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Businesses often include other companies’ trademarks as domain names, metatags, or content on their Web sites. A variety of recent federal court decisions help explain when that kind of use is permitted — and when it is prohibited — under trademark dilution and infringement rules. One case [FOOTNOTE 1] was brought by Avlon Industries, the registered owner of a number of trademarks for hair care products, including KeraCare, against Arthur Robinson, who offered a variety of brands of hair care products on his Web site, including Avlon products. Robinson had registered at least 15 variants of the word “KeraCare” as domain names, so that when a shopper entered one of them into a browser, the shopper would be redirected to Robinson’s site. [FOOTNOTE 2] Robinson argued that he could not be liable for trademark dilution because Avlon had failed to establish that its marks were famous. Robinson contended that only the “upscale African-American women’s marketplace” was aware of the marks and that they were otherwise not well known. The court stated, however, that if the marks were unfamiliar to the vast majority of shoppers, Robinson would not have registered variants of the word KeraCare as domain names for use in connection with his Web site. The court also pointed out that Avlon had registered its KeraCare mark in 1991 and that the registration had become incontestable — and thus presumptively valid and protectable — in 1997. The court then found that Avlon’s trademarks were famous. The court also decided that Robinson had diluted Avlon’s trademarks. It first noted that Robinson was using domain names containing Avlon’s exact marks, which prevented Avlon from identifying its own Web site and products using its marks. Moreover, the court continued, Robinson’s use of Avlon’s marks permitted Robinson to decide what messages and goods were associated with his Web site and, by extension, with Avlon’s marks. In the court’s view, Robinson’s control of all the possible variants of Avlon’s marks on the Internet prevented Avlon from using its marks to identify its goods and thus diluted the marks. The court made it clear that it was not holding that using a competitor’s mark in a domain name per se dilutes the mark, finding a difference between using a mark for a permissible purpose and “taking over the mark.” However, a mark holder is entitled to have the fairness of a competitor’s use of the mark within a domain name tested, which was the purpose of Avlon’s successful suit. A company’s use on the Internet of another’s trademarks, or of trademarks that are confusingly similar, also may amount to trademark infringement depending on the nature of the use to which the trademark is put. For example, the 6th U.S. Circuit Court of Appeals upheld a preliminary injunction granted against the use of a competitor’s trademark within a domain name, but reversed and remanded for findings as to its inclusion in the competitor’s metatags. [FOOTNOTE 3] PACCAR Inc., a manufacturer of heavy trucks and truck parts that owned the marks “Peterbilt” and “Kenworth,” brought suit for trademark infringement against Telescan Technologies, the owner of several Web sites providing truck locator services for consumers. Telescan not only used several domain names that included PACCAR’s trademarks to link with its sites, but also included the Peterbilt and Kenworth marks in the wallpaper on its manufacturer specific sites and metatags connected with those sites. At the outset, the PACCAR court rejected the proposition that in granting the preliminary injunction, the district court had enunciated a per se rule that domain names are always source identifying, but did “state the obvious” that domain names can and do communicate information as to the source or sponsor of a particular site. The circuit court therefore analyzed the case in regard to what it considered to be the most significant factor in determining whether there was infringement: whether Telescan’s use of PACCAR’s trademarks were likely to cause consumer confusion. The court found that the goods and services provided by PACCAR and Telescan were closely related and in fact satisfied two of three criteria used to assess the likelihood of confusion. The court determined that because the goods and services offered by the parties were sufficiently similar and because Telescan also offered additional services that were related to PACCAR’s services and products, there was a high likelihood of confusion. The court pointed out that Peterbilt and Kenworth were very strong and distinctive marks that had been used nationwide to indicate a certain manufacturer of trucks for decades and thus were entitled to protection. The court also found that the similarity of the registered domain names to the marks, including character strings identical to PACCAR’s marks, was an important factor. The court ruled that the “mere addition” of characters to the marks, such as, for example, peterbilttrucks.com or kenworthusedtrucks.com, did not eliminate the likelihood of confusion. Because Peterbilt and Kenworth were so closely associated with trucks, “peterbilttrucks.com” was not appreciably different from “peterbilt.com,” the court ruled. The court observed that both PACCAR and Telescan marketed their goods and services through the Internet, and it found that the likelihood of confusion between the two companies’ marks therefore was increased. It noted that marketing on the Internet increases the likelihood of confusion because of the ease with which a consumer may access any given Web site. It noted that a disclaimer of affiliation made available to a consumer after it had entered Telescan’s site came too late to avoid “initial interest confusion.” Finally, the court analyzed Telescan’s assertion of the “fair use” defense. At the outset, the court rejected Telescan’s claim that it was using PACCAR’s marks in a descriptive fashion when it included them in domain names linked to its Web sites. Moreover, the court found that fair use requires the descriptive term be used to describe the competitor’s and not the trademark holder’s product. Here there was no real dispute that Telescan was using the “Peterbilt” and “Kenworth” marks within its domain names to describe its offer of PACCAR used trucks and services. Significantly, the court distinguished between the use of the marks in Telescan’s domain names as opposed to in its Web site content and metatags. [FOOTNOTE 4] It rejected the concept of “nominative fair use,” which permits a party to use