Many of you have heard that I have re-launched "the arts and technology law group" just weeks ago. With it, this blog re-launches. I am blessed to have found an area of law that I love and clients and colleagues that have grown with me. Re-launching one's own practice is no easy task I'll admit but if there is one thing I know it is this: so long as I am still passionate about customer service, practicing law and helping buinesses fend off those who rip them off, I will succeed. I realized this year though that that alone was not enough, I must also have fun doing it. Life is simply too short. I am sure you agree, right? As a result, I've come up with a set of values I strive to live by in 2007. Of course, I hope you'll help me keep to them but I also hope you'll share with me the adages (sp?) that keep you happy, healthy, wealthy and wise. Thank you in advance for your support and for nourishing me this year.
FOCUS --- PEOPLE -- DON'T OVER DO IT -- HAVE FUN
1) Focus: Many years ago, I met with Arthur Herschaft the CEO of Paxar, a public company that is known as the leader in printing bar code labels on prodcts. He built this billion dollar company with a smart team but he built it from the modest beginnings. How did he get there? Focus. I strive to be the best infringement litigator in Northern California. When someone's mark, brand, product, software, design is stolen, injunctive relief (aka TRO's, preliminary injunctions) are like mini-trials. It's a bit like an all out raid on an entrenched enemy. No saving your big guns for later in trial. I thrive on this stuff and have made it my focus.
2) People: All we have on this earth is the personal connections with others. I do my best to be present with those around me and to be honest and caring. I do not always succeed, I know, but I try. My grandmother told me that you must be nice to everyone you meet because you never know who they are. If a prospective client, employee, co-worker is not nice to a doorman, receptionist, that is a red-flag for me. I'd rather move on. Lastly, get off email and blackberries and let's see each other face to face. The older I get the more I seek face time with my clients, my colleagues, my partners. Even a little is better than none. When can we have coffee? Or lunch?
3) Don't Overlawyer: I am a pushy lawyer when I have to be. Sometimes I push too hard I'm sure but it's my style. I remind myself everyday that the impression I make - from how I dress to how I speak and write - reflects on my clients. I strive to remind opposing counsel too that we are just like bus drivers getting thru a tough path. Don't get me wrong, if opposing counsel turns up the heat, I thrive on turning up the heat too. But - let us remember to treat each other with civility and respect. When I negotiate an agreement or argue a motion for a client, I want the world to think two things: The lawyer is credible and so his his client, I want to work with them. If I cannot do that, I have failed.
4) Have fun: If I do not laugh with my clients and revel in their success with them, and connect with them on a personal level, I am not right for them and they are not right for me. This true for my public clients as well as for my family owned, closely held clients. In the end, it is people who have their lives and livings at stake in what they do. Let us not forget that. If we work hard, get the substance right, we must remember to connect with each other and have a bit of fun. The work we do is mostly serious but let us find the time for a smile and a laugh. Maybe break some bread together. Don't you agree.
See you out there, I hope. Don't be a stranger.
Some articles I've been quoted in this year (kudos to my former firms PR people):
On Stolen Art
On China
On Apple v. Beatles' Apple
Best regards, Gregory Rutchik
Thursday, December 14, 2006
Monday, April 17, 2006
Both Houses pass Trademark Dilution Revision Act of 2005
Prior to this Bill, it was not possible for an owner of a famous (or not so famous) mark to obtain injunctive relief without the "presence of actual or likely confusion, or actual economic injury." Under Mosely v. Victoria Secret, __ US __ (2002) The Trademark Dilution Revision Act ("TDRA") of 2005 ends that struggle but with major ramifications for the marketplace of brands.
Then
1) Prior to the TDRA, circuits were split on whether actual damage was a necessary element.
2) Mosely held that "whatever difficulties proof may be entailed, they are not an acceptable reason for dispensing with proof of an essential element of a statutory violation." (16)
3) The statute in question the FTDA requirED that "the owner of a famous mark" is entitled to injunctive relief.... if that use 'causes dilution of the distinctive quality" of the famous mark. 15 U.S.C. 1125(c)(1). The text "unambiguously REQUIRED a showing of actual dilution, rather than a likelihood of dilution." (Mosely, 14).
Now: Post TDRA Amendment
1)Injunctive relief is available 'regardless of the presence or absence of actual or likely confusion, of competition, or actual economic injury." (15 U.S.C.1125(c)(1), as amended).
2) To show a mark famous now, the "court may consider" (i) the duration, extent or advertising and publicity of the mark; (ii) the amount of goods/services offered under the mark; and (iii) the extent of actual recognition."
Ramifications:
Eff.org plays up the concerns cited by the Supremes in the Mosely decision:
1) "the use of DUPONT shoes, BUICK apsirin, and KODAK pianos would be actionable under this litgiation."
2) Publicknowledge.org suggests that because a mark "does not need to be identical" to be protected, it is "quite possible that courts will enjoin KADEK pianos, BIECK aspirin and DOPUNT shoes" as well. This seems like an unlikely application.
Then
1) Prior to the TDRA, circuits were split on whether actual damage was a necessary element.
2) Mosely held that "whatever difficulties proof may be entailed, they are not an acceptable reason for dispensing with proof of an essential element of a statutory violation." (16)
3) The statute in question the FTDA requirED that "the owner of a famous mark" is entitled to injunctive relief.... if that use 'causes dilution of the distinctive quality" of the famous mark. 15 U.S.C. 1125(c)(1). The text "unambiguously REQUIRED a showing of actual dilution, rather than a likelihood of dilution." (Mosely, 14).
Now: Post TDRA Amendment
1)Injunctive relief is available 'regardless of the presence or absence of actual or likely confusion, of competition, or actual economic injury." (15 U.S.C.1125(c)(1), as amended).
2) To show a mark famous now, the "court may consider" (i) the duration, extent or advertising and publicity of the mark; (ii) the amount of goods/services offered under the mark; and (iii) the extent of actual recognition."
Ramifications:
Eff.org plays up the concerns cited by the Supremes in the Mosely decision:
1) "the use of DUPONT shoes, BUICK apsirin, and KODAK pianos would be actionable under this litgiation."
2) Publicknowledge.org suggests that because a mark "does not need to be identical" to be protected, it is "quite possible that courts will enjoin KADEK pianos, BIECK aspirin and DOPUNT shoes" as well. This seems like an unlikely application.
Tuesday, April 11, 2006
Rutchik Quoted: U.S. Expects `Incremental' Progress in Trade Summit With China
U.S. Expects `Incremental' Progress in Trade Summit With China
April 10 (Bloomberg) -- The Bush administration said it expects China to agree at a summit tomorrow to extend a crackdown on makers of pirated movies and enforce a ban on the use of illegally obtained software by businesses and government.
Other topic for the meeting in Washington with Chinese Vice Premier Wu Yi, U.S. Trade Representative Rob Portman and U.S. Commerce Secretary Carlos Gutierrez include China's ban on U.S. beef imports, standards for telecommunications investment and regulatory transparency, two senior U.S. officials told a group of reporters today on condition of anonymity.
The meeting is an opportunity for China and the U.S. to dampen tensions over the record $202 billion trade gap between the two countries before Chinese President Hu Jintao visits U.S. President George W. Bush next week.
``They want to get some items delivered and out of the way so that the Hu visit goes smoothly,'' said Patrick Mulloy, a former Commerce Department official who is now a member of the U.S.-China Economic and Security Review Commission.
China is offering a series of ``incremental'' concessions now, with more likely to be announced when Hu is in Washington, the U.S. officials said. One item not on the agenda is China's currency policies, which U.S. lawmakers and some businesses blame for helping to subsidize low-cost exports of cheap Chinese toys, computers, auto parts and other goods to the U.S.
The $285 billion trade relationship between the U.S. and China has grown contentious because of China's currency and market access policies. The need to resolve those and other differences has become more important as China is now the second-largest foreign holder of U.S. debt and is likely to pass Mexico this year as the second-largest U.S. trading partner.
``We have a tenuous relationship with China,'' said Gregory Rutchik, a senior counsel at the law firm of Liner Yankelevitz Sunshine & Regenstreif LLP in San Francisco. ``We rely on them as a manufacturer and they buy our debt.''
U.S. Lawmakers
U.S. lawmakers have been pressuring the Bush administration to work harder to open the Chinese market to more U.S. exports and convince the Chinese government to cut-down on what the U.S. says are illegal subsidies to companies.
``Our economic relationship is now at a critical point, and failure by China to address key outstanding trade concerns and fulfill longstanding commitments creates the risk of serious damage,'' U.S. Senator Max Baucus, a Montana Democrat, and 16 of his colleagues wrote in a letter to Wu on April 7.
They called on China to lift its ban on U.S. beef, cut government intervention in markets, revalue its currency and achieve ``significant'' reductions in movie and music piracy.
Bush shares in that last concern, saying today he wants Hu to ``make a declaration'' on intellectual property protection.
``It's difficult for a nation that likes to trade, like ours, to go into a country uncertain as to whether or not patents will be protected or product will be protected from copy,'' Bush said at Johns Hopkins University in Washington.
