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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...

Hasbro, Inc. v. Clue Computing, Inc.

66 F. Supp. 2d 117 (D. Mass., Sept. 2, 1999), aff'd., 232 F.3d 1 (1st Cir., 2000)

Court grants defendant summary judgment, dismissing claim that defendant's use of the domain name "www.clue.com" infringes and dilutes plaintiff Hasbro Inc.'s ("Hasbro") federally registered trademark "clue."

Plaintiff Hasbro sells children's toys and related items, including the board game "Clue." Hasbro obtained federal trademark registration for the mark "clue" in 1950, which it has used continuously since in its sales of the "Clue" board game. During this period of time, Hasbro has spent millions of dollars advertising its mark, which, according to the Court, "has gained widespread recognition [both] in the United States and abroad."

Defendant Clue Computing Inc. is a small computer consulting firm who's predecessor registered the domain name "www.clue.com" in 1994. Defendant operates a website at "www.clue.com" which promotes defendant's computer consulting business, and provides prospective customers with both the address and means of contacting defendant.

Plaintiff claimed that defendant's use of its mark in this fashion infringed and diluted plaintiff's famous mark in violation of both the Lanham Act and Massachusetts Anti-Dilution Act. The court disagreed, and dismissed plaintiff's complaint in its entirety.

Plaintiff's infringement claim failed because, as determined by the Court, plaintiff had failed to show the requisite likelihood of confusion needed to establish such a claim. In reaching this conclusion, the Court relied on a number of factors, including the limited evidence of actual consumer confusion arising out of defendant's use of the "clue.com" domain name during the four year period in which defendant was engaged in such conduct. The Court also pointed to the dissimilar nature of both the products offered by plaintiff and defendant and the consumers interested in purchasing them.

In addition, the court relied upon the different channels of advertising and trade used by the parties to market their products. Though both parties marketed their products on the Internet, plaintiff's Internet activities made up but a "very small component" of its business regarding the Clue board game. This was significant, said the court, because "[w]here products have some overlap in channels of advertising and trade but primarily occupy different channels, courts have not found likelihood of confusion based on this factor." Finally, in reaching its determination that plaintiff had failed to demonstrate a likelihood of consumer confusion, the court relied on the fact that there was no evidence that defendant adopted its 'Clue Computing' name so as to create confusion among consumers or improperly benefit from an association with plaintiff's mark.

Perhaps most interesting was the court's rejection of the "initial interest confusion" doctrine which formed the basis of the Ninth Circuit's decision in Brookfield Communications. Said the Court:

[T]he kind of confusion that is more likely to result from Clue Computing's use of the "clue.com" domain name - namely, that consumers will realize they are at the wrong site and go to an Internet search engine to find the right one - is not substantial enough to be legally significant. "[A]n initial confusion on the part of web browsers ... is not cognizable under trademark law."

The Court also held that plaintiff had failed to establish its entitlement to relief under the Federal Trademark Dilution Act. Notwithstanding plaintiff's extensive use and advertising of its "clue" mark and the widespread recognition it had gained both inside and outside the United States, the court held the mark was not "famous," a prerequisite to relief under the Federal Trademark Dilution Act. In reaching this result, the court relied primarily on the fact that "clue", the mark in question, was a common term used in a significant number of trademarks not owned by plaintiff.

The Court further held that even if the mark "clue" was famous, plaintiff was not entitled to relief because defendant's use did not dilute the distinctive quality of plaintiff's mark, another prerequisite to relief under the Trademark Dilution Act.

The Court rejected plaintiff's claim that defendant's mere use of the "clue" mark in a domain name, without more, constituted per se dilution thereof in violation of the Act. Said the Court:

These courts seem to suggest that simply preventing a plaintiff from using his own famous trademark as a domain name dilutes the plaintiff's ability to identify his goods and services and may frustrate or deter potential consumers ... I join those courts finding that, while use of a trademark as a domain name to extort money from the markholder or to prevent that markholder from using the domain name may be per se dilution, a legitimate competing use of the domain name is not. Holders of a famous mark are not automatically entitled to use that mark as their domain name; trademark law does not support such a monopoly. If another Internet user has an innocent and legitimate reason for using the famous mark as a domain name and is the first to register it, that user should be able to use the domain name, provided that it has not otherwise infringed upon or diluted the trademark.

The Court went on to hold that defendant's use neither blurred nor tarnished plaintiff's famous mark. To constitute blurring, a plaintiff must show "one mark seen by customers as now identifying two sources." "These guidelines seem to require that consumers at least potentially associate the two products with the same mark". Finding that "Hasbro's evidence is not sufficient to show as a matter of law that consumers will see one mark as identifying two sources or will associate both products with Hasbro's mark," the court dismissed Hasbro's Federal Dilution claim.

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

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