Opinion
CV-S-01-0294-LRH(LRL)
October 22, 2002
ORDER
On November 13, 2001, Plaintiff Visa International Service Association ("Visa International") filed a Motion for Summary Judgment (Docket #39) on its dilution claim. On November 26, 2001, Defendant JSL filed a Motion for Partial Summary Judgment Docket #47) on Visa International's claims for trademark infringement. On December 20, 2001, Defendant JSL filed a Motion for Partial Summary Judgment (Docket #80) on Visa International's claim for cybersquatting and Visa International subsequently counter moved for summary judgment on the claim (Docket #86). For the reasons set out below, the Court finds that Plaintiff is entitled to injunctive relief and grants the Plaintiff's Summary Judgment Motion on the dilution claim. Additionally, for the reasons set out below, the Court denies other summary judgment motions and counter motions as hereafter discussed.
I. BACKGROUND
This case involves a dispute over the rights to a trademark and Internet domain name. Visa International is the financial services company that owns the trademark and service mark Visa. Defendant JSL Corporation ("JSL") has adopted and is using the mark eVisa and the domain name evisa.com for its business. On March 15, 2001, Visa International filed a complaint against JSL for trademark infringement under 15 U.S.C. § 1124, unfair competition under 15 U.S.C. § 1125(a), trademark dilution under 15 U.S.C. § 1125(c), cybersquatting under 15 U.S.C. § 1125(d), common law trademark infringement, deceptive trade practices under N.R.S. § 598.0915, and intentional interference with prospective economic advantage. On April 23, 2001, JSL filed an answer and asserted counterclaims for trademark infringement under 15 U.S.C. § 1125(a) and common law trademark infringement.
On March 30, 2001, Visa International moved for a preliminary injunction on its trademark dilution and trademark infringement claims. At the preliminary injunction hearing on July 6, 2001, the court held that Visa International was likely to succeed on the merits of its trademark dilution claim, but denied granting a preliminary injunction. The court based its decision on Visa International's failure to establish that it would suffer irreparable harm absent the granting of injunctive relief. On December 20, 2001, the court stayed remaining discovery in this matter pending ruling on Visa International's Motion for Summary Judgment on Dilution. The case was reassigned to this Court on January 14, 2002.
II. FACTS
Visa International first used the Visa mark in 1976 and has used the Visa mark continuously ever since. It first registered the Visa mark with the United States Patent and Trademark Office ("PTO") in 1977. Visa International owns forty-three (43) federal trademark registrations containing Visa, which are used for a variety of goods and services.
In addition to its federally registered trademarks, Visa International filed several applications for federal trademarks containing Visa that were pending before the PTO as of November 2001, including but not limited to: E-Visa; E Visa; EVisa; Visa Web; The Future Takes Visa; Visa Smart; Verified by Visa; Visa Buxx; Visa RiskUSA; Visa Business Partner; and Visabusiness.com ( Design).
The Visa mark has been used in each of the 50 states in the United States and around the world, including in over 300 countries and territories, and on the Internet. Visa International has over 21,000 licensees of the Visa mark located around the world, including over 14,000 in the United States. Over 750 million Visa -branded payment cards have been issued to cardholders worldwide, including over 350 million in the United States. Visa -branded cards are accepted for financial transactions at more than 21 million merchants and automated teller machines worldwide, including over 4.3 million of such acceptance locations in the United States.
Under service agreements with its member banks, Visa international's Visa -branded payment cards are used in over $1.8 trillion in payment transactions per year worldwide, with over $811 billion per year in the United States. Moreover, Visa -branded payment cards were used for over $19.5 billion of Internet transactions for the twelve-month period ending September 2001. In the United States, Visa International processes more than 12 billion transactions per year.
Over the past 25 years, Visa International, directly and through its licensees, spent billions of dollars on advertising and marketing the Visa brand in print and other media around the world, including on the Internet. During the four-year period from 1997 through 2000, Visa International spent more than $1 billion on advertising in the United States.
Visa International has used a variety of advertising channels to market the Visa brand, including television and print advertisements in newspapers and periodicals, including the Wall Street Journal and New York Times, through promotions, on the Internet and over the radio. Visa International has also promoted the Visa mark through sponsorships. The Visa card is the official card of the National Football League, the official card of NASCAR, the official card of the Triple Crown horse races, and the official card of the 2002 Winter Olympics in Salt Lake City.