The U.S. is preparing to file a lawsuit with the World Trade Organization alleging Chinese intellectual property laws fall short of the global requirements China agreed to when it joined the WTO in 2001, people familiar with the case said last week. The administration has been discussing the legal strategy with the film, music and software industries and Congress.
Administration officials have said in those strategy meetings that they intend to file the suit if the summits in Washington fail to resolve the issue, the people said.
April 10 (Bloomberg) -- The Bush administration said it expects China to agree at a summit tomorrow to extend a crackdown on makers of pirated movies and enforce a ban on the use of illegally obtained software by businesses and government.
Other topic for the meeting in Washington with Chinese Vice Premier Wu Yi, U.S. Trade Representative Rob Portman and U.S. Commerce Secretary Carlos Gutierrez include China's ban on U.S. beef imports, standards for telecommunications investment and regulatory transparency, two senior U.S. officials told a group of reporters today on condition of anonymity.
The meeting is an opportunity for China and the U.S. to dampen tensions over the record $202 billion trade gap between the two countries before Chinese President Hu Jintao visits U.S. President George W. Bush next week.
``They want to get some items delivered and out of the way so that the Hu visit goes smoothly,'' said Patrick Mulloy, a former Commerce Department official who is now a member of the U.S.-China Economic and Security Review Commission.
China is offering a series of ``incremental'' concessions now, with more likely to be announced when Hu is in Washington, the U.S. officials said. One item not on the agenda is China's currency policies, which U.S. lawmakers and some businesses blame for helping to subsidize low-cost exports of cheap Chinese toys, computers, auto parts and other goods to the U.S.
The $285 billion trade relationship between the U.S. and China has grown contentious because of China's currency and market access policies. The need to resolve those and other differences has become more important as China is now the second-largest foreign holder of U.S. debt and is likely to pass Mexico this year as the second-largest U.S. trading partner.
``We have a tenuous relationship with China,'' said Gregory Rutchik, a senior counsel at the law firm of Liner Yankelevitz Sunshine & Regenstreif LLP in San Francisco. ``We rely on them as a manufacturer and they buy our debt.''
U.S. Lawmakers
U.S. lawmakers have been pressuring the Bush administration to work harder to open the Chinese market to more U.S. exports and convince the Chinese government to cut-down on what the U.S. says are illegal subsidies to companies.
``Our economic relationship is now at a critical point, and failure by China to address key outstanding trade concerns and fulfill longstanding commitments creates the risk of serious damage,'' U.S. Senator Max Baucus, a Montana Democrat, and 16 of his colleagues wrote in a letter to Wu on April 7.
They called on China to lift its ban on U.S. beef, cut government intervention in markets, revalue its currency and achieve ``significant'' reductions in movie and music piracy.
Bush shares in that last concern, saying today he wants Hu to ``make a declaration'' on intellectual property protection.
``It's difficult for a nation that likes to trade, like ours, to go into a country uncertain as to whether or not patents will be protected or product will be protected from copy,'' Bush said at Johns Hopkins University in Washington.
The U.S. is preparing to file a lawsuit with the World Trade Organization alleging Chinese intellectual property laws fall short of the global requirements China agreed to when it joined the WTO in 2001, people familiar with the case said last week. The administration has been discussing the legal strategy with the film, music and software industries and Congress.
Administration officials have said in those strategy meetings that they intend to file the suit if the summits in Washington fail to resolve the issue, the people said.
Monday, April 10, 2006
China and Piracy: Rutchik Quoted
U.S. Prepares WTO Lawsuit on China's Copyright Laws, People Say
April 7 (Bloomberg) -- The Bush administration's dispute with China over its movie piracy and other copyright infringement may escalate into litigation as early as this month unless Chinese leaders offer an acceptable solution during summits with the U.S. that start next week, people briefed on the matter said.
The U.S. is preparing to file a lawsuit with the World Trade Organization alleging Chinese intellectual property laws fall short of the global requirements China agreed to when it joined the WTO in 2001, the people said. The administration has been discussing the legal strategy with the film, music and software industries and congressional staff members, they said.
Administration officials have said in those strategy meetings that they intend to file the suit if the summits in Washington fail to resolve the issue, the people said.
The preparation of a suit reflects frustration in Washington that promises China made to curb the illegal manufacturing U.S. goods haven't led to a decline in lost revenue from piracy. U.S. companies say those losses total $250 billion annually.
``There is still a lack of a meeting of the minds'' over how China is dealing with the issue, said James Jochum, a former U.S. Commerce Department official who now works on China issues at the law firm of Mayer, Brown, Rowe & Maw LLP in Washington. ``The U.S. thinks it is going poorly, and the Chinese think it is going well. There is an incredible disconnect.''
Yan Xiaohong, the deputy commissioner of China's National Copyright Administration, and other Chinese officials say they are making progress to stem piracy. They point to recent mandates for businesses to buy legal software and new measures that transfer more copyright violation cases to criminal courts.
Strategy Shift
The decision to base a complaint on allegations that China fails to fulfill WTO standards requiring criminal prosecutions and transparency of rules represents a new U.S. approach. Previously, U.S. officials had discussed basing a suit on data showing the volume of illegal merchandise. That data has proven difficult to obtain, the people involved in the matter said.
The lawsuit would be one of the most complex cases in the 11-year history of the WTO, which oversees rules of international commerce for 149 member nations.
The U.S. has made the protection of intellectual property the centerpiece of its trade agenda. It sees China as the center of global production for illegal copies of a wide variety of items including Harry Potter books, Microsoft software, Louis Vuitton handbags, automotive parts, and pharmaceutical medicine.
``China is manufacturing 80 percent of the pirated goods'' out there, said Gregory Rutchik, a senior counsel at the law firm of Liner Yankelevitz Sunshine & Regenstreif LLP in San Francisco. ``We are talking about a multi-billion dollar industry. The scope is just staggering.'' [See e.g. Testimony before Senate puts the number between 85 and 90% of all copyrighted works!]
Trade Summit
U.S. and Chinese trade officials are scheduled to meet April 11 for an annual policy meeting in Washington that is intended to produce pledges on how the two nations conduct business with each other. In each of the last two meetings, China pledged new crackdowns on intellectual property rights violations, promises the U.S. says haven't been fulfilled.
Chinese President Hu Jintao is scheduled to meet with President George W. Bush in Washington on April 20 to talk abut a broad range of issues, including trade relations.
In addition to illegal goods being made in China for sale in China, pirated goods are now being exported to the U.S. for sale, Commerce Secretary Carlos Gutierrez said in a speech on March 14.
``We know there's rampant piracy in China, and we know it affects our imports to China in a very direct way,'' U.S. Trade Representative Rob Portman said in an interview April 5.
Options Explored
In a separate interview last month, Portman said that the U.S. is considering bringing a WTO complaint against China over this issue. He didn't provide specifics then, and a spokeswoman for Portman declined to comment yesterday about the possibility.
``The U.S. government has been supportive of our China agenda, and we're working with them to explore all of our options to stop our losses'' due to piracy, Gayle Osterberg, a spokeswoman for the Motion Picture Association of America, said.
In recent discussions with industry representatives, the U.S. trade office complained that it hasn't been getting the data it needs from them to bring a case that would argue systematic piracy in China is a violation of WTO provisions.
In a meeting with U.S. business representatives in Beijing last month, the general counsel for the U.S. Trade Representative's office, James Mendenhall, pleaded with companies to provide him with the information necessary to file such a case. Speaking with reporters after the meeting, Mendenhall said he told the business representatives, ``You need to arm us with the facts.''
Data Lacking
In addition, the U.S. has been unable to get data on the extent of copyright piracy and government crackdowns that it demanded from China last year under a separate WTO provision.
The Chinese plan to come down harder on all large companies found to use pirated software, Yan, the deputy copyright commissioner in China, said March 27.
China shut down 17 assembly lines for pirated digital video discs last year and has closed six more this year, Yan said.
Not all U.S. businesses are in favor of litigation because of fears it could damage commercial relations between the two countries.
``We are optimistic,'' said Robert Holleyman, the Washington-based president of the Business Software Alliance, which represents companies such as Microsoft Corp. ``China has made a number of very specific commitments related to software. We are optimistic that ultimately we are on the right path.''
George Scalise, president of the Semiconductor Industry Association, agreed. ``WTO cases generally take too long,'' he said.
To contact the reporter on this story:
Mark Drajem in Washington at mdrajem@bloomberg.net
April 7 (Bloomberg) -- The Bush administration's dispute with China over its movie piracy and other copyright infringement may escalate into litigation as early as this month unless Chinese leaders offer an acceptable solution during summits with the U.S. that start next week, people briefed on the matter said.
The U.S. is preparing to file a lawsuit with the World Trade Organization alleging Chinese intellectual property laws fall short of the global requirements China agreed to when it joined the WTO in 2001, the people said. The administration has been discussing the legal strategy with the film, music and software industries and congressional staff members, they said.
Administration officials have said in those strategy meetings that they intend to file the suit if the summits in Washington fail to resolve the issue, the people said.
The preparation of a suit reflects frustration in Washington that promises China made to curb the illegal manufacturing U.S. goods haven't led to a decline in lost revenue from piracy. U.S. companies say those losses total $250 billion annually.
