Tag Archives: infringement

Court denies motion to dismiss AdWords trademark infringement case

FragranceNet.com, Inc. v. Les Parfums, Inc., — F.Supp.2d —, 2009 WL 4609268 (E.D.N.Y. December 8, 2009)

FragranceNet.com sells perfume online. It sued several of its competitors, claiming trademark infringement and other causes of action like unfair competition and unjust enrichment, over the defendants’ alleged purchase of variations of the term “fragrancenet” to trigger sponsored links on Google results pages. These sponsored links allegedly drove traffic to defendants’ websites.

The defendants moved to dismiss the complaint. Had this case been filed a year ago, the defendants may have argued that the case should be dismissed because the purchase of keywords to trigger sponsored links was not “use” of the marks. But in light of the Rescuecom decision from this past spring, defendants were constrained to argue differently.

They claimed that the case should be dismissed because the purchased keywords are generic terms and therefore not protectible as trademarks. The court rejected this argument, holding that it was inappropriate to determine whether the marks are generic at the motion to dismiss stage because plaintiff had adequately stated plausible trademark claims in its complaint. The question of genericness is better considered with some actual facts.

Photo courtesy Flickr user hslo under this Creative Commons license.

Trademark infringement and false designation claims not subject to heightened pleading standard

Court also foreshadows that if all they’re talking about is metatags, there won’t be much of a case.

Indiaweekly.com, LLC v. Nehaflix.com, Inc., 2009 WL 189867 (D. Conn. January 27, 2009)

In moving to dismiss claims brought against it for trademark infringement and false designation of origin under 15 U.S.C. Secs. 1114(1) and 1125(a), Indiaweekly.com, LLC claimed that the counterplaintiff Nehaflix.com had failed to allege sufficient facts to meet the standard of Fed. R. Civ. P. 9(b). That rule requires that “[i]n alleging fraud . . . a party must state with particularity the circumstances constituting fraud . . . .”

Bollywood mudflap

The U.S. District Court for the District of Connecticut rejected Indiaweekly.com’s assertion that such claims were subject to Rule 9′s heightened pleading standard. Nehaflix.com’s allegations that Indiaweekly.com placed Nehaflix’s trademark on Indiaweekly.com to draw in search traffic survived the motion to dismiss. It was plausible that potential Nehaflix customers, when searching for the term “Nehaflix” would, upon being directed to another site containing the term and selling competing goods, conclude that the two businesses were related when in fact they were not.

It is important to note that the court assumed for the sake of the motion to dismiss that the allegations that the Nehaflix mark “appeared” on Indiaweekly.com meant that the mark was visible when viewing the site and not merely in metatags. The court nodded to S&L Vitamins v. Australian Gold, Inc., 521 F.Supp.2d 188 (E.D.N.Y. 2007), which held that mere metatag use was not “use in commerce” for purposes of the Lanham Act.

Photo courtesy Flickr user Meanest Indian under this Creative Commons license.

Should ISPs get paid to respond to DMCA takedown notices?

CNET News is running a story about how Jerry Scroggin, the owner of Louisiana’s Bayou Internet and Communications, expects big media to pay him for complying with DMCA takedown notices. No doubt Scroggin gets a little PR boost for his maverick attitude, and CNET keeps its traffic up by covering a provocative topic. After all, people love to see the little guy stick it to the man.

Here is something from the article that caught my attention:

Small companies like [Bayou] are innocent bystanders in the music industry’s war on copyright infringement. Nonetheless, they are asked to help enforce copyright law free of charge.

A couple of assumptions in this statement need addressing. I submit that:

ISPs are not innocent bystanders.

As much as one may disdain the RIAA, the organization is enforcing legitimate copyright rights. Though an ISP may have no bad intent to help people infringe (i.e., the “innocent” part), infringing content does pass through their systems. And few would disagree that the owner of a system is in the best position to control what happens in that system. So unless we’re going to turn the entire network over to a government, we must rely on the ISPs at the lower parts of the web to comply with the DMCA. They owe a duty. It’s in this way that the ISPs are anything by innocent bystanders in the copyright wars. In fact, they’re soldiers (albeit perhaps drafted).

Though the administrative burdens of DMCA compliance fall on the ISPs, the work is not undertaken for free.

