Internet Expands Trademark Infringement

While it's true that as an information conduit, the Internet reduces the likelihood of confusion by allowing the buyer to approach an online purchase with more sophistication, the technology also bolsters the likelihood of confusion among consumers using the Internet by allowing new, unlawful uses of trademarks. Also, the traditional use of a mark on the Internet (to identify the source of goods) is likely to amplify certain trademark characteristics, including:

• The strength of a mark;
• The proximity of the products or services to a geographical location; and
• Actual confusion.

Trademark Particulars

Trademarks connect a name or symbol with a good or service. They benefit owners by allowing them to profit from the goodwill associated with the mark. On the other side of the potential or actual transaction, trademarks benefit consumers by memorializing a level of quality. U.S. trademark law is designed to prevent confusion in the marketplace and is enforced by preventing fraud through deception.

The elements necessary to prove trademark infringement are well established under federal and state case law. These elements apply to Internet and traditional trademark infringement. A plaintiff in a trademark-infringement matter has the burden of proving that the defendant's use of a mark has created a likelihood of confusion about the origin of the defendant's goods or services. This proof is achieved by the plaintiff first showing that it has developed a trademark right worthy of protection, and then showing that the defendant is using a confusingly similar mark in such a way that it creates a likelihood of confusion, mistake or deception ' or a combination of these misapplications ' among the consuming public.

Poloroid Corp. v. Polorad Elec. Corp., 287 F.2d 492 (2d Cir. 1961), details eight factors that a court must evaluate prior to finding that an entity has used a trademark in such a way that would result in a likelihood of confusion in the mind of a consumer regarding the source of a product. They are:

1. The strength of the plaintiff's mark;
2. The degree of similarity between the plaintiff's mark and defendant's mark;
3. The proximity of the products or services;
4. The likelihood that the plaintiff will bridge the gap;
5. Evidence of actual confusion;
6. The defendant's good faith in adopting the mark;
7. The quality of defendant's product or service; and
8. The sophistication of the buyers.

The Lanham Act (Federal Trademark Act of 1946) also provides rights for the trademark holder. In particular, the Act allows mark holders to take action to end deceitful practices in interstate commerce involving the misuse of trademarks.

Marks, for instance, gain rights when used. The Internet allows marks to be used in nontraditional ways that expand the use of the marks as well as the likelihood of confusion and, along with that increased or actual likelihood of confusion, an increase in infringement claims. The use of trademarks on the Internet has four major forms of alternative use besides their traditional form of use as a publication:

1. Domain names;
2. Meta tags;
3. Hyperlinks; and
4. Framing marks.

Major Internet Alternative Trademark Uses

Domain Names

A domain name, of course, is the registered identifier that generally replicates a firm name, product or phrase. To acquire an Internet address, an entity need only pay a nominal fee to an Internet registrar, such as Network Solutions Inc., and file for a name not previously registered. Due to the ease with which domains can be registered, many trademarked domain names were initially registered by enterprising entities known as cybersquatters who knowingly reserved a trademark as a domain name merely to sell it for profit.

Typo-squatting is another form of cybersquatting that relies on erroneous user input. Typo-squatting occurs when an entity registers a famous mark with misspellings, reversed letters or other common typos built into the domain name in an attempt to redirect an Internet user to the cybersquatter's own Web site. Alternatively, a cybersquatter might try to get the famous mark's owner to pay to redirect the mistyped Web address to the mark owner's Web address.

Another potential trademark issue involving domain names is those names that more than one person or entity could claim. In Nissan Motor Co. v. Nissan Computer Corp., 89 F. Supp. 2d 1154 (C.D. Cal. 2000), the Nissan car company (which was first to register its trademark) brought suit against the Nissan computer company (dubbed after the owner's surname) for trademark infringement after the computer firm registered domain names using the word Nissan. The court found that the computer firm's registration resulted in consumer confusion for several reasons, including initial interest confusion and actual confusion.

The court found initial interest confusion because the Nissan name might have led a consumer to believe that it was a Web site for Nissan cars, and that alone is enough to find consumer confusion. The court also found actual confusion because nearly all the computer company's revenue stemmed from visitors to the Web site clicking on automobile advertisements displayed on it. Despite this, the court was careful to point out that there is a 'judicial reluctance to enjoin use of a personal name' even when it apparently infringes on a trademark, but that it was still possible to limit the use with a 'carefully tailored injunction.'

This case and others resulted in the enactment of the Anti-Cybersquatting Consumer Protection Act. Additionally, the Internet Corporation for Assigned Names and Numbers ('ICANN') adopted its Uniform Domain Name Dispute Resolution Policy to provide an alternative to litigation in dealing with abusive domain-name registrations.