``There is still a lack of a meeting of the minds'' over how China is dealing with the issue, said James Jochum, a former U.S. Commerce Department official who now works on China issues at the law firm of Mayer, Brown, Rowe & Maw LLP in Washington. ``The U.S. thinks it is going poorly, and the Chinese think it is going well. There is an incredible disconnect.''
Yan Xiaohong, the deputy commissioner of China's National Copyright Administration, and other Chinese officials say they are making progress to stem piracy. They point to recent mandates for businesses to buy legal software and new measures that transfer more copyright violation cases to criminal courts.
Strategy Shift
The decision to base a complaint on allegations that China fails to fulfill WTO standards requiring criminal prosecutions and transparency of rules represents a new U.S. approach. Previously, U.S. officials had discussed basing a suit on data showing the volume of illegal merchandise. That data has proven difficult to obtain, the people involved in the matter said.
The lawsuit would be one of the most complex cases in the 11-year history of the WTO, which oversees rules of international commerce for 149 member nations.
The U.S. has made the protection of intellectual property the centerpiece of its trade agenda. It sees China as the center of global production for illegal copies of a wide variety of items including Harry Potter books, Microsoft software, Louis Vuitton handbags, automotive parts, and pharmaceutical medicine.
``China is manufacturing 80 percent of the pirated goods'' out there, said Gregory Rutchik, a senior counsel at the law firm of Liner Yankelevitz Sunshine & Regenstreif LLP in San Francisco. ``We are talking about a multi-billion dollar industry. The scope is just staggering.'' [See e.g. Testimony before Senate puts the number between 85 and 90% of all copyrighted works!]
Trade Summit
U.S. and Chinese trade officials are scheduled to meet April 11 for an annual policy meeting in Washington that is intended to produce pledges on how the two nations conduct business with each other. In each of the last two meetings, China pledged new crackdowns on intellectual property rights violations, promises the U.S. says haven't been fulfilled.
Chinese President Hu Jintao is scheduled to meet with President George W. Bush in Washington on April 20 to talk abut a broad range of issues, including trade relations.
In addition to illegal goods being made in China for sale in China, pirated goods are now being exported to the U.S. for sale, Commerce Secretary Carlos Gutierrez said in a speech on March 14.
``We know there's rampant piracy in China, and we know it affects our imports to China in a very direct way,'' U.S. Trade Representative Rob Portman said in an interview April 5.
Options Explored
In a separate interview last month, Portman said that the U.S. is considering bringing a WTO complaint against China over this issue. He didn't provide specifics then, and a spokeswoman for Portman declined to comment yesterday about the possibility.
``The U.S. government has been supportive of our China agenda, and we're working with them to explore all of our options to stop our losses'' due to piracy, Gayle Osterberg, a spokeswoman for the Motion Picture Association of America, said.
In recent discussions with industry representatives, the U.S. trade office complained that it hasn't been getting the data it needs from them to bring a case that would argue systematic piracy in China is a violation of WTO provisions.
In a meeting with U.S. business representatives in Beijing last month, the general counsel for the U.S. Trade Representative's office, James Mendenhall, pleaded with companies to provide him with the information necessary to file such a case. Speaking with reporters after the meeting, Mendenhall said he told the business representatives, ``You need to arm us with the facts.''
Data Lacking
In addition, the U.S. has been unable to get data on the extent of copyright piracy and government crackdowns that it demanded from China last year under a separate WTO provision.
The Chinese plan to come down harder on all large companies found to use pirated software, Yan, the deputy copyright commissioner in China, said March 27.
China shut down 17 assembly lines for pirated digital video discs last year and has closed six more this year, Yan said.
Not all U.S. businesses are in favor of litigation because of fears it could damage commercial relations between the two countries.
``We are optimistic,'' said Robert Holleyman, the Washington-based president of the Business Software Alliance, which represents companies such as Microsoft Corp. ``China has made a number of very specific commitments related to software. We are optimistic that ultimately we are on the right path.''
George Scalise, president of the Semiconductor Industry Association, agreed. ``WTO cases generally take too long,'' he said.
To contact the reporter on this story:
Mark Drajem in Washington at mdrajem@bloomberg.net
Monday, December 12, 2005
Carpe Diem!
As 2005 rolls to an end, I am left with several realizations. The web has now made it possible for everyone to become a somebody ala a blogster. And, with Andreeson's new toy, "http://www.ning.com" the web has also made it possible for everyone to be their web site. The problem is, with all this blah, blah, blah, are are "better" society? Do we feed more hungry mouths, do we keep more healthier? Are we richer? Cleaner?
I remember when I first interviewed with Goldman Sachs in 1986 and I blew the interview by answering the "how would I invest $1 million dollars" question by stating (at the end of what I though was a solid diversified approach) that I'd give some of the money away. Wasn't it important to be socially conscious? In all activities? No. Never when you're an investment banker. "No one ever hires their investment banker to give their money away," David Darst (then head of Securities Sales and kind of my mentor during the interviewing) told me. The same adage - making a difference in the world -- I feel holds true for the Internet. 2005 is definitely the year of http://www.Google.com and http://www.ning.com shows us that we are on the verge of making it possible for each of us to have our own search engine -- yippee. 2006 may very well be the year of "so what." Not to be negative or anything but China and its stability really will have a lot to do with our future.
I'm getting my news by running bablefish on baidu.com's new's link so I can read their news in English.
Where do you get get your news and how do you change your life because of it?
I remember when I first interviewed with Goldman Sachs in 1986 and I blew the interview by answering the "how would I invest $1 million dollars" question by stating (at the end of what I though was a solid diversified approach) that I'd give some of the money away. Wasn't it important to be socially conscious? In all activities? No. Never when you're an investment banker. "No one ever hires their investment banker to give their money away," David Darst (then head of Securities Sales and kind of my mentor during the interviewing) told me. The same adage - making a difference in the world -- I feel holds true for the Internet. 2005 is definitely the year of http://www.Google.com and http://www.ning.com shows us that we are on the verge of making it possible for each of us to have our own search engine -- yippee. 2006 may very well be the year of "so what." Not to be negative or anything but China and its stability really will have a lot to do with our future.
I'm getting my news by running bablefish on baidu.com's new's link so I can read their news in English.
Where do you get get your news and how do you change your life because of it?
Thursday, October 20, 2005
Being sued for trademark infringement, defending yourself, and winning!
Note: This decision came down more than one year ago but was just published. I thought it was pretty cool that it was published so I thought I'd share it with you. You've heard it before but here it is again -- Past performance is never a guarantee of future performance.
JUPITER HOSTING, INC. v. JUPITERMEDIA CORP.
US v. Them
JUPITER HOSTING, INC., a Delaware corporation, Plaintiff, v. JUPITERMEDIA
CORPORATION, a Delaware corporation, Defendant.
No. C 04-1820 CW
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
2004 U.S. Dist. LEXIS 28669
September 11, 2004, Decided
September 11, 2004, Filed
COUNSEL: [*1] For Jupiter Hosting Inc, a Delaware Corporation, Plaintiff: Gregory Alan Rutchik, the arts and technology group , San Francisco, CA; Roy S. Gordet, Roy S. Gordet, Attorney at Law, San Francisco, CA.
For Jupitermedia Corporation, a Delaware corporation, Defendant: John C. Rawls, Sarah Anne Silbert, Fulbright & Jaworski L.L.P., Los Angeles, CA; Brandon Claus Fernald, Fulbright & Jaworski L.L.P., Los Angeles, CA; Mark N. Mutterperl, Fulbright & Jaworski L.L.P., New York, NY.
For Jupitermedia Corporation a Delaware corporation, Counter-claimant: Brandon Claus Fernald, Fulbright & Jaworski L.L.P., Los Angeles, CA; Sarah Anne Silbert, Fulbright & Jaworski L.L.P., Los Angeles, CA.
For Jupiter Hosting Inc a Delaware Corporation, Counter-defendant: Gregory Alan Rutchik, the arts and technology group, San Francisco, CA; Roy S. Gordet, Roy S. Gordet, Attorney at Law, San Francisco, CA.
JUDGES: CLAUDIA WILKEN, United States District Judge.
OPINIONBY: CLAUDIA WILKEN
OPINION: ORDER DENYING DEFENDANT'S MOTION FOR A PRELIMINARY INJUNCTION
Defendant Jupitermedia Corporation moves for a preliminary injunction against Plaintiff Jupiter Hosting, Inc. enjoining Plaintiff from making commercial use of its[*2] brand name, "Jupiter Hosting," including use in Plaintiff's domain name, "jupiterhosting.com." Plaintiff opposes the motion. The matter was heard on November 5, 2004. Having considered the parties' papers and oral argument on the motion, the Court DENIES Defendant's request for a preliminary injunction.
BACKGROUND
Plaintiff Jupiter Hosting, Inc. has contracts with approximately eighty-five web-hosting companies nationwide both to construct and to maintain websites and website infrastructure. Plaintiff registered its domain name, "jupiterhosting.com," in October, 2001 and thereafter installed a webpage at www.jupiterhosting.com, from which it conducts business with customers by way of its domain name servers: nsl.jupiterhosting.com and ns2.jupiterhosting.com.
