Client wanted to sue under Federal Trademark Act of 1995.
This is a SAMPLE ONLY of what all 1st year law students must write.
TO: Assigning Partner, Big 9th Circuit Law Firm
FROM: Alice Marie Beard
RE: W. J. Barone, Inc. Considerations regarding
proceeding with federal trademark dilution claims against
Under the Federal Trademark Dilution Act of 1995, is W. J. Barone, Inc., likely to prevail against Protect It, Inc., in a federal trademark "dilution claim" based on Protect It's use of Barone's federally registered trademark "PreciousThings" as an internet domain name?
Yes, probably. Under the Federal Trademark Dilution Act of 1995, W. J. Barone, Inc., appears to have a strong case against Protect It, Inc. Within the last 18 months, the 9th Circuit Court of Appeals has handed down three decisions that seem favorable to our client's position.
Pertinent facts: Our client, W. J. Barone, Inc., has had the trademark "PreciousThings" registered and in continuous use since 1978. The company is well known in the broader industry in which it does business; its product is known as "top of the line." When Barone attempted to register <preciousthings.com> with Network Solutions in June 1999, the company learned that Protect It had registered that domain name in Dec. 1997 and has been using the website to sell a similar product that is in direct competition with our client's products. Protect It's product is almost a "knock off" of our client's product, and the two companies compete in the same geographic and trade areas. Protect It has been in business since the early 1990s; it has no trademarks registered or in use. Protect It has had its web site up for almost two years. During that time, Protect It has grown to be a company with sales and advertising numbers that are nearly the same as our client's. Protect It admits that one-third of its sale come from the web site. Our client has experienced a decline in sales in the past six months. Protect It has begun using the <preciousthings.com> domain name on stationery and in advertising. We have sent Protect It a cease-and-desist letter. The company refuses to change, relinquish, or sell the domain name.
Statutory law on the issue took effect Jan. 16, 1996, and is found at 15 U.S.C. §1125(a)(1)(A) and (c)(1) and (4), with definitions at 15 U.S.C. §1127:
Our client would argue that Protect It, in connection with the sale of a good, is using a term that is likely to cause confusion among potential customers.
Our client would argue that it registered the name "PreciousThings" in 1978 and has continually used the name since then. Protect It has been in business only since the early 1990s and has used the conflicting domain name since 1997.
Regarding § 1125 (c)(1)(A), it can be argued that Barone's PreciousThings acquired distinctiveness since it is regarded as top of the line. Regarding § 1125 (c)(1)(B) and (c)(1)(C), Barone's has used the trademark continually since 1978, and Baron's continually has invested in advertising. It spends $115,000 per year on national advertising. Regarding § 1125 (c)(1)(D), with the use of the internet, Protect It has expanded its geographical sales area to include the entire United States and beyond. We would need to get more information from Barone, but the fact that Barone's budgets in terms of national advertising argues that Barone's geographic sales area includes all of the United States. Regarding § 1125 (c)(1)(E), the channels of trade are identical. Regarding § 1125 (c)(1)(F), this is the "fame" issue, and this is the point on which the case will turn. Sec. 1125 (c)(1)(G) is a non-issue, and § 1125 (c)(1)(H) has been met by Barone's.
Protect It could not use any of the § 1125 (c)(4) defenses to the charge of dilution.
The heart of the issue is found in 15 U.S.C. §1127, the definition of the term "dilution." The use of the domain name by Protect It has lessened the ability of Barone to use its trademark to distinguish its product.
Besides statutory law, there is another aspect to consider: As explained in Panavision Int'l, LP, v. Toeppen, 141 F.3d 1316, 1319 (9th Cir. 1998), although Network Solutions registers domain names on a first-come, first-served basis, Network Solutions requires that
As made clear in Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresgee Co., 316 U.S. 203, 205 (1942), "The protection of trade-marks is the law's recognition of the psychological function of symbols." While a trademark of the 1940s was as simple as a white rectangular band with a red ball, times have changed, and Judge Trott stated it well in Avery Dennison Corp. v. Sumpton, 189 F.3d 868 (9th Cir., 1999): "We are the third panel of this court in just over a year faced with the challenging task of applying centuries-old trademark law to the newest medium of communication -- the Internet."
