Internet Library of Law
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All Decisions - Internet Library of Law and Court Decisions

Adult Entertainment - Updated November 01, 2007

Court holds that the Communications Decency Act (“CDA”), 47 U.S.C. Section 230, immunizes operator of online adult dating service from claims arising out of a user’s false statement in her user-profile that she was over 18.  Relying on this profile, plaintiff met and had consensual sexual relations with a minor, for which he was subsequently arrested.  Plaintiff brought this suit, seeking redress.  Importantly, the contract between the parties expressly provided that SexSearch.com does not “assume any responsibility for verifying the accuracy of the information provided by other users of the Service.”  Because plaintiff sought to hold SexSearch.com, a provider of Interactive Computer Services, liable for its publication of content authored by another, his claims, whether couched as breach of contract, fraud or negligent misrepresentation, were barred by application of the CDA.  Plaintiff’s breach of contract claim similarly failed because SexSearch did not assume responsibility for verifying the age of users.

Court issues preliminary injunction against Cybernet Ventures, which operates an Age Verification Service, based on the use by web sites operated by third parties of various images in which plaintiff held the copyright, or featuring a model who had assigned her right of publicity to plaintiff. 

Cybernet Ventures operates the Age Verification Service "Adult Check."  Participating web sites put a script on their site which direct first time users to Cybernet, who sells them access to the Adult Check family of sites.  The user is thereafter free to visit Adult Check sites for a set period of time.  The fees generated by this user are paid to Cybernet, who splits them with the web site which sent the user to Cybernet.  To assist the user in finding Adult Check sites to his liking, Cybernet provides both a series of links as well as a search engine.  It also advertises its network. 

Cybernet takes an active interest in the content of Adult Check sites, employing a staff of 12 to review the site both before it is admitted to the Adult Check family, and periodically thereafter.  The content of the site is reviewed by Cybernet to prevent the inclusion of prohibited images.  Cybernet also provides comment on the site's layout.  The images on each site, however, are not provided by Cybernet.  Instead, each site is run by a third party, who is responsible for locating the images, arranging to have the site hosted, and advertising the site.

Perfect 10, which holds the copyright in a number of images of nude women made available to the public both on its web site and in a magazine, brought this suit, charging that web sites in the Adult Check family contained over 10,000 images in which Perfect 10 held the copyright. 

The court determined that Perfect 10 was likely to prevail on its claims contributory and vicarious copyright infringement against Cybernet, as well on its claims of unfair competition under Cal. Bus. and Professions Code Section 17200.  The court held that Perfect 10 was likely to prevail on its contributory infringement claim because Cybernet was likely to be held to have the requisite notice of the infringing activities at issue, and to have materially contributed to this infringement by its operation of the Age Verification Service, and particular its collection of fees for, and advertising of the web sites in question.

The court further held that Perfect 10 was likely to prevail on its vicarious infringement claim, because Cybernet had the ability to control the web sites, as evidenced by the review of its content it conducted, and received a direct financial benefit from the presence on these web sites of the infringing images.  Lastly, the court held that Perfect 10 was likely to prevail on its unfair competition claim, because Cybernet was likely to be held to have aided and abetted a violation of various models' right to publicity, again by virtue of its knowledge of infringement, and contributed thereto by virtue of its operation of the AVS system.

The court further held that Cybernet was unlikely to be able to avoid this liability under the safe harbor provisions of the Digital Millennium Copyright Act, because the court was likely to hold both that the DMCA policy Cybernet adopted failed to comply with the DMCA, and that Cybernet failed to reasonably implement such a policy, or terminate repeat infringers.  Cybernet was also unlikely to be able to seek the protections of the DMCA because it received a financial benefit directly attributable to infringing activity it had the right and ability to control.

The court accordingly issued a preliminary injunction, which prohibited Cybernet from utilizing or linking to the images in question.  The injunction further obligated Cybernet to stop linking to sites containing the images in question where Cybernet had either notice thereof, or knew or should have known of the presence of the images, under circumstances specified in the injunction.  The injunction also obligated Cybernet to undertake reviews both of sites seeking to become members of the Adult Check network, and of designated existing sites, to ascertain whether they were using any of the images at issue, and to bar such new sites from entering the network without proper rights documentation.  The scope of this injunction is discussed in greater depth in the accompanying "in depth" analysis of this decision.

Plaintiffs operate the Voyeurdorm.com web site, at which subscribers, for a price, can view the activities of five women in a house located in Tampa, Florida, including those that occur in bedrooms, bathrooms and showers. Reversing the decision of the District Court, the United States Court of Appeals for the Eleventh Circuit held that plaintiffs' operation of this web site does not constitute a violation of the Tampa City Code, which prohibits the operation of an adult entertainment establishment in the residential neighborhood in which the house at which plaintiffs' filming activities took place is located.

Advertisements Online - Updated April 04, 2008

This section of the Internet Law Library contains a host of court decisions that address the legality of the use of another's trademark to trigger the display of various forms of online advertising, typically marketing a competitor's product, including sponsored links displayed on search engine results pages as part of a keyword advertising program, and pop-up ads that are displayed in a separate window on the user's computer screen.  Among other issues, these cases address whether such use of a party's trademark constitutes a use in commerce, or a trademark use of the trademark sufficient to give rise to trademark infringement claims. 

Reversing the court below, the Second Circuit dismisses trademark infringement claims brought by a mark holder and website operator against a distributor of pop-up ads.  Such claims fail because "as a matter of law, [defendant] WhenU does not 'use' [plaintiff] 1-800's trademarks within the meaning of the Lanham Act, 15 U.S.C. § 1127 when it (1) includes 1-800's website address … in an unpublished directory of terms that trigger delivery of WhenU's contextually relevant advertising to [computer] users; or (2) causes separate, branded pop-up ads to appear on a [computer] user's computer screen either above, below, or along the bottom edge of the 1-800 website window."

The absence of such a use by WhenU of plaintiff's trademarks is fatal to 1-800 Contacts' trademark infringement claims, and mandated reversal of the District Court's grant of preliminary injunctive relief.  The District Court had enjoined WhenU from including the domain name of plaintiff's website in its unpublished directory, or causing pop-up ads to be displayed when that domain name is entered into the URL bar of a web browser, or as a search term.

In reaching this result, the Second Circuit agreed with the decisions of two other district courts - the Eastern District of Virginia in U-Haul Inc. v. WhenU.com Inc., 279 F. Supp. 2d 723 (E.D.Va. 2003) and the Eastern District of Michigan in Wells Fargo & Co., et al. v. WhenU.com Inc., 293 F.Supp.2d 734 (E.D.Mich. 2003) - each of which similarly held that WhenU's activities did not infringe the respective plaintiffs' trademarks because such activities did not constitute the requisite use of the plaintiffs' respective marks.

Finding plaintiff likely to prevail on its claims of trademark infringement, the District court issued a preliminary injunction, enjoining the pop-up advertiser WhenU from delivering ads which are triggered by a consumer's entry of plaintiff's domain name in either his browser or a search engine, or from including plaintiff's domain name in defendant's proprietary directory, which is used to identify the ads to be delivered to consumers.  Defendant WhenU delivered pop-up ads of plaintiff's competitor to computer users when they typed plaintiff's domain name into either their browser or a search engine.  The court found such conduct likely to cause actionable "initial interest confusion" and to allow defendants to divert consumers seeking plaintiff's products to their own offerings, and thereby unfairly profit from plaintiff's goodwill.  Applying the eight factor Polaroid test, the court found that consumers were likely to be confused by defendants' actions, despite the branding of defendant's advertisements as "a WhenU offer."  As such, the court held that plaintiff was likely to prevail on its trademark infringement claims, and enjoined defendants from continuing to use plaintiff's domain name as a trigger for the delivery of advertisements. 

The court also held that plaintiff was unlikely to prevail on its copyright infringement claims, which arose out of the delivery of pop-up advertisements in a "window" which partially covered the 'window' in which plaintiff's site appeared on a consumer's computer screen.  The court found that this conduct neither violated plaintiff's right to display its copyrighted website, nor its right to create derivative works therefrom.  This later ruling was premised on the court's determination that defendant's ads are not sufficiently fixed to constitute an infringing derivative work.

The court's holding on plaintiff's trademark infringement claims is at odds with that reached by two other district courts - the District Court for the Eastern District of Virginia in U-Haul International, Inc. v. WhenU.com, 279 F.Supp. 2d 723 (E.D.Va. 2003), and the District Court for the Eastern District of Michigan in Wells Fargo & Co. v. WhenU., 2003 WL 22808692 (E.D. Mich. 2003), each of which refused to issue similar injunctive relief.  As the Southern District of New York court noted, "this Court disagrees with, and is not bound by these findings."

Federal District Court holds that the use of plaintiff's 'JR Cigars' trademark as a keyword in GoTo.com's pay-for priority search engine to trigger the display of advertisements from third party competitors constitutes a "trademark use" sufficient to support trademark infringement and dilution claims under the Lanham Act.  Such trademark use arises out of GoTo.com's acceptance of bids from JR Cigar's competitors for a linkage to plaintiff's marks, by which GoTo trades on the value of those marks.  Such trademark use also arises out of GoTo's act of giving such advertisers priority over 'natural' search results, and thereby steering potential customers away from JR Cigar to its competitors.  Finally, such trademark use arises out of GoTo.com's use of a "Search Term Suggestion Tool" to assist in marketing JR Cigar's marks to its competitors, which tool shows the search traffic attracted by plaintiff's mark.