Defendant Jupitermedia Corporation is an Internet company located in Darien, Connecticut that offers a variety of services to information technology specialists, website developers and Internet markets through its webpage at www.jupitermedia.com. Defendant registered its domain name, jupitermedia.com, on October 25, 2000. According to Defendant, its business is comprised primarily of four Internet divisions that provide (1) [*3] technology market research, (2) general information for website developers, (3) information on Internet conferences and trade shows, and (4) online subscriptions to resources from a variety of design-oriented websites. Defendant has registered the marks "JUPITER," "JUPITER RESEARCH," "JUPITERRESEARCH" and "JUPITEREVENTS" with the United States Patent and Trademark Office (PTO).
Plaintiff filed a complaint on May 7, 2004 seeking a declaratory judgment that it was not in violation of any of Defendant's trademark or intellectual property rights in connection with Plaintiff's commercial activities. On July 16, 2004, Defendant filed this motion for a preliminary injunction, alleging that Plaintiff's use of "Jupiter Hosting" to identify its products, services and domain name violates the Lanham Act, the Anticybersquatting Consumer Protection Act, and California's Unfair Competition Law.
On August 24, 2004, the PTO denied Plaintiff's request to register the mark "JUPITER HOSTING," concluding that Plaintiff's mark would likely be confused with Defendant's "JUPITER" mark because the marks were highly similar in sound, meaning and appearance. The PTO allowed Plaintiff the option of responding[*4] to the denial, and Plaintiff contends that its PTO application is still pending.
LEGAL STANDARD
"The function of a preliminary injunction is to maintain the status quo ante litem pending determination of the action on the merits." Wash. Capitols Basketball Club v. Barry, 419 F.2d 472, 476 (9th Cir. 1969). The moving party is entitled to a preliminary injunction if it establishes either: (1) a combination of probable success on the merits and the possibility of irreparable harm, or (2) that serious questions regarding the merits exist and the balance of hardships tips sharply in the moving party's favor. Clear Channel Outdoor, Inc. v. City of Los Angeles, 340 F.3d 810, 813 (9th Cir. 2003); Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir. 1987); see also Wm. Inglis & Sons Baking Co. v. ITT Cont'l Baking Co., 526 F.2d 86, 88 (9th Cir. 1975); County of Alameda v. Weinberger, 520 F.2d 344, 349 (9th Cir. 1975).
The test is a "continuum in which the required showing of harm varies inversely with the required showing of meritoriousness." Rodeo Collection, 812 F.2d at 1217[*5] (quoting San Diego Comm. Against Registration & the Draft v. Governing Bd. of Grossmont Union High Sch. Dist., 790 F.2d 1471, 1473 n.3 (9th Cir. 1986)). To overcome a weak showing of merit, a plaintiff seeking a preliminary injunction must make a very strong showing that the balance of hardships is in its favor. Rodeo Collection, 812 F.2d at 1217. In appropriate cases, the Court should also consider whether injunctive relief would serve the public interest. Int'l Jensen, Inc. v. Metrosound U.S.A., Inc., 4 F.3d 819, 822 (9th Cir. 1993).
DISCUSSION
Defendant argues that it is entitled to a preliminary injunction against Plaintiff because there is a high probability that Defendant will succeed on its claims, and that Defendant stands to suffer irreparable harm if the preliminary injunction is not granted. Defendant also argues that the balance of hardships tips sharply in its favor.
I. Lanham Act
The Lanham Act, in pertinent part, imposes civil liability on those who (1) "use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark" where such use (2) "is likely to cause confusion, or to cause[*6] mistake, or to deceive." 15 U.S.C. § 1114. The Ninth Circuit has identified eight factors that are relevant to whether consumers are likely to confuse related goods: (1) strength of the mark, (2) proximity of the goods, (3) similarity of the marks, (4) evidence of actual confusion, (5) marketing channels used, (6) degree of care likely to be exercised by the purchaser, (7) evidence of bad faith intent in selecting the mark, and (8) likelihood of expansion and overlap of the products. AMF, Inc. v. Sleekcraft, 599 F.2d 341, 348-49 (9th Cir. 1979). In the context of the Internet, three of these Sleekcraft factors retain particular importance: (1) similarity of the marks, (2) relatedness [proximity] of the goods and services, and (3) the use of the Internet as a marketing channel. GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir. 2000).
A. Probability of Success on the Merits
1. Similarity of the Marks
The Ninth Circuit considers the "similarity of the marks" factor to be a "critical question" in the likelihood of confusion analysis. Id. In assessing the similarity between marks, the court looks at the[*7] relevant marks as they appear in full in the marketplace, Filipino Yellow Pages, Inc. v. Asian Journal Publ'ns, Inc., 198 F.3d 1143, 1147-50 (9th Cir. 1999), in order to compare their appearance, meaning and sound. Dreamwerks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127, 1131 (9th Cir. 1998).
Defendant argues that the parties' marks are highly similar in appearance, meaning and sound, principally because they both contain the same central feature -- the word "Jupiter." That contention is supported by the PTO findings which reached that exact conclusion. Plaintiff argues that the marks are not substantially similar because, as displayed on their respective Internet websites, the marks have different fonts, color schemes and layouts. Plaintiff further argues that its mark is written on two separate lines of text while "Jupitermedia" is written as one word on a single line of text.
These relatively trivial differences do not diminish the substantial similarities that the marks share. The term "hosting" does little more than describe a feature of Plaintiff's services, potentially leading to confusion with other services associated with the mark "Jupiter, [*8] " the names of which Defendant has registered with the PTO (e.g. "JUPITER RESEARCH"). The substantial similarities between the marks support Defendant's claim that a likelihood of confusion may very well exist in this case.
2. Relatedness of Goods and Services
The Ninth Circuit has ruled that, in the Internet context, "even services that are not identical are capable of confusing the public." GoTo.com, 202 F.3d at 1206. The court in GoTo.com ruled that, because the Internet is a unique medium in which companies routinely offer a variety of services under a single banner or mark, it introduces problems into the standard analysis of relatedness: "Whereas in the world of bricks and mortar, one may be able to distinguish easily between an expensive restaurant in New York and a mediocre one in Los Angeles, the Web is a very different world." Id. (internal cites omitted).
Plaintiff argues that it is not a direct competitor of Defendant; its services are not complementary to those sold by Defendant and do not serve the same business function. Plaintiff installs computer hardware and maintains websites, while Defendant offers primarily research and other informational[*9] services over the Internet. However, given the Ninth Circuit's statements regarding how the Internet clouds distinctions between services, Plaintiff's argument that it offers different Internet-related services than does Defendant is not persuasive. Both parties agree that the relevant test is whether the public is likely to make an association between related producers and products. Dreamwerks, 142 F.3d at 1127-28. There is a likelihood that Defendant could demonstrate such an association in this instance.
3. Same Marketing Channel
The court in GoTo.com ruled that the Web, as a marketing channel, is "particularly susceptible to a likelihood for confusion," in large part because it allows for competing marks to be displayed at the same time on the same screen. 202 F.3d at 1207.
There is no real dispute that the parties share the same marketing channel: the Internet. Plaintiff argues that it also advertises at a trade show called Internext, but Internext markets only to representatives of adult content Internet websites. Plaintiff also argues that it advertises in different Internet locations than does Defendant, but the Ninth Circuit has previously[*10] held that the Web itself is a marketing channel for purposes of likelihood of confusion analysis. Id.
4. Strength of Mark
While the three factors just addressed constitute the "controlling troika" of Sleekcraft factors when assessing the likelihood of confusion in Internet trademark infringement cases, id. at 1205, and while those factors tilt generally in Defendant's favor, that initial inference of potential or probable confusion is not determinative. See Halo Mgmt. LLC v. Interland, Inc., 308 F. Supp. 2d 1019, 1036 (N.D. Cal. 2003). That is the case because, according to the Ninth Circuit, where the market is inundated by products using the particular trademarked word, there is a corresponding likelihood that consumers "will not likely be confused by any two in the crowd." Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1144 (9th Cir. 2002). "The popularity of a particular mark-related term may impact the strength of marks using that term"; where the market is "crowded" with a particular mark term, thereby "weakening" said term, "any individual user of the [] term thus lacks significant ability to prevent the use of [the[*11] term] by others in the field." Halo, 308 F. Supp. at 1034. Here, Plaintiff has provided evidence that the mark "Jupiter" is used by several dozen companies in California (where Plaintiff's principal place of business is located) and several dozen more in New York, many of which advertise on and/or provide services relating to the Internet. Pinkney Decl., Exs. 1-29. The term "Jupiter" is the identifiable mark for "www.jupitertele.com," "www.jupiter.com," "www.jupitertech.com," "www.jupiterprod.com," and "www.jupiterns.com," among others. Id., Ex. 2, 3, 8, 9, 24. Defendant argues that some of the companies identified by Plaintiff provide dissimilar products and services. This is true, although many plainly do provide computer, technology and Internet-related products on or through the Web. While the companies may not offer services identical to Defendant's vast array of Internet services, Defendant cannot argue on the one hand that the Internet broadens and blurs categories for purposes of likelihood of confusion analysis (e.g. relatedness of goods and services) and, on the other hand, that companies operating on the Internet are not comparable for purposes of[*12] crowded market analysis because they do not offer services identical to Defendant's.