The safe harbor that ISPs enjoy in return for compliance is a huge compensation. An entity in the safe harbor has more certainty that a suit for infringement would be unsuccessful. Were there more doubt about the outcome, there would be more litigation. More litigation equals more cost. And I guarantee you that those litigation costs would dwarf the administrative costs associated with taking down content identified in a notice. So substract the administrative costs from the hypothetical litigation costs, and there you have the compensation paid to ISPs for compliance.

What do you think?

Pirate Christmas photo courtesy Flickr user Ross_Angus under this Creative Commons license.

Statutory damages for copying competitor’s catalog on website

Silver Ring Splint Co. v. Digisplint, Inc., 2008 WL 2478390 (W.D.Va. June 18, 2008)

Silver Ring and Digisplint are competitors in a niche industry, each producing and selling fine jewelry quality finger splints made of gold and sterling silver. Silver ring sued Digisplint for copyright infringement alleging that Digisplint copied text from Silver Ring’s 1994 catalog, and posted that text on Digisplint’s website.

Before trial, the court awarded summary judgment to Silver Ring on the question of liability for copyright infringement. The question of damages proceeded to trial. Finding that “nearly identical and very similar text comprise[d] substantial portions of both [works],” and that the similarities were “obvious and persuasive,” the court awarded Silver Ring $30,000 in statutory damages pursuant to 17 U.S.C. §504(c)(1). It found that Digisplint’s copying was willful, and although Digisplint reaped no profits from the infringement, the award was to serve as a deterrent to future conduct of the sort.

Digisplint had filed a counterclaim pursuant to the Anticybersquatting Consumer Protection Act (ACPA) over Silver Ring’s registration of digisplint.com. The court found in favor of Digisplint on this claim, and entered an injunction against any further registration of a confusingly similar domain name. But because Silver Ring registered the domain name in 1998, prior to the enactment of the ACPA, Digisplint was entitled to no money damages, only an injunction.

No initial interest confusion in metatag and sponsored listing case

Designer Skin, LLC v. S & L Vitamins, Inc., No. 05-3699, 2008 WL 2116646 (D. Ariz. May 20, 2008)

It’s always a bit nerve wracking to write about decisions when I know that counsel of record is probably going to be reading the post. That’s the situation with the recent Designer Skin v. S & L Vitamins case. Law blogger Ron Coleman (whom I consider a friend though we’ve never met) is defense counsel in the case, and he has been a longtime supporter of Internet Cases with encouragement back when I started in 2005, and with frequent links to here from his blog Likelihood of Confusion.

Ron’s good reputation is in apparent proportion to his lawyering skills, as his client S & L Vitamins was largely victorious in summary judgment proceedings in a trademark infringement matter before the U.S. District Court in Arizona. The case exemplifies a modern issue concerning the use of trademarks on the Internet.

Plaintiff Designer Skin sells indoor tanning products. Designer Skin is pretty selective about who it allows to resell its goods. Defendant S & L Vitamins – a web-based reseller – is not on Designer Skin’s list of permitted resellers. But S & L sells the products anyway. And it gets traffic to its website in part by using Designer Skin’s trademark in metatags, in page HTML, and as a keyword to trigger sponsored search results.

Designer Skin sued S & L asserting a number of causes of action, including trademark infringement. The parties cross moved for summary judgment. One main issue was whether S & L’s conduct resulted in “initial interest confusion” a la Brookfield Comm. Inc. v. West Coast Entertainment Group, 174 F.3d 1036 (9th Cir. 1999). The court ruled in favor of S & L, holding that Designer Skin’s arguments for initial interest confusion failed as a matter of law.

The court ascertained that Designer Skin was arguing initial interest confusion based on (1) S & L’s use of Designer Skin’s marks in metatags, HTML and as keywords, (2) higher placed search results (presumably because of the metatags and use of the mark in HTML), and (3) the appearance of Designer Skin’s marks on S & L’s web pages.

The first argument – said the court – misstated the law. The mere fact that S & L used the marks in this way was not enough for initial interest confusion. Missing was the notion of “bait and switch”. The court emphasized that “[d]eception . . . is essential to a finding of initial interest confusion.” When web users clicked on links to S & L’s pages which indicated Designer Skin products were being sold, they were taken to pages which, not deceivingly, sold Designer Skin products.

