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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...
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Avery Dennison Corporation v. Jerry Sumpton., et al

CV 97-407 JSL, 999 F.Supp. 1337 (C.D. Cal. Mar. 16, 1998) rev'd. 189 F.3d 868, 1999 U.S. App. Lexis 19954 (9th Cir., August 23, 1999)

Defendants were cybersquatters that registered as domain names over 12,000 proper names, many of which were also federally registered trademarks. Defendants registered these domains with the avowed intent of licensing them to third-parties solely for use as e-mail addresses. Among the names defendants registered were avery.net and dennison.net. These domain names contained federal registered trademarks owned by plaintiff, who used the marks to sell office furniture.

The court held that defendants' conduct violated the Federal Trademark Dilution Act. Of interest, the court held that a famous mark was used in the ordinary course of trade, a prerequisite to a finding of dilution:

when (a) it is registered as a domain name by a registrant who is not otherwise identified by or associated with any of the commonly accepted meanings of the domain name, and (b) it is not used by the registrant as its own domain name, but rather is held by the registrant for sale or license to others.

The court further held that dilution occurs within the meaning of the act when one registers a famous mark as a domain name, and thereby blocks the trademark owner from using its mark in the domain name of a web site designed to advertise or sell it products. Said the court:

It is the registration of the trademark name as a domain name, which denies the holder of the famous trademark from using its trademark name as an Internet domain name, that dilutes the ability to identify goods and services.

Under these standards, defendants had violated the Trademark Dilution Act by registering domain names containing famous marks with the intent of licensing them to third-parties. This prevented the plaintiff from utilizing the mark in its domain name, which diluted the mark.

The fact that defendants had used ".net" as the top level domain name did not alter this result. Dilution was found to occur even though plaintiff could, and did, own the domain names avery.com and dennison.com.
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