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Federal Court Transfers Otamedia Domain Names to Philip Morris USA
Judges Ruling Sends Strong Message to Internet Cigarette Retailers
NEW YORK (August 20, 2004) - The United States District Court for the Southern District of New York today ordered the transfer of Switzerland-based internet cigarette retailer Otamedia's yesmoke.com and yessmoke.com domain names to Philip Morris USA. In his opinion, Judge Gerard Lynch found that Otamedia was selling Philip Morris USA cigarettes into the US in violation of the law and his January 2003 injunction prohibiting them from doing so.
Judge Lynch delivered a stern warning to Otamedia, "Before this proceeding, Otamedia evidently calculated that its elusive and ephemeral location, coupled with the 'virtual' nature of its business, placed it safely beyond the reach of conventional enforcement measures available to a U.S. federal court. But '[l]ife is never static, and the passing of a decade has brought changes to the [Internet retail sales] business as it has to every other.' Philip Morris has now identified an efficacious means to enforce the Judgment, a means inherent in the very same technology by which Otamedia has to date been able to violate with impunity."
"We are pleased Judge Lynch has ordered the transfer of Otamedia's domain names and continued protection of our trademark rights. We believe this will send a message to all internet retailers who sell our products unlawfully," said Jack Holleran, senior vice president of compliance and brand integrity, Philip Morris USA.
This action is the second ruling Philip Morris USA has received against Otamedia. In 2002, Philip Morris USA sued Otamedia in the same federal court. The 13-count complaint contained a multitude of claims including, but not limited to, infringement of registered Philip Morris USA trademarks in violation of the Lanham Act, illegal importation of cigarettes bearing Philip Morris USA trademarks in violation of the Lanham Act and Imported Cigarette Compliance Act (ICCA) and infringement of unregistered trademarks and unfair competition in violation of the Lanham Act.
In January 2003, the court entered a judgment against Otamedia that prevented Otamedia from using the Philip Morris USA trademarks; selling, offering to sell, importing or attempting to import, cigarettes to U.S. consumers that are made by Philip Morris USA not intended for sale within the United States.
When Philip Morris USA learned that Otamedia was continuing to sell illegally-imported Philip Morris USA cigarettes over the Internet to U.S. consumers in violation of the court's injunction, Philip Morris USA asked the court to modify the injunction to include the transfer of the yesmoke.com and yessmoke.com domain names to Philip Morris USA to prevent Otamedia from continuing to violate Philip Morris USA's legal rights and the court's order. In today's ruling, the court granted Philip Morris USA's request.
"Philip Morris USA has long argued that most, if not all, internet cigarette vendors are violating federal and state laws with respect to excise taxes, illegal imports and age verification," said Holleran "Today's ruling will help stop Otamedia, which we believe controls close to half of the Internet cigarette market, from using these domain names to violate these laws."
