IP News

Ninth Circuit Rules in Favor of eBay

In Perfumebay.com Inc. v. eBay Inc., 2007 WL 3243998, No. 05-56794 (9th Cir., 2007), the U.S. Court of Appeals for the Ninth Circuit agreed with the district court's decision that the conjoined forms of 'perfumebay' [perfumebay and PerfumeBay] created a likelihood of consumer confusion with the eBay mark and affirmed the permanent injunction preventing Perfumebay.com from using the infringing marks. The court also affirmed the district court's decision that the non-conjoined form of Perfumebay's mark [Perfume Bay] did not create a likelihood of confusion, but reversed the district court's decision that Perfumebay's marks did not produce a likelihood of dilution.

Jacquelyn Tran, president and owner of Perfumebay, began selling perfume on the Internet, including on eBay's Web site, in the late 1990s. She used both the conjoined and non-conjoined forms of 'perfumebay.' Tran also sells perfume on five other Web sites, including Perfumes.com, Scentguru.com, and PerfumeShop. com. She attempted to apply for a trademark for the 'perfumebay' mark, but eBay filed an opposition with the U.S. Patent and Trademark Office. After the parties failed to negotiate a settlement, Perfumebay sought a declaratory judgment that its various marks did not infringe eBay's mark. The district court held that the conjoined forms of 'perfumebay' created a likelihood of confusion and permanently enjoined Perfumebay from using 'PerfumeBay' as a single word. The district court, however, found that the non-conjoined forms of 'Perfume Bay' did not create a likelihood of confusion and also held that the Perfumebay marks did not produce a likelihood of dilution.

In addressing the likelihood of confusion issue, the court stated that in an Internet context the three most important factors are '(1) the similarity of the marks, (2) the relatedness of the goods and services, and (3) the parties' simultaneous use of the Web as a marketing channel.' When this 'controlling troika or internet trinity' points to a likelihood of confusion, then the remaining factors 'must weigh strongly against a likelihood of confusion to avoid the finding of infringement.' With respect to the 'similarity of the marks' factor, the court noted that the 'Perfumebay' mark completely incorporates the eBay mark, especially when the 'PerfumeBay' mark is utilized with a capital 'B,' and held that this factor weighs against Perfumebay. The court likewise held that the remaining two factors weigh against Perfumebay. Because Perfumebay and eBay both use the Internet to sell perfume and because the Web, as a marketing channel, is likely to increase confusion since it allows for competing marks to be encountered at the same time and on the same screen, the court held that the 'controlling troika' points to a likelihood of confusion. The court further held that a broad injunction against Perfumebay's use of the conjoined marks is appropriate given that both eBay and Perfumebay sell perfume on the Internet and use search engines to attract customers. In affirming the district court's ruling that the non-conjoined versions of the 'Perfume Bay' mark do not create a likelihood of confusion, the court noted that the district court's injunction maintained 'an equitable balance,' since the separated mark does not include eBay's entire mark and cannot be utilized as a domain name.

In addressing eBay's dilution claim, the court agreed with eBay that the district court erred in limiting the likelihood of dilution factors to the marks' similarity and the renown of the plaintiff's mark, instead of applying the test articulated in Thane International, Inc. v. Trek Bicycle Corp., 305 F.3d 894 (9th Cir. 2002), which requires a court to consider whether the plaintiff's mark 'is so highly distinctive that consumers are likely to view a junior mark that is a bit different as essentially the same as the senior one.' The court held that the district court erred by not fully considering the strength, fame, and distinctiveness of eBay's mark in making its dilution finding. In reaching this conclusion, the court looked to evidence that demonstrated the strong recognition and association of eBay's mark with its services and the fact that the 'PerfumeBay' mark contains either the entire eBay mark or the dominant suffix 'Bay.' Thus, the court noted, consumers 'may no longer associate the usage of the 'Bay' suffix with eBay's unique services, specifically the sale of products on [the] internet ' ' and this would create a likelihood of dilution of the eBay mark.

Hany Rizkalla, Ph.D. is an associate in the New York office of Kenyon & Kenyon LLP. He can be reached at 212-908-6105.

