JACKSON, Miss. (Legal Newsline) - A man who registered some 60 website names containing the words “Mississippi” and “lottery” shortly before the state announced its first lottery in 2018 was rightfully stripped of the domains, the Mississippi Supreme Court ruled.
The fact the man tried to sell the domain names to the state before initiating any litigation was prime evidence he violated the federal Anticybersquatting Consumer Protection Act, the court found.
Starting in December 2017, Jonathan Carr began registering names including mslottery.com, mississippilottery.com, mslottery.us, mississippilottery.us and mississippilottery.org in what he later described as an investment. He set up websites under some of the names, including one with a man surrounded by dollar bills floating in the air and the ‘JOIN THE WINNER CIRCLE’ written on his chest.
Mississippi established its lottery in August 2018, after decades of vigorous debate in the legislature. The state obtained state and federal trademark protection for “Mississippi Lottery” and “Mississippi Lottery Corporation” in March the following year. That same month, Carr messaged a lawyer representing the MLC, and his colleague Bill Smith responded.
Carr says Smith offered to buy his domain names and he “grew extremely uncomfortable and wished to contact his attorney.” Smith says Carr told him he “foresaw the need for a lottery website” and bought more than 100 variations of the name Mississippi Lottery as “an investment,” after which Smith offered to pay a reasonable price for the domains. A second attorney sat in on the call and took notes which support Smith’s recollection, the court said.
In April 2019, attorney Robert Deming called Smith about the sale of the domain names. In May, Mississippi filed a domain dispute complaint with the National Arbitration Forum. Before that process was complete, Carr tried to register the name Mississippi Lottery Corp. with the Mississippi Secretary of State. In July, the NAF ordered Carr to turn over all five domain names to the state.
Carr sued to recover the names and the MLC countersued, seeking legal expenses and $100,000 in damages. The state dropped its request for damages after a trial court rejected Carr’s claims.
On appeal, Carr argued Mississippi couldn’t claim the domain names because he registered them before the trade name “Mississippi Lottery” was in use. He cited a Georgia case where the court rejected a politician’s attempt to protect “dar4ptc,” which he said stood for “Dar for Peachtree City,” because it hadn’t been in common use before somebody else registered the domain name. The Mississippi Supreme Court said the Georgia court got it wrong, however, because the ACPA displaced traditional trademark law.
More authoritative was a Second Circuit decision that held a name can be distinctive even before it is used. Lawmakers anticipated this problem while debating the ACPA when they discussed how “dot-con artists” might register the names of athletes or politicians before they became famous in hopes of capitalizing later, the court observed.
Carr also lost the argument he registered his domain names before the Mississippi Lottery was established. A Korean named Jongsun Park registered the name “globalsantafe.com” the day after Global Marine and Santa Fe International announced their merger, the court said, but a court found Park had no evidence of any legitimate or prior use of the name.
Carr conceded the topic of a Mississippi lottery had been “hotly contested and discussed” for 30 years. He also admitted registering at least 60 variations on domains including “Mississippi” and “lottery” in them. The evidence supports the finding that “the MLC had a distinctive or famous mark entitled to protection under the ACPA, despite the fact that the lottery had not yet been approved by the legislature when Carr registered his domain names,” the court concluded.
While the Mississippi rules of evidence hold settlement discussions to be inadmissible, the court ruled, Carr began talking about selling his domain names before any lawsuits were filed, “making it less likely that Carr was attempting to engage in settlement negotiations.” Several federal courts have held that an offer to sell domain names can prove a core element of an ACPA claim, the court noted.