The facts in Halo are analogous. In Halo, the plaintiff sought preliminary injunctive relief enjoining the defendant from using its Internet website "www.bluehalo.com"; the plaintiff held a registered trademark for the mark "HALO." 308 F. Supp. 2d at 1024. The Halo court noted that, while the "controlling troika" of factors clearly favored the plaintiff, the fact that the relevant trademark field was crowded cut against the plaintiff's likelihood of confusion claim. Id. at 1036. In denying the plaintiff's motion for a preliminary injunction, the court reasoned, "Dozens of companies utilize some variant of the halo' term, and many of these companies do so in the Internet and computer context without distinguishing their marks from [plaintiff's]. . . . Consumers confronted with marks ranging from halosec.com' to haloelectrics.com' to bluehalo.com' will, as the Ninth Circuit has suggested, not be confused by the use of the relevant trademarked term." Id. at 1036-37 (internal citations omitted) (emphasis in original).
Where a plaintiff's[*13] mark resides in a crowded field, "hemmed in on all sides by similar marks on similar goods," that mark is weak as a matter of law. PostX Corp. v. docSpace Co., Inc., 80 F. Supp. 2d 1056, 1061 (N.D. Cal. 1999). Plaintiff has provided substantial evidence that Defendant's trademark is positioned in a crowded field.
5. Remaining Sleekcraft Factors
The remaining Sleekcraft factors are relatively unimportant to the likelihood of confusion analysis in Internet-related cases. GoTo.com, 202 F.3d at 1205.
Defendant has provided no real evidence of actual confusion on the part of consumers other than several telephone calls to Defendant inquiring about services similar to those offered by Plaintiff. There is no evidence that those callers intended to call Plaintiff or were confused or misled in their inquiries by Plaintiff's advertising of its products or services. However, the Ninth Circuit has ruled that a showing of actual confusion is not necessary at the preliminary injunction stage, GoTo.com, 202 F.3d at 1208, and it is not necessary that Defendant make such a showing here. The parties argue over the degree of care exercised[*14] by consumers seeking Internet-related services over the Web. The Ninth Circuit is clear on this issue: "Navigating amongst websites involves practically no effort whatsoever, and arguments that Web users exercise a great deal of care [] are unconvincing." Id. at 1209. Thus, Plaintiff's argument that consumers are likely to exercise a high degree of care because its services are relatively expensive is not persuasive.
Neither party has made a clear showing regarding Plaintiff's intent in choosing its mark. The issue is not important in this analysis, and a showing of malicious intent is not required at the preliminary injunction stage. Halo, 308 F. Supp. 2d at 1038.
The evidence on the question of whether Plaintiff intends or is likely to expand into Defendant's primary field of services is ambiguous. Plaintiff argues that there is little likelihood that the parties' services would overlap because they occupy very different Internet-related fields. Again, Plaintiff installs computer hardware and maintains websites, while Defendant offers primarily research and other informational services. Furthermore, Plaintiff asserts that it does not directly[*15] compete for advertising space with Defendant. However, in some sense, the parties' services already overlap because they are both Internet and computer-related services that are offered exclusively over the Web through the parties' websites. This factor does not weigh heavily for either side.
The remaining Sleekcraft factors thus add little to the Court's analysis. The "controlling troika" of Sleekcraft factors favor Defendant's argument for a preliminary injunction. However, Plaintiff has provided substantial evidence suggesting that Defendant's mark has been rendered weak by a crowded field, thus diminishing the likelihood of confusion among consumers. Defendant therefore has not shown probable success on the merits of its claim under the Lanham Act.
B. Balancing of Hardships
Because Defendant has not shown a probability of success on the merits, the Court must now determine whether Defendant has raised serious questions on the merits of its claim and, if so, whether the balance of hardships tips sharply in Defendant's favor.
Defendant has raised serious questions as to the merits of its Lanham Act claim that are addressed in the previous sections of this order. However, [*16] Defendant has not shown that the balance of hardships tips sharply in its favor. The parties dispute how injurious a preliminary injunction would be to Plaintiff. According to Plaintiff, forfeiture of its domain name would cause its customers' domain servers to cease functioning, thus shutting the company down and putting it at risk of insolvency and legal liability to its customers. Plaintiff also contends that its customers are contractually entitled to compensation if its servers go down, and thus inactivating the servers for any length of time puts Plaintiff at risk of bankruptcy.
According to Defendant, Plaintiff would merely have to change the domain names of its servers and the transition costs would therefore be minimal. Defendant argues that, when customers of Plaintiff's predecessor migrated to Plaintiff's servers, the cost was only several thousand dollars. This dispute need not be resolved at this time because Defendant has not shown that it will suffer irreparable harm or be substantially injured if the preliminary injunction is not granted. Defendant's claim of irreparable harm derives solely from its contention that once a plaintiff has demonstrated a likelihood of[*17] confusion under the Lanham Act, it is presumed that the plaintiff will suffer irreparable harm if injunctive relief is not granted. That contention is true, Metro Publ'g, Ltd. v. San Jose Mercury News, 987 F.2d 637, 640 (9th Cir. 1993), but because Defendant has not shown a likelihood of confusion, irreparable injury cannot be inferred.
Moreover, Defendant's own moving papers suggest that it has not been injured by Plaintiff's use of the mark "Jupiter Hosting." Both parties agree that Plaintiff registered its domain name in October, 2001. According to Defendant, from 1999 to 2003, its annual revenues rose nearly three hundred percent, to almost $ 48 million. In the first quarter of 2004, its revenues were $ 14.4 million, an increase of almost seventy-five percent over the corresponding period in 2003. DeMilt Decl. P 14. Not only has Defendant failed to show irreparable injury by inference, it appears from its moving papers that it has flourished during the time that Plaintiff has utilized the mark "Jupiter Hosting," and Defendant makes no attempt to show that this trend will change if a preliminary injunction is not granted. Defendant has not demonstrated that the[*18] balance of hardships tips sharply in its favor, and a preliminary injunction is therefore not appropriate.
II. Anticybersquatting Consumer Protection Act
The ACPA holds a person civilly liable who (1) has a "bad faith intent to profit from" a registered mark, and (2) registers or uses a domain name that is either identical or confusingly similar to the registered mark. 15 U.S.C. § 1125(d) (1) (A).
Defendant's argument as to how the "confusingly similar" prong of ACPA section 1125(d) is satisfied relies solely on its "likelihood of confusion" argument under the Lanham Act. In its reply papers, Defendant offers a single sentence asserting that the "confusingly similar" prong offers broader protection to trademark holders than does the "likelihood of confusion" test, but offers no further analysis on the topic. Because the Court has ruled that Defendant has not exhibited a probability of success of its argument that there is a likelihood of confusion between the parties' marks under the Lanham Act, it similarly rejects Defendant's contention that there is a likelihood that the marks will be found confusingly similar under the ACPA test.
Because the Court[*19] rules that Defendant is not likely to satisfy the second prong of section 1125(d)(1)(A) of the ACPA for the purpose of a preliminary injunction, analysis of the first prong's bad faith intent requirement is unnecessary. Moreover, even if Defendant could raise serious questions on the merits of its ACPA claim, it has not demonstrated that the balance of hardships tips sharply in its favor.
III. Unfair Competition Law
Defendant also argues that it is likely to prevail on the merits of its claim under California's Unfair Competition Law. However, Defendant offers no analysis relating to its Unfair Competition Law claim and does nothing more than refer to it in passing several times in its papers. The Court nevertheless addresses Defendant's probability of success on the merits of its Unfair Competition Law claim.
Under California Business and Professions Code section 17200, "unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice." The unfair competition law "embraces anything that can properly be called a business practice and that at the same time is forbidden by law." Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1135 (2003).[*20] In other words, section 17200 "borrows" violations from other laws and makes them independently actionable as unfair business practices. Id.
Defendant must therefore demonstrate a probability of success on its claim that Plaintiff has violated a law independent of the Unfair Competition Law before the State law claim will be triggered. Here, the Court has ruled that Defendant has not shown a probability that it will succeed on either its Lanham Act claim or its ACPA claim. Thus, Defendant has not demonstrated that it is likely it will prevail on its Unfair Competition Law claim. Furthermore, while Defendant has raised serious questions on the merits of at least its underlying Lanham Act claim, it has not shown that the balance of hardships tips sharply in its favor. A preliminary injunction is not appropriate based on this claim.
CONCLUSION
For the foregoing reasons, Defendant's motion for a preliminary injunction is DENIED.
IT IS SO ORDERED.
Dated: 11/9/04
CLAUDIA WILKEN
United States District Judge
JUPITER HOSTING, INC. v. JUPITERMEDIA CORP.
US v. Them
JUPITER HOSTING, INC., a Delaware corporation, Plaintiff, v. JUPITERMEDIA
CORPORATION, a Delaware corporation, Defendant.