In a 1997 study entitled "The World's Greatest Brands" by interbrand, Visa ranked as the 14th top brand in the world. Among financial services brands, Visa ranked 1st.
On or before March 8, 1994, Visa International registered the domain name Visa.com. Visa International has operated a Web site on the Internet at Visa.com since at least as early as November 1994. The Visa.com Web site provides information on a variety of products and services including, but not limited to, financial services, payment services (such as "Visa ePay"), Internet shopping, and information on new technologies.
The Visa.com Web site has received approximately twenty-five million visits since its inception. During August 2001, there were more than 3.4 million page views by visitors to the Visa.com Web site. In addition to Visa.com, Visa International owns many other domain names containing the Visa marks, includingVisabusiness.com and e-Visa.com.
According to a 2001 study focused on online payment methods by bizrate.com, " Visa continues to be the leading brand owned among online buyers for the seventh consecutive quarter." Visa is the most used brand for online purchases with approximately 50% of the market share. In a study entitled "The Power of Internet Branding," by Greenfield Online, Inc., Visa ranked as the 17th strongest brand on the Internet in a survey of consumers in the United States.
Defendant, Joseph Orr, is the sole owner and sole officer of Defendant JSL Corporation. JSL does not have any employees and has never had any employees. JSL Corporation operates out of Defendant's apartment in New York City and uses a post office box in Las Vegas, Nevada, as its business address.
As the principal of JSL, Joseph Orr will also be referred to as "Defendant" in this Order.
Defendant Orr resided in Japan from approximately 1989 to 1998 or 1999. During this time, defendant and another individual founded an English language school in Japan. They decided to name the school "Eikaiwa Visa." "Eikaiwa" means English conversation in Japanese. Someone involved in the school suggested that they use the name "visa." They wanted a name that "already had some positive associations," and a name that suggested "world travel" and "global." Defendant chose the word "visa" as part of the name for the language school without first consulting with a trademark attorney.
At some point, Defendant decided to register a domain name for Eikaiwa Visa. His first choice was evisa.com, but someone had already registered that domain name. Instead, Defendant registeredEVISA-jp.com. Defendant later registered evisa.com on August 27, 1997, after it was no longer registered to someone else. Defendant adopted the name eVisa and the domain name evisa.com because he thought eVisa to be short, catchy and associated with travel.
JSL posted Web sites on the Internet at both evisa.com andevisa-jp.com. JSL has used the eVisa mark in several different ways on its Web sites, including: (a) as VISA in all capitals and in a font similar to how Visa International has used its Visa mark on Visa -brand payment cards and on its Visa.com Web site; (b) in mixed upper and lowercase letters: eVisa; and (c) in all lowercase letters with the letter "e" appearing in red and "visa" appearing in blue against a white background.
For the sake of uniformity, the Court will use the "eVisa" variant throughout this Order when referring to the mark used by Defendant Orr/JSL.
As of 1997, when JSL began using the eVisa mark, Visa International had used the Visa mark for more than twenty (20) years, it had appeared on more than 524 million Visa -branded payment cards and on decals at more than 12.9 million merchants and ATMs, and had been used to purchase hundreds of billions of dollars of goods and services, including $981 billion in 1996 alone. However, Visa International had never used the "evisa" mark.
On or about August 13, 1999, Ken Taylor of Marksmen (a brand protection company hired by Visa International) contacted JSL about purchasing theevisa.com domain name. JSL initially responded that the "evisa.com domain name was not for sale. After receiving the first communication from Marksmen, JSL suspected that Visa International was trying to buy the evisa.com domain name or, alternatively, someone was trying to buy the domain name to sell to Visa International, or somebody wanted the domain name for a travel passport site. After Marksmen offered $10,000 for the domain name, JSL responded that "[f]or the right price, evisa.com might be available, but I'll have to check with a couple of people, one of whom is in Japan and one of whom is on vacation." Defendant admitted during his deposition that this was a false statement, because he did not have to check with anybody in Japan or anyone on vacation.
This appears to have been part of the negotiation between the parties. In any event, in September 1999, Marksmen increased the offer for theevisa.com domain name to $50,000. On September 13, 1999, Defendant responded: "That is starting to sound a little more interesting, I must say, but I talked with the principals, and they still don't want to sell . . . I think if we got an offer in the range of $150,000 we'd be pretty tempted to sell . . . ." Defendant eventually increased his price for the evisa.com domain name to $250,000.