The Court went on to deny cross-motions by JR Cigar and GoTo.com for summary judgment, holding issues of fact precluded its determination of the likelihood of consumer confusion arising out of such usage of plaintiff's marks, and hence from resolving the trademark infringement claims at issue.

Finally, the Court dismissed claims advanced by plaintiff under both New Jersey's Consumer Fraud Act, N.J.S.A. §56:8 et seq. and the federal Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §6102(b).  The Court held that plaintiff lacked standing to proceed under New Jersey's Consumer Fraud Act, and that the reach of the Telemarketing Act did not extend to the acts at issue in the case at bar.

Court holds that the Communications Decency Act ("CDA") immunizes defendant Craigslist, Inc. ("Craigslist") from liability for publishing housing ads authored by third parties that allegedly violate the Fair Housing Act, 42 U.S.C. § 3604(c) ("FHA").  In reaching this result, the Court held that the immunity afforded internet service providers under section 230(c)(1) of the CDA only extends to claims seeking to hold an ISP liable as a publisher for content authored by third parties, and not to all claims arising out of the ISP's role in giving the public access to such content.  Because the FHA claims at issue were premised on Craigslist's publication of offensive ads authored by third parties, the Court held they were barred by the immunity granted under Section 230(c)(1).

Affirming the District Court below, the Seventh Circuit holds that Craigslist cannot be held liable for violating the Fair Housing Act as a result of its online publication of discriminatory housing ads authored by third parties. To hold Craigslist liable for such conduct would require it to be treated as a ‘publisher’ of these advertisements, which is prohibited by Section 230(c)(1) of the Communications Decency Act.  As a result, the Seventh Circuit affirms the District Court’s grant of summary judgment, dismissing plaintiff’s Fair Housing Act claims against Craigslist.

Court holds that the FTC is likely to prevail on its claims that defendants violated the Federal Trade Commission Act ("FTCA"), 15 U.S.C. § 45(a)(1).  Defendants were charged with downloading to consumers' computers, without their knowledge or consent, both spyware and adware that delivered pop-up advertisements for anti-spyware software, as well as "exploit code" which altered consumers' home pages, and redirected their browsers to websites selected by defendants.  Apparently, this occurred when consumers visited defendants' websites.  The Court found that this conduct likely ran afoul of the FTCA's prohibition against the use of "unfair or deceptive acts or practices" in commerce.  The Court accordingly issued 'temporary injunctive relief' requiring defendants to remove from their websites the software script that allowed defendants to download this software to consumers' computers without their knowledge.

Court holds that defendants, individual officers of co-defendant Search Cactus LLC (“Search Cactus”) can be held personally liable for violations of the Ohio Consumer Sales Practices Act (“OCSPA”) arising out of the transmission by Search Cactus of allegedly misleading and deceptive promotional emails, if “the officer took part in the act, specifically directed the act, or participated or cooperated in the act.”  Because the complaint alleged that the individual defendants approved the content of the promotional emails in question, the Court denied the individual defendants’ motion to dismiss, and allowed plaintiff, a recipient of such emails, to pursue his OCSPA claim against them.

Court denies Google's motion to dismiss trademark infringement and dilution claims asserted by American Blind, which claims arose out of Google's alleged use of American Blind's trademarks to trigger the display of third party advertisements in search engine results for those marks.  The Court declined, on this motion, to hold that use of American Blind's trademarks in this fashion was insufficient to give rise to trademark infringement or dilution claims because it did not constitute a use of the marks to identify the source of goods or services supplied by Google.  The Court did dismiss the tortious interference with prospective business advantage claim asserted by American Blind, holding that American Blind had failed to allege the interference with sufficiently certain economic relationships necessary to proceed with such a claim.

District Court holds that Google’s use of defendant American Blind & Window Factory’s (“ABWF”) trademarks to trigger the display of competitors’ ads as part of Google’s “Ad Words” program is a use of those marks in commerce within the meaning the Lanham Act.  These competitors’ ads are displayed by Google as ‘sponsored links’ and do not contain defendant’s trademarks.  The Court accordingly allows ABWF to proceed with trademark infringement claims arising from such use of its marks, finding that ABWF had presented sufficient evidence of consumer confusion to survive Google’s motion for summary judgment.  This evidence included the results of a survey that reported that 29% of consumers believed that such “sponsored links” were affiliated with the company that owned the trademark the consumer used to initiate his search.  The Court held as a result that whether consumers were in fact confused by “sponsored links” that do not contain defendant’s mark was an issue of fact requiring resolution at trial.

The Court did dismiss so much of defendant’s claims that were premised on its “American Blind” and “American Blinds” marks, which the Court held were descriptive.  Because ABWF did not submit sufficient evidence to establish that these (then) common law marks had developed sufficient secondary meaning to be entitled to protection from Google’s conduct at the time Google began its allegedly infringing activity, the Court dismissed so much of ABWF’s claims as were grounded on the alleged use of its American Blind and American Blinds marks.

Finally, the Court dismissed ABWF’s Federal and California dilution claims, finding that ABWF had failed to submit sufficient evidence that its marks were “famous,” a prerequisite to such dilution claims.  It should be noted that the court designated its decision as “not for citation.”

In a bench ruling, Court holds that the display by search engine giant Google of third party advertisements denominated "sponsored links", which ads are triggered by the entry of a trademark as a search term, does not run afoul of the Lanham Act provided the "sponsored links" do not contain the searched-for trademark.  However, the display of "sponsored links" which do contain the searched-for trademark are likely to confuse consumers and thus was held to run afoul of the Lanham Act.

The Court did not resolve the issue of Google's potential liability for the display of such third party ads, noting that Google had a policy prohibiting its advertisers from displaying "sponsored links" containing trademarks of third parties when such marks are used as the triggering search term.  It should also be noted that the Court's finding that consumers would not be confused by "sponsored links" that did not contain a trademark was based, in large part, on its rejection of survey evidence presented by the mark holder.  The Court rejected this evidence, despite its showing of consumer confusion, because the consumers were simultaneously shown both ads that did and did not contain the trademarked term.

Court denies motion to dismiss brought by search giants Google and Overture, and allows plaintiff GEICO to proceed with trademark infringement and unfair competition claims arising out of defendants' alleged practice of selling advertising triggered by the entry of plaintiff's trademarks as search terms, which advertisements are displayed in the search results generated by such searches.

The Court held that the First Amendment, and the guaranties afforded Google and Yahoo thereunder, barred claims seeking redress as a result of Google and Yahoo's refusal to run advertisements on their search engines they did not wish to run.  In reaching this result, the Court followed decisions that afforded newspapers similar First Amendment protections when challenges arose concerning their refusal to run advertisements they deemed objectionable.  As a result, the Court dismissed claims advanced by plaintiff arising out of the defendants' refusal to run his advertisements, including claims that the defendants defrauded him and engaged in deceptive business practices, violated his First Amendment rights, and failed to meet the duties imposed on those, like inn keepers, engaged in a public calling.

The Court also held that Google and Yahoo were immunized from such claims by the Communications Decency Act, 27 U.S.C. Section 230, which "bars 'lawsuits seeking to hold a service provider liable for its exercise of a publisher's traditional editorial functions - such as deciding whether to publish, withdraw, alter or postpone content.'" It should be noted that plaintiff was proceeding pro se.

In six related lawsuits arising out of the sale by online Canadian-based pharmacies of both branded and generic versions of plaintiff's popular anticholesterol medication "Zocor," the Court granted motions to dismiss trademark infringement claims challenging defendants' purchase of the keyword "Zocor" from search engines to trigger the display of "sponsored links" to defendants' websites.  Such purchases do not constitute the requisite 'use in commerce' of plaintiff's mark necessary to sustain such claims.  The Court also granted defendant CrossBorder's motion to dismiss trademark infringement claims arising out of its use of plaintiff's trademark "Zocor" on its website, at which CrossBorder sold both plaintiff's own product, as well as a generic version described as "generic simvastatin."  "Simvastatin" is the active ingredient in "Zocor."  Because it sold branded Zocor at its website, this was a permitted fair use of plaintiff's mark.

The Court declined at this early stage of the proceedings to dismiss the trademark infringement and dilution claims advanced against the remaining defendants.  Defendants link the "Zocor" mark to web pages at which they sold both branded Zocor and generic products described alternatively as "generic Zocor," "Zocor generic" or "Zocor-generic."  The Court was unwilling on this motion to determine whether such uses were likely to confuse consumers as to the source and sponsorship of these generic products, and hence unwilling to declare them permitted fair uses of plaintiff's trademarks.

Finally, the Court granted the motion to dismiss for want of personal jurisdiction of defendant CanadaDrug's CEO.  This individual, a Canadian resident, was neither alleged to have personally undertaken any actions in the United States in furtherance of the infringing activities at issue, nor been a "primary actor" therein.