The second argument for initial interest confusion failed essentially because it wasn’t plausible. Even if Designer Skin had presented evidence (which the court found it hadn’t) that S & L was showing up higher in search results for “Designer Skin,” only “the naive few” would be deceived. And fooling any less than an appreciable number of users would not be enough for the claim to survive.

As for the third argument, the court found it impossible for initial interest confusion to arise based on what appeared on the site. A searcher could not be tricked into initially visiting a site by the look of the site itself – by that time he or she would already be there.

In short, the court held that because there was no deception on the part of S & L, there could be no initial interest confusion. S & L was using Designer Skin’s marks to truthfully inform searchers what they could find at the S & L site – authentic Designer Skin products.

The vexing linkage between access and protection in DMCA anticircumvention analysis

A couple of days ago David Donoghue wrote about the recent case of Nordstrom Consulting, Inc. v. M&S Technologies, Inc., No. 06-3234, 2008 WL 623660 (N.D. Ill. March 4, 2008). Dave’s post gives a very thorough treatment of all aspects of the case, which involve primarily allegations of infringement of the copyright in software.

The case also involved a claim of circumvention under the Digital Millennium Copyright Act, at 17 U.S.C. 1201(a). The court granted the defendants’ summary judgment motion on this claim.

The dispute arose from a rather typical set of facts. The parties had collaborated on the development of some software. Along the way the principal author of the software became dissatisfied and parted ways. Litigation ensued over the parties’ ownership and use of the source code.

Before plaintiff Nordstrom officially severed ties, he went on vacation. While he was gone, one of the defendant’s employees (Butler) sent Nordstrom an email saying that Butler needed access to the source code which was stored on a computer there in the office, in order to help out a customer. Nordstrom didn’t respond for several days, and in the meantime, Butler disabled the BIOS password for the computer.

Nordstrom sued under Section 1201 over this disabling of the password. The court relied heavily on the Federal Circuit’s decision in Chamberlain Group, Inc. v. Skylink Technologies, Inc., 381 F.3d 1178 (Fed. Cir. 2004) to conclude that there was no violation of Section 1201′s anticircumvention provisions.

The Chamberlain case draws a necessary connection between circumvention and infringement. And the presence of this connection is the vexing part of the analysis. A quick reading of Section 1201 does not reveal the link.

But the Chamberlain court held that Section 1201′s prohibition on circumvention does not give rise to a new property interest, only a new cause of action, one that goes after circumvention of methods controlling access to protected works. One can’t pursue a defendant just for circumvention in a vacuum, so to speak. The circumvention has to bear some “reasonable relationship to the protections that the Copyright Act otherwise affords copyright owners.” Chamberlain, 381 F.3d at 1202. In other words, without infringement or the facilitation of infringement arising from the cirumvention, a cause of action under 1201 does not arise. The linkage is one between access and protection.

The holding of the Nordstrom case as to the DMCA claim picks up on this link between access and protection. Summary judgment on the circumvention claim was proper because the plaintiff could not show that Butler’s disabling of the BIOS password protection on the computer storing the source code enabled any infringement. The evidence before the court was that Butler accessed the code to fix a problem on behalf of an authorized licensee of the software. Because of the license, there could be no infringement. Without any connection to infringement, under the teaching of Chamberlain, a cause of action for circumvention could not be sustained.

1-800-SKI-VAIL found not to infringe VAIL ski resort mark

Vail Associates, Inc. v. Vend-Tel-Co., Ltd., — F.3d —-, 2008 WL 342272, (10th Cir. February 7, 2008)

[Brian Beckham is a contributor to Internet Cases and can be contacted at brian.beckham [at] gmail dot com.]

Vail Associates, owner of the incontestable service mark VAIL (which is used in connection with a wide variety of skiing and resort-related services), sued Vend-Tel-Co, the operator of the “1-800-SKI-VAIL” phone number, for infringement. After trial, the District Court entered judgment in Vend-Tel-Co’s favor, and Vail Associates sought review.

The Court of Appeals for the Tenth Circuit affirmed the lower court’s judgment, holding that use of Vend-Tel-Co’s “1-800-SKI-VAIL” mark (registered in 2001) was not likely to cause confusion with Vail Associates’s VAIL mark (registered in 1989).