Although JSL registered the evisa.com domain name in August 1997, JSL did not have any content on the evisa.com Web site before the time that Marksmen first contacted JSL about purchasing the domain name in August 1999. JSL did not file a trademark application for eVisa until October 5, 1999 — eight weeks after Marksmen first contacted JSL about the evisa.com domain name.
JSL did not seek legal counsel prior to the time that JSL decided to register the evisa.com domain name. It was after Marksmen contacted JSL about purchasing the evisa.com domain name that JSL sought legal advice regarding its use of eVisa.
Defendant has incorporated and uses two corporate entities with identical names but with different states of incorporation: JSL Corporation (a Nevada corporation located in Las Vegas, Nevada) and JSL Corporation (a Delaware corporation located in New York City). Defendant states that JSL's principal place of business is a post office box at a Mail Boxes Etc. on Sahara Avenue in Las Vegas, Nevada. Defendant stated that JSL (Delaware) owns the eVisa trademark and domain name. However, JSL's registration of the evisa.com domain name identifies the registrant's address as in Las Vegas, Nevada. In JSL's application to register the eVisa mark and JSL's notices of opposition filed with the United States Patent and Trademark Office, JSL represented that JSL (Nevada) owned the eVisa mark.
JSL filed three trademark opposition actions on or about February 7, 2001, against Visa International's service mark applications for the eVisa, e-Visa, and e Visa marks for financial services in the United States Patent and Trademark Office ("USPTO").
Prior to the date on which Visa International filed this lawsuit, JSL stated on its Web site that it provides e-commerce, Web site development, and payment services, including online credit card processing. After Visa International filed this suit, JSL removed the reference to credit card processing from its Web site and Defendant then claimed in his sworn declaration that JSL does not provide payment services.
JSL has registered domain names containing trademarks of other major corporations. In August 1999, JSL registered the domain nameusadirect-online.com, which contains ATT's USA DIRECT mark for long distance telephone services. ATT has three federal trademark registrations for USA DIRECT dating back to 1988. In addition, JSL registered the domain name picturebookmaker.com that contains Sony's PICTURE BOOK mark for notebook computers. JSL registered thepicturebookmaker.com domain name in 1999, one year after Sony applied for its federal trademark registration for PICTURE BOOK. In 1997, JSL registered the jserv.com domain name, which according to Defendant's deposition was supposed to call to mind the COMPUSERVE trademark owned by Compuserve Incorporated. As Defendant explained, "[i]t was supposed to be a clever variation on compuserve. You know, compuserve — jserv? But it wasn't as clever as I thought because I thought that compuserve was spelled without an 'E,' so I left the 'E' out." COMPUSERVE is a federally registered trademark of Compuserve.
Finally, JSL received e-mail messages at its evisa.com Web site that, based on the content of the messages, were intended for Visa International.
III. STANDARD FOR SUMMARY JUDGMENT
A motion for summary judgment is a procedure that terminates, without a trial, actions in which "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A summary judgment motion may be made in reliance on the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any." Id.
The movant is entitled to summary judgment if the nonmoving party, who bears the burden of persuasion, fails to designate "'specific facts showing that there is a genuine issue for trial.'" Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (quoting Fed.R.Civ.P. 56(e)). Thus, to preclude a grant of summary judgment, the nonmoving party must set forth "'specific facts showing that there is a genuine issue for trial.'"Matsushita Elec. Indust. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P. 56(e)). The substantive law defines which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). All justifiable inferences must be viewed in the light most favorable to the nonmoving party. County of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001) (citing Zenith Radio Corp., 475 U.S. at 587).
Although the nonmoving party has the burden of persuasion, the party moving for summary judgment bears the initial burden of showing the absence of a genuine issue of material fact. Metro Indust., Inc. v. Sammi Corp., 82 F.3d 839, 847 (9th Cir. 1996). That burden is met by showing an absence of evidence to support the nonmoving party's case. Celotex Corp., 477 U.S. at 325. The burden then shifts to the nonmoving party to set forth specific facts demonstrating that there is a genuine issue for trial. Liberty Lobby, Inc., 477 U.S. at 250. In meeting this burden, the nonmoving party must go "beyond the pleadings and by its own evidence present specific facts showing that there is a genuine issue for trial."Far Out Prod. v. Oskar, 247 F.3d 986, 997 (9th Cir. 2001) (citing Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996)) (quotations omitted).