In this domain name dispute decided in accordance with the Uniform Domain Name Dispute Resolution Policy (“UDRP”), the Panel holds that respondent Navigation Catalyst Systems Inc. (“NCS”) violated the UDRP by registering 35 domain names that contained complainant’s “myxer tones” mark, or variations thereof, which NCS used as pay-per-click landing pages, featuring advertisements of complainant’s competitors.  In reaching this result, the Panel held that respondent’s use of another’s mark in the domain names of pay-per-click landing pages was not a legitimate use of the domain sufficient to defeat complainant’s claim under the UDRP.  The Panel further held that respondent had acted with the requisite bad faith because it had used complainant’s mark to attract users to  advertisements for its competitors.  This finding was supported by the fact that respondent continued to register offending domain names even after the commencement of the instant UDRP proceeding.  Finally, the Panel rejected respondent’s contention that it did not act in bad faith because it was unaware of complainant’s mark.  The Panel held it was reasonable to conclude that respondent was in fact aware of complainant’s prior use of its mark at the time it registered the domains in question because a trademark and even an internet search would have revealed both a pending trademark application for complainant’s mark, and its use thereof.

Court allows plaintiff to proceed with ‘click-fraud’ claim against defendant Findwhat.com, a search engine operator.  The complaint alleged that to increase its revenues from pay-per-click advertisements posted on its site by plaintiff, defendant Findwhat.com directed defendant Advertising.com to engage ‘bots’ and individuals to click on plaintiff’s advertisements.  This had the effect of increasing defendant Findwhat.com’s revenues, as plaintiff paid it on a pay-per-click basis.  The complaint alleged that defendant Findwhat also bid on pay-per-click search terms, thereby improperly increasing the price plaintiff had to bid therefore to obtain higher placement for such terms.  The Court held that such misconduct could run afoul of the implied covenant of good faith and fair dealing in the parties’ contract, and accordingly allowed plaintiff to proceed with a breach of contract claim against defendant Findwhat.com.

Findwhat.com changed its name to Miva, Inc. in June 2005.

The Court did dismiss the balance of the claims plaintiff asserted.  Its unjust enrichment claims failed because there was a valid contract governing the subject matter of plaintiff’s claim.  Plaintiff’s negligence claims failed because of the absence of any independent duty on the part of defendant Findwhat.com to monitor the source of the ‘clicks’ plaintiff received.  Such an obligation would be governed by the terms of the parties’ contract. 

Finally, plaintiff’s fraudulent concealment claim failed because of plaintiff’s failure to plead such claim with the requisite particularity.  Plaintiff was granted leave to replead this claim, premised on defendant Findwhat.com’s alleged duty to disclose that it was improperly causing a third party to click on plaintiff’s ads so as to increase Findwhat.com’s revenues.  Such a claim, if properly alleged, would serve to support a civil conspiracy claim against defendant Advertising.com, which was the party that allegedly arranged to have a ‘bot’ click on plaintiff’s ads.

Reversing the decision of the court below, the Ninth Circuit Court of Appeals denied the motion of defendants Netscape Communications Corp. ("Netscape") and Excite, Inc. ("Excite")  for summary judgment, and allowed plaintiff Playboy Enterprises Inc. ("Playboy") to proceed with trademark infringement and dilution claims brought as a result of defendants' practice of keying banner ads for 'adult' products to plaintiff's trademarks.  Keying is a practice used by the operators of search engines to generate revenue via the sale of banner ads.  For a fee, the search engine operator will display an advertiser's ad along with, and on, a search results page, when a consumer types one of a series of designated terms into the operator's search engine.  In this fashion, defendants keyed the display of their clients' adult-oriented ads to plaintiff's marks.  The Ninth Circuit held that when the advertiser's banner ad is not labeled so as to identify its source, this practice could result in trademark infringement by application of the 'initial interest confusion' doctrine.  The Ninth Circuit accordingly refused to dismiss plaintiff's trademark infringement claims.  The Ninth Circuit further held that issues of fact also precluded the dismissal of plaintiff's dilution claims.

Judge Berzon wrote a concurring opinion, in which he sharply criticized Brookfield Communications, the Ninth Circuit decision from which the 'initial interest confusion' doctrine springs, and the overbroad interpretation he believes it has been given by other jurists. Specifically, Judge Berzon believes that keying clearly labeled ads to plaintiff's marks should not give rise to a trademark infringement claim because the consumer is not confused when he elects to visit the clearly labeled web site of the mark holder's competitor, in lieu of that of the mark holder.

Federal District Court holds that Google's use of plaintiff's trademark "Rescuecom" as a keyword in Google's "Ad words" program to trigger the display of "sponsored link" advertisements from third party competitors for a fee is not a "trademark use" of plaintiff's mark, as the mark is not being used to identify the source of any goods or services.  The same holds true of Google's use of plaintiff's trademark in its "Keyword Suggestion Tool," in which Google recommends to potential advertisers, including plaintiff's competitors, keywords they may be interested in using, for a fee, as a trigger for the display of their advertising.  Notably the advertisements themselves, which appear along with search results for plaintiff's mark, were not alleged to display plaintiff's Rescuecom mark. 

As a result, the Court grants Google's motion to dismiss trademark infringement, unfair competition and dilution claims brought by plaintiff under the Lanham Act, as such claims require a showing of actionable "trademark use" which, the Court holds, Rescuecom cannot make.  Having dismissed plaintiff's federal claims, the Court declined to exercise pendant jurisdiction over plaintiff's state law claims, including a claim for tortuous interference.

In reaching this result, the District Court elected not to follow decisions reached by the courts in Geico v. Google, 330 F.Supp. 2d 700 (E.D. Va. 2004) and Edina Realty v. MLS Online.com, 2006 WL 737064 (D.Minn., March 20, 2006) which had denied motions to dismiss trademark infringement claims arising out of similar activity.  The Court, instead, followed the path taken by the court in Merck & Co. Inc. v. Mediplan Health Consulting, Inc., 425 F.Supp. 2d 402 (S.D.N.Y. 2006), which dismissed similar claims on the ground, inter alia, that there was no "trademark use."

Second Circuit holds plaintiff Time Warner Cable Inc. (“Time Warner”) likely to prevail on false advertising claims advanced under Section 43 of the Lanham Act as a result television advertisements defendant Directv ran, which were found to be literally false.  Affirming the decision of the District Court, the Second Circuit held that, when seen in context, these advertisements falsely claim that the quality of the picture a user of an HD TV receives from Directv is better than the picture received from Time Warner cable.  Irreparable injury was presumed because, even though the advertisements at issue did not directly refer to Time Warner, the viewing audience would see the advertisement as targeted at plaintiff.  As a result, the Second Circuit affirmed so much of the District Court’s decision that enjoined Directv from further publication of these offending advertisements in markets where Time Warner operates.

In reaching this result, the Second Circuit held that an “advertisement can be literally false even though it does not explicitly make a false assertion, if the words or images, considered in context, necessarily and unambiguously imply a false message.”

The Second Circuit held, however, that internet banner advertisements that promoted Directv’s products, while literally false, constituted non-actionable puffery, because they made claims so exaggerated that no consumer could rely on them.  The banner advertisements at issue depicted a split screen.  One side of the screen presented a clear, crisp picture that was represented to be the picture a user would view if receiving his signal from Directv.  The other side of the screen contained a picture that was blurry and pixilated, which was represented as the picture the consumer would see if receiving a signal from “other tv”, or “basic cable.”  The ads urged consumers to “find out why Directv’s picture beats cable.”  While this depiction was literally and demonstrably false, because the pictures from both sources were equivalent, the Second Circuit held it was so exaggerated as to constitute non-actionable puffery on which no consumer could rely.  As a result, the Second Circuit reversed so much of the District Court’s decision which enjoined Directv from continuing to run these banner advertisements. 

Said the Court: “[T]he category of non-actionable puffery encompasses visual depictions that, while factually inaccurate, are so grossly exaggerated that no reasonable consumer would rely on them in navigating the marketplace.”

Court grants defendants' motion for summary judgment, and dismisses trademark infringement, copyright infringement and unfair competition claims brought by website owner against distributor of pop-up ads.  Defendants distribute a software program, which causes pop-up ads to be displayed on a user's computer screen in a window that covers all or part of plaintiff's website.  The court held that such conduct does not constitute a use of plaintiff's trademark, a prerequisite to a trademark infringement claim.  Quite the contrary, the display results from the computer user's consensual download of defendants' software, and his ability to control, via the multitasking capabilities of window's operating environment, what appears on his own computer screen.  Similarly, defendants' acts do not infringe plaintiff's copyright in the material that appears on plaintiff's website, because defendants neither display plaintiff's copyrighted materials nor make a derivative work thereof.  Defendants' ads instead appear in a separate window on a user's computer screen, which operates independently of plaintiff's website, and leaves the content appearing thereon untouched.

Denying cross-motions for summary judgment, the Court allows the Government to pursue civil claims against defendant Cyberheat Inc. ("Cyberheat") for violation of the CAN-SPAM Act arising out of the transmission of sexually explicit emails by its affiliates that did not meet the strictures of the Act.  While Cyberheat did not directly pay its affiliates to transmit such emails, it paid them "finder's fees" for subscribers their promotional activities produced - including subscribers produced by email - and provided affiliates with promotional materials that could be used - via links - in promotional emails.  The court held that questions of fact as to defendant's knowledge of its affiliates' activities, and the steps defendant could or did take to prevent violations of the Act after it became aware of consumer complaints, prevented the court from determining whether Cyberheat should be held either vicariously liable for the acts of its affiliates, or to have initiated or procured the transmission of the offending emails within the meaning of the CAN-SPAM Act.   The court reached this result notwithstanding the fact that Cyberheat's contracts with its affiliates contained explicit prohibitions against the transmission of emails that violate CAN-SPAM.

