Caterpillar Inc. v. Telescan Techs., 2002 WL 1301304 (C.D. Ill. Feb. 13, 2002) (full-text).
Factual Background Edit
Plaintiff, owner of the CATERPILLAR and CAT trademarks for heavy equipment and related services, sued defendant for trademark infringement and violations of the ACPA. Defendant registered more than 50 domain names containing famous trademarks of others, including six names containing plaintiff's trademarks: "catusedquipment.com," "catnewequipment.com," "caterpillarusedequip.com," "caterpillarnewequip.com," "caterpillarequipment.com," and "caterpillardealers.com."
Four of these names connected to websites identified as the "Caterpillar Used Equipment website," the "Caterpillar New Equipment website," the "Caterpillar Equipment website," and the "Caterpillar Dealers website." Defendant intended to use the domain names to direct traffic to its "heavyscan.com" website, which contained a listing of heavy-equipment inventories of subscribing dealers.
Trial Court Proceedings Edit
In the case, defendant defaulted when its counsel withdrew and it failed to obtain substitute counsel as the court directed. The court held that defendant's actions constituted trademark infringement, cybersquatting, and dilution.
Trademark infringement Edit
Regarding trademark infringement, visitors to defendant's websites were likely to mistakenly believe that the sites were "affiliated with Caterpillar when they see the Caterpillar Marks in the domain names and on the sites and also see a listing of Caterpillar products."
The disclaimers on defendant's websites were not effective to alleviate the likelihood of confusion. Moreover, even if the disclaimers were effective, they would not cure initial interest confusion. Even if visitors to defendant's sites realized they were not sponsored by plaintiff, they could nonetheless stay at the sites and purchase CATERPILLAR equipment through the unauthorized dealers listed on defendant's "heavyscan.com" site. Because defendant registered and used the domain names to trade on plaintiff's goodwill, plaintiff was entitled to its attorney's fees.
Defendant's actions also violated the ACPA based on its use of the domain names to divert traffic to its "heavyscan.com" website and its registration of other domain names containing third-party trademarks. Indeed, at least one court had already found defendant's registration of domain names containing famous third-party marks for a similar business to violate the Lanham Act.
Trademark dilution Edit
And defendant's actions also constituted dilution under the FTDA because they "lessen[ed] Caterpillar's ability to identify its goods and services via the Internet." The court rejected defendant's fair-use defense because its use of plaintiff's marks in the domain names and on its websites was likely to cause confusion about the source or sponsorship of defendant's goods and services.
First sale doctrine Edit
Nor did the first-sale doctrine excuse defendant's actions because they went beyond simply selling a product under the product's trademark. According to the court, "the first sale doctrine flounders where the plaintiff manufacturer has an established network of authorized dealers and defendant's actively misleads consumers into thinking that defendant is part of that network." In addition to enjoining defendant from using or registering any marks, designations, or domain names containing plaintiff's marks or confusingly similar terms and ordering transfer of the domain names to plaintiff, the court ordered defendant to disclose to the court and plaintiff all other domain names it owns that contain plaintiff's marks and to provide an accounting of all profits derived from defendant's actions so that the court and plaintiff can consider whether the profits should be paid to plaintiff.
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