IV. DISCUSSION
A. DILUTION CLAIM
Visa International has moved for summary judgment on its claim for trademark dilution under the Federal Trademark Dilution Act ("FTDA"), 15 U.S.C. § 1125(c). Courts in this Circuit and District have granted summary judgment on dilution claims and have found defendants to have violated the FTDA as a matter of law. See Panavision International, L.P. v. Toeppen. 141 F.3d 1316 (9th Cir. 1998); Mirage v. Stirpe, 152 F. Supp.2d 1208, 1216-17 (D. Nev. 2000).
The FTDA protects famous trademarks from third-party use that dilutes "the distinctive quality of the mark." 15 U.S.C. § 1125(c). "Dilution" means the "lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake or deception." 15 U.S.C. § 1127. Under the FTDA, the owner of a famous mark is entitled to an injunction against another's commercial use of the mark or trade name, if such use began after the mark became famous and causes dilution of the distinctive quality of the mark. 15 U.S.C. § 1125(c)(1).
A trademark can be diluted either by "blurring" or by "tarnishment." Blurring is the "whittling away" of the selling power and value of a trademark caused by unauthorized use of the mark. Panavision Int'l. L.P. v. Toeppen, 945 F. Supp. 1296, 1304 (C.D. Cal. 1996), aff'd, 141 F.3d 1316 (9th Cir. 1998). Tarnishment occurs when a famous mark is used for poor quality products or services or is used in a manner that is unwholesome or demeans the character of the trademark owner. Panavision, 141 F.3d at 1326 n. 7; see also Toys "R' Us v. Akkaoui, 40 U.S.P.Q.2d 1836, 1838 (N.D. Cal. 1996).
Visa International seeks summary judgment based on dilution by blurring. To establish that JSL has violated the FTDA based on its use of the eVisa mark and the evisa.com domain name, Visa International must show that: (1) its Visa mark is famous; (2) JSL is making a commercial use of the trademark in commerce; (3) JSL's use began after Visa International's Visa mark became famous; and (4) JSL's use of the mark presents a likelihood of dilution of the distinctive value of Visa International's Visa mark. See Avery Dennison Corp. v. Sumpton, 189 F.3d 868, 874 (9th Cir. 1999); Panavision, 141 F.3d at 1324.
1. The Visa Mark is famous within the meaning of the FTDA
As noted above, to demonstrate that JSL has violated the FTDA, Visa International must show the four part test is satisfied. The first part of the test considers whether Visa International's Visa mark is famous within the meaning of the FTDA. To determine this, a court may consider the eight nonexclusive considerations set forth in the FTDA:
(1) the degree of inherent or acquired distinctiveness of the mark; (2) the duration and extent of use of the mark in connection with the goods or services with which the mark is used; (3) the duration and extent of advertising and publicity of the mark; (4) the geographical extent of the trading area in which the mark is used; (5)the channels of trade for the goods or services with which the mark is used; (6) the degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought; (7)the nature and extent of use of the same or similar marks by third parties; and (8)whether the mark is federally registered.15 U.S.C. § 1125(c). A court should weigh the eight Considerations independently and "it is the cumulative effect of these considerations which will determine whether a mark qualifies for federal protection from dilution." S. Rep. 100-515, 1988 U.S.C.C.A.N. at 5605.
The first consideration in determining whether the Visa mark is famous is the degree of inherent or acquired distinctiveness of the mark. Trademarks that are inherently distinctive are "afforded the greatest protection, because their intrinsic nature serves to identify a particular source of a product." Official Airline Guides v. Goss, 6 F.3d 1385. 1390 (9th Cir. 1993) citing Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992). A trademark is inherently distinctive when it is suggestive, arbitrary or fanciful. Official Airline, 6 F.3d at 1390. A suggestive mark requires imagination to make a connection between the mark and an attribute of the goods or services to which it is applied. Id. at 1391. An arbitrary mark consists of a common word or words that are not descriptive of the goods or services to which the mark is applied. Id. at 1390-91. A fanciful mark is a coined term, such as Kodak. Id.
Visa International's Visa mark is inherently distinctive when applied to Visa International's goods and services. The dictionary meaning of the word "visa" is "an endorsement made by an authorized representative of one country upon a passport issued by another, permitting the passport holders entry into or transit through the country making the endorsement." Webster's New Unabridged Dictionary (1996). The Visa mark is arbitrary when used in connection with the goods and services provided by Visa International, such as financial and banking services, because the dictionary or common meaning of "visa" does not describe any characteristic of these goods and services.
