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E-Stamp v. Lahoti

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Citation Edit

E-Stamp Corp. v. Lahoti, Case No. 2:99-CV-9287-GAF-MAN (C.D. Cal. Jun. 12, 2000) (order granting permanent injunction); (Aug. 1, 2000) (order awarding attorney’s fees).

Factual Background Edit

Plaintiff marketed Internet-based postage software under the mark E-STAMP, which it federally registered in April 1998. Plaintiff registered the domain names “e-stamp.com” and “estamp.com” in 1996. Defendant, with knowledge of plaintiff, registered the domain name “estamps.com” on November 8, 1998, and offered to sell the “estamps.com” name to plaintiff and its competitors the next day. In February 1999, defendant posted a website at “estamps.com” to inform people about the benefits of buying postage online through “E-Stamps,” hoping this would increase the value of his “estamps.com” domain name in an eventual sale.

Trial Court Proceedings Edit

Plaintiff obtained a temporary restraining order against defendant in May 1999 and obtained a preliminary injunction in June 1999, enjoining defendant from “using” the “estamps.com” website or confusingly similar names and ordering defendant to post a disclaimer stating “[t]his website is not in any way affiliated with E-Stamp Corporation or E-Stamp™ Internet postage.” In February 2000, the court found defendant in contempt for failing to post the disclaimer, and referring “estamps.com” visitors to his new site located at the confusingly similar name “estampsnow.com,” which defendant registered under a phony name. The court ordered defendant to “turn over administrative control to [plaintiff] all websites which [defendant] owned or controlled whose name contained the term ‘estamp’.”

In June 2000, shortly after a bench trial, the court held in favor of plaintiff. Defendant’s principal defense was that plaintiff’s mark E-STAMP was generic. However, media evidence showing overwhelming use of “e-stamp” in a non-generic manner, the lack of relevant dictionary listings, survey evidence, plaintiff’s aggressive enforcement against generic uses, and plaintiff’s extensive marketing activities, all supported the conclusion that E-STAMP was not generic. According to the court, “the fact that the mark E-STAMP contains the prefix “e” does not render the mark generic . . . . [because] a trademark must be examined by viewing the trademark as a whole, rather than by dissecting its parts.”

Plaintiff succeeded on its trademark infringement claim because: (1) the mark E-STAMP was a suggestive mark and thus inherently protectable and, even assuming E-STAMP was descriptive, it had acquired secondary meaning; (2) defendant’s “estamps” mark and “estamps.com” domain name were virtually identical to plaintiff’s E-STAMP mark; and (3) in addition to evidence of actual confusion, defendant’s website could easily cause “initial interest confusion.”

The court rejected defendant’s fair-use defense, because E-STAMP was not descriptive and defendant used the mark in bad faith. As to plaintiff’s federal and state dilution claims, plaintiff’s extensive market presence rendered the E-STAMP mark famous, and defendant’s actions constituted dilution.

Plaintiff also prevailed on its ACPA claim. Defendant acted with a bad-faith intent to profit based on his attempts to sell infringing domain names to plaintiff and others, and the deliberate concealment of his connection with infringing websites. Accordingly, defendant was enjoined from, among other things, infringing the mark E-STAMP and registering, trafficking, or using any domain name identical or confusingly similar to E-STAMP. And finding that defendant’s deliberate and ongoing infringement and willful violation of court orders constituted an “exceptional case” under 15 U.S.C. §1117(a), plaintiff was awarded its attorney’s fees.

In an August 1, 2000, order, the court reiterated the scope of its permanent injunction and awarded plaintiff attorney’s fees in the amount of $305,615.20.

Source Edit

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