time of domain registration. The ACPA couldn’t be clearer on this point. The clauses are dead simple, and hammered home via reiteration. I paste the US Code, to dispel your smoke.
What a jackpot dream it would be if trademark litigators were able to trick anyone into thinking otherwise. Then every impoverished attorney could enjoy their big day at the vomitorium. ($480,000 in billables borne by the defense alone in the recent IMI.COM suit.)
Your change in the law would be like legalizing a protracted hatchet attack on any person who owns a thing of value. Every soul in this country owns domain names–Etsy girls, garage tradesmen, kids and octogenarians alike. Will they all be fodder for the slaughter? Domain investing isn’t a misdeed–it results in real estate value, and this suppresses fraud. As intended by the drafters.
It is no victimless crime to spread disinformation about federal law in order to foment litigation. Taxpayers will pay 7.6 billion USD next year to fund our federal courts. There is a bumper crop of starveling attorneys pushing this agenda right now. They must find another mark.
I don’t recall proposing a change in the law. Unlike the UDRP, federal litigation is protracted and a judge doesn’t just read the initial pleadings and make a snap decision (or take parties at their word absent a chance to consider evidence submitted at the right time and through the proper protocols.) If the case is ultimately meritless (and the plaintiff’s attorneys should have known that) — which appears to be the case — Lahoti should be able to recover his fees later. If your argument is that this litigation is pointless and expensive — we’re on the same page and you can say that about 95% of cases on most dockets.
ACPA – 15 U.S.C. § 1125(d):
(d) Cyberpiracy prevention
(1)(A) A person shall be liable in a civil action by the owner of a mark, including a
personal name which is protected as a mark under this section, if, without regard to the
goods or services of the parties, that person
(i) has a bad faith intent to profit from that mark, including a personal name which
is protected as a mark under this section; AND
(ii) registers, traffics in, or uses a domain name that–
(I) in the case of a mark that is distinctive AT THE TIME OF REGISTRATION OF THE
DOMAIN NAME, is identical or confusingly similar to that mark;
(II) 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; or
(III) is a trademark, word, or name protected by reason of section 706 of
Title 18 or section 220506 of Title 36.
Right, so the issue is whether this company owned any trademark rights prior to the registration of the domain. The fact they weren’t in business at the time the domain registered is not, alone, probative. For instance, if the plaintiff hypothetically purchased another company’s trademark rights to SCRATCH right before filing the lawsuit and that company’s trademark rights commenced in 1988 then these rights would inure to their benefit in the lawsuit and 1988 would be treated as the pertinent date in interpreting the statute. Whether or not anything like this has occurred would be a matter to be delved into in discovery and presented to the court in substantive briefings.
Really. That’s what you meant?
There’s no TM assignment in their Complaint.
https://domainnamewire.com/wp-content/scratch.pdf. Who’s burying that lead.
https://media3.giphy.com/media/31TsJOgYOvIWWYMEaR/giphy.gif
“Lahoti should be able to recover his fees later.” Thanks, Jesus of Fort Lauderdale.
I don’t live in Fort Lauderdale and your reading comprehension skills are severely lacking.
My last line was ad hominem, I apologize. Trademark litigation is public record and affects all consumers and taxpayers, but I had no call to be snide about FL.
“…I don’t think the bad-faith prong in ACPA cases is inextricably intertwined with the subjective motivation at the time of registration.” I did see that you clarified…there could be an undisclosed TM assignment.
So I’ve unjustly conflated you with the trademark litigators in the instant article. Who are willing to feign confusion about ACPA targeting so that they may drag every living registrant into federal court…to the tune of several hundreds of thousands of dollars and two years of their lives. Money which registrants will get back at close of litigation, as you point out, but years and families which they will not. Money which the litigators will enjoy uninterrupted.
Unless there is a malpractice suit.
Case has been settled, including transferring the domain:
https://domainnamewire.com/2019/10/17/scratch-foundation-gets-scratch-org-in-settlement/