Meta Tags

The second trademark infringement issue unique to the Internet entails meta tags, which provide Internet page-setting information that is normally invisible to a user. Meta tags are commonly used by search engines, such as Google, to index site content. The content of meta tags, when properly used, gives content some context. Four types of content are often used as a part of meta tags:

• Resource type;
• Key word;
• Description; and
• Distribution.

The unauthorized use of another's mark as an element of meta-tag content could result in infringement.

The use of registered marks as part of a meta tag might result in consumer confusion and, as such, could be a basis for infringement litigation; for example, the use of various 'Playboy' trademarks in meta-tag lines. (See, Playboy Enter., Inc. v. Calvin Designer Label, 985 F. Supp. 1220 (N.D. Cal. 1997) and Playboy Enter., Inc. v. Torri Welles, 7 F. Supp. 2d 1098 (S.D. Cal. 1998)).

The Seventh and Ninth District courts have ruled that meta-tag use might infringe on famous marks. (See, Promatek Indus. v. Equitrak Corp., 300 F.3d 808 (7th Cir. 2002); and Brookfield Communications v. West Coast Entertainment, 174 F.3d 1036 (9th Cir. 1999)). Both courts have followed the same line of reasoning, holding that the 'initial interest confusion' that consumers experience, regardless of whether it results in actual confusion once they are viewing the Web site, is adequate for the imposition of trademark-infringement liability. It should be noted that the Promatek decision was amended to state that meta-tag usage by a defendant come into play only when the infringing company is actually using the trademark to deceive consumers.

Hyperlinks

Hyperlinks are the third trademark-infringement issue unique to the Internet. A hyperlink is an element of an electronic document that links to another place in the same document or to an entirely different document. Users typically click on the hyperlink to follow the link to the document to which it is connected. Hyperlinks are an indispensable constituent of all hypertext systems, such as the World Wide Web. Hyperlink use, however, has the potential for trademark infringement, and allegations have been made that hyperlinks can cause trademark-infringement problems in the form of passing off, reverse passing off, and false advertising.

Framing

Framing is the fourth way that a trademark can be violated on the Internet. Framing occurs when one Internet site displaces another site's content by surrounding or framing it with a portion of its own site. In the case of TotalNews (The Washington Post v. TotalNews, Southern District of New York, Civil Action Number 97-1190), the Washington Post and other newspaper publishers brought suit against an Internet news site for using framing technology to display the news organizations' information on the TotalNews site and surrounding the other content with its own advertising. This practice was found to be tantamount to trademark dilution because the framing practice was likely to confuse users in that they would be led to believe that the source of these advertisements was the plaintiffs' newspapers.

Double Jeopardy

The special trademark-infringement problems that the Internet presents (domain names, hyperlinks, meta tags and framing) are in addition to the amplification of traditional trademark infringement that results from the worldwide use of the Internet. Consider the international trademark-infringement difficulties faced by Playboy Enterprises. In Playboy Enter., Inc. v. Chuckleberry Publ'g, Inc., 687 F.2d 563 (2d Cir. 1982), the Second Circuit Court of Appeals had granted an injunction, enjoining Chuckleberry from using the confusingly similar mark Playmen for the distribution of Chuckleberry's Italy-based magazine. Despite this judicial result in a parallel suit brought to enjoin Chuckleberry's use in Italy, the Italian court upheld the use of the Playmen mark.

Subsequently, in Playboy Enter., Inc. v. Chuckleberry Publ'g Inc., 939 F. Supp 1032 (S.D.N.Y. 1996), when Chuckleberry published an Internet Web site for its magazine, again using the mark Playmen, based in Italy, Playboy brought suit for a violation of the injunctive order granted in the prior Playboy v. Chuckleberry case, citing that the worldwide nature of access to Internet Web sites was a violation of the court order. The court agreed, stating that the Web site was the same as the circulation of a magazine (a 'use') within U.S. territory and ordered Chuckleberry to block U.S. access to the Web site.

Other Cases Apply

Other cases have similarly expanded the application of U.S. trademark law involving the Internet. In the case of Levi Strauss & Co. v. Sunrise Int'l Trading Inc., 51 F.3d 982, 984 (11th Cir. 1995), for instance, a confusingly similar product to that of Levi Strauss' was sold from China, though never actually within the United States. Based on the fact that the quality of these goods could reflect poorly on the mark owner, the court applied the Lanham Act extraterritorially.

e-Commerce enterprises are well advised to have their counsel pay the closest attention to how trademarks might be used online ' other companies' and their own.