The court held that because it was in the business of sending sexually explicit materials over the Internet, defendant owed a duty to the public to exercise reasonable care to prevent those who did not wish to see such materials from being involuntarily exposed to such uninvited intrusions.  The question of whether defendant Cyberheat met this duty was left for another day.

Court issues a preliminary injunction, enjoining defendant Gator Corporation ("Gator") from causing pop-up ads to appear on a user's computer screen at the same time the user is viewing any of the 16 web sites operated by the plaintiff news organizations.  Such ads appear as a result of the operation of Gator's software, which a user has installed on his computer.  Gator's software apparently tracks the user's Internet usage, and delivers ads to his computer that defendant believes will interest the user based on his prior Internet usage  When these ads appear on a user's screen, they partially cover up the web site that also appears there.  Gator did not have plaintiffs' permission to cause ads to appear in this fashion.  The court held that plaintiffs were likely to prevail on their claim that causing pop-up ads to appear in this manner is an infringement of plaintiffs' trademarks, which are found on the web pages the pop-up ads partially cover up.   The court accordingly issued a preliminary injunction enjoining defendant from continuing this activity "on" plaintiffs' sites.

Court denies website operators' application for a preliminary injunction, and refuses to enjoin defendant WhenU.com, Inc. from delivering advertisements, triggered by a computer user's visit to plaintiffs' sites, that either pop-up or under those sites.  Defendant WhenU delivers such ads via its software applications Save and Save Now!  These applications are typically consensually downloaded by the user to his or her computer as the quid pro quo of his free receipt of another software application.

The Court held that WhenU's delivery of these ads neither infringes the trademarks found on plaintiffs' sites, nor their copyrights in the material thereon.  WhenU's activities - including the use of plaintiffs' marks in a directory which determines the ads a user receives, and the display of ads in windows that partially obscure plaintiffs' websites but do not contain plaintiffs' marks - do not constitute a use of plaintiffs' marks in commerce, a prerequisite to a trademark infringement claim.  Plaintiffs' trademark infringements claims also failed because plaintiffs did not present evidence sufficient to establish that users would likely be confused by WhenU's activities, and conclude that plaintiffs sponsored WhenU's ads.  Rather, the Court held, users with Save and Save Now! installed on their computers are likely to conclude that WhenU is the sponsor of the ads in question, both because the ads so inform the user, and because of their familiarity with such displays.

The Court held that plaintiffs' copyright infringement claims failed because the appearance of WhenU's ads in a window that partially obscures plaintiffs' sites does not constitute the creation of an unauthorized derivative work in violation of plaintiffs' exclusive right to create the same.  Rather, plaintiffs' copyrighted works - the content of their websites - remain unaltered on the servers on which they are hosted, and simply appear simultaneously with WhenU's advertisements in separate windows opened by and with the consent of the user on whose computer screen they appear.  Plaintiffs' copyright infringement claims also failed because any images appearing on a user's screen are simply too transitory to constitute the creation of a work.  As such, WhenU and the users cannot be held to have created a derivative work, and thus cannot be held to have infringed plaintiffs' copyrights.

Court issues preliminary injunction, enjoining enforcement of Utah's Spyware Control Act, which, inter alia, prohibits the delivery of 'pop-up' ads that obscure any portion of an Internet website, and bars advertisers from downloading programs that deliver ads to a consumer's computer unless the consumer's consent to such download is obtained in the manner specified by the Act.  The Court issued such relief because it found that plaintiff was likely to prevail on its claim that those portions of the Act run afoul of the Commerce Clause of the United States Constitution.

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Court holds that competitor’s purchase of sponsored links from Google that are triggered by the entry of plaintiff’s “Boston Duck Tours” mark constitute a trademark use of plaintiff’s mark actionable under the Lanham Act.  Recognizing that the courts have reached conflicting answers to this question, the Court stated:

In short, the emerging view outside of the Second Circuit is in accord with the plain language of the statute.  Because sponsored linking necessarily entails the ‘use’ of the plaintiff’s mark as part of a mechanism of advertising, it is ‘use’ for Lanham Act purposes.

The Court further holds that the display of such sponsored link advertisements by defendant in the case at bar does not violate either the Lanham Act, or a prior preliminary injunction issued by the Court, because the ads market defendant as “Super Duck Excursions” and ‘serve[] to distinguish the defendant from the plaintiff.”  The preliminary injunction previously issued by the Court had enjoined defendant from continuing to use the phrase “duck tours” as a trademark or service mark in the greater Boston area, as such use was likely to infringe plaintiff’s ‘Boston Duck Tours’ mark.  As a result, defendant had changed its name from “Super Duck Tours” to “Super Duck Excursions.”

Court holds that alleged purchase and use of a competitor’s trade marks as key words to trigger the display of sponsored ads in a search engine is a use of that mark in commerce subject to the strictures of the Lanham Act.  The ads in question did not feature the searched-for mark.  Said the District Court of New Jersey:

The Court is mindful of the challenges that sometime arise in applying existing legal principles in the context of newer technologies.  As expressed by the Edina Realty court, supra, Defendants’ alleged use of Plaintiff’s mark is certainly not a traditional ‘use I commerce.’  Nonetheless, the Court finds Plaintiff has satisfied the ‘use’ requirement of the Lanham Act in that Defendants’ alleged use was ‘in commerce’ and was ‘in connection with any goods or services.’15 U.S.C. Section 1125(a)(1).  First, the alleged purchase of the keyword was a commercial transaction that occurred “in commerce,’ trading on the value of Plaintiff’s mark.  Second, Defendants’ alleged use was both “in commerce” and “in connection with any goods or services” in that Plaintiff’s mark was allegedly used to trigger commercial advertising which included a link to Defendants’ furniture retailing website.  Therefore, not only was the alleged use of Plaintiff’s mark tied to the promotion of Defendants’ goods and retail services, but the mark was used to provide a computer user with direct access (i.e. a link) to Defendants’ website through which the user could make furniture purchases.  The court finds that these allegations clearly satisfy the Lanham Act’s “use” requirements.

Following the lead of the Second Circuit in 1-800 Contacts, Inc. v. WhenU.com, 414 F.3rd 400 (2d Cir. 2005) and of other district courts in the Second Circuit, the Court holds that the use of plaintiff’s mark either as a keyword to prompt the appearance of sponsored links advertising defendant’s site in Google’s search engine, or in the metatags of defendant’s site to trigger higher search engine placement, does not constitute a use in commerce of plaintiff’s mark sufficient to give rise to trademark infringement or dilution claims, either under the Lanham Act or New York state law.  Such use of plaintiff’s mark, reasoned the court, is the equivalent to store product placement, where the store places its own generic products on store shelves adjacent to more well-known brands to take advantage of the consumer’s attraction thereto.  As such a use is permissible, so to is the use of plaintiff’s mark in keyword advertising. 

The Court relied on decisions in Merck & Co., 425 F.Supp.2d 402, Rescuecom Corp. v. Google, Inc., 456 F.Supp.2d 393 (N.D.N.Y., 2006) , and Site Pro-1 Inc. v. Better Metal LLC, No. 06-CV-6508 (ILG)(RER)(EDNY, May 9, 2007), each of which “held that the purchase of a trademark as a ‘Sponsored Link’ is not ‘use’ within the meaning of the Lanham Act.” 

Said the Court:

It would be inconsistent with the reasoning set forth in 1-800 Contacts to conclude that the use of trademarks in keywords and metatags constitutes Lanham Act ‘use’ where, as here, defendant does not place the trademark on any product, good or service nor is it used in any way that would indicate source or origin.  Here, the use of plaintiff’s trademark is strictly internal, and, because such use is not communicated to the public, the use does not indicate source or origin of the mark.

As a result, the Court denied plaintiff’s motion to amend its complaint to assert, inter alia, claims of trademark infringement and dilution arising out of the use of its mark in keyword advertising and metatags.  The Court held that such amendment would be futile, as the proposed claims could not withstand a motion to dismiss.

In should be noted that, according to the court, ‘courts in other circuits have generally sustained such claim.’  However, the Court elected to follow the precedent cited above and deny plaintiff’s motion to amend.

Affiliates - Updated April 12, 2007

Court denies summary judgment motion by Lands' End "affiliates," seeking dismissal of claims arising out of affiliates' undisclosed use of typo domains to redirect traffic to Lands' End's website, and to profit on the sales made to consumers delivered to Lands' End's site in this fashion.  As affiliates, defendants received a percentage of sales made by Lands' End to consumers they brought to Lands' End's website.  The Court accordingly allowed plaintiff to proceed with claims that defendants' conduct violated the Anticybersquatting Consumer Protection Act ("ACPA") and breached the parties' affiliate agreements.  The Court also allowed plaintiff to pursue fraud claims arising out of defendants' concealment of this use of Lands' End typo domains.  The Court did grant so much of the defendants' summary judgment motion which sought dismissal of false advertising claims plaintiff advanced under both the Lanham Act and Wisconsin state law, holding that defendants did not mislead consumers by their conduct.  Consumers were unaware of the redirection, and received exactly what they expected to receive - Lands' End merchandise from Lands' End.

