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Designer Skin LLC v. S & L Vitamins, Inc., et al.
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...

Playboy Enterprises, Inc. v. Netscape Communications Corp.

55 F. Supp. 2d 1070, 1999 U.S. Dist. Lexis 9638, Case No. CV 99-320 AHS (C.D. Cal., June 24, 1999), aff'd. 202 F.3d 278 (9th Cir. 1999)

Plaintiff Playboy Enterprises Inc. ("Playboy") brought this suit to challenge defendants' practice of "keying" advertisements to the words "playboy" and "playmate." Plaintiff holds federal trademarks in both "Playboy" and "Playmate," which marks it uses in connection with the sale of adult entertainment products. Defendants Netscape and Excite each operate search engines. For a fee, defendants will display an advertiser's banner ads in random rotation on web pages containing the results of searches produced by defendants' search engines. For an increased fee, defendants will display an advertiser's banner ads whenever a user utilizes one of a series of designated terms in his search. This practice, known as "keying," allows the advertiser to target his ads and reach a more receptive audience. (For example, an advertisement for the Honda Civic could appear when a user selects "car" or "automobile" as a search term).

Defendants key various adult entertainment ads to a group of over 450 terms, which include the terms "playboy" and "playmate." As a result, individuals who use one of those terms in a search are greeted not only by a list of web sites which contain the word "playboy" or "playmate", but also by a paid banner advertisement from a purveyor of adult entertainment services. These banner ads do not contain either the word "playboy" or "playmate."

Plaintiff argued that this practice constitutes both trademark infringement and dilution, in violation of federal law and the laws of the State of California. The court disagreed, and denied plaintiff's motion for a preliminary injunction enjoining defendants from continuing their keying activities.

The court found that plaintiff's claims failed for a number of reasons. Plaintiff's infringement and dilution claims each require that defendants "use plaintiff's trademarks in commerce." The court held that defendants did not use plaintiff's trademarks "playboy" and "playmate" in their keying activities. Rather, defendants were merely using words found in the English language over which plaintiff does not have a monopoly, and which are found not only in the trademarks held by Playboy, but in trademarks held by others as well. Defendants' use of these words in their keying activities is but one of several permitted uses that do not require a trademark owner's consent.

Excite and Netscape are not using a PEI trademark. PEI uses the words "playboy" and "playmate" as trademarks, i.e., to identify its products. Internet users search for the words "playboy" and "playmate"; and Excite and Netscape use the words "playboy" and "playmate" in their search engines. Netscape and Excite do not use these words to identify any goods or service and have no intent to do so, much less an intent to confuse consumers.

Because defendants were not using plaintiff's trademarks, but rather English words, the trademark infringement and dilution claims failed. In reaching this conclusion, the court rejected plaintiff's argument that the association by defendants and their advertisers of "playboy" with adult entertainment ads evidences defendants' use of that term in a trademark capacity.

The infringement claim also failed because plaintiff did not show that consumers were likely to be confused by defendants' alleged use of plaintiff's mark, another perquisite of a trademark infringement claim. Plaintiff offered no consumer surveys showing that consumers believed that the banner advertisements shown when they conducted their search for the term "playboy" were affiliated with, or endorsed by plaintiff "Playboy." Nor had defendants received any complaints from users who claimed to be confused by these ads, which, as set forth above, did not contain the words "playboy" or "playmate". The court also pointed to the fact that the search results pages produced in response to a "playboy" search contain not only a banner ad but links to plaintiff's websites as well.

Plaintiff argued that defendants' actions caused consumer confusion under the Ninth Circuit's "initial interest confusion" doctrine, relying on Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999). As stated by the court:

Initial interest confusion, as coined by the Ninth Circuit, is a brand of confusion particularly applicable to the Internet. Generally speaking, initial interest confusion may result when a user conducts a search using a trademark term and the results of the search include web sites not sponsored by the holder of the trademark search term, but rather of competitors. Id. The Ninth Circuit reasoned that the user may be diverted upon arriving at the competitor's site. Once there, however, even though the user knows she is not in the site initially sought, she may stay. In that way, the competitor has captured the trademark holder's potential visitors or customers.

The court distinguished Brookfield on the grounds that Netscape and Excite, unlike the defendant in Brookfield, were using words found in the English language. The court also distinguished Brookfield because, unlike the Brookfield defendant, Netscape and Excite were not plaintiff's competitors.

The court similarly rejected plaintiff's dilution claim, because plaintiff had shown neither blurring, tarnishment, nor any other lessening of the ability of its famous marks as an advertising agent for goods or services. Plaintiff did not show blurring, because defendant did not use plaintiff's marks to advertise its own goods or services. Nor did plaintiff show that defendants tarnished its famous marks. To show tarnishment:

plaintiff would still be required to show that associating marks admittedly famous for adult entertainment with others purveyors of adult entertainment somehow harms plaintiff's marks. Whether PEI is a cut above the rest, as it contends, is undercut by the fact that PEI's marks are associated with other purveyors of adult entertainment in other marketing channels, as defendants' exhibits graphically establish. Adoption of plaintiff's tarnishment would secure near monopoly control of the placement of plaintiff's marks and the associated goods and services on the Internet, where arguably, "placement" is a nebulous concept. A greater showing of harm is required.

The court held that defendants' use of "playboy" and "playmate" in keying was both a permitted fair use of plaintiff's marks, as well as a use protected by the First Amendment. On this latter point, the court stated:

Here, PEI is seeking to leverage its trademarks "Playboy(R)" and "Playmate(R)" (which cannot be searched on the Internet) into a monopoly on the words "playboy" and "playmate". Indeed, by seeking a prohibition on all advertisements that appear in response to the search words "playboy" and "playmate", PEI would effectively monopolize the use of these words on the Internet. This violates the First Amendment rights of (a) Excite and Netscape; (b) other trademark holders of "playboy" and "playmate"; as well as (c) members of the public who conduct Internet searches.

The full text of the court's decision can be found on a web site maintained by America Online.

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