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A permanent injunction and $305,615.20 in attorneys’ fees were levied against Orange County, California resident Dave Lahoti July 31 after a federal judge found him guilty in June of trademark infringement ( E-Stamp Corp. v. Dave Lahoti, Case No. 00-9287, C.D. Calif.). INTERNET POSTAGE SALES The case originated in late 1997 when Lahoti registered the online domain name estamps.com — and a series of slight variations thereof — after he learned of an emerging Internet postage industry, according to findings of fact by U.S. Judge Gary Allen Feess of the Central District of California. A large part of that industry centered around E-Stamp Corp., which, after winning the approval of the U.S. Postal Service, became one of the first and only companies permitted to offer sales of postage over the Internet. After obtaining the domain names, Lahoti offered to sell estampsnow.com and estamps.com back to E-Stamp. The judge found that Lahoti’s conduct qualified his as an exceptional case within the meaning of Section 35(a) of the Lanham Act (15 U.S.C. 1117[a]), which holds that fees may be awarded in a trademark case when an infringement is “malicious, fraudulent, deliberate or willful.” “Lahoti’s attack on Plaintiff’s mark occurred at a time when E-Stamp Corp. was particularly vulnerable. Yet it was at this early stage of development that Lahoti directed much of his activities with the admitted hope of profit through increasing the value of his web site … Under these facts, this case is exceptional and E-Stamp Corp. should recover its attorneys’ fees,” Judge Feess wrote. PERMANENT INJUNCTION Because Lahoti allegedly attempted to skirt the trademark issue by creating Web pages with similarly named domains, Judge Feess instituted a permanent injunction to negate the issue in the future. In his July 31 order, the judge prohibited Lahoti from “using any Internet domain name that is identical or confusingly similar to E-STAMP,” including estamps, as well as lengthened version such as estampsnow or second-level domain names such as estamps.net. Furthermore, Lahoti was ordered to provide the plaintiffs with all rights, titles, interest in or control over any remaining Internet domains he created which bear resemblance to the E-Stamp Corp. trademark. Judge Feess retained jurisdiction over the case to enforce the injunction in the future if needed. ‘GENERICNESS’ DEFENSE During the three-day trial, Lahoti attempted to justify the use of the trademark by characterizing it as generic in nature — because e-stamps begins with the letter “e” — but because the trademark in question was federally registered, the burden of proving its genericness rested with the defendant. Judge Feess rejected Lahoti’s assertion, citing California Cooler, Inc. v. Loretto Winery, Ltd. (774 F. 2d 1451, 1455 [9th Cir. 1985]), Continental Airlines, Inc. v. United Air Lines, Inc. (53 U.S.P.Q. 2d 1385 [T.T.A.B. 1999]) and Tech 2000 Realty Group v. Internet Home Services, Inc. (No. C-99-21135 RMW [N.D. Cal. 2000]) as proof. “Although those cases are not controlling, this Court nevertheless concludes that they are distinguishable and do not support Lahoti’s assertion that the E-STAMP mark is generic … The fact that E-STAMP contains the prefix ‘e ‘ does not render the mark generic … A trademark must be examined by viewing the trademark as a whole, rather than by dissecting its parts,” Judge Feess wrote. Lahoti has filed a notice of appeal with the 9th U.S. Circuit Court of Appeals, sources said. John A. O’Malley and Nicole E. Krasny of Fulbright & Jaworski in Los Angeles represent E-Stamp Corp. Neil A. Smith of Limbach and Limbach in San Francisco and Brett P. Wakino of Alhambra, Calif., represent Dave Lahoti.

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