Denying cross-motions for summary judgment, the Court allows the Government to pursue civil claims against defendant Cyberheat Inc. ("Cyberheat") for violation of the CAN-SPAM Act arising out of the transmission of sexually explicit emails by its affiliates that did not meet the strictures of the Act.  While Cyberheat did not directly pay its affiliates to transmit such emails, it paid them "finder's fees" for subscribers their promotional activities produced - including subscribers produced by email - and provided affiliates with promotional materials that could be used - via links - in promotional emails.  The court held that questions of fact as to defendant's knowledge of its affiliates' activities, and the steps defendant could or did take to prevent violations of the Act after it became aware of consumer complaints, prevented the court from determining whether Cyberheat should be held either vicariously liable for the acts of its affiliates, or to have initiated or procured the transmission of the offending emails within the meaning of the CAN-SPAM Act.   The court reached this result notwithstanding the fact that Cyberheat's contracts with its affiliates contained explicit prohibitions against the transmission of emails that violate CAN-SPAM.

The court held that because it was in the business of sending sexually explicit materials over the Internet, defendant owed a duty to the public to exercise reasonable care to prevent those who did not wish to see such materials from being involuntarily exposed to such uninvited intrusions.  The question of whether defendant Cyberheat met this duty was left for another day.

Alcohol - Updated May 11, 2002

Court holds that those provisions of North Carolina's Alcoholic Beverage Control law which prohibit out-of-state retailers from selling liquor directly to North Carolina consumers, while allowing in-state wineries to make such sales, are unconstitutional violations of the Commerce Clause of the United States Constitution.  The dormant Commerce Clause prohibits states from enacting regulations, such as those at bar, which directly discriminate against interstate commerce.  The court held that the legislation at issue was not saved by operation of the Twenty First Amendment, which grants the States the power to regulate in-State liquor sales.  The Twenty First Amendment does not trump the Commerce Clause; rather, when faced with a conflict between their competing concerns, courts engage in a balancing test, asking "whether the interests implicated by [the] state regulation are so closely related to the powers preserved by the Twenty First Amendment that the regulation may prevail …".  Here, North Carolina did not identify the state interests served by the challenged regulation.  As a result, the District Court assumed the purpose of the legislation was to protect local wineries from out-of-state competitors.  The Court held that such an improper purpose mandates a finding that the statute is an unconstitutional violation of the Commerce Clause.  The Court accordingly enjoined North Carolina from enforcing the statutes at issue, including those laws "that prohibit … out-of state wine dealers from directly shipping wines to … North Carolina residents."

Court denies motion brought by defendants to dismiss claim that N.Y. Alcohol and Beverage Control Law ("ABC Law") Sections 102 (1)(a), (c) and (d) is unconstitutional because it violates the Commerce Clause, the Privileges and Immunity Clause and the First Amendment.

(Court dismissed plaintiff's claim that defendant, by allegedly selling alcoholic beverages over the Internet to Massachusetts residents without the license required under Massachusetts law, had tortiously interfered with plaintiff's business relationships with consumers. The Court held that the licensing statute, Mass. M.G.L. Chapter 138, did not create a private right of action in liquor wholesalers to enforce it. Instead, enforcement was within the purview of the state's Alcoholic Beverage Control Commission.)

Americans With Disabilities Act - Updated September 26, 2006

Court holds that defendant Southwest Airlines Co.'s web site is not a "place of public accommodation" under Title III of the Americans with Disabilities Act, ("ADA") and accordingly that Southwest has no obligation under Title III to make its web site accessible to the visually impaired.  Title III of the ADA prohibits those who operate "places of public accommodation" from discriminating against individuals with disabilities.  The Court held that under the plain and unambiguous language of the ADA a "public accommodation must be a physical, concrete structure."  Because defendant's website was not such a structure, the Court dismissed plaintiffs' claims for relief under Title III of the ADA.

Denying, in part, a motion to dismiss, the Court allowed plaintiffs to proceed with claims that allege that the failure of defendant Target Corporation ("Target") to make its Target.com website accessible to the blind violates various statutes that prohibit discrimination against the disabled, including the Americans with Disabilities Act ("ADA"), 42 U.S.C. 12182.  The Court did, however, dismiss so much of plaintiffs' claims that sought to challenge the accessibility of those portions of the Target.com site that "offer information and services unconnected to Target stores."  At this time, plaintiffs were only allowed to proceed with claims that challenged the accessibility of portions of the Target.com site that, if inaccessible, would "impede the full and equal enjoyment of goods and services offered in Target stores."  The Court noted that it may, in the future, permit plaintiffs to pursue broader claims if it was established that Target's site and stores are part of an integrated merchandising effort.

The Court denied plaintiffs' motion for mandatory injunctive relief, seeking to compel Target to make its site accessible to the blind.  Issues of fact as to whether the site, as presently constructed, was accessible to blind internet users using 'screen reader' programs precluded a finding at this time that plaintiffs were likely to prevail on the merits of their claims, and mandated denial of their request for injunctive relief.

Anticybersquatting Consumer Protection Act - Updated March 03, 2008

This section of the Internet Law Library contains a host of court decisions that address whether a party's use of another's trademark in a domain name runs afoul of the Anticybersquatting Consumer Protection Act.  Analyzed court decisions address both commercial uses of the mark - in a domain operated by a competitor, by an affiliate of the mark holder, by a cybersquatter looking to profit thereon, or by a party itself holding rights in the mark in question - as well as noncommercial uses of the mark - such as in the domain of a complaint or gripe site.  Cases also address a number of issues that arise under the Anticybersquatting Consumer Protection Act, including whether the domain owner acted with a bad faith intent to profit from his use of another's mark in his domain name, and the applicability of the Anticybersquatting Consumer Protection Act to 'typo' domains.

The Sixth Circuit affirms the District Court's award of summary judgment to plaintiffs, and holds that defendant Bob D'Amato infringed and diluted plaintiffs' famous "Audi," "Quatro," and Audi Four Ring Logo marks, and violated the Anticybersquating Consumer Protection Act.  Defendant was held to have infringed plaintiffs' marks by operating a website at the domain www.audisport.com, at which both goods such as hats and shirts bearing the "Audi Sport" logo, and advertising space, were offered for sale.  The Sixth Circuit accordingly affirmed the District Court's decision, which permanently enjoined defendant from making continued infringing use of Audi's trademarks, directed D'Amato to transfer the audisport.com domain to plaintiffs, and awarded plaintiffs Audi AG ("Audi") and Volkswagen of America Inc. ("Volkswagen") attorneys' fees as the prevailing party.  The Court reached this result notwithstanding both defendant's claim that his use of Audi's marks on his website in connection with the sale of goods was orally authorized by an Audi dealer, and his placement of a disclaimer on defendant's site after receipt of a cease and desist letter.  A written agreement between Audi and the dealer made clear that the dealer lacked authority to so authorize defendant's use of Audi's trademarks.

In this domain name dispute, the Ninth Circuit holds that the use of another’s trademark as the domain name for a non-commercial gripe site does not constitute trademark infringement or dilution in violation of the Lanham Act.  To run afoul of the Lanham Act, a mark must be used in connection with the sale of goods or services.  A web site which is merely critical of another’s goods or services does not fit this bill.  The Ninth Circuit accordingly affirmed the District Court’s grant of summary judgment, dismissing plaintiff’s trademark infringement and dilution claims.

The Ninth Circuit reversed, however, so much of the District Court’s decision which dismissed plaintiff’s Anticybersquatting Consumer Protection Act (“ACPA”) claim.  The ACPA does not have a commercial use requirement, and, accordingly, establishing that the mark was used as the domain for a non-commercial gripe site does not absolve the griper from potential liability under the ACPA.  Because that was the basis on which the lower court dismissed plaintiff’s ACPA claim, its dismissal was reversed.  The matter was remanded to the District Court to determine whether defendant used the mark with a bad faith intent to profit therefrom, in violation of the ACPA.

The court holds that the provisions of the Anticybersquatting Consumer Protection Act that permit a trademark holder to proceed with an in rem action against a domain name do not violate the Due Process clause of the United States Constitution.

Plaintiff, holder of a federally registered trademark in the mark "Chambord" for sale of a liqueur and assorted food products, brought this action under the Anticybersquatting Consumer Protection Act, and for trademark infringement and dilution, against defendant, who holds a federally registered trademark in the mark "Chambord" for the sale of coffee makers. The action was triggered by defendant's registration of the domain name "chambord.com," at which it planned to, but had not yet offered for sale its coffee makers. The court dismissed the action, holding, inter alia, that (a) the ACPA claim failed because defendant had not acted in bad faith in continuing to utilize its federally registered mark for the sale of coffee makers; (b) the trademark infringement claim failed because the initial interest confusion doctrine (a consumer looking for company's As site finds company B's instead) was inapplicable to situations where the parties in question did not offer competing goods; and (c) the dilution act claim failed because plaintiff's mark was not famous at the time defendant commenced its use of the mark.