Besides Avery Dennison, two other 9th Circuit cases are on point: Panavision Int'l., LP, v. Toeppen, 141 F.3d 1316, 1319 (9th Cir. 1998), and Brookfield Communications, Inc., v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999). Since these cases are defining the law and building on each other, they will be presented chronologically:
Panavision dealt with a "cybersquatter." Defendant acquired domain names matching over 100 well-known trademarks and then attempted to sell the domain names to the companies who owned the trademarks. The court was emphatic in its support of trademark owners against "cybersquatters" as it affirmed the district court's decision that to do so was a dilution of the trademark. At 1327, the court said, "We reject [defendant] Toeppen's premise that a domain name is nothing more than an address. A significant purpose of a domain name is to identify the entity that owns the web site." The court went on to quote from Cardservice Int'l v. McGee, 950 F. Supp. 737, 741 (E.D. Va. 1997): "A customer who is unsure about a company's domain name will often guess that the domain name is also the company's name. ... [A] domain name mirroring a corporate name may be a valuable corporate asset, as it facilitates communication with a customer base." The court concluded that the defendant's registration of the plaintiff's "trademarks as his domain names on the Internet diluted those marks within the meaning of the Federal Trademark Dilution Act, 15 U.S.C. §1125(c)."
Brookfield dealt with whether federal trademark laws prohibit a video store chain (West Coast) from using the trademark of an entertainment-industry information provider (Brookfield) in the domain name of the video store's web site. Brookfield was founded in 1987; in about December 1993, the company began a part of its business that it began marketing under the name "MovieBuff." In 1996, Brookfield tried to register the domain name <moviebuff.com> but was informed by Network Solutions that the domain name had already been registered by West Coast. On August 19, 1997, Brookfield applied for a trademark on the name "MovieBuff." Trademark was granted September 29, 1998. October 1998, Brookfield learned that West Coast planned to begin a web site using the <moviebuff.com> domain name. In the decision for Brookfield, the court said,
The court ruled that the favor goes to the party with the first use. In Brookfield, there had even been some question about "first use." With W. J. Barone, there is no question about first use.
The court noted that establishing seniority is only half the battle: "Brookfield must also show that the public is likely to be somehow confused about the source of sponsorship of West Coast's . . . web site -- and somehow associate that site with Brookfield." In Brookfield, the two "marks" had some minor difference that the court ruled inconsequential; the businesses were also similar but not identical. The court, however, ruled for Brookfield. The Brookfield court noted, "[T]he more similar the marks in terms of appearance, sound, and meaning, the greater the likelihood of confusion." The court further noted,
The court quoted Official Airline Guides, 6 F.3d at 1394: "When an alleged infringer knowingly adopts a mark similar to another's, courts will presume an intent to deceive the public."
Avery Dennison involved Avery Dennison and a business selling "vanity" e-mail addresses and web sites. Sumpton had acquired hundreds of domain names corresponding to commonly used surnames. His business was selling the domain name or e-mail address to persons wanting a domain name which corresponded with their own names. Avery Dennison sued on the use of both "Avery" and "Dennison." Avery Dennison lost because they were unable to show any connection between a web site with the commonly used surname of Avery or Dennison, and because there was no indication of any business competition regarding any product or sale.
Avery Dennison quotes Panavision's interpretation of 15 U.S.C. §1125(c)(1): "[I]njunctive relief is available under the Federal Trademark Dilution Act if a plaintiff can establish that (1) its mark is famous; (2) the defendant is making commercial use of the mark in commerce; (3) the defendant's use began after the plaintiff's mark became famous; and (4) the defendant's use presents a likelihood of dilution of the distinctive value of the mark." Panavision Int'l, LP v. Toeppen, 141 F.3d 1316, 1324.
The standard in the 9th Circuit is clear. We can prove points 2, 3, and 4 for our client. Point 1 we can argue from a strong position.
While it appears that Barone's case against Protect It would be a strong one based on the recently decided binding cases in the 9th Circuit, there are words of caution to be noted from Professor J. Thomas McCarthy. McCarthy is one of the "authorities" on the issue of trademark law. He is the author of McCarthy on Trademarks and Unfair Competition (4th ed. 1997) and McCarthy's Desk Encyclopedia of Intellectual Property (2nd ed. 1995). In "The 1996 Federal Anti-Dilution Statute," 16 Cardozo Arts & Ent LJ 587, 589, McCarthy notes,
W. J. Barone appears to have a strong case, but the interpretations on the law are new. Our task will be to argue that the internet, while a new venue for commerce, should not be a safe harbor for violating property rights.
other examples of what all 1st-year law students write
Alice Marie Beard