Hasbro Loses Latest Round Over Clue.Com Domain

In a decision that could refine the legal definition of cybersquatting, a federal court in Boston has ruled against toy maker Hasbro Inc. in a long-running legal dispute over the domain clue.com.

In June, 1994 clue.com was registered to Clue Computing, a small Internet consulting firm in Boulder, Colo. In February 1996, Hasbro initiated a domain dispute through Network Solutions Inc., claiming Clue Computing was infringing on its trademarked mystery board game.

In subsequent years, three lawsuits have been slung back and forth by both sides, including one involving NSI. The case culminated in the Sept. 2nd judgement by Judge Douglas Woodlock, in which he ruled that Clue Computing was not infringing or diluting any legal rights of Hasbro.

Eric Robison, president and CEO of Clue Computing, said Wednesday that he’s excited by the court’s decision, but defending himself against Hasbro’s claims of cybersquatting has cost him a heavy personal and financial toll.

“I’ve been expecting to be destroyed for the past three and a half years. It’s cost me my marriage and to some extent my health. And my actual legal bills run around six figures. But I don’t want the Internet to be run by bullies and oligopolies,” Robison said.

Hasbro currently uses the address clue-mystery.com to promote the game. It also owns and operates sites at addresses including scrabble.com, monopoly.com, and battleship.com.

Thomas A. Mullen, the Massachusetts attorney who defended Clue Computing in the case, said the court saw through what Mullen called Hasbro’s “cynical” claims of trademark dilution.

“Their only interest is in having a uniform set of dot coms to which they can attract the consuming public. They really have no interest in preventing the dilution of their mark. If they did, why didn’t they seek an injunction against my client’s use of the mark ‘clue’ in connection with his business name?”

According to Mullen, the judge rightly refused to create what’s called a “per se” rule of dilution.

“The judge here said we’re not going to create a new category of dilution just for domain names, and unless a trademark holder can show either tarnishment or blurring we’re not going to issue an injunction under the dilution statute.”

The decision in Hasbro v. Clue Computing marks one of the few times a domain name holder has prevailed in court against accusations of trademark dilution and infringement. A decision
last month by the Ninth Circuit Court of Appeals that returned two domains to a registrant who was sued for trademark dilution by Avery Dennison Corporation was cited in Judge Woodlock’s ruling, according to Mullen.

While the decision by the Massachusetts district court will have no binding effect on other cases, some Internet law experts say that it’s nonetheless a major decision.

Carl Oppedahl, partner at Oppedahl and Larson in Frisco, Colo., said the mere threat of a lawsuit has often enabled trademark holders to pry domains away from registrants. But he said the outcome of the clue.com case should cause both trademark attorneys to rethink their strategy.

“Hasbro is worse off now legally than if it had never tried to get this domain away from the owner — it would not have this court case in which its mark was ruled to be non-famous. And so for trademark lawyers who are honest with their clients, it will mean that clients will be better advised as to how not all domain name owners are wrong-doers.”

Clue Computing’s legal victory may be short lived. A Hasbro spokesperson Wednesday said the company disagrees with the judge’s order and is filing an appeal with the First Circuit Court of Appeals.

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