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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...

Marianne Bihari and Bihari Interiors, Inc. v. Craig Ross and Yolanda Truglio

2000 U.S. Dist. Lexis 14180, 119 F. Supp. 2d 309 (S.D.N.Y., September 28, 2000)

Court refuses to enjoin defendants from operating web sites critical of plaintiffs' business, or from utilizing plaintiffs' common-law service mark in meta tags on those sites to attract visitors seeking information about plaintiffs. The court also refused to enjoin defendants from continuing to publish allegedly libelous statements about plaintiffs on their web sites.

Plaintiff Marianne Bihari is an interior designer who does business under the name Bihari Interiors. Plaintiffs claim common-law rights in the service mark "Bihari Interiors" as a result of their continuous use of this mark since 1989 in connection with their operation of this business. Plaintiffs do not operate a web site.

Defendants are individuals who retained plaintiffs to render interior and architectural design services for their apartment. Dissatisfied with plaintiffs' performance, defendants commenced suit in state court (the "State Court Action") charging plaintiffs with breach of contract and fraud.

Defendants also launched a series of 'consumer complaint' web sites, on which they posted uncomplimentary statements about plaintiffs and their performance on the job for defendants. More particularly, the web sites contained the following statements:

Welcome to the first web site designed to protect people from the alleged ill intentions of Marianne Bihari & Bihari Interiors. Keep in mind that this site reflects only the view points and experiences of one Manhattan couple that allegedly fell prey to Marianne Bihari & Bihari Interiors. There possibly may be others that have experienced similar alleged fraud and deceit from Marianne Bihari & Bihari Interiors. Please feel free to e-mail us if you think you were victimized by Marianne Bihari & Bihari Interiors. Our goal is to protect you from experiencing the overwhelming grief and aggravation in dealing with someone that allegedly only has intentions to defraud. If you think you need advice before entering into a contract with Marianne Bihari & Bihari Interiors - Please Click Here.

At a later point in time, the sites added a link which took the user to the full text of the First Amended Complaint filed in the State Court Action. The web sites also contained a series of links that took users to sites of other interior designers.

Initially, these sites were operated at the domains "www.bihari.com" and "www.bihariinteriors.com". After the commencement of the instant suit, these sites were taken down, and replaced with sites of identical content located at "www.designscam.com" and "www.manhattaninteriordesign.com."

All of defendant's websites used plaintiffs' service mark "Bihari Interiors" in their meta tags. The description meta tags contained the following language: "This site deals with problems experienced when hiring a new [sic] York City (Manhattan) designer. It discusses Marianne Bihari [,] fraud and deceit and interior decorating."

Claiming that defendants' conduct violated the Anticybersquatting Consumer Protection Act ("ACPA"), the Lanham Act, and various state law prohibitions on libel, plaintiffs commenced suit, and sought a preliminary injunction enjoining defendants from using the names "Bihari" or "Bihari Interiors" in the domain names or meta tags of their web sites, or from publishing on those sites certain allegedly libelous statements about plaintiffs. Finding that plaintiffs were not entitled to the requested relief, the Court denied plaintiffs' application in all respects.

In reaching this conclusion, the Court held that plaintiffs were not likely to prevail on their Lanham Act claims of trademark infringement. To establish such a claim, the plaintiff must show both ownership of a valid trademark and a use by defendants of that mark in commerce in such a way as "is likely to cause confusion . . . as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of the [defendant's] goods, services, or commercial activities by another person."

Though defendants are not interior designers, and do not sell or offer for sale goods or services on the web sites in question, the Court held that the challenged use was a use "in commerce" because the site was linked to other sites (run by third parties) which did sell and offer for sale goods or services. Said the Court:

Defendants are not interior designers and do not sell visitors any products or services. However, the [defendant's] web sites contain hyperlinks to other web sites which promote the services of other interior designers. The [defendant's] web sites effectively act as a conduit, steering potential customers away from Bihari Interiors and toward its competitors, thereby transforming [t]his otherwise protected speech into a commercial use.

The Court nonetheless held that defendants' conduct was not likely to run afoul of the Lanham Act "because [defendant's] use of the 'Bihari Interiors' mark in the meta tags is not likely to cause confusion and is protected as a fair use."

The Court held that consumers were not likely to believe that a web site highly critical of plaintiffs was sponsored by them, and therefore were not likely to be confused about the source of the sites in question. Said the Court:

Because the purpose of the web sites is to injure Bihari Interiors commercially, no reasonable viewer would believe that the disparaging comments regarding Bihari's business ethics -- comments which appear on the first page of the web sites -- are endorsed by Bihari.

