Public Citizen Litigation Group
1600 20th Street, N.W.
Washington, D.C. 20009-1001
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(202) 588-1000
BY TELECOPIER: 305-358-3309
December 24, 2007
James Gale, Esquire
Feldman Gale
30th Floor
One Biscayne Tower
2 South Biscayne Boulevard
Miami, Florida 33131-4332
Re: ProsperReport.com domain name
Dear Mr. Gale:
I am writing to confirm what I told you on the telephone—our client will not agree to your demand that he give up the domain name prosperreport.com, which he used for his web site that (among other things) provides links to forums for uncensored discussion about flaws in the business practices of your client, Prosper Marketplace, Inc. Your client does not have any viable claims for damages or injunctive relief. Hence, my client will not execute the agreement that you have proffered for his signature.
My client's web site features a collection of links to discussions by Prosper's members of their concerns about the way in which Prosper is conducting its business, and specifically about some of the problems with Prosper. He created the web site because, although your client previously encouraged such open discussion, more recently it has been engaged in heavy censorship which, my client believes, is intended to mask problems from members. Thus, his web site provides access to discussion archives that Prosper has deleted from its own web site, as well as links to the official Prosper forums and various unofficial Prosper forums. Of course the law protects your client's right, as a web host, to censor discussions on its own web site to its heart's content. 47 U.S.C. § 230. (Whether such censorship is wise is a different question.) That does not mean, however, that your client is entitled to invoke judicial process to censor discussions on other web sites, or to prevent would-be discussions from using your client's name accurately to show that their web sites are ones where Internet users can locate discussions about Prosper. Whether it is denominated as fair use, or lack of trademark use, or lack of likely confusion, a third-party's right to use a trademarked word accurately to depict the subject matter of discussion is a fundamental precept of the trademark laws. Moreover, the use of a trademarked company name to identify a web site about that company is non-commercial speech that is fully protected by the First Amendment.
The fact that your client is one of many businesses that uses the "prosper" name, and one of many holders of a trademark in the term "prosper" (in your client's case, for less than two years) does not mean that, under the trademark laws, concerned members of the Prosper community cannot use the mark as a part of a domain name to denote a noncommercial web site that features commentary on Prosper itself. My client's right to use the name in this way is well-established by the caselaw, including decisions of the United States Courts of Appeals for the Fourth, Fifth, Sixth, and Ninth Circuits, as well as many different United States District Courts, and extends to your threatened claims for infringement/unfair competition as well as under the ACPA. E.g., Lamparello v. Falwell, 420 F.3d 309 (4th Cir. 2005), rev'g 360 F.Supp. 2d 768 (E.D.Va. 2004); Bosley Medical v. Kremer, 403 F.3d 672 (9th Cir. 2005); TMI v. Maxwell, 368 F.3d 433 (5th Cir. 2004); Lucas Nursery and Landscaping v. Grosse, 359 F.3d 806 (6th Cir. 2004) (ACPA); Taubman v. WebFeats, 319 F.3d 770 (6th Cir. 2003) (Section 32); Lighthouse Ministry v. Discovery Computing, 2007 WL 951542 (D. Utah March 26, 2007) (Section 32 and ACPA); Mayflower Transit vs. Prince, 314 F. Supp.2d 362 (D. N.J. 2004); Ficker v. Tuohy, 305 F. Supp.2d 569, 572 (D. Md. 2004) (ACPA and Section 43); Northland Ins. Cos. v. Blaylock, 115 F. Supp.2d 1108 (D. Minn. 2000).
Nobody would come to our client's web site and be confused about whether it is sponsored by Prosper itself. The very top of the page contains a prominent disclaimer of affiliation, along with a hyperlink to your client's web site. Thus, even if the buzzword doctrine of "initial interest confusion" that you invoked when we spoke had any proper application in this non-commercial context, any misunderstanding about who sponsors the web site would be immediately dispelled when a user first reached the prosperreport.com home page, and a visitor who really wanted to reach your client's web site could immediately proceed there with only the click of a mouse button.