No. C 04-1820 CW
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
2004 U.S. Dist. LEXIS 28669
September 11, 2004, Decided
September 11, 2004, Filed
COUNSEL: [*1] For Jupiter Hosting Inc, a Delaware Corporation, Plaintiff: Gregory Alan Rutchik, the arts and technology group , San Francisco, CA; Roy S. Gordet, Roy S. Gordet, Attorney at Law, San Francisco, CA.
For Jupitermedia Corporation, a Delaware corporation, Defendant: John C. Rawls, Sarah Anne Silbert, Fulbright & Jaworski L.L.P., Los Angeles, CA; Brandon Claus Fernald, Fulbright & Jaworski L.L.P., Los Angeles, CA; Mark N. Mutterperl, Fulbright & Jaworski L.L.P., New York, NY.
For Jupitermedia Corporation a Delaware corporation, Counter-claimant: Brandon Claus Fernald, Fulbright & Jaworski L.L.P., Los Angeles, CA; Sarah Anne Silbert, Fulbright & Jaworski L.L.P., Los Angeles, CA.
For Jupiter Hosting Inc a Delaware Corporation, Counter-defendant: Gregory Alan Rutchik, the arts and technology group, San Francisco, CA; Roy S. Gordet, Roy S. Gordet, Attorney at Law, San Francisco, CA.
JUDGES: CLAUDIA WILKEN, United States District Judge.
OPINIONBY: CLAUDIA WILKEN
OPINION: ORDER DENYING DEFENDANT'S MOTION FOR A PRELIMINARY INJUNCTION
Defendant Jupitermedia Corporation moves for a preliminary injunction against Plaintiff Jupiter Hosting, Inc. enjoining Plaintiff from making commercial use of its[*2] brand name, "Jupiter Hosting," including use in Plaintiff's domain name, "jupiterhosting.com." Plaintiff opposes the motion. The matter was heard on November 5, 2004. Having considered the parties' papers and oral argument on the motion, the Court DENIES Defendant's request for a preliminary injunction.
BACKGROUND
Plaintiff Jupiter Hosting, Inc. has contracts with approximately eighty-five web-hosting companies nationwide both to construct and to maintain websites and website infrastructure. Plaintiff registered its domain name, "jupiterhosting.com," in October, 2001 and thereafter installed a webpage at www.jupiterhosting.com, from which it conducts business with customers by way of its domain name servers: nsl.jupiterhosting.com and ns2.jupiterhosting.com.
Defendant Jupitermedia Corporation is an Internet company located in Darien, Connecticut that offers a variety of services to information technology specialists, website developers and Internet markets through its webpage at www.jupitermedia.com. Defendant registered its domain name, jupitermedia.com, on October 25, 2000. According to Defendant, its business is comprised primarily of four Internet divisions that provide (1) [*3] technology market research, (2) general information for website developers, (3) information on Internet conferences and trade shows, and (4) online subscriptions to resources from a variety of design-oriented websites. Defendant has registered the marks "JUPITER," "JUPITER RESEARCH," "JUPITERRESEARCH" and "JUPITEREVENTS" with the United States Patent and Trademark Office (PTO).
Plaintiff filed a complaint on May 7, 2004 seeking a declaratory judgment that it was not in violation of any of Defendant's trademark or intellectual property rights in connection with Plaintiff's commercial activities. On July 16, 2004, Defendant filed this motion for a preliminary injunction, alleging that Plaintiff's use of "Jupiter Hosting" to identify its products, services and domain name violates the Lanham Act, the Anticybersquatting Consumer Protection Act, and California's Unfair Competition Law.
On August 24, 2004, the PTO denied Plaintiff's request to register the mark "JUPITER HOSTING," concluding that Plaintiff's mark would likely be confused with Defendant's "JUPITER" mark because the marks were highly similar in sound, meaning and appearance. The PTO allowed Plaintiff the option of responding[*4] to the denial, and Plaintiff contends that its PTO application is still pending.
LEGAL STANDARD
"The function of a preliminary injunction is to maintain the status quo ante litem pending determination of the action on the merits." Wash. Capitols Basketball Club v. Barry, 419 F.2d 472, 476 (9th Cir. 1969). The moving party is entitled to a preliminary injunction if it establishes either: (1) a combination of probable success on the merits and the possibility of irreparable harm, or (2) that serious questions regarding the merits exist and the balance of hardships tips sharply in the moving party's favor. Clear Channel Outdoor, Inc. v. City of Los Angeles, 340 F.3d 810, 813 (9th Cir. 2003); Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir. 1987); see also Wm. Inglis & Sons Baking Co. v. ITT Cont'l Baking Co., 526 F.2d 86, 88 (9th Cir. 1975); County of Alameda v. Weinberger, 520 F.2d 344, 349 (9th Cir. 1975).
The test is a "continuum in which the required showing of harm varies inversely with the required showing of meritoriousness." Rodeo Collection, 812 F.2d at 1217[*5] (quoting San Diego Comm. Against Registration & the Draft v. Governing Bd. of Grossmont Union High Sch. Dist., 790 F.2d 1471, 1473 n.3 (9th Cir. 1986)). To overcome a weak showing of merit, a plaintiff seeking a preliminary injunction must make a very strong showing that the balance of hardships is in its favor. Rodeo Collection, 812 F.2d at 1217. In appropriate cases, the Court should also consider whether injunctive relief would serve the public interest. Int'l Jensen, Inc. v. Metrosound U.S.A., Inc., 4 F.3d 819, 822 (9th Cir. 1993).
DISCUSSION
Defendant argues that it is entitled to a preliminary injunction against Plaintiff because there is a high probability that Defendant will succeed on its claims, and that Defendant stands to suffer irreparable harm if the preliminary injunction is not granted. Defendant also argues that the balance of hardships tips sharply in its favor.
I. Lanham Act
The Lanham Act, in pertinent part, imposes civil liability on those who (1) "use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark" where such use (2) "is likely to cause confusion, or to cause[*6] mistake, or to deceive." 15 U.S.C. § 1114. The Ninth Circuit has identified eight factors that are relevant to whether consumers are likely to confuse related goods: (1) strength of the mark, (2) proximity of the goods, (3) similarity of the marks, (4) evidence of actual confusion, (5) marketing channels used, (6) degree of care likely to be exercised by the purchaser, (7) evidence of bad faith intent in selecting the mark, and (8) likelihood of expansion and overlap of the products. AMF, Inc. v. Sleekcraft, 599 F.2d 341, 348-49 (9th Cir. 1979). In the context of the Internet, three of these Sleekcraft factors retain particular importance: (1) similarity of the marks, (2) relatedness [proximity] of the goods and services, and (3) the use of the Internet as a marketing channel. GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir. 2000).
A. Probability of Success on the Merits
1. Similarity of the Marks
The Ninth Circuit considers the "similarity of the marks" factor to be a "critical question" in the likelihood of confusion analysis. Id. In assessing the similarity between marks, the court looks at the[*7] relevant marks as they appear in full in the marketplace, Filipino Yellow Pages, Inc. v. Asian Journal Publ'ns, Inc., 198 F.3d 1143, 1147-50 (9th Cir. 1999), in order to compare their appearance, meaning and sound. Dreamwerks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127, 1131 (9th Cir. 1998).
Defendant argues that the parties' marks are highly similar in appearance, meaning and sound, principally because they both contain the same central feature -- the word "Jupiter." That contention is supported by the PTO findings which reached that exact conclusion. Plaintiff argues that the marks are not substantially similar because, as displayed on their respective Internet websites, the marks have different fonts, color schemes and layouts. Plaintiff further argues that its mark is written on two separate lines of text while "Jupitermedia" is written as one word on a single line of text.
These relatively trivial differences do not diminish the substantial similarities that the marks share. The term "hosting" does little more than describe a feature of Plaintiff's services, potentially leading to confusion with other services associated with the mark "Jupiter, [*8] " the names of which Defendant has registered with the PTO (e.g. "JUPITER RESEARCH"). The substantial similarities between the marks support Defendant's claim that a likelihood of confusion may very well exist in this case.
2. Relatedness of Goods and Services
The Ninth Circuit has ruled that, in the Internet context, "even services that are not identical are capable of confusing the public." GoTo.com, 202 F.3d at 1206. The court in GoTo.com ruled that, because the Internet is a unique medium in which companies routinely offer a variety of services under a single banner or mark, it introduces problems into the standard analysis of relatedness: "Whereas in the world of bricks and mortar, one may be able to distinguish easily between an expensive restaurant in New York and a mediocre one in Los Angeles, the Web is a very different world." Id. (internal cites omitted).
Plaintiff argues that it is not a direct competitor of Defendant; its services are not complementary to those sold by Defendant and do not serve the same business function. Plaintiff installs computer hardware and maintains websites, while Defendant offers primarily research and other informational[*9] services over the Internet. However, given the Ninth Circuit's statements regarding how the Internet clouds distinctions between services, Plaintiff's argument that it offers different Internet-related services than does Defendant is not persuasive. Both parties agree that the relevant test is whether the public is likely to make an association between related producers and products. Dreamwerks, 142 F.3d at 1127-28. There is a likelihood that Defendant could demonstrate such an association in this instance.
3. Same Marketing Channel
The court in GoTo.com ruled that the Web, as a marketing channel, is "particularly susceptible to a likelihood for confusion," in large part because it allows for competing marks to be displayed at the same time on the same screen. 202 F.3d at 1207.
