Factual Background Edit
Plaintiff Panavision is the owner of the marks PANAVISION and PANAFLEX in connection with theatrical motion picture and television camera and photographic equipment. Toeppen registered the domain names "panavision.com" and "panaflex.com." He did not use either domain name in connection with the sale or promotion of any goods or services. Toeppen's "panavision.com" website displayed an aerial view of Pana, Illinois, and the "panaflex.com" website contained only the word "hello." When Panavision requested that Toeppen relinquish the "panavision.com" domain name, Toeppen demanded $13,000 from Panavision.
Trial Court Proceedings Edit
Panavision sought to enjoin defendant Toeppen from using the domain names "panavision.com" and "panaflex.com." The district court granted summary judgment on Panavision’s Federal Trademark Dilution Act (FTDA) claim, enjoined Toeppen from further use of the marks PANAVISION and PANAFLEX as domain names, and ordered Toeppen to transfer the domain names to Panavision. Because the district court was dealing with issues of first impression, it declined to award attorney's fees to plaintiff in the absence of legal precedent regarding the application of trademark law to the Internet.
Appellate Court Proceedings Edit
On appeal, the Ninth Circuit affirmed and adopted the rationale and analysis of the district court. According to the court, Toeppen's scheme of registering the trademarks as domain names with the intent to arbitrage them constituted a "commercial use in commerce" diluting Panavision's marks. Toeppen's use of Panavision's marks, the court noted, was far from benign, as he had registered hundreds of domain names utilizing well-known marks of others with the stated intention of selling or licensing them to the true owners.
Recognizing that a domain name functions as more than an address in that it identifies a website's owner and/or provides information on the contents of a website, the court agreed that Toeppen's use of Panavision's trademarks as domain names lessened the capacity of the marks to identify and distinguish Panavision's goods and services. Not only would Toeppen's use force potential customers to search through the hundreds of websites retrieved by a search engine to find Panavision's true website, but it would also remove control over the PANAVISION and PANAFLEX trademarks and reputations from the rightful owner of the marks.
The Ninth Circuit affirmed the district court's application of the "effects test" and upheld the exercise of personal jurisdiction in California over an Illinois cybersquatter, finding that purposeful availment was satisfied where defendant deliberately targeted his activity at plaintiff, a forum resident, with the intent to interfere with plaintiff's business in the forum state. Defendant registered plaintiff's federally registered trademark as a domain name and then attempted to extract payment of a $13,000 "fee" from plaintiff for the domain name. Defendant then registered another of plaintiff's marks as a domain name.
The court found that defendant's scheme to extort money from plaintiff prevented plaintiff from using its own trademark as a domain name to establish a website easily located by Internet users, unless plaintiff paid his fee. According to the court, this extortion scheme constituted the "something more" required to justify the imposition of personal jurisdiction in cases where jurisdiction is predicated on Internet contacts because it showed that defendant did more than merely register another's trademark as a domain name and post a website. The court further determined that plaintiff's cause of action arose out of defendant's forum-related activities, and that the exercise of jurisdiction was reasonable where defendant failed to present a compelling case negating reasonableness.
- This page uses content from Finnegan’s Internet Trademark Case Summaries. This entry is available under the Creative Commons Attribution-Share Alike License 3.0 (Unported) (CC-BY-SA).