Although the cases would not even countenance your suit if the domain name were identical or similar to your trademark, the domain name at issue here is "prosperreport." This domain name is not "confusingly similar" to your client's mark under the ACPA, and is not likely to cause any confusion because the manner in which domain names have been said to create a likelihood of confusion is by diverting customers who guess at the name of a web site when looking for a trademark holder on the Internet. But a member of the public who is looking for your client's web site is highly unlikely to type "prosperreport" into his or her web browser; hence, there is little basis for your claim of likely confusion, not to speak of the "initial interest confusion" you mentioned in our telephone conversation.
Indeed, it is apparent that your client has no problem with the use of such domain names that include its trademarks. Not only are there several third party web sites that use such domain names—some of them expressly making clear that they do so without your client's endorsement—but your client's own web site proudly "showcase[s]" some of those web sites and their contents. http://www.prosper.com/tools/3rdParty.aspx. The domain names for those web sites include "proprosper.com" "lendsmartandprosper.com," "fantasyprosper.com" and "prosperanalytics.com," not to speak of "prosperlending.blogspot.com." Although your client may believe that it can invoke the trademark laws to block public access to criticism while allowing access to praise, this believe is sorely mistaken.1
Although the fact that "prosperreport" is not confusingly similar to your client's mark is sufficient to dispose of Prosper's ACPA claim, your client cannot meet the second element of the ACPA claim, which would require proof that my client registered or used the domain name with a "bad faith intent to profit." This requirement embodies the purpose of the ACPA to stop "the Internet version of a land grab.... Cybersquatting is the practice of registering 'well-known brand names as Internet domain names" in order to force the rightful owners of the marks "to pay for the right to engage in electronic commerce under their own brand name.'" Virtual Works v. Volkswagen of America, 238 F.3d 264, 267 (4th Cir. 2001). My client registered the domain for the purpose of fostering discussion and has never sought to sell the domain name. That is sufficient to defeat any claim of "bad faith intent to profit" under the ACPA.
Finally, your client may hope that by filing suit it will send a message to critics that the use of the Internet for uncensored comment on its activities will be costly. But its decision to file suit over this domain name may be even more costly for your client. Our experience with the other domain name cases that we have litigated is that the litigation itself brought more attention to the criticisms than they would otherwise have received. For example, a Google search for "prosper" does not bring up our client's site on the first page, or even the first several pages, of search results. If your client makes the mistake of filing the lawsuit that you threaten, that may well change. Indeed, although your client has become known to some Internet users, it is not well-known to the general public. I scarcely think it would be in your client's interest if the first thing that the general public learned about your client is that it is so afraid of open discussion that it needs to sue to stop easy access to that discussion.
I hope this letter will persuade you and your client to leave my client alone. If not, I note that your letter cites California law as one legal theory supposedly supporting your position. Although we might prefer to have you sue in California where Bosley is the circuit precedent, my client does not live in California and we do not agree that you can get personal jurisdiction there. My client lives in New York and would accept personal jurisdiction there. Please let me know when and where you intend to file suit so that we can identify local counsel and be ready to litigate. On the other hand, if you decide not to pursue your demand, I should be grateful if you would let me know that too.
Sincerely yours,
Paul Alan Levy
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1When we spoke, you suggested that my client should adopt the domain name "prospersucks.com." That name would be inappropriate, because it is not an accurate depiction either of his web site or of his views about Prosper Marketplace. My client does not believe that your client "sucks." In fact, he is a member of the Prosper community who has made numerous loans to other Prosper members. His concern is about flaws in your client's collection processes, and, even more importantly, about your client's attempts to conceal those flaws from members who seek to have the flaws corrected for the better protection of all members. His web site does not seek t tear down Prosper, but rather to promote transparency about Prosper which he believes is essential to the proper functioning of the Prosper community. Moreover, the domain names Prospersucks.com, prospersucks.org and prospersucks.net are currently registered (albeit by somebody who is not using them in any manner related to Prosper). In any event, the lesson of Taubman, Bosley, TMI, Lamparello, and many similar cases that we have litigated for Internet speakers is that accurate domain names need not couple trademarks with vulgarities in order to be protected.