another’s mark to identify the manufacturer’s product. However, the court held that, because the marks here were included in domain names that did not contain any qualifying language, Telescan was improperly using PACCAR’s marks to identify its own products and services. The court distinguished between the use of the terms in domain names from inclusion in metatags. Based on the criteria set forth and the fact that metatags are not transparent to consumers, the court concluded that the use of the marks in metatags might be non-infringing or a fair use of another’s marks and remanded the matter back to the district court for further findings. CONSUMER CONFUSION The determinative importance of consumer confusion was recently rejected by the U.S. Supreme Court in KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. [FOOTNOTE 5] In that case, KP sought a declaration under the Lanham Act that its use of the term “microcolor” constituted a “fair use” of the term that had been trademarked by its competitor, Lasting Impression. Lasting Impression counterclaimed for infringement, claiming that KP’s use of the phrase caused consumer confusion. The Supreme Court made several important determinations in reversing the circuit court’s determination of the case. It held that the trademark holder bears the burden of proof as to consumer confusion. Thus, a party depending on the statutory affirmative defense of fair use has no burden to prove the absence of consumer confusion. Additionally, contrary to cases such as PACCAR, “some possibility of consumer confusion must be compatible with fair use.” The Supreme Court reasoned that the inherent risk of consumer confusion was one that the trademark holder assumed when it selected generic terminology as its trademark and that therefore, the trademark holder could not monopolize the use of descriptive words. However, the Court refused to extend its ruling to eliminate consideration of the likelihood of consumer confusion as relevant to determination of a fair use defense. Indeed, the Court concluded that the likelihood and extent of consumer confusion bears on the question of whether the use is, indeed, fair and whether the use of the term is truly descriptive or has taken on a secondary meaning as a result of the actions of the trademark holder. Nevertheless, because KP Permanent did not discuss the use of marks on the Internet, per se, and maintained consumer confusion as a relevant, if not determinative factor, the analysis performed by the PACCAR court as to infringement and fair use remains valuable. As existing intellectual property principles are applied to Internet uses, two criteria appear to be coming to the forefront in the disputes. First, the nature of the Internet use of the mark is relevant as distinguishing between overt use of someone’s mark within a domain name as opposed to within metatags or content connected to a Web site. Second, the extent to which a mark is highly generic has great import in the virtual world. This is because, unlike in the “real world,” each Internet domain name must be unique and there cannot be multiple users of a mark in either different localities or different businesses, (e.g., United Airlines, United Van Lines, etc.) For example, the 2nd Circuit concluded that use of another’s mark within a domain name can rarely, if ever, constitute a fair use of another’s mark. [FOOTNOTE 6] In that case, the court enjoined use of only a limited few of 66 domain names which contained variations of the phrase “A Children’s Place” because of the generic nature of the trademark. Defendant claimed that he registered the domain names because of his intention to create an Internet portal for children’s sites and services available on the Internet. The court vacated the preliminary injunction to the extent it found that there was no likelihood of success on plaintiff’s dilution claim, because the mark “A Children’s Place” was not adequately distinctive or famous. However, in regard to the infringement claim, the court held that where the defendant’s domain names were “so close to plaintiff’s mark that the differences are scarcely noticeable,” infringement was a possibility. Conversely, as the defendant’s domain names became more distinguishable from plaintiff’s mark, “the similarities are likely to appear to consumers as more reflective of the fact that both are being used to designate something to do with children … rather than a common source.” As to closely related domain names, the court rejected application of the fair use defense. The court stated that fair use requires that the mark be used solely in descriptive fashion and not as a mark on behalf of the infringer. It concluded that inclusion of a term in a domain name is not “simply an adjectival use” but as an address or name of a Web site and thus a mark. Accordingly, whereas the court distinguished internal use of variations of the term “a children’s place” within the Web site to describe the offered services, use of domain names containing the character string, “a childrensplace” was as a mark and therefore could be an infringing use. CONCLUSION Trademark law on the Internet raises a host of issues, including some that are different from traditional trademark disputes. For instance, a disclaimer may avoid a finding of trademark infringement in a typical case but not in a Web-related dispute. [FOOTNOTE 7] Businesses with strong marks should find, however, that they will be able to protect themselves from dilution and infringement whether arising in traditional situations or on the Web. Shari Claire Lewis, a partner at Rivkin Radler in Uniondale, N.Y., specializes in litigation in the areas of Internet, domain name, and computer law as well as professional liability and medical device and product liability. ::::FOOTNOTES:::: FN1 Avlon Industries v. Robinson, 2005 U.S. Dist. Lexis 5552 (N.D. Ill. Feb. 8, 2005). FN2 This practice is sometimes referred to as “typosquatting.” FN3 PACCAR, Inc. v. Telescan Technologies, 319 F. 3d 243 (6th Cir. 2003). FN4 Metatags are hidden words associated with a Web site that, inter alia, are accessed by search engines to locate sites that may be responsive to a given Internet search. Metatags have been analogized to library card catalogues. PACCAR, 319 F. 3d at 248 note 2. FN5 125 S.Ct. 542 (Dec. 8, 2004). FN6 TCPIP Holding Co. Inc. v. Haar Communications Inc., 244 F.3d 88 (2nd Cir. 2001). FN7 See e.g., Simon Prop. Group v. MySimon, Inc., 2001 U.S. Dist. Lexis 852 (N.D. Ill. Jan. 24, 2001).

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