Key to the appellate court’s decision was witness testimony from the proceedings. Vail Associates’s vice-president of marketing and sales testified that customers dialing the phone number would mistakenly think they were reaching Vail Associates, but acknowledged “hundreds of uses of the letters V-A-I-L in the names of [other] businesses in the Vail Valley.” As for the descriptive term “ski,” testimony from another witness revealed ownership of no less than 23 vanity phone numbers incorporating that term. Also important was the testimony of a travel agent who fielded calls to the number 1-800-SKI-VAIL. She testified that the typical caller would ask questions of a general nature (e.g., about products, directions, lift prices, ski conditions, etc.).

Vend-Tel-Co’s main witness, trademark attorney Kenneth Germain, testified that in the context of ski resorts, the VAIL mark was a “world renowned” strong mark, but that in the context of goods and services offered by businesses in the Vail area, it was weak (being geographically descriptive). Germain further testified that he did not deduce an intent to infringe (Vend-Tel-Co’s advertising materials promoted area businesses), and that use of the VAIL mark was a necessary, good faith component of the Vend-Tel-Co’s marketing activities.

Viewing the evidence in the light most favorable to the Vail Associates, the Court of Appeals was satisfied that the District Court did not err in finding that consumers perceive the VAIL mark as referring to a particular geographic location, namely, a Colorado skiing destination. It held that Vail Associates failed to prove consumers associate the word “Vail” exclusively with its resort services.

As to the likelihood of confusion factors, the court found none favored Vail Associates. It observed that (1) Vail Associates offered little evidence of actual confusion, and the testimony reflected that consumers recognized Vail as a destination, not a specific service provider, (2) despite some showing of secondary meaning, the VAIL mark was found to be “not particularly strong”, (3) Vail Associates did not prove that in creating the phone number Vend-Tel-Co intended to deceive the public, trade on Vail Associates’s goodwill or reputation, or infringe its mark, (4) the marks were not similar in sight, sound, or meaning, (5) the parties’ services were not similar, but rather “symbiotic”, and were not marketed in a similar manner, or with similar connotations, and (6) consumers exercised great care in purchasing Vail Associates’s services which the court termed “first class accommodations at first class prices” in contrast to dialing a toll-free number.

The dissenting opinion offered that: (1) the marks were confusingly similar (indeed, the additional “1-800-SKI” elements furthered consumer confusion), (2) Vend-Tel-Co intended to trade on the goodwill and reputation of Vail Associates, (3) there was ample testimonial evidence of actual confusion (namely the travel agent’s testimony), (4) the services and their marketing “appeal to exactly the same class of consumers,” (5) despite care exercised by consumers in purchasing ski packages, there was significant, uncured initial interest confusion, and (6) VAIL is an incontestible descriptive mark whose strength was proven by evidence of secondary meaning, and that Vend-Tel-Co did not take VAIL out of the ski resort services context; instead, it emphasized that context with their choice of mark.

Alienware goes after “free” computer offer

Alienware Corporation v. Online Gift Rewards, No. 08-1560, S.D.N.Y. (Filed February 14, 2008).

High-performance computer manufacturer Alienware has filed suit against an online marketer alleging trademark infringement, dilution, and other theories of unfair competition. Alienware claims that the defendant has “disseminated mass unsolicited electronic solicitations” and posted Web pages offering “free” Alienware laptops, when in reality, one has to perform some “onerous” tasks to get them.

According to Alienware, after accepting the offer, users must purchase a specified amount of goods from various other sites. And this obligation is not clearly communicated, but is “presented to the consumer, if at all, only after he or she expends significant time and effort in responding to inquiries and navigating the multiple prompts.”

One may be tempted to speculate that the defendant in this case could raise some kind of defense based on fair use of the trademark. (How could you let people know what you’re offering unless you tell them; and giving away actual Alienware computers also seems like it could be protected under the first sale doctrine.)

And Alienware may have anticipated this defense, by alleging that it’s only “Alienware” serving as the source identifier for the offer, and “[t]here is no other recognizable or identifiable indication of source.” The defendant is an entity called “Online Gift Rewards.” Alienware claims that the designation is “likely to be perceived as a generic description of the offering rather than a source indicator.”