Affirming the District Court, the Eighth Circuit holds that plaintiffs are likely to prevail on Anticybersquatting Consumer Protection Act ("ACPA") claims arising out of defendant's registration of numerous domain names incorporating plaintiffs' trademarks, which domains defendant linked to a website advocating a ban on abortions.  This anti-abortion website also contained links to other sites which solicited funds, via the sale of goods or donations, to aid anti-abortion causes.  In reaching this result, the Eighth Circuit rejected defendant's claim that his use of plaintiffs' trademarks in this fashion was protected by the First Amendment.

In this domain name dispute, Court enjoined defendants from continuing to utilize the domain name ernestandjuliogallo.com, and directed them to transfer the name to plaintiff E. and J. Gallo Winery ("Gallo"), which holds a trademark in the mark "Ernest and Julio Gallo." The court further awarded Gallo statutory damages under the Anticybersquatting Consumer Protection Act ("ACPA") in the amount of $25,000 as a result, inter alia, of defendants' registration of the domain name at issue, and their use of that domain name to operate a web site that commented on this lawsuit, and contained articles critical of alcohol consumption. Defendants had also registered some 2000 other domain names, a number of which contained the names of famous companies, cities and buildings.

Court issues permanent injunction under the Anticybersquatting Consumer Protection Act ("ACPA"), enjoining defendant, described by the court as a "notorious cybersquatter," from continuing to operate web sites at domains containing common misspellings of plaintiff's registered service marks. The court also awarded plaintiff $530,653.34, which included both the maximum $100,000 statutory award for each domain name improperly used, as well as plaintiff's attorney's fees and costs.

Finding plaintiff likely to prevail on claims of trademark infringement and cybersquatting, Court issues preliminary injunction directing defendants, purported competitors operating a business under the same name as plaintiff, to transfer to plaintiff 74 domain names which contain plaintiff's trademarks or variations thereof, during the pendency of this suit.  The Court further directed plaintiff to remove the existing content on the sites found at those domains and replace it with an "under construction" notification, and pay all registration fees for these domains which may become due.  The Court reached this result notwithstanding the fact that defendants had registered the main domain at issue, gardenoflife.com, before plaintiff commenced its use of that mark in commerce.  On this motion, the Court rejected defendants' claim that they had been using the mark "gardenoflife" in commerce continuously since 1974.  The Court found instead that defendants' use of the mark did not commence until after plaintiff's.  As a result, and because defendants registered many of the domains at issue after plaintiff had entered into negotiations with defendants for the purchase of the gardenoflife.com name, which domains contained variations of plaintiffs marks unrelated to defendants' business, the court found plaintiff likely to prevail on claims of trademark infringement and cyberquatting.

In this in rem action commenced under the Anticybersquatting Consumer Protection Act, the Court holds that it can direct a top level domain registry – here Verisign – located in Virginia to cancel the domain registration of a domain found to be registered in violation of the ACPA.  In this case, the Court directed that such cancellation be effected unilaterally by the domain registry, which was directed to place the domain name on ‘hold’ status, thereby rendering it inactive, until such time as it is transferred to the trademark holder.

The Court holds that such relief is appropriate here, given the fact that the Korean domain name registrar with whom the domain name at issue was registered refused to transfer the domain as directed in a prior judgment issued by the Court.  After the Court issued this order, the domain registrant obtained an injunction from a Korean court, enjoining the registrar from transferring the domain.  The Korean registrar, in the face of this subsequent order, refused to comply with the US Court’s direction to transfer the domain to plaintiff.

The Court, on default, found that the domain registrant had violated the ACPA by registering the domain name at issue – globalsantafe.com – one day after Global Marine and SantaFe announced their agreement to merge into an entity to be called GlobalSantaFe.

Court finds that a disgruntled customer violated the Anticybersquatting Consumer Protection Act ("ACPA") by registering a domain name containing defendant Microfinancial's trademark, at which domain plaintiff operated a website critical of defendant.  The Court determined that plaintiff had registered the domain name with a bad faith intent to profit therefrom, in large part because plaintiff had offered to transfer the domain to Microfinancial if it refunded certain lease payments plaintiff had made which were at the heart of his dispute with defendant, as well as funds plaintiff claims defendant improperly received from third parties.  The Court accordingly granted Microfinancial summary judgment on its ACPA claim.

Court holds plaintiff infringed defendants' trademarks, and violated the Anticybersquatting Consumer Protection Act ("ACPA"), as a result of his operation of a 'typo' web site at the domain Fallwell.com at which he criticized the Rev. Falwell's views on homosexuality, and expressed his own contrary views on that subject.  At one time, the site informed interested visitors of a book plaintiff considered relevant to this discussion, and provided a link to Amazon.com at which they could purchase it.  The Court reached this result notwithstanding the fact that plaintiff's site featured a prominent disclaimer, advising users that it was not defendants' official site.

Court denies summary judgment motion by Lands' End "affiliates," seeking dismissal of claims arising out of affiliates' undisclosed use of typo domains to redirect traffic to Lands' End's website, and to profit on the sales made to consumers delivered to Lands' End's site in this fashion.  As affiliates, defendants received a percentage of sales made by Lands' End to consumers they brought to Lands' End's website.  The Court accordingly allowed plaintiff to proceed with claims that defendants' conduct violated the Anticybersquatting Consumer Protection Act ("ACPA") and breached the parties' affiliate agreements.  The Court also allowed plaintiff to pursue fraud claims arising out of defendants' concealment of this use of Lands' End typo domains.  The Court did grant so much of the defendants' summary judgment motion which sought dismissal of false advertising claims plaintiff advanced under both the Lanham Act and Wisconsin state law, holding that defendants did not mislead consumers by their conduct.  Consumers were unaware of the redirection, and received exactly what they expected to receive - Lands' End merchandise from Lands' End.

In this domain name dispute, Court grants Mattel, the holder of numerous trademarks in and including the word "Barbie," summary judgment, holding that defendant violated the Anticybersquatting Consumer Protection Act ("ACPA") by registering the domain names "barbiesbeachwear.com" and "barbiesclothing.com," causing those who accessed such domains to view a commercial web site selling women's apparel operated by the defendant, and effectuating a single $10 sale of merchandise to an investigator hired by plaintiff who accessed one of the domains in question. The court ordered defendant to relinquish the domain names at issue, and to pay Mattel $2000 in damages. The court declined to award Mattel its attorneys' fees.

Court holds that defendant's use of plaintiff's service mark in the domain names of noncommercial web sites critical of plaintiff does not constitute a violation of the Anticybersquatting Consumer Protection Act ("ACPA") because this was a "bona fide noncommercial" use of the mark which defendant had reasonable grounds to believe was lawful.  In reaching this result, the Court determined that defendant was motivated not by an intent to use his critical web site to extract money from plaintiff, but instead by a desire to express his dissatisfaction with plaintiff's alleged conduct.  The Court accordingly granted defendant's motion for partial summary judgment, and dismissed plaintiff's ACPA claim.  Left for another day were libel and trade libel claims arising out of the sites' content, as well as a Federal Dilution Act claim under 15 U.S.C. § 1125(c) arising out of the defendant's use of plaintiff's service mark.

Court denies motion to dismiss made by foreign domain name registrant, and allows trademark owner to proceed with in rem action, seeking relief under both the Anticybersquatting Consumer Protection Act, and the Lanham Act for trademark infringement.  The ACPA gives a trademark holder the right to proceed in rem to have a domain name transferred to it, or its registration cancelled, and allows a United States court to exercise jurisdiction over a res – the domain name – where the registry or registrar for such domain name is located in the United States.  This is true notwithstanding the fact that the United States court lacks personal jurisdiction over the domain name registrant.

The Fourth Circuit, affirming the decision of the district court below, held that defendant was guilty of service mark infringement and unfair competition, and had violated the Anticybersquatting Consumer Protection Act ("ACPA"), as a result of his creation and operation of a web site at the domain www.peta.org, which contained plaintiff's federally registered service mark "peta." In reaching this conclusion, the Fourth Circuit rejected defendant's defense that his site, titled "People Eating Tasty Animals," was a parody of plaintiff's "People for the Ethical Treatment of Animals" organization because the domain name containing plaintiff's mark did not appear simultaneously with that aspect of the web site containing the parody of plaintiff's organization.

In this domain name dispute, the Second Circuit affirmed the holding of the District Court, which enjoined plaintiff Sporty's Farm LLC ("Farm") from continuing to use a domain name containing defendant's federally registered trademark "Sporty's" and directed plaintiff to take such steps as were necessary to transfer the domain name at issue to defendant. The Second Circuit's decision was based on the newly enacted Anticybersquatting Consumer Protection Act, and not on the Federal Trademark Dilution Act, which had been relied upon by the District Court below.

Reversing the District Court, the Fifth Circuit holds that defendant's operation of a non-commercial gripe site at a domain which varied from plaintiff's mark solely by the subtraction of the letter "s" did not violate either the Federal or Texas State Dilution Acts, nor did it run afoul of the Anticybersquatting Consumer Protection Act ("ACPA").  The Court determined that defendant's actions were not motivated by the requisite bad faith intent to profit from the use of the mark, but rather, by defendant's desire to inform the public about his dispute with plaintiff and the services it offered him.  The absence of such bad faith was fatal to plaintiff's ACPA claim.  Plaintiff's Federal Dilution Act claim failed because defendant's use was not commercial.