The Court also rejected plaintiffs' argument that they could establish the requisite likelihood of consumer confusion under the "initial interest confusion doctrine" enunciated by Ninth Circuit in Brookfield Communications Inc. v West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999). Initial interest confusion occurs when a consumer looking for a company and its products on the web is diverted by improper means to a competitor's web site.

The Court first noted that the Second Circuit had not yet "explicitly applied" this doctrine to an Internet case. Assuming its applicability, the court found that plaintiffs could not prove initial interest confusion for several reasons. First, plaintiff did not operate a web site, hence, the user was not being diverted from one site to another, an essential component of an "initial interest confusion" claim. Second, given the search results that would lead a party to defendants' sites, the user was not likely to believe that defendants' sites were sponsored by plaintiffs. Thus, the Court noted that the typical search result for defendants' sites would contain the following description:

... the heading "Manhattan Interior Design Scam - Bihari Interiors." Each web site with that heading contains the following description underneath the title: "This site deals with the problems experienced when hiring a New York City (Manhattan) designer. It discusses Marianne Bihari, fraud and deceit and ...."

That, combined with the fact that the search results informed the user that the site in question was located at the domain "designerscam.com" or "manhattaninteriordesign.com" would make it unlikely that the user would believe the site in question belonged to plaintiffs, or be confused as to its source, initially or otherwise.

The Court also held that "use of the "Bihari Interiors mark in the meta tags [of defendants' sites] is protected as a fair use." "Fair use is established when the challenged term is a use, otherwise than as a mark,. . . of a term or device which is descriptive of and used fairly and in good faith only to describe the good or services of such party . . .".

The Court held that defendants' use met both requirements. Defendants used Bihari Interiors "to fairly identify the content of his web sites," which are, in fact, about plaintiffs. Accordingly, defendant used the mark in the descriptive sense.

The Court also found that defendants used the mark in good faith, notwithstanding the court's conclusion that defendants operated the site to "cause Bihari commercial harm." The question here is whether the defendants used plaintiffs' mark with the intention of capitalizing on plaintiffs' reputation and any confusion caused by defendants' use of the mark. The Court held this was not defendants' intent -- his intent instead was to catalogue the content of his site for search engines. In reaching this conclusion, the court pointed to the fact that defendants had posted a disclaimer on their site. Said the Court:

The [defendant's] web sites include a disclaimer: "Keep in mind that this site reflects only the view points and experiences of one Manhattan couple . . ." See Amended Complaint P. 92. Although a disclaimer cannot insulate [defendant] from liability, it indicates good faith use of the service marks and weighs in [defendant's] favor.

The Court also noted that:

Moreover, use of the "Bihari Interiors" mark in the meta tags of his web sites is the only way Gross can get his message to the public. . . . A broad rule prohibiting use of "Bihari Interiors" in the meta tags of web sites not sponsored by Bihari would effectively foreclose all discourse and comment about Bihari Interiors, including fair comment. Courts must be particularly cautious of over extending the reach of the Lanham Act and intruding on First Amendment values.

The Court also refused to enjoin defendants from continuing to publish allegedly libelous statements about plaintiffs on the web sites. The court noted that courts generally will not enjoin the publication of libelous statements:

Our Circuit Court of Appeals has longed warned against enjoining libel: "Equity will not restrain by injunction the threatened publication of a libel, as such, however great the injury to property may be. This is the universal rule in the United States and was formerly the rule in England.

Courts will, however, consider enjoining such statements if they are in furtherance of another tort. Applying this rule, the court declined to enjoin defendants' from continuing to post the statements about plaintiffs' at issue on their sites. In so holding, the court rejected plaintiffs' argument that this speech was published in furtherance of defendants' alleged efforts to harass plaintiffs. Said the court:

[Defendant's] harassing conduct ceased more than seven months before Bihari filed this lawsuit and plaintiffs have not alleged that the harassment has resumed. Most important, plaintiffs are not seeking to enjoin any harassing conduct by [defendant]. Rather, plaintiffs seek to enjoin the web sites making it quite clear that the speech itself is what plaintiffs are targeting, not [defendant's] alleged past harassment.

Finally, the Court held that the ACPA did not support the instant request for injunctive relief because defendants had stopped using domain names containing plaintiffs' mark, and were in the process of returning these domain names to NSI. The ACPA does not, held the Court, apply to the use of a mark in a site's meta tags.

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