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Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Paccar, Inc. v. Telescan Technologies, L.L.C.

115 F. Supp. 2d 772 (E.D. Mich., August 25, 2000), aff'd. in part, vacated in part and remanded, 319 F.3d 243 (6th Cir. 2003)

In this trademark infringement suit, the court enjoined defendant, a truck listing service, from using plaintiff's registered federal trademarks in either the domain name, meta tags, site title or wallpaper of web sites that inform consumers of entities offering plaintiff's trucks for sale.

Plaintiff Paccar Inc. is the owner of the federally registered trademarks "Peterbilt" and "Kenworth," which marks plaintiff has long used in connection with its business of manufacturing heavy trucks and truck parts. Plaintiff also operates a used-truck locator service at its web site, which aids consumer in finding used Peterbilt and Kenworth trucks offered for sale.

Defendant Telescan Technologies L.L.C. ("Telescan") operates a number of web sites which also provide truck locator services. Some of these sites provide information concerning new and used Peterbilt and Kenworth trucks. These sites are operated at the domains <>, <>, <>, <>, <>, <>, <>, <>, and <>.

To drive traffic to these sites, defendant used plaintiff's marks in the web sites' title and meta tags, and repeated the marks throughout the wallpaper of the sites.

Claiming this conduct constituted trademark infringement and trademark dilution in violation of the Lanham Act, 15 U.S.C. §§ 1114 and 1125, plaintiff brought suit and sought a preliminary injunction. Finding such relief warranted, the court issued a preliminary injunction, enjoining defendant from using plaintiff's marks in the domain name, meta tags, title and wallpaper of its sites. The court also directed defendant to transfer the domain names at issue to plaintiff.

The Court found that defendant's use of the plaintiff's marks, as described above, was likely to cause consumer confusion as to the source of defendant's web site. The Court based this determination on its holdings that (a) plaintiff's marks were fanciful and arbitrary, and strong marks used by plaintiff nationwide for decades in connection with the manufacture of heavy trucks; (b) defendant used marks that were very similar to those of plaintiff (the fact that defendant added words like 'truck,' 'new trucks' or 'used trucks' to the marks did not render defendant's marks "appreciably different" from plaintiff's given the close association of plaintiff's mark with trucks); (c) both parties operated used-truck locator services on the Internet and (d) consumers would not exercise great care in looking at the web sites in question.

The Court rejected defendant's claim that the inclusion of a disclaimer on its site negated any possibility of consumer confusion. The disclaimer provided that "This website provides a listing service for name brand products and has no affiliations with any manufacturer whose branded products are listed herein." Such a disclaimer was ineffective, held the court, because it did not prevent "initial interest confusion." Said the Court:

The presence of a disclaimer on Telescan's web sites does not remedy any infringement caused by an improper domain name. An infringing domain name has the potential to misdirect consumers as they look for web sites associated with the owner of a trademark. A disclaimer that purports to disavow association with the trademark owner after the consumer has reached the site comes too late; the customer has already been misdirected. This problem [is] denoted as "initial interest confusion ...

More importantly, the court rejected defendant's claim that its use of plaintiff's mark was a protected fair use. Defendant relied heavily on Volkswagen A.G. v. Church, 411 F.2d 350 (9th Cir. 1969) which held that a party's use of another's trademark in advertising repair services of those products was a permitted fair use. The Court rejected this analogy, holding instead that use by defendant of plaintiff's mark in the domain name, meta tags, wallpaper and title of a site which aided consumers in locating plaintiff's products, was not a permitted fair use. The Court reached this conclusion, in large part, because it believed that domain names are typically seen by consumers as identifying the source of the web site. Said the Court:

Due to the nature of the Internet, and the way in which Internet surfers search for information on the Web, a domain name is significantly different than a classified advertisement. The use of the name of a truck in a classified advertisement communicates information as to the source of the truck, not information as to the seller of the truck. Words in domain names, however, do communicate information as to the nature of the entity sponsoring the web site. Using the name Peterbilt or Kenworth in a domain name sends a message to Internet users that the web site is associated with, or sponsored by the company owning the trademarks Peterbilt or Kenworth. ... Telescan's arguments essentially confuse the nature of what its domain names describe; the domain names here describe the web site, not the trucks. Consequently, it is not a fair use.

The court also held this was not a permitted fair use because defendant sought to "derive a benefit from the reputation of [plaintiff's] Peterbilt and Kenworth marks."

Finally, the Court held that defendant, by its conduct, had diluted plaintiff's mark. The Court held that such dilution occurs simply as a result of placing plaintiff's mark in the domain name of a web site it did not control (without any evidence that the site on which the name was placed was in any way objectionable). Said the Court:

Here, there is sufficient evidence to believe that a consumer may mistakenly associate Telescan's web sites with Paccar's trademarks. Since Paccar has no power to influence or control what appears on Telescan's web sites, it is effectively "at the mercy" of Telescan. Thus, Telescan's use of Paccar's trademarks in Telescan's domain name is trademark dilution.
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