Bosley Medical v. Kremer: Trademarks

The Ninth Circuit shielded a noncommercial gripe site from infringement and dilution claims but held that ACPA cybersquatting requires no commercial use.

When a dissatisfied hair restoration patient registered his former clinic’s name as a domain and filled the site with criticism, he handed the Ninth Circuit one of the cleanest vehicles it would ever get for separating the strands of trademark law that govern domain names. In Bosley Medical Institute, Inc. v. Kremer, 403 F.3d 672 (9th Cir. 2005), decided April 4, 2005, a panel of Judges T.G. Nelson, Silverman, and Tallman, in an opinion by Judge Silverman, held that a noncommercial gripe site cannot support Lanham Act infringement or dilution claims, because both require commercial use of the mark. At the same time, the court held that the Anticybersquatting Consumer Protection Act contains no such requirement, and it revived Bosley’s cybersquatting claim for a remand focused on the statute’s actual gatekeeper: bad faith intent to profit.

Two decades on, Bosley remains the framework decision for every trademark.com criticism-site dispute: it tells mark owners which doors are closed, and it gave the ACPA an independent life that does not depend on the defendant selling anything at all.

At a glance

Case: Bosley Medical Institute, Inc. v. Kremer, 403 F.3d 672 (9th Cir. 2005), Nos. 04-55962, 04-57059
Decided: April 4, 2005 (argued March 8, 2005); panel of T.G. Nelson, Silverman, and Tallman, JJ.; opinion by Silverman, J.; affirmed in part, reversed in part, and remanded
Holding: Use of another’s mark as the domain name of a noncommercial criticism site is not actionable as trademark infringement or dilution, which require use in connection with a sale of goods or services, but the ACPA has no commercial use element, so a cybersquatting claim turns on bad faith intent to profit.
Status: Final. On remand the parties settled in August 2007, with Kremer retaining one of the disputed domains and surrendering the other after a year; the case was dismissed with prejudice.

A snowball rolled at Bosley’s headquarters

Michael Kremer underwent a hair restoration procedure at Bosley Medical Institute and was unhappy with the result. On January 7, 2000, he registered bosleymedical.com, and later bosleymedicalviolations.com. Five days after the registration, he appeared at Bosley’s Beverly Hills office and delivered a letter to Dr. Bosley warning, in substance, that once his story spread over the internet it would have a snowball effect and be too late to stop.

The sites that followed were pure criticism: they catalogued Kremer’s grievances and reported on a 1996 Los Angeles County District Attorney investigation into Bosley’s business practices. Crucially, they carried no advertising, sold no goods or services, and linked to no competitor of Bosley. Kremer earned no revenue from the site, and the district court record reflects that it disclaimed any affiliation with Bosley and linked to Bosley’s own website.

Bosley sued in June 2001 in the Northern District of Illinois, asserting federal trademark infringement, dilution, unfair competition, and cybersquatting, plus state law claims. Kremer won a transfer to the Southern District of California, where the district court granted him summary judgment across the board: no commercial use meant no infringement, no dilution, and, in the district court’s view, no ACPA claim either. The court also struck Bosley’s state claims under California’s anti-SLAPP statute, teeing up an attorneys’ fee award. Bosley appealed.

Commercial use: the threshold the Lanham Act never crosses

The infringement and dilution rulings turned on statutory text that predates the internet. Sections 32 and 43(a) of the Lanham Act, 15 U.S.C. §§ 1114 and 1125(a), reach uses of a mark “in connection with” the sale, offering, distribution, or advertising of goods or services. The dilution statute as it then stood, the Federal Trademark Dilution Act, expressly required “commercial use in commerce” of the famous mark. The court treated the inquiry as effectively the same for both: was Kremer’s use commercial?

It was not. Kremer sold nothing, advertised nothing, and competed with no one. Bosley pressed a more creative theory: Kremer’s site linked to a page that in turn linked to a newsgroup where competitors advertised, and to his lawyer’s website, so commerce lurked somewhere downstream. The Ninth Circuit rejected the argument as far too attenuated. A roundabout chain of links to third parties’ commercial content does not transform a critic’s own noncommercial speech into a commercial use of the plaintiff’s mark. The court distinguished its own decision in Nissan Motor Co. v. Nissan Computer Corp., 378 F.3d 1002 (9th Cir. 2004), where the core function of the defendant’s site was to advertise his own computer business, and from Taubman Co. v. Webfeats, 319 F.3d 770 (6th Cir. 2003), where the defendant placed links to commercial businesses directly on the site. It cited the Fifth Circuit’s TMI, Inc. v. Maxwell, 368 F.3d 433 (5th Cir. 2004), for the proposition that the commercial use requirement is not satisfied where the defendant’s site had no outside links.

Bosley also argued that Kremer’s use was in connection with Bosley’s goods and services because it prevented users from reaching the clinic, the theory the Fourth Circuit accepted in People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359 (4th Cir. 2001). The Ninth Circuit respectfully disagreed with that rationale, observing that the PETA defendant’s site had in any event linked to more than 30 commercial operations, and that PETA’s reading would sweep almost all critical consumer commentary into the Lanham Act. Judge Silverman distilled the point into the opinion’s most quoted line: “Bosley cannot use the Lanham Act either as a shield from Kremer’s criticism, or as a sword to shut Kremer up.” Summary judgment for Kremer on infringement and dilution was affirmed.

