Designer Skin LLC v. S & L Vitamins, Inc., et al.
CCBN.Com, Inc. v. C-Call.Com, Inc.
73 F.Supp.2d 106, 1999 U.S. Dist. Lexis 18187 (D. Mass. Nov. 18, 1999)
The court denied plaintiff's application for a preliminary injunction, enjoining defendant from continuing to operate a website at a domain name which purportedly infringed plaintiff's trademark.
Plaintiff and defendant are direct competitors who offer to investment professionals information about public companies provided by the investor relations departments of those concerns. This information includes access to company-hosted conference calls for investment professionals.
Plaintiff CCBN currently offers these services for free at a web site it operates at "streetevents.com," for which name it has applied for federal trademark protection. Defendant also offers its information at a web site located at the url "streetfusion.com," for which mark it too has sought federal trademark registration. Unlike plaintiff, defendant charges its customers for access to its information, with prices ranging up to $400,000 for a one year subscription.
Claiming that defendant's use of the domain name and mark "streetfusion.com" infringed its rights in "streetevents.com," plaintiff commenced this suit, in which it alleged that defendant was engaging in unfair competition in violation of section 43 of the Lanham Act, 15 U.S.C. Section 1125(a). Plaintiff sought a preliminary injunction, enjoining defendant from continuing this conduct. Finding that plaintiff had not established a sufficient likelihood of prevailing on the merits, the court denied plaintiff's application.
Neither party possessed a federally registered trademark. Accordingly, their respective rights turned on which party first commenced use of their mark in commerce. The court, on the record before it, was unable to determine which party had first commenced use of the marks at issue. The operative question, held the court, was whether plaintiff had commenced use of its mark in commerce. Such use can be shown "by demonstrating 'test market use' of the mark preparatory to the provision of services." Relying on Future Domain Corp. v. Trantor Sys. Ltd., 1993 U.S. Dist. Lexis 9177 (N.D. Cal. 1993) the court held that "test marketing involves offering the product for sale through normal channels of trade in limited markets for limited times."
Plaintiff registered its domain name in October 1998. In November and December, plaintiff tested its brand name via telemarketing. It did not commence operation of a web site at its "streetevents.com" domain until January 1999. At that time, plaintiff, in an effort to test the site, provided an unidentified number of individuals with access to the site for the purpose of obtaining their feedback. In February, plaintiff distributed postcards and brochures concerning its web site at a conference for investment professionals. In February and March, an unspecified number of mailings concerning the site were sent to investment professionals. The first advertisements for the site were not ordered until May 1999.
This evidence, concluded the court, was insufficient to permit it to determine if plaintiff's use of the "streetevents.com" mark predated defendant's use of its "streetfusion.com" mark, which appeared to commence in mid to late April, 1999. At that time, defendant sought trademark registration for its mark, and commenced operation of a web site, the launch of which was announced in a May 1 press release. Said the court:
Because of the gaping holes in the record with respect to numbers of customers and amount of promotional and advertising activities in the early part of 1999, plaintiff has not established that it began to offer services in commerce under the mark StreetEvents.com until April, 1999 at the earliest. ... Even in the absence of establishing priority in actual sales, plaintiff may nonetheless prevail if it establishes sufficient test-marketing. ... Because of the dearth of information on the extent of test-marketing in the early months of 1999, plaintiff has not established a likelihood of success on priority even under a test-marketing theory.
The court went on to hold that even if plaintiff had commenced use of its mark before defendant, it had not established sufficient likelihood of consumer confusion to entitle it to the requested relief. The court reached this result notwithstanding the fact that plaintiff submitted evidence of approximately 20 incidents in which investment professionals had actually confused the two services. Said the court "de minimus confusion, which is easily resolved and does not affect the ultimate purchasing decision, is of minimal relevance." Because the purchasing decisions in question were made over a long period of time by sophisticated professionals, and required a substantial expenditure, the court held that this evidence did not demonstrate "actual confusion in purchasing the parties' products."
The court also based its decision on the weakness of plaintiff's mark. Though it found the mark "streetevents.com" to be suggestive, and not descriptive, it found the mark weak because "of the short time [the mark] has been in use and the common use of the word "street" in the financial world."