Flow Control Indus. v. AMHI, Inc., 278 F.Supp.2d 1193 (W.D. Wash. Mar. 12, 2003) (full-text).
Factual Background Edit
Plaintiff and defendant were competitors in the chemical valve business. Plaintiff marketed products under the mark SKOFLO and defendant marketed products under the mark AMFLOW. The dispute began when plaintiff used defendant's mark AMFLOW and the phonetic equivalent AMFLO in its metatags. Defendant responded by using plaintiff's mark SKOFLO and the phonetic equivalent SKOFLOW in its metatags and by also registering the domain name "skoflo.com" and directing it to its "amflow.com" website.
Defendant admittedly registered the "skoflo.com" name to get plaintiff's attention to stop using defendant's marks as metatags. Defendant proposed a settlement in which both parties would remove the offending metatags and defendant would deactivate the "skoflo.com" domain name, but defendant's proposal did not include transfer of the domain name. Defendant took the position that it had "every legal right" to own the name and that if plaintiff wanted the domain name, it should make an offer to purchase the name for "a commercially reasonable sum."
Trial Court Proceedings Edit
After negotiations failed, plaintiff sued defendant for trademark infringement and cybersquatting. The court granted plaintiff's motion for summary judgment on the issues of infringement and cybersquatting.
As an initial matter, the court rejected defendant's argument that plaintiff had unclean hands because plaintiff's use of defendant's mark in metatags did not relate to the rights plaintiff was trying to enforce in its SKOFLO mark. The appropriate remedy for plaintiff's alleged infringement was an infringement counterclaim.
Regarding infringement, the court ruled in favor of plaintiff because: (1) defendant used a mark identical to plaintiff's, (2) plaintiff's mark was distinctive, (3) defendant used plaintiff's mark to sell competing products, (4) there was some evidence of actual confusion, (5) defendant used plaintiff's mark to increase interest in its own product, and (6) both parties used the Internet to market their products.
Relying on Brookfield Communications v. West Coast Entertainment, the court found that defendant's use of plaintiff's mark created actionable initial-interest confusion. Summary judgment was also proper on the cybersquatting claim because defendant had a bad-faith intent to profit from registering the "skoflo.com" domain name. Not only did defendant register the domain name "to improve its bargaining position in a commercial dispute," but it used the name to attract potential customers to its website.
Plaintiff elected to recover statutory damages under the ACPA, but the court deferred this issue until it decided defendant's counterclaim for trademark infringement. Although defendant's registration and use of the domain name "skoflo.com" were clearly different than the parties' "metatag battle," the court was required to balance the equities of the case in determining the appropriate amount of statutory damages.
The court did enjoin defendant from using plaintiff's marks, including SKOFLO and SKOFLOW, as a domain name or as metatags. Defendant's decision to remove the metatags and domain name transfer to plaintiff after suit was filed did not obviate the need for injunctive relief. Finally, the court rejected plaintiff's request that defendant post a "conspicuous notice" on its home page.
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