The ACPA is a different statute with a different trigger

Then the opinion pivoted. The district court had dismissed Bosley’s cybersquatting claim for the same reason it dismissed the others: no commercial use. That, the Ninth Circuit held, was error, because the ACPA, 15 U.S.C. § 1125(d), enacted in 1999, does not contain a commercial use element. The statute imposes liability on one who registers, traffics in, or uses a domain name that is identical or confusingly similar to a distinctive mark, with a “bad faith intent to profit” from the mark. Congress listed nine nonexclusive bad-faith factors, one of which, § 1125(d)(1)(B)(i)(IV), asks whether the registrant made bona fide noncommercial or fair use of the mark at the site. If noncommercial use categorically defeated the claim, that factor would be meaningless, and courts try to avoid readings that render part of a statute superfluous.

The court also invoked the statute’s purpose. Cybersquatters classically register a mark-bearing domain and hold it hostage, making no commercial use of anything while they wait to be paid. As the opinion put it, “Allowing a cybersquatter to register the domain name with a bad faith intent to profit but get around the law by making noncommercial use of the mark would run counter to the purpose of the Act.” Noncommercial use, in other words, is evidence bearing on bad faith; it is not an element-level exit from the statute.

Because discovery on Kremer’s intent had never been completed, and the issue fell outside the summary judgment motions as framed, the court reversed and remanded the ACPA claim. It also reversed the anti-SLAPP order striking Bosley’s state claims, since that ruling rested on the now-unsettled premise that Bosley’s suit lacked any merit. The panel was careful to say what it was not deciding: whether Kremer actually harbored a bad faith intent to profit, from his snowball letter or anything else, was a question for remand.

What the remand produced

The endgame was quieter than the opinion. Back in the Southern District of California, the district court denied Kremer’s renewed motions in March 2007 and ordered discovery to proceed. In August 2007 the parties settled and the case was dismissed with prejudice. According to Public Citizen, which represented Kremer, the settlement let him keep one of the two domains at issue and required him to give up the other after a year. No court ever adjudicated whether Kremer had a bad faith intent to profit.

Open questions

Where bad faith begins for critics. Bosley deliberately left open whether a critic who registers trademark.com, as opposed to trademarksucks.com, and signals that the mark owner should worry, crosses into bad faith intent to profit. The settlement means the Ninth Circuit never answered it in this case.
The dilution landscape shifted. Congress replaced the FTDA with the Trademark Dilution Revision Act in 2006, deleting the “commercial use in commerce” phrase but adding an express exclusion for any noncommercial use of a mark, 15 U.S.C. § 1125(c)(3)(C). The result for gripe sites is the same, but the statutory route differs from the one Bosley walked.
How attenuated is too attenuated. The opinion holds that links to pages that link to commerce are too roundabout, without drawing a precise line. Sites with donation buttons, affiliate links, or ad-supported hosting still generate litigation over which side of Bosley and Nissan they occupy.
Domain marketplaces and re-registration. Bosley predates the modern aftermarket; how its bad-faith framework applies to domain investors who never post content remains contested under later cases such as GoPets Ltd. v. Hise, 657 F.3d 1024 (9th Cir. 2011).

Implications for brands and businesses

Infringement and dilution claims against pure criticism sites will fail. If the registrant sells nothing, hosts no ads, and links to no competitors, §§ 32 and 43(a) do not reach the use, and the noncommercial-use exclusion shelters it from dilution claims. Demand letters premised on those theories invite fee exposure and bad press.
The ACPA is the live theory, so build the bad-faith record. Offers to sell the domain, patterns of registering others’ marks, false contact information, and pre-registration threats all feed the § 1125(d)(1)(B)(i) factors. Kremer’s snowball letter is exactly the kind of fact that keeps a cybersquatting claim alive past summary judgment.
Critics should mind the commercial trapdoors. A single ad unit, affiliate link, or direct link to a competitor can convert a protected gripe site into a commercial use under Nissan and Taubman. Registering the bare mark as the domain, rather than a plainly critical variant, also raises the litigation risk even when the claim ultimately fails.
Defensive registration remains the cheapest fix. Registering the exact mark and close variants costs a rounding error compared to six years of litigation that ends in a split-the-domains settlement.

Frequently asked questions

Can a company sue a gripe site that uses its trademark as a domain name? Not for infringement or dilution if the site is genuinely noncommercial. Under Bosley, those Lanham Act claims require use in connection with a sale of goods or services, and pure criticism with no advertising, sales, or competitor links does not qualify. A cybersquatting claim under the ACPA remains available, but only if the registrant had a bad faith intent to profit from the mark.

Why did the ACPA claim survive when the infringement claim failed? Because the two statutes have different elements. Sections 32 and 43(a) of the Lanham Act reach only commercial uses of a mark, while the ACPA, 15 U.S.C. § 1125(d), asks whether the defendant registered, trafficked in, or used a domain name with a bad faith intent to profit. The Ninth Circuit held that reading a commercial use requirement into the ACPA would let cybersquatters evade the statute by parking marks in noncommercial sites.

What happened to the bosleymedical.com domain after the case? The Ninth Circuit remanded the cybersquatting claim for discovery on bad faith intent to profit. On remand the district court denied Kremer’s motions in March 2007, and the parties settled in August 2007. According to Public Citizen, which represented Kremer, he kept one of the two domains at issue and gave up the other after a year, and the case was dismissed with prejudice.