[Download the complaint]

Sponsored listing trademark action survives motion to dismiss

T.D.I. Intern., Inc. v. Golf Preservations, Inc., (Slip Op.) 2008 WL 294531 (E.D.Ky. January 31, 2008)

Plaintiffs T.D.I. International and XGD Systems sued their former employee Samson Bailey and his company Golf Preservations for, among other things, violation of the Lanham Act, 15 U.S.C. §1051 et seq. Plaintiffs alleged that defendants’ purchase of plaintiffs’ trademarks to trigger competitive advertising on Google and Yahoo was trademark infringement and unfair competition.

Defendants moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss the complaint, but the court denied the motion. It found that under the Twombly standard, plaintiffs had alleged facts sufficient to state a claim to relief that was plausible on its face.

Predictably, defendants had argued that the purchase of plaintiffs’ marks as keywords did not constitute a “use” of the marks as provided in the Lanham Act at 15 U.S.C. § 1127. They relied heavily on Interactive Products Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d 687, 695 (6th Cir.2003) (a case involving the appearance of a mark in the post-domain path of a URL), and 1-800 Contacts, Inc. v. When U.com, Inc., 414 F.3d 400 (2d Cir.2005) (involving pop-up advertisements triggered by page content and user activities).

Plaintiffs relied on a number of cases to argue that the purchase of keywords was a use as defined in the Lanham Act, and also (correctly) asserted that the scenario of buying keywords to trigger advertising is notably different from use in a post-domain URL (as in Interactive Products) and unseen triggering of pop-up advertisements (as in 1-800 Contacts). Given the split of authority and the corresponding “uncertain state of the law on the specific issue presented in [the] case,” the Court sided with plaintiffs and found that defendants’ arguments were not sufficient to warrant dismissal.

Anonymous alleged infringer identified with little substantive inquiry into infringement claim

[In re Subpoena Issued Pursuant to the Digital Millennium Copyrigt Act to: 43SB.com, No. 07- 6236, 2007 WL 4335441 (D. Idaho, December 7, 2007).]

When the general counsel for Melaleuca, Inc. saw some negative content someone had posted about the company on the Web site 43rdstateblues.com, he sent a cease and desist letter demanding the content be removed. The letter, however, did not accomplish its intended purpose. Instead, the site owner posted the entire letter.

Melaleuca did not give up, but just adapted its strategy. It served a DMCA subpoena [see 17 U.S.C. §512(h)] on the site, seeking to identify the person who posted the letter “so that [Melaleuca] might seek redress for copyright infringement.” Melaleuca claimed that its copyright rights in the letter were infringed when it was posted online. (Claiming copyright in cease and desist letters is not a new tactic.  See, e.g., here and here.) 

The website moved to quash the subpoena, asserting, among other things, that the letter was not subject to copyright protection, and that the failure by Melaleuca to establish a prima facie case of copyright ownership was fatal to the subpoena.

The court denied the motion to quash. The Web site had argued that Melaleuca could not own a copyright in the letter, according to 17 U.S.C. 102(b)’s exclusion of “any idea, procedure, process, system, method of operation, concept, principle or discovery” form copyright protection. But the court rejected that argument.

Declining to “go into an in-depth analysis of the merits of a copyright infringement claim in determining whether to quash [the] subpoena,” the court found that Melaleuca’s copyright registration in the letter was sufficient to establish ownership of a valid copyright.  As for alleged copying, the court found that posting of the entire letter was sufficient.

There are a couple of interesting observations to be made from this decision.  First, unlike cases in which plaintiffs seek to uncover the identity of anonymous defendants accused of defamation [see here], this court gave – relatively speaking – little inquiry into the merits of the plaintiff’s case.  Perhaps it felt that such an analysis was not necessary given that the Copyright Office had already determined copyrightable subject matter to exist (when it issued the registration certificate).

A second interesting question arises when one considers how the court might have ruled had the defendant asserted fair use as a basis for the motion to quash. (Doesn’t it seem like posting a cease and desist letter on the Internet, ostensibly for eliciting public ridicule, is a transformative use?) Given the fact intensive inquiry of a fair use analysis, the court would have probably reached the same conclusion, if anything to put off the factfinding until later.  But would a court do that in other cases where the offending, anonymous use is more obviously fair?