There is no real dispute that the parties share the same marketing channel: the Internet. Plaintiff argues that it also advertises at a trade show called Internext, but Internext markets only to representatives of adult content Internet websites. Plaintiff also argues that it advertises in different Internet locations than does Defendant, but the Ninth Circuit has previously[*10] held that the Web itself is a marketing channel for purposes of likelihood of confusion analysis. Id.
4. Strength of Mark
While the three factors just addressed constitute the "controlling troika" of Sleekcraft factors when assessing the likelihood of confusion in Internet trademark infringement cases, id. at 1205, and while those factors tilt generally in Defendant's favor, that initial inference of potential or probable confusion is not determinative. See Halo Mgmt. LLC v. Interland, Inc., 308 F. Supp. 2d 1019, 1036 (N.D. Cal. 2003). That is the case because, according to the Ninth Circuit, where the market is inundated by products using the particular trademarked word, there is a corresponding likelihood that consumers "will not likely be confused by any two in the crowd." Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1144 (9th Cir. 2002). "The popularity of a particular mark-related term may impact the strength of marks using that term"; where the market is "crowded" with a particular mark term, thereby "weakening" said term, "any individual user of the [] term thus lacks significant ability to prevent the use of [the[*11] term] by others in the field." Halo, 308 F. Supp. at 1034. Here, Plaintiff has provided evidence that the mark "Jupiter" is used by several dozen companies in California (where Plaintiff's principal place of business is located) and several dozen more in New York, many of which advertise on and/or provide services relating to the Internet. Pinkney Decl., Exs. 1-29. The term "Jupiter" is the identifiable mark for "www.jupitertele.com," "www.jupiter.com," "www.jupitertech.com," "www.jupiterprod.com," and "www.jupiterns.com," among others. Id., Ex. 2, 3, 8, 9, 24. Defendant argues that some of the companies identified by Plaintiff provide dissimilar products and services. This is true, although many plainly do provide computer, technology and Internet-related products on or through the Web. While the companies may not offer services identical to Defendant's vast array of Internet services, Defendant cannot argue on the one hand that the Internet broadens and blurs categories for purposes of likelihood of confusion analysis (e.g. relatedness of goods and services) and, on the other hand, that companies operating on the Internet are not comparable for purposes of[*12] crowded market analysis because they do not offer services identical to Defendant's.
The facts in Halo are analogous. In Halo, the plaintiff sought preliminary injunctive relief enjoining the defendant from using its Internet website "www.bluehalo.com"; the plaintiff held a registered trademark for the mark "HALO." 308 F. Supp. 2d at 1024. The Halo court noted that, while the "controlling troika" of factors clearly favored the plaintiff, the fact that the relevant trademark field was crowded cut against the plaintiff's likelihood of confusion claim. Id. at 1036. In denying the plaintiff's motion for a preliminary injunction, the court reasoned, "Dozens of companies utilize some variant of the halo' term, and many of these companies do so in the Internet and computer context without distinguishing their marks from [plaintiff's]. . . . Consumers confronted with marks ranging from halosec.com' to haloelectrics.com' to bluehalo.com' will, as the Ninth Circuit has suggested, not be confused by the use of the relevant trademarked term." Id. at 1036-37 (internal citations omitted) (emphasis in original).
Where a plaintiff's[*13] mark resides in a crowded field, "hemmed in on all sides by similar marks on similar goods," that mark is weak as a matter of law. PostX Corp. v. docSpace Co., Inc., 80 F. Supp. 2d 1056, 1061 (N.D. Cal. 1999). Plaintiff has provided substantial evidence that Defendant's trademark is positioned in a crowded field.
5. Remaining Sleekcraft Factors
The remaining Sleekcraft factors are relatively unimportant to the likelihood of confusion analysis in Internet-related cases. GoTo.com, 202 F.3d at 1205.
Defendant has provided no real evidence of actual confusion on the part of consumers other than several telephone calls to Defendant inquiring about services similar to those offered by Plaintiff. There is no evidence that those callers intended to call Plaintiff or were confused or misled in their inquiries by Plaintiff's advertising of its products or services. However, the Ninth Circuit has ruled that a showing of actual confusion is not necessary at the preliminary injunction stage, GoTo.com, 202 F.3d at 1208, and it is not necessary that Defendant make such a showing here. The parties argue over the degree of care exercised[*14] by consumers seeking Internet-related services over the Web. The Ninth Circuit is clear on this issue: "Navigating amongst websites involves practically no effort whatsoever, and arguments that Web users exercise a great deal of care [] are unconvincing." Id. at 1209. Thus, Plaintiff's argument that consumers are likely to exercise a high degree of care because its services are relatively expensive is not persuasive.
Neither party has made a clear showing regarding Plaintiff's intent in choosing its mark. The issue is not important in this analysis, and a showing of malicious intent is not required at the preliminary injunction stage. Halo, 308 F. Supp. 2d at 1038.
The evidence on the question of whether Plaintiff intends or is likely to expand into Defendant's primary field of services is ambiguous. Plaintiff argues that there is little likelihood that the parties' services would overlap because they occupy very different Internet-related fields. Again, Plaintiff installs computer hardware and maintains websites, while Defendant offers primarily research and other informational services. Furthermore, Plaintiff asserts that it does not directly[*15] compete for advertising space with Defendant. However, in some sense, the parties' services already overlap because they are both Internet and computer-related services that are offered exclusively over the Web through the parties' websites. This factor does not weigh heavily for either side.
The remaining Sleekcraft factors thus add little to the Court's analysis. The "controlling troika" of Sleekcraft factors favor Defendant's argument for a preliminary injunction. However, Plaintiff has provided substantial evidence suggesting that Defendant's mark has been rendered weak by a crowded field, thus diminishing the likelihood of confusion among consumers. Defendant therefore has not shown probable success on the merits of its claim under the Lanham Act.
B. Balancing of Hardships
Because Defendant has not shown a probability of success on the merits, the Court must now determine whether Defendant has raised serious questions on the merits of its claim and, if so, whether the balance of hardships tips sharply in Defendant's favor.
Defendant has raised serious questions as to the merits of its Lanham Act claim that are addressed in the previous sections of this order. However, [*16] Defendant has not shown that the balance of hardships tips sharply in its favor. The parties dispute how injurious a preliminary injunction would be to Plaintiff. According to Plaintiff, forfeiture of its domain name would cause its customers' domain servers to cease functioning, thus shutting the company down and putting it at risk of insolvency and legal liability to its customers. Plaintiff also contends that its customers are contractually entitled to compensation if its servers go down, and thus inactivating the servers for any length of time puts Plaintiff at risk of bankruptcy.
According to Defendant, Plaintiff would merely have to change the domain names of its servers and the transition costs would therefore be minimal. Defendant argues that, when customers of Plaintiff's predecessor migrated to Plaintiff's servers, the cost was only several thousand dollars. This dispute need not be resolved at this time because Defendant has not shown that it will suffer irreparable harm or be substantially injured if the preliminary injunction is not granted. Defendant's claim of irreparable harm derives solely from its contention that once a plaintiff has demonstrated a likelihood of[*17] confusion under the Lanham Act, it is presumed that the plaintiff will suffer irreparable harm if injunctive relief is not granted. That contention is true, Metro Publ'g, Ltd. v. San Jose Mercury News, 987 F.2d 637, 640 (9th Cir. 1993), but because Defendant has not shown a likelihood of confusion, irreparable injury cannot be inferred.
Moreover, Defendant's own moving papers suggest that it has not been injured by Plaintiff's use of the mark "Jupiter Hosting." Both parties agree that Plaintiff registered its domain name in October, 2001. According to Defendant, from 1999 to 2003, its annual revenues rose nearly three hundred percent, to almost $ 48 million. In the first quarter of 2004, its revenues were $ 14.4 million, an increase of almost seventy-five percent over the corresponding period in 2003. DeMilt Decl. P 14. Not only has Defendant failed to show irreparable injury by inference, it appears from its moving papers that it has flourished during the time that Plaintiff has utilized the mark "Jupiter Hosting," and Defendant makes no attempt to show that this trend will change if a preliminary injunction is not granted. Defendant has not demonstrated that the[*18] balance of hardships tips sharply in its favor, and a preliminary injunction is therefore not appropriate.
II. Anticybersquatting Consumer Protection Act
The ACPA holds a person civilly liable who (1) has a "bad faith intent to profit from" a registered mark, and (2) registers or uses a domain name that is either identical or confusingly similar to the registered mark. 15 U.S.C. § 1125(d) (1) (A).
Defendant's argument as to how the "confusingly similar" prong of ACPA section 1125(d) is satisfied relies solely on its "likelihood of confusion" argument under the Lanham Act. In its reply papers, Defendant offers a single sentence asserting that the "confusingly similar" prong offers broader protection to trademark holders than does the "likelihood of confusion" test, but offers no further analysis on the topic. Because the Court has ruled that Defendant has not exhibited a probability of success of its argument that there is a likelihood of confusion between the parties' marks under the Lanham Act, it similarly rejects Defendant's contention that there is a likelihood that the marks will be found confusingly similar under the ACPA test.
