Designer Skin LLC v. S & L Vitamins, Inc., et al.
Virtual Works, Inc. v. Network Solutions, Inc., Volkswagen of America Inc., et al.
2000 U.S. Dist. Lexis 2670, 106 F. Supp. 2d 845 (E.D.Va., Feb. 24,2000) aff'd., 238 F3d.264 (4th Cir., January 22, 2001)
Court grants defendants Volkswagen AG and Volkswagen of America Inc. (collectively "Volkswagen") summary judgment, holding that plaintiff's use of defendants' "vw" trademark in a domain name, which also happen to be the initials of plaintiff's firm, constitutes cyberpiracy, trademark dilution and trademark infringement.
The court does not recite in its opinion the nature of either plaintiff's business or its use of defendants' "vw" trademark. From plaintiff's web site, however, (located at www.vw.net) it appears that plaintiff and its predecessors have, since at least 1996, been engaged in the business of providing web site development, hosting and other "e-commerce" solutions to its clients. Sometime in 1996, plaintiff's predecessor Virtual Worlds registered the domain name "www.vw.net" at which it apparently commenced a web site advertising its services. According to the court, at some point in time, plaintiff offered to sell its vw.net domain to the defendants. In addition, at some point in time, plaintiff posted on its web site disparaging remarks about defendant, which contained, according to the court, "references to Volkswagen as Nazi's using slave labor." The court also found that there was evidence in the record of actual consumer confusion, in the form of e-mails plaintiff received that were intended for defendants.
Plaintiff commenced this action, charging the defendants with tortious interference with plaintiff's "vw.net" domain name. Defendants counterclaimed, alleging that plaintiff's use of defendants' mark in its "vw.net" domain constituted cyber piracy, trademark dilution and trademark infringement in violation of the Lanham Act.
The court found that plaintiff had run afoul of the newly enacted Anticybersquatting Consumer Protection Act by registering a domain name containing defendants' famous trademark. The court held that plaintiff undertook such registration with a bad faith intent to profit from a previously registered mark within the meaning of the Act. In reaching this conclusion, the court relied on the fact that "Virtual Works has never registered a trademark or conducted business using [the vw] initials," "vw" was not the legal name plaintiff's entity, plaintiff's use of the vw mark has created a likelihood of confusion and has been used to disparage defendants as set forth above, plaintiff had offered to sell the domain to defendants and defendants' trademark was famous.
The court further found that plaintiff had infringed and diluted defendants' trademark. On this latter point, the court stated:
Recent case law holds that internet cyberpiracy constitutes per se trademark dilution. ... VW being associated with Virtual Works instead of Volkswagen constitutes trademark dilution.