The Visa mark has previously been found to be inherently distinctive.Visa International Service Association v. Bankcard Holders of Arizona, 211 U.S.P.Q. 28, 40 (N.D. Cal. 1981) ("A strong mark, such as the Visa trademark, is considered distinctive, arbitrary or fanciful. . . . The trademark, VISA, is a strong mark which is entitled to protection against . . . the dilution of the value of its trademark."); Visa International Service Association v. VISA/Master Charge Travel Club, 213 U.S.P.Q. 629, 635 (N.D. Cal. 1981) ("A strong mark, such as the VISA trademark, is considered distinctive, arbitrary or fanciful").
The second consideration in determining whether the Visa mark is famous is the duration and extent of use of the mark in connection with the goods or services with which the mark is used. The facts of this case show that Visa International has used the Visa mark for more than twenty-five (25) years. The Visa mark has been used in each of the fifty (50) states and around the world including in more than 300 countries and territories. Moreover, Visa International has used the Visa mark on more than 750 million payment cards, including 350 million in the United States. Visa branded cards are accepted for payment at more than twenty-one million merchants and automated teller machines worldwide, including more than 4.3 million locations in the United States.
The third consideration in determining whether the Visa mark is famous is the duration and extent of the advertising and publicity of the mark. Visa International has widely promoted and advertised the mark for more than twenty-five (25) years in print, television, radio and other media, including the Internet. Visa International, either directly or through its licensees, has spent billions of dollars on advertising. During the four-year period from 1997 through 2000, Visa International spent more than $1 billion on advertising.
The fourth consideration in determining whether the Visa mark is famous, is the geographical extent of the trading area in which the mark is used. The Visa mark has been used in each of the fifty (50) states and around the world, including in more than 300 countries and territories, and on the Internet.
The fifth consideration in determining whether the Visa mark is famous is the channels of trade for the goods or services in which the mark is used. The Visa mark is used in numerous channels of trade for the purchase of goods and services, including twenty-one million merchant locations, and on the Internet, where more than $19.5 billion in transactions were performed using the Visa card in the twelve-month period ending September 2001.
The sixth consideration in determining whether the Visa mark is famous is the degree of recognition of the mark in the trading areas and channels of trade used by the owner of the mark and the person against whom the injunction is sought. The Visa mark has a high level of recognition based on the NOP Research Group survey showing that 99% of U.S. consumers were aware of the Visa brand of payment cards. Additionally, a study entitled "The World's Greatest Brands" by Interbrand, ranked Visa as the 14th top brand in the world. As noted, Visa ranked the 17th strongest brand on the Internet in a survey of consumers in the United States.
The seventh consideration in determining whether the Visa mark is famous is the nature and extent of use of the same or similar marks by third parties. Plaintiff asserts that there is no evidence of widespread trademark use of the Visa mark by third parties. Moreover, survey evidence submitted by Plaintiff demonstrates that Visa is a famous mark, notwithstanding the existence of any third-party use. The Court agrees. Although Defendant submitted evidence of the mark being used by a tire company and a golf club manufacturer, there is no evidence that these brands are well known, or even marginally well known.
The eighth consideration in determining whether the Visa mark is famous is whether the mark is federally registered. 15 U.S.C. § 1125. As of December 2001, Visa International owned forty-four (44) federal registrations Containing the Visa mark.
Applying the famousness considerations to the facts, the Court finds that the Visa mark is famous and distinctive within the meaning of the FTDA. "[T]o meet the famousness element of protection under the dilution statute, a mark [must] be truly prominent and renowned." Avery Dennison, 189 F.3d at 875 (quoting K.P. Lund Trading ApS v. Kohler Co., 163 F.2d 27, 46 (1st Cir. 1998) (internal quotations omitted)). All of the eight considerations, taken together, strongly support the conclusion that the Visa mark is truly prominent and renowned. Accordingly, Visa International has demonstrated that its mark is famous under the statute.
2. Commercial Use
To satisfy the second part of the test, Visa International must show that JSL is making commercial use of the eVisa mark in commerce. That is, the "use of a famous and distinctive mark to sell goods other than those produced or authorized by the mark's owner." Mattel, Inc. v. MCA Records. Inc., 296 F.3d 894, 903 (9th Cir. 2002). This requirement appears to be easily satisfied. There is no dispute that JSL has made commercial use of the mark on its Web site and in the domain nameevisa.com. JSL has represented in filings with the PTO that it has used the eVisa mark in commerce. JSL offers "language education" services through its eVisa Web site. JSL has also indicated on its Web site that it creates "commerce sites" and can take payment and ship products. Accordingly, JSL is making commercial use of the eVisa mark within the meaning of the FTDA.