Because the Court[*19] rules that Defendant is not likely to satisfy the second prong of section 1125(d)(1)(A) of the ACPA for the purpose of a preliminary injunction, analysis of the first prong's bad faith intent requirement is unnecessary. Moreover, even if Defendant could raise serious questions on the merits of its ACPA claim, it has not demonstrated that the balance of hardships tips sharply in its favor.
III. Unfair Competition Law
Defendant also argues that it is likely to prevail on the merits of its claim under California's Unfair Competition Law. However, Defendant offers no analysis relating to its Unfair Competition Law claim and does nothing more than refer to it in passing several times in its papers. The Court nevertheless addresses Defendant's probability of success on the merits of its Unfair Competition Law claim.
Under California Business and Professions Code section 17200, "unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice." The unfair competition law "embraces anything that can properly be called a business practice and that at the same time is forbidden by law." Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1135 (2003).[*20] In other words, section 17200 "borrows" violations from other laws and makes them independently actionable as unfair business practices. Id.
Defendant must therefore demonstrate a probability of success on its claim that Plaintiff has violated a law independent of the Unfair Competition Law before the State law claim will be triggered. Here, the Court has ruled that Defendant has not shown a probability that it will succeed on either its Lanham Act claim or its ACPA claim. Thus, Defendant has not demonstrated that it is likely it will prevail on its Unfair Competition Law claim. Furthermore, while Defendant has raised serious questions on the merits of at least its underlying Lanham Act claim, it has not shown that the balance of hardships tips sharply in its favor. A preliminary injunction is not appropriate based on this claim.
CONCLUSION
For the foregoing reasons, Defendant's motion for a preliminary injunction is DENIED.
IT IS SO ORDERED.
Dated: 11/9/04
CLAUDIA WILKEN
United States District Judge
Tuesday, July 26, 2005
What keeps you awake? Is it business risk?
Sleeping well at night?
I am often counseling clients about risk. Much of the real risk in our business lives is not insurable. That is, the risk that a customer will buy our goods or services, is not insurable. Risks presented by a competitive marketplace however, can be insurable.
Today, I am talking to those of you who have:
* brands you care about
* web sites that promote your business, your products and your services
* customized, branded software you license
As we march off towards summer vacation, let me leave you with some thoughts that might help you sleep better:
1) "Advertising injury" coverage: Is it there at all? Unless your business is literally your surname, you should get out your Commercial General Liability policy and confirm that your policy includes coverage for "advertising injury." You should demand the whole policy from your insurance broker. The declarations page will not tell you this information. After you have discussed your coverage with counsel, come back when you have the definitions section of the policy that defines "advertising injury."
** If you do not have a policy or your policy does not have "advertising injury" coverage, you might consider asking your broker specifically for such a policy OR inquiring about a Cyberliability or Media Liability Policy.
2) Do you have at least five figures to fund your defense? No matter how "in the right you may be" defending against infringement will be costly. While insurance is no panacea, here are some sleep at night type benefits: Insurance may pay cost of defense, helps you protects your 'crown jewels', protects cash flow, reduces your initial pressure to settle.
3) Running naked Is it a sound business practice to build a brand and not insure it? If your insurance policy has coverage for "advertising injury" and you have confirmed the meaning of this coverage with counsel, coverage may mean the difference between defending yourself and giving up your brand without a fight. Without the insurance paying the lawyer to defend a claim of infringement of another's brand, most businesses simply cannot afford the six figures it may cost and will chose the path of least resistance.
4) Insurance is better than nothing Insurance, no matter how good, will not cover you if you use someone else's brand and lose a suit for infringement. No insurance policy will give you money for lost business, interruption from the law suit and most importantly DOES NOT compensate you if you lose and the other side attempts to get the profits you derived from using 'their' brand. You are on your own.
5) Counterclaims not usually covered If you bring suit, you may not be covered. Before brining suit, even if you are faced with a cease and desist letter from opposing counsel, find out when your coverage begins. If you file a counterclaim, most policies are 'defense' policies do not provide coverage (i.e. most do not pay attorneys' fees). Some patent insurance policies however cover counterclaims but impose a sublimit on attorneys' fees.
5) The devil is in the details You MUST know the answers to the following questions about your insurance regardless of the type of coverage. (a) What is included in "advertising injury" coverage? (b) Who is the 'named insured' on your policy? (c) Find out if territory exclusions mean that if you sell your product outside the territory and are sued for a sale occuring outside, you are not covered? (d) Do your agreements with customers/partners indemnify them for patent infringement? If so, do you have coverage? Might your customer/partner agree to limit your indemnity to insurance coverage? I do not know why this tact is not tried more often or why it would be an unreasonable position. (e) Right to appoint counsel?
6) Do you use independent contractors to do software development or design? You should confirm whether there is coverage in your policy for independent contractors and temp workers. An amendment to who is covered may be required.
7) What happens if you win> If you successful defend against an injunction, you should find what your policy says in terms of winning/losing. Most policies require the insured -- you hopefully -- to consent to settlement. If you win an award, many policies clearly require the insurance company to get back its defense costs first before you see any money.
I know many of these issues will make you anxious because you do not know the answers to these questions off the top of your head. If you've read this far though, hopefully you've at least pulled out your insurance policy or sent off an email to find out. Afterall, if your paying for insurance so you can manage risk, it makes sense to confirm your coverage. It may be too late if you wait until after you get a cease and desist letter.
Caveat : "Terms of policies vary. Please check your individual policies for these provisions and terms. The take away here is to see these issues. This is not meant to be legal advice but for your information only.
I am often counseling clients about risk. Much of the real risk in our business lives is not insurable. That is, the risk that a customer will buy our goods or services, is not insurable. Risks presented by a competitive marketplace however, can be insurable.
Today, I am talking to those of you who have:
* brands you care about
* web sites that promote your business, your products and your services
* customized, branded software you license
As we march off towards summer vacation, let me leave you with some thoughts that might help you sleep better:
1) "Advertising injury" coverage: Is it there at all? Unless your business is literally your surname, you should get out your Commercial General Liability policy and confirm that your policy includes coverage for "advertising injury." You should demand the whole policy from your insurance broker. The declarations page will not tell you this information. After you have discussed your coverage with counsel, come back when you have the definitions section of the policy that defines "advertising injury."
** If you do not have a policy or your policy does not have "advertising injury" coverage, you might consider asking your broker specifically for such a policy OR inquiring about a Cyberliability or Media Liability Policy.
2) Do you have at least five figures to fund your defense? No matter how "in the right you may be" defending against infringement will be costly. While insurance is no panacea, here are some sleep at night type benefits: Insurance may pay cost of defense, helps you protects your 'crown jewels', protects cash flow, reduces your initial pressure to settle.
3) Running naked Is it a sound business practice to build a brand and not insure it? If your insurance policy has coverage for "advertising injury" and you have confirmed the meaning of this coverage with counsel, coverage may mean the difference between defending yourself and giving up your brand without a fight. Without the insurance paying the lawyer to defend a claim of infringement of another's brand, most businesses simply cannot afford the six figures it may cost and will chose the path of least resistance.
4) Insurance is better than nothing Insurance, no matter how good, will not cover you if you use someone else's brand and lose a suit for infringement. No insurance policy will give you money for lost business, interruption from the law suit and most importantly DOES NOT compensate you if you lose and the other side attempts to get the profits you derived from using 'their' brand. You are on your own.
5) Counterclaims not usually covered If you bring suit, you may not be covered. Before brining suit, even if you are faced with a cease and desist letter from opposing counsel, find out when your coverage begins. If you file a counterclaim, most policies are 'defense' policies do not provide coverage (i.e. most do not pay attorneys' fees). Some patent insurance policies however cover counterclaims but impose a sublimit on attorneys' fees.
5) The devil is in the details You MUST know the answers to the following questions about your insurance regardless of the type of coverage. (a) What is included in "advertising injury" coverage? (b) Who is the 'named insured' on your policy? (c) Find out if territory exclusions mean that if you sell your product outside the territory and are sued for a sale occuring outside, you are not covered? (d) Do your agreements with customers/partners indemnify them for patent infringement? If so, do you have coverage? Might your customer/partner agree to limit your indemnity to insurance coverage? I do not know why this tact is not tried more often or why it would be an unreasonable position. (e) Right to appoint counsel?
6) Do you use independent contractors to do software development or design? You should confirm whether there is coverage in your policy for independent contractors and temp workers. An amendment to who is covered may be required.
7) What happens if you win> If you successful defend against an injunction, you should find what your policy says in terms of winning/losing. Most policies require the insured -- you hopefully -- to consent to settlement. If you win an award, many policies clearly require the insurance company to get back its defense costs first before you see any money.
I know many of these issues will make you anxious because you do not know the answers to these questions off the top of your head. If you've read this far though, hopefully you've at least pulled out your insurance policy or sent off an email to find out. Afterall, if your paying for insurance so you can manage risk, it makes sense to confirm your coverage. It may be too late if you wait until after you get a cease and desist letter.
Caveat : "Terms of policies vary. Please check your individual policies for these provisions and terms. The take away here is to see these issues. This is not meant to be legal advice but for your information only.
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