While it's true that as an information conduit, the Internet reduces the likelihood of confusion by allowing the buyer to approach an online purchase with more sophistication, the technology also bolsters the likelihood of confusion among consumers using the Internet by allowing new, unlawful uses of trademarks. Also, the traditional use of a mark on the Internet (to identify the source of goods) is likely to amplify certain trademark characteristics, including:

• The strength of a mark;
• The proximity of the products or services to a geographical location; and
• Actual confusion.

Trademark Particulars

Trademarks connect a name or symbol with a good or service. They benefit owners by allowing them to profit from the goodwill associated with the mark. On the other side of the potential or actual transaction, trademarks benefit consumers by memorializing a level of quality. U.S. trademark law is designed to prevent confusion in the marketplace and is enforced by preventing fraud through deception.

The elements necessary to prove trademark infringement are well established under federal and state case law. These elements apply to Internet and traditional trademark infringement. A plaintiff in a trademark-infringement matter has the burden of proving that the defendant's use of a mark has created a likelihood of confusion about the origin of the defendant's goods or services. This proof is achieved by the plaintiff first showing that it has developed a trademark right worthy of protection, and then showing that the defendant is using a confusingly similar mark in such a way that it creates a likelihood of confusion, mistake or deception ' or a combination of these misapplications ' among the consuming public.

Poloroid Corp. v. Polorad Elec. Corp. , 287 F.2d 492 (2d Cir. 1961), details eight factors that a court must evaluate prior to finding that an entity has used a trademark in such a way that would result in a likelihood of confusion in the mind of a consumer regarding the source of a product. They are:

1. The strength of the plaintiff's mark;
2. The degree of similarity between the plaintiff's mark and defendant's mark;
3. The proximity of the products or services;
4. The likelihood that the plaintiff will bridge the gap;
5. Evidence of actual confusion;
6. The defendant's good faith in adopting the mark;
7. The quality of defendant's product or service; and
8. The sophistication of the buyers.

The Lanham Act (Federal Trademark Act of 1946) also provides rights for the trademark holder. In particular, the Act allows mark holders to take action to end deceitful practices in interstate commerce involving the misuse of trademarks.

Marks, for instance, gain rights when used. The Internet allows marks to be used in nontraditional ways that expand the use of the marks as well as the likelihood of confusion and, along with that increased or actual likelihood of confusion, an increase in infringement claims. The use of trademarks on the Internet has four major forms of alternative use besides their traditional form of use as a publication:

1. Domain names;
2. Meta tags;
3. Hyperlinks; and
4. Framing marks.

Major Internet Alternative Trademark Uses

Domain Names

A domain name, of course, is the registered identifier that generally replicates a firm name, product or phrase. To acquire an Internet address, an entity need only pay a nominal fee to an Internet registrar, such as Network Solutions Inc., and file for a name not previously registered. Due to the ease with which domains can be registered, many trademarked domain names were initially registered by enterprising entities known as cybersquatters who knowingly reserved a trademark as a domain name merely to sell it for profit.

Typo-squatting is another form of cybersquatting that relies on erroneous user input. Typo-squatting occurs when an entity registers a famous mark with misspellings, reversed letters or other common typos built into the domain name in an attempt to redirect an Internet user to the cybersquatter's own Web site. Alternatively, a cybersquatter might try to get the famous mark's owner to pay to redirect the mistyped Web address to the mark owner's Web address.

Another potential trademark issue involving domain names is those names that more than one person or entity could claim. In Nissan Motor Co. v. Nissan Computer Corp. , 89 F. Supp. 2d 1154 (C.D. Cal. 2000), the Nissan car company (which was first to register its trademark) brought suit against the Nissan computer company (dubbed after the owner's surname) for trademark infringement after the computer firm registered domain names using the word Nissan. The court found that the computer firm's registration resulted in consumer confusion for several reasons, including initial interest confusion and actual confusion.

The court found initial interest confusion because the Nissan name might have led a consumer to believe that it was a Web site for Nissan cars, and that alone is enough to find consumer confusion. The court also found actual confusion because nearly all the computer company's revenue stemmed from visitors to the Web site clicking on automobile advertisements displayed on it. Despite this, the court was careful to point out that there is a 'judicial reluctance to enjoin use of a personal name' even when it apparently infringes on a trademark, but that it was still possible to limit the use with a 'carefully tailored injunction.'

This case and others resulted in the enactment of the Anti-Cybersquatting Consumer Protection Act. Additionally, the Internet Corporation for Assigned Names and Numbers ('ICANN') adopted its Uniform Domain Name Dispute Resolution Policy to provide an alternative to litigation in dealing with abusive domain-name registrations.