Court holds that defendant violated the Anticybersquatting Consumer Protection Act by registering sixteen domain names containing misspellings of plaintiff’s trademark, at which domains defendant operated web sites that voiced his complaints about plaintiff’s business practices.  Defendant did not offer any goods or services for sale at these web sites, and there is no mention in the record of any attempts by defendant to try and sell the domain names to the plaintiff.

The Fourth Circuit, affirming the determination of the district court below, held that plaintiff violated the Anticybersquatting Consumer Protection Act ("ACPA") by registering and offering to sell to defendant the domain name vw.net, which contains defendant Volkswagen's famous "vw" mark.

Anticybersquatting Consumer Protection ActAnticybersquatting Consumer Protection ActAnticybersquatting Consumer Protection ActAnticybersquatting Consumer Protection ActAnticybersquatting Consumer Protection ActAnticybersquatting Consumer Protection ActAnticybersquatting Consumer Protection ActAnticybersquatting Consumer Protection ActAnticybersquatting Consumer Protection Act Quick Hits

In this in rem action commenced under the Anticybersquatting Consumer Protection Act (“ACPA”), the Court modifies its previously issued judgment, and directs a Virginia based domain registry – Public Interest Registry – to unilaterally cancel the registration of the domain name AOL.org and transfer it to plaintiff America Online.  The Court had previously found that this domain had been registered in violation of the ACPA, and had issued a judgment directing it domain registrar to transfer it to America Online.  The domain registrar, a Chinese entity, refused to comply, instead permitting the domain registrant to transfer the domain to another domain registrar, this time located in Korea.  This registrar too refused to transfer the domain to America Online.  Accordingly, the Court held that under the ACPA it was empowered to unilaterally direct a domain registry to cancel a domain, and transfer it to the trademark holder.

Court finds plaintiff Ballistic Products Inc. likely to prevail on its claim that its competitor - defendant Precision Reloading Inc. – violated the  Anticybersquatting Consumer Protection Act as a result of its registration of two “typo” domain names, containing misspellings of plaintiff’s then common law trademark.  Defendants registered these domain names to “attract potential customers” and pointed them to their own web site, at precisionreloading.com, where they sold competing products.  Finding such actions likely to confuse consumers, the Court issued a preliminary injunction, enjoining defendants from further use of the “typo” domains, and directed their immediate transfer to the plaintiff.

The Court further held that it could assert personal jurisdiction over the non-resident defendants.  The Court held that defendant Precision Reloading Inc. had sufficient contact with Minnesota to permit the assertion of general personal jurisdiction over it.  It had over the last 18 months sold over $21,000 in product to Minnesota customers, and purchased over $32,000 of merchandise from Minnesota sellers.  It had also distributed 223 catalogues to Minnesota residents, advertising its products, advertised nationally in publications sent to Minnesota and operated a website that received numerous ‘hits’ some of which were likely to be from Minnesota residents.  Specific jurisdiction could be exercised over both Precision and the remaining defendants under the ‘effects test’ articulated by the Supreme Court in Calder v. Jones.  The Corporate defendants committed tortuous misconduct directed against the plaintiff, a Minnesota company, the effects of which would be felt by that company in Minnesota.  Said the Court:

Defendants’ registration of domain names that are slight misspellings of Ballistic’s trademark and domain name was an action directed at Minnesota such that Defendants’ should ‘reasonably anticipate being haled into court’ in Minnesota. … ‘[a]n individual injured in Minnesota need not got to Connecticut to seek redress from persons who, though remaining in Connecticut, knowingly caused the injury in Minnesota.’ 

The Court held that the individual defendants, officers of Precision, “are primary participants in an alleged wrongdoing intentionally directed at a forum state resident, and jurisdiction over them is proper on that basis.”  It was the individual defendants who came up with the idea of registering the ‘typo’ domain names at issue to attract business for the defendant Precision Reloading. 

Court finds plaintiff guilty of trademark infringement and unfair competition in violation of the Lanham Act, and cybersquatting in violation of the Anticybersquatting Consumer Protection Act, as a result of its purchase and use in commerce of the domain name cosmos.com.  Plaintiff’s use infringed the rights of defendant in its registered trademarks Cosmos and Cosmos Tourama, which were used by affiliated companies, through licenses, to promote and market travel and vacation tours.  Plaintiff’s website featured information on travel tours provided by third parties.  Plaintiff both purchased its domain, and began this use, after Cosmos European Travels had registered its mark, and commenced its use in commerce.

In finding that plaintiff’s conduct ran afoul of the Anticybersquatting Consumer Protection Act, the court found that plaintiff had acted with a bad faith intent to profit from its use of its mark.  In reaching this result, the Court relied, in part, on the fact that plaintiff had failed to conduct a trademark search at the time it purchased the cosmos.com domain from a third party.  Such a search, held the Court, would have made plaintiff aware of defendant’s rights in its mark, and its use in the travel industry.  The Court also relied on the fact that plaintiff, after being conducted by consumers seeking defendant, offered for a fee to enter into various arrangements with defendant that would give it access to the cosmos.com domain.  Said the Court:

It is equally important … to step back and examine the larger picture to determine whether it is consistent with a finding of bad faith.  It is.  The larger picture does not reveal an ongoing business entity that, prior to purchasing a domain name, made a reasonable investigation to ensure that the name was non-infringing and then purchased a relatively obscure domain name.  to the contrary, the big picture here reflects that plaintiffs did not engage in any business until they purchased the disputed domain name and when they did so, they made no effort to ascertain whether the ‘cosmos’ name was a registered trademark, as it then had been for eleven years.  Nor did plaintiffs make any reasonable investigation to determine whether the name was used in the travel industry.  Had plaintiffs conducted the proper investigation, they not only would have easily discovered that defendant had registered the cosmos’ and ‘cosmos tourama’ marks, but they also likely would have seen evidence of the fact that defendant had spent millions of dollars promoting the ‘cosmos’ mark and had succeeded in generating a large amount of revenue in the travel business ($400 million over five years).  In the larger picture, these facts loom large, and  it is hard to see how they could have been missed by plaintiffs.  Furthermore, within three years of purchasing the cosmos.com domain name, plaintiffs, armed with the certain knowledge that many consumers thought the cosmos.com website belonged to defendant, sought to sell defendant space and access to the site for a substantial sum of money.  This is closely akin to purchasing a domain name with an intent to exploit it by selling it to the registered owner of the trademark incorporated in the domain name.  In sum, the big picture is fully consistent with a finding of bad faith.

In addition, the fact that plaintiff was now known as CosmosTravels.com, Inc., did not permit it to avoid a finding of bad faith., as this name change occurred only after the domain name at issue had been purchased.  Said the Court “If such a name change could preclude a finding of bad faith, an entity could escape the effect of the ACPA simply by registering an infringing domain name and then changing its business name to match the infringing domain name.”

As a result of its determination, the Court directed plaintiff to transfer the cosmos.com domain to defendant. 

On the parties’ cross-motions for summary judgment, the Court finds the corporate defendants guilty of copyright infringement as a result of their unauthorized use of two of plaintiff’s copyrighted photographs in advertisements for their businesses. 

The Court further held that defendant Andrew Vilenchik, the sole board member and shareholder of defendant Vilana Financial, could not be held vicariously liable for defendant’s copyright infringement, because he did not have or derive a sufficiently direct financial interest from the use of plaintiff’s photographs.

The Court granted plaintiff summary judgment, dismissing defendants’ claim that his use of defendants’ trademark in the path of his site’s domain name violated the Anticybersquatting Consumer Protection Act.  Defendants’ claim failed both because they failed to submit sufficient evidence that plaintiff had a bad faith intent to profit from this use of the mark, and because use of the mark in the path of the domain name does not constitute actionable use of the mark in a domain name

The Court also dismissed trademark infringement claims brought by defendants as a result of plaintiff’s use of their trademark in a website that purportedly disparaged defendants as a result of their use of the photographs at issue, and in the meta tags of that site.  The court held defendants failed to establish the requisite likelihood of consumer confusion sufficient to sustain such a claim, given that the parties were not competitors – plaintiff was a photographer, and defendants sold real estate and mortgage services – and plaintiff’s website was highly critical of defendants.  In reaching this result the court noted that “a defendant’s use of a trademark in metatags in a descriptive manner can constitute a non-infringing fair use.”

Finally, the Court left for trial defendants’ remaining claims, which included deceptive trade practices, interference with contractual and business relationships, and misappropriation of name and likeness, all of which arose out of the disparaging remarks posted on plaintiff’s website about the defendants.  This site included a photograph of defendant Vilenchik.  Because issues of fact existed as to the truth of these statements, the court reserved decision on these claims until trial.

It should be noted that plaintiff ultimately prevailed at trial, was awarded approximately $20,000 on his copyright infringement claims, and that defendants’ remaining claims were dismissed.

