Intellectual Property – No jurisdiction over France.com trademark suit

Where French trial and appellate courts previously declared the French Republic, and not a California company, is the rightful owner of the domain name France.com, the French Republic was immune from France.com’s trademark and cybersquatting suit.

Background

In 1994, a California corporation, France.com Inc. purchased and registered the domain name France.com and trademarks for “France.com.” Twenty years later, the corporation initiated a lawsuit in France alleging that a Dutch company’s use of the France.com trademark constituted trademark infringement.

The French Republic and its tourism office intervened. Following extensive litigation, French trial and appellate courts declared the French Republic the rightful owner of the domain name.

The corporation then filed this suit against the French entities, which moved to dismiss the case, asserting sovereign immunity under the Foreign Sovereign Immunities Act, or FSIA. After the district court denied the motion, the French entities timely appealed.

Analysis

The FSIA provides that a “foreign state” enjoys immunity “from the jurisdiction of the courts of the United States” unless a specific, enumerated exception applies. The corporation maintains that its complaint sets forth sufficient facts to establish two of the exceptions: the “commercial activity” exception and the “expropriation” exception.

Commercial activity

The “commercial activity” exception strips foreign states of immunity in cases “based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.”

The corporation argues that the act providing the basis for its suit is the French State’s use of France.com to offer links to tours, accommodations, restaurants and other tourism resources and to sell advertisements. But the complaint makes clear that the conduct that the corporation asserts “actually injured” is the adverse French judgment holding that France.com properly belongs to the French State.

It is not at all clear that the French State’s actions in obtaining the website in a judicial proceeding constitute a “seizure” or an “expropriation” for purposes of the FSIA’s “expropriation” exception to immunity. But even if those actions did constitute an “expropriation” under the FISA, they clearly do not constitute a “commercial activity.”

The corporation suggests that France sought to take control of the domain name to take advantage of the corporation’s “market share.” But the Supreme Court has repeatedly held that the text of the FSIA requires the court examine the nature, rather than the purpose, or the “reason why the foreign state engages in the activity.”

Finally, to the extent that the corporation contends that only the transfer of the domain name harmed it, and not the preceding court judgment, that argument too fails. The French judgment provided the sole basis for France’s request to Web.com to transfer the domain name. Without the judgment issued by the French trial and appellate courts, there would have been no ground for the request.

Expropriation

To establish the expropriation exception, a plaintiff must show that “(1) rights in property are in issue; (2) that the property was ‘taken’; (3) that the taking was in violation of international law; and (4) that one of the two nexus requirements is satisfied.”

First, it is unclear whether the alleged conduct qualifies as an “expropriation” for FSIA purposes. But even if the French judicial decree constitutes an “expropriation” for purposes of the FSIA, the corporation fails to identify any international law that this “expropriation” violated. Although the corporation argues repeatedly that the French court applied French law in a way that conflicts with or is “hostile to” the laws of the United States, it does not demonstrate a violation of international law.

The corporation also asserts that the French courts had no authority to declare the domain name France.com the property of the French State. The corporation does not explain or even allege how this is so. The judgment is reversed and remanded with instructions to dismiss with prejudice for lack of subject matter jurisdiction.

Reversed and remanded with instructions.

France.com Inc. v. The French Republic (Lawyers Weekly No. 001-061-21, 14 pp.) (Diana Gribbon Motz, J.) Case No. 20-1016. March 25, 2021. From E.D. Va. (Liam O’Grady, J.) John Michael Griem Jr. for Appellants. Benjamin S. Barlow for Appellee.