Meta Tags

The second trademark infringement issue unique to the Internet entails meta tags, which provide Internet page-setting information that is normally invisible to a user. Meta tags are commonly used by search engines, such as Google, to index site content. The content of meta tags, when properly used, gives content some context. Four types of content are often used as a part of meta tags:

• Resource type;
• Key word;
• Description; and
• Distribution.

The unauthorized use of another's mark as an element of meta-tag content could result in infringement.

The use of registered marks as part of a meta tag might result in consumer confusion and, as such, could be a basis for infringement litigation; for example, the use of various 'Playboy' trademarks in meta-tag lines. ( See, Playboy Enter., Inc. v. Calvin Designer Label , 985 F. Supp. 1220 (N.D. Cal. 1997) and Playboy Enter., Inc. v. Torri Welles , 7 F. Supp. 2d 1098 (S.D. Cal. 1998)).

The Seventh and Ninth District courts have ruled that meta-tag use might infringe on famous marks. ( See, Promatek Indus. v. Equitrak Corp. , 300 F.3d 808 (7th Cir. 2002); and Brookfield Communications v. West Coast Entertainment , 174 F.3d 1036 (9th Cir. 1999)). Both courts have followed the same line of reasoning, holding that the 'initial interest confusion' that consumers experience, regardless of whether it results in actual confusion once they are viewing the Web site, is adequate for the imposition of trademark-infringement liability. It should be noted that the Promatek decision was amended to state that meta-tag usage by a defendant come into play only when the infringing company is actually using the trademark to deceive consumers.

Hyperlinks

Hyperlinks are the third trademark-infringement issue unique to the Internet. A hyperlink is an element of an electronic document that links to another place in the same document or to an entirely different document. Users typically click on the hyperlink to follow the link to the document to which it is connected. Hyperlinks are an indispensable constituent of all hypertext systems, such as the World Wide Web. Hyperlink use, however, has the potential for trademark infringement, and allegations have been made that hyperlinks can cause trademark-infringement problems in the form of passing off, reverse passing off, and false advertising.

Framing

Framing is the fourth way that a trademark can be violated on the Internet. Framing occurs when one Internet site displaces another site's content by surrounding or framing it with a portion of its own site. In the case of TotalNews (The Washington Post v. TotalNews, Southern District of New York, Civil Action Number 97-1190), the Washington Post and other newspaper publishers brought suit against an Internet news site for using framing technology to display the news organizations' information on the TotalNews site and surrounding the other content with its own advertising. This practice was found to be tantamount to trademark dilution because the framing practice was likely to confuse users in that they would be led to believe that the source of these advertisements was the plaintiffs' newspapers.

Double Jeopardy

The special trademark-infringement problems that the Internet presents (domain names, hyperlinks, meta tags and framing) are in addition to the amplification of traditional trademark infringement that results from the worldwide use of the Internet. Consider the international trademark-infringement difficulties faced by Playboy Enterprises. In Playboy Enter., Inc. v. Chuckleberry Publ'g, Inc. , 687 F.2d 563 (2d Cir. 1982), the Second Circuit Court of Appeals had granted an injunction, enjoining Chuckleberry from using the confusingly similar mark Playmen for the distribution of Chuckleberry's Italy-based magazine. Despite this judicial result in a parallel suit brought to enjoin Chuckleberry's use in Italy, the Italian court upheld the use of the Playmen mark.

Subsequently, in Playboy Enter., Inc. v. Chuckleberry Publ'g Inc. , 939 F. Supp 1032 (S.D.N.Y. 1996), when Chuckleberry published an Internet Web site for its magazine, again using the mark Playmen , based in Italy, Playboy brought suit for a violation of the injunctive order granted in the prior Playboy v. Chuckleberry case, citing that the worldwide nature of access to Internet Web sites was a violation of the court order. The court agreed, stating that the Web site was the same as the circulation of a magazine (a 'use') within U.S. territory and ordered Chuckleberry to block U.S. access to the Web site.

Other Cases Apply

Other cases have similarly expanded the application of U.S. trademark law involving the Internet. In the case of Levi Strauss & Co. v. Sunrise Int'l Trading Inc. , 51 F.3d 982, 984 (11th Cir. 1995), for instance, a confusingly similar product to that of Levi Strauss' was sold from China, though never actually within the United States. Based on the fact that the quality of these goods could reflect poorly on the mark owner, the court applied the Lanham Act extraterritorially.

e-Commerce enterprises are well advised to have their counsel pay the closest attention to how trademarks might be used online ' other companies' and their own.