In an action brought by Mattel under the Anticybersquatting Consumer Protection Act, as a result of defendants’ registration of the domain names BarbieToy.com and BarbieRetro.com, the Southern District of New York held that it could exercise personal jurisdiction over a non-resident defendant because “defendants solicited sales over the Internet, accepted an order from a resident of this state, and shipped goods into this state to fill that order.”  As a result, the Court denied defendants’ motion to dismiss this action for want of personal jurisdiction.  The defendants were retailers who primarily sold vintage toy reproductions.  At some point, they expanded their product line to include licensed ‘Barbie Classic’ items.  The domain names were purchased to promote this product line, and redirected the user to defendants’ website at which such items were offered for sale.  Plaintiff arranged to purchase two Barbie items from defendants’ website, which defendants shipped to plaintiff in New York.  As stated above, this purchase was sufficient to establish personal jurisdiction over the defendants in New York.

The Court nonetheless transferred the case to Texas, where the defendants reside, pursuant to 28 U.S.C. Section 1401(a).  Said the Court:

In the interests of justice and trial efficiency, this action should be transferred to the Southern District of Texas.  The locus of operative facts is in both the Southern District of Texas and New York;  Defendants documents related to the website in question are located in Houston Texas; Mattel is a worldwide manufacturer with offices all over the United States and Defendants are a one man outfit, located only in Houston Texas, maintaining the action in New York will pose a heavy financial burden on defendants; neither party is located in the Southern District of New York and Defendants are located in Houston, Texas.

Finding that defendant cybersquatters violated both the Anticybersquatting Consumer Protection Act (“ACPA”) and the Federal Trademark Dilution Act (“FTDA”), the court directed defendants to transfer to plaintiff domain names containing plaintiff’s famous “Pinehurst” mark, enjoined defendants from further using “Pinehurst” in a domain name, and awarded plaintiff both statutory damages in the amount of $100,000 and attorneys fees.   Plaintiff is the owner of the world famous Pinehurst Golf Resort.  The court found that defendants had registered the domain names in question – pinehurstresort.com and pinehurstresorts.com - with a bad faith intent to profit therefrom because, among other things, they had registered over 8000 domain names, many of which contained the trademarks of well-known corporations, golf courses or law firms, had offered, in settlement, to transfer the domain names at issue to plaintiff in exchange for a ‘contribution’ to their legal expenses and had registered additional ‘typo’ domains after the commencement of this suit.  Such a finding also rested on defendants’ stated purpose in registering these and other domains, which was to “mess” with “corporate America,” as well as on the fact that the domains at issue had been registered by an entity named NameIsForSale.com 

In reaching this result, the court rejected defendants’ claim that their conduct was a permissible ‘parody’ of plaintiff’s mark.  Such a defense failed, in part, because the content of defendants’ site – on which was located images of a miniature golf course and a trailer park – was not seen until after the user had already made a decision to enter the site based on the domain names at issue, which did not parody plaintiff or its golf course.  Said the court “A parody must convey two simultaneous and contradictory messages, that it is the original but also that it is not the original and is instead a parody. … Looking at Defendants’ domain names alone, there is no suggestion of a parody. … The domain names convey the first message, that it is the original, but the second message, that it is ‘not the original and that it is a parody, is discovered only by accessing the website and reading through the website’s content.”

The court further held that defendant had violated the FTDA by virtue of having registered the domain names in question, and thereby having prevented plaintiff from using them in commerce.  This reduced the selling power of plaintiff’s famous
”Pinehurst” mark, thereby diluting it.  Said the court:  “Because of the unique nature of domain names in electronic commerce and the resulting economic harm when marks are registered as domain names by cyberpirates, Defendants’ use of Plaintiff’s service marks in their Pinehurst domain names constitutes dilution.”

Reversing the court below, the First Circuit holds that a domain registrant who loses a UDRP proceeding and is directed to transfer his domain name to a trademark holder may pursue relief under the Anticybersquatting Consumer Protection Act.  This statute expressly provides that:

A domain name registrant whose domain name has been suspended, disabled, or transferred under a policy described under clause (ii) may, upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this chapter.  The Court may grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant.

Said the First Circuit:

Section 1114(2)(D)(v) grants domain name registrants who have lost domain names under administrative panel decisions applying the UDRP an affirmative cause of action in federal court for a declaration of nonviolation of the ACPA and for the return of the wrongfully transferred domain names.

A successful plaintiff can recover the domain lost in the UDRP proceeding.

In reaching this result, the court rejected defendants’ argument, accepted by the court below, that there was no actionable case or controversy that could be the subject of plaintiff’s action for declaratory judgment, because defendants had no intention of pursuing a claim against plaintiff for violation of the Anticybersquatting Consumer Protection Act.  Because this dispute had been brought to WIPO for resolution, and because it had resolved the dispute adversely to plaintiff, resulting in his loss of his domain name, an actual controversy did in fact exist. 

The First Circuit also rejected defendants’ argument that, by agreeing to the UDRP in his registration agreement, plaintiff contractually agreed both to be bound by any decision rendered in a UDRP proceeding by an authorized provider, and waived any rights he may have under the ACPA.

As a result, the First Circuit allowed plaintiff to pursue his claim that he was the valid owner of the domain Corinthians.com.  Plaintiff had registered this domain with NSI.  Defendants owned a Brazilian trademark in Corinthiao, the Portuguese equivalent of “Corinthians,” which is the name of a well-known soccer team in Brazil.  A WIPO panel found plaintiff to be a cybersquatter, in large part because he offered to sell the domain to defendants, and had not, according to the panel’s decision, made any use of it prior to his receipt of a cease and desist letter from defendants in response to his solicitation.  After this contact, but before the commencement of the UDRP proceeding, plaintiff posted on his website biblical quotations.  The domain was subsequently transferred to the defendants. 

The First Circuit allowed plaintiff to pursue his claim that he was not in violation of the Anticybersquatting Consumer Protection Act and seek the return of the domain name.

Additional cases can be found in the Domain Name section of the Index.

Anticybersquatting Consumer Protection Act - In Rem - Updated February 23, 2008

The court holds that the provisions of the Anticybersquatting Consumer Protection Act that permit a trademark holder to proceed with an in rem action against a domain name do not violate the Due Process clause of the United States Constitution.

In this in rem action commenced under the Anticybersquatting Consumer Protection Act, the Court holds that it can direct a top level domain registry – here Verisign – located in Virginia to cancel the domain registration of a domain found to be registered in violation of the ACPA.  In this case, the Court directed that such cancellation be effected unilaterally by the domain registry, which was directed to place the domain name on ‘hold’ status, thereby rendering it inactive, until such time as it is transferred to the trademark holder.

The Court holds that such relief is appropriate here, given the fact that the Korean domain name registrar with whom the domain name at issue was registered refused to transfer the domain as directed in a prior judgment issued by the Court.  After the Court issued this order, the domain registrant obtained an injunction from a Korean court, enjoining the registrar from transferring the domain.  The Korean registrar, in the face of this subsequent order, refused to comply with the US Court’s direction to transfer the domain to plaintiff.

The Court, on default, found that the domain registrant had violated the ACPA by registering the domain name at issue – globalsantafe.com – one day after Global Marine and SantaFe announced their agreement to merge into an entity to be called GlobalSantaFe.

Court denies motion to dismiss made by foreign domain name registrant, and allows trademark owner to proceed with in rem action, seeking relief under both the Anticybersquatting Consumer Protection Act, and the Lanham Act for trademark infringement.  The ACPA gives a trademark holder the right to proceed in rem to have a domain name transferred to it, or its registration cancelled, and allows a United States court to exercise jurisdiction over a res – the domain name – where the registry or registrar for such domain name is located in the United States.  This is true notwithstanding the fact that the United States court lacks personal jurisdiction over the domain name registrant.

Anticybersquatting Consumer Protection Act - In RemAnticybersquatting Consumer Protection Act - In Rem Quick Hits

In this in rem action commenced under the Anticybersquatting Consumer Protection Act (“ACPA”), the Court modifies its previously issued judgment, and directs a Virginia based domain registry – Public Interest Registry – to unilaterally cancel the registration of the domain name AOL.org and transfer it to plaintiff America Online.  The Court had previously found that this domain had been registered in violation of the ACPA, and had issued a judgment directing it domain registrar to transfer it to America Online.  The domain registrar, a Chinese entity, refused to comply, instead permitting the domain registrant to transfer the domain to another domain registrar, this time located in Korea.  This registrar too refused to transfer the domain to America Online.  Accordingly, the Court held that under the ACPA it was empowered to unilaterally direct a domain registry to cancel a domain, and transfer it to the trademark holder.

Antitrust - Updated May 08, 2008

Court dismisses action seeking redress as a result of Google’s alleged downward manipulation of the “Page Rank” it assigned plaintiff’s website.  This act allegedly reduced the ranking of plaintiff Kinderstart.com’s search engine in various Google Search results which, in turn, adversely impacted both the traffic and advertising revenue plaintiff Kinderstart.com’s site generated.  “Page Rank” is a system offered by Google for rating the usefulness of websites.  Google’s search engine utilizes the relative “Page Ranks” it assigns to websites in determining the order in which to deliver responsive search results to a user’s query. 

In its Second Amended Complaint, plaintiff claimed such acts constituted violations of the Sherman Antitrust Act, the Lanham Act and California Business and Professions Code Section 17200, as well as plaintiff’s right to free speech under both the Federal and California constitutions.  Plaintiff Kinderstart.com also alleged that it was defamed by Google’s alleged statement that the low