Ninth Circuit Rules in Favor of eBay

In Perfumebay.com Inc. v. eBay Inc ., 2007 WL 3243998, No. 05-56794 (9th Cir., 2007), the U.S. Court of Appeals for the Ninth Circuit agreed with the district court's decision that the conjoined forms of 'perfumebay' [perfumebay and PerfumeBay] created a likelihood of consumer confusion with the eBay mark and affirmed the permanent injunction preventing Perfumebay.com from using the infringing marks. The court also affirmed the district court's decision that the non-conjoined form of Perfumebay's mark [Perfume Bay] did not create a likelihood of confusion, but reversed the district court's decision that Perfumebay's marks did not produce a likelihood of dilution.

Jacquelyn Tran, president and owner of Perfumebay, began selling perfume on the Internet, including on eBay's Web site, in the late 1990s. She used both the conjoined and non-conjoined forms of 'perfumebay.' Tran also sells perfume on five other Web sites, including Perfumes.com, Scentguru.com, and PerfumeShop. com. She attempted to apply for a trademark for the 'perfumebay' mark, but eBay filed an opposition with the U.S. Patent and Trademark Office. After the parties failed to negotiate a settlement, Perfumebay sought a declaratory judgment that its various marks did not infringe eBay's mark. The district court held that the conjoined forms of 'perfumebay' created a likelihood of confusion and permanently enjoined Perfumebay from using 'PerfumeBay' as a single word. The district court, however, found that the non-conjoined forms of 'Perfume Bay' did not create a likelihood of confusion and also held that the Perfumebay marks did not produce a likelihood of dilution.

In addressing the likelihood of confusion issue, the court stated that in an Internet context the three most important factors are '(1) the similarity of the marks, (2) the relatedness of the goods and services, and (3) the parties' simultaneous use of the Web as a marketing channel.' When this 'controlling troika or internet trinity' points to a likelihood of confusion, then the remaining factors 'must weigh strongly against a likelihood of confusion to avoid the finding of infringement.' With respect to the 'similarity of the marks' factor, the court noted that the 'Perfumebay' mark completely incorporates the eBay mark, especially when the 'PerfumeBay' mark is utilized with a capital 'B,' and held that this factor weighs against Perfumebay. The court likewise held that the remaining two factors weigh against Perfumebay. Because Perfumebay and eBay both use the Internet to sell perfume and because the Web, as a marketing channel, is likely to increase confusion since it allows for competing marks to be encountered at the same time and on the same screen, the court held that the 'controlling troika' points to a likelihood of confusion. The court further held that a broad injunction against Perfumebay's use of the conjoined marks is appropriate given that both eBay and Perfumebay sell perfume on the Internet and use search engines to attract customers. In affirming the district court's ruling that the non-conjoined versions of the 'Perfume Bay' mark do not create a likelihood of confusion, the court noted that the district court's injunction maintained 'an equitable balance,' since the separated mark does not include eBay's entire mark and cannot be utilized as a domain name.

In addressing eBay's dilution claim, the court agreed with eBay that the district court erred in limiting the likelihood of dilution factors to the marks' similarity and the renown of the plaintiff's mark, instead of applying the test articulated in Thane International, Inc. v. Trek Bicycle Corp. , 305 F.3d 894 (9th Cir. 2002), which requires a court to consider whether the plaintiff's mark 'is so highly distinctive that consumers are likely to view a junior mark that is a bit different as essentially the same as the senior one.' The court held that the district court erred by not fully considering the strength, fame, and distinctiveness of eBay's mark in making its dilution finding. In reaching this conclusion, the court looked to evidence that demonstrated the strong recognition and association of eBay's mark with its services and the fact that the 'PerfumeBay' mark contains either the entire eBay mark or the dominant suffix 'Bay.' Thus, the court noted, consumers 'may no longer associate the usage of the 'Bay' suffix with eBay's unique services, specifically the sale of products on [the] internet ' ' and this would create a likelihood of dilution of the eBay mark.

Hany Rizkalla, Ph.D. is an associate in the New York office of Kenyon & Kenyon LLP. He can be reached at 212-908-6105.