3. JSL's use of eVisa mark began after Visa International's Visa mark became famous.
The third part of the test is that JSL's use of the eVisa mark began after Visa International's Visa mark became famous. JSL began use of the eVisa mark in December 1997. Visa International's Visa mark became famous long before 1997. According to the Interbrand study, Visa was the 14th most successful brand in the world by 1997. By 1997. the Visa mark had been in use for more than twenty (20) years, had appeared on more than 524 million payment cards and decals and more than 12.9 million merchants and ATMs, and had been used to purchase hundreds of billions of dollars of goods and services. Accordingly, the Visa mark was famous prior to JSL's first use of the eVisa mark.
4. Likely to dilute the Visa mark
The fourth part of the test that Visa International must satisfy is that JSL's use of the eVisa mark will dilute the distinctive value of Visa International's Visa mark. In the Ninth Circuit, this element of a dilution claim is satisfied if the plaintiff shows that "the defendant's use presents a likelihood of dilution of the distinctive value of the [plaintiff's] mark." Avery Dennison, 189 F.3d at 874; see also, Panavision, 141 F.3d at 1324.
The Plaintiff must show that the Defendant's mark is similar to Plaintiff's famous mark or, in the case of domain names, the Defendant's domain name is the same or similar to the Plaintiff's famous mark. See Panavision, 141 F.3d at 1327 (the Ninth Circuit affirmed the granting of summary judgment on the plaintiff's dilution claim and found that dilution by blurring occurred where the defendant registered and used thepanavision.com domain name that was similar to plaintiff's famous "Panavision" mark); Porsche Cars North America, Inc. v. Spencer, 55 U.S.P.Q. 1026, 1030 (E.D. Cal. 2000) (the court held that defendant's registration and use of the domain name porschesource.com diluted plaintiff's famous "Porsche" mark).
A defendant's mark or domain name need not be identical to the plaintiff's mark for dilution to occur. In Porsche Cars, the court held that Porsche's famous "Porsche" mark would "likely be diluted by the defendant's registration and trafficking" in the domain nameporschesource.com even though the defendant's domain name contained the word "source" while the Porsche mark does not. 55 U.S.P.Q.2d at 1030. In Mirage, the court held that a number of the defendant's domain names diluted the plaintiffs' famous marks. The court found that excaliburhotelcasino.com,luxorhotelcasino.com, miragehotelcasino.com,montecarlohotelcasino.com diluted the plaintiffs' marks Excalibur, Luxor, Mirage and Monte Carlo respectively. 152 F. Supp.2d at 1216-17. The court made this finding even though the domain names contained the words "hotel" and "casino," which were not part of the plaintiffs' marks.
The question presented here is whether JSL's eVisa mark will likely dilute Visa International's Visa mark. There is no dispute that the eVisa mark contains Visa International's famous Visa mark in its entirety. There is also no dispute that the only difference between the two marks is JSL's addition of a letter "e" as a prefix, which is commonly used to denote the online version of a business. Accordingly, the Defendant's eVisa mark is very similar to Plaintiff's Visa mark.
See, e.g., enike.com, etoyota.com,ehonda.com, ekelloggs.com, e-coke.com,eplayboy.com and enordstrom.com.
The established facts show that Defendant's use of eVisa is likely to or has diluted, by blurring, the distinctive quality of Visa International's Visa mark. Defendant's use of the famous Visa mark in its domain name has diluted the Plaintiff's ability to identify and distinguish its goods and services. See Mirage, 152 F. Supp.2d at 1217. This Circuit has recognized that a "significant purpose of a domain name is to identify the entity that owns the web site," and "[u]sing a company's name or trademark as a domain name is also the easiest way to locate the company's web site." Panavision, 141 F.3d at 1327.
Therefore, if customers use a search engine to find Plaintiff's Web site and are forced to wade through hundreds of Web sites, they may never find Plaintiff's official Web site. Id. As "e" is a commonly used prefix to denote the online version of a business, evisa.com presents a serious impediment to customers trying to locate the Visa Web site. Finally, permitting Defendant's unauthorized use of the Visa mark would put Plaintiff's name and reputation at the mercy of Defendant. Id. at 1327. In Mirage, 152 F. Supp.2d 1208, 1216-17, the court, in granting plaintiffs' motion for summary judgment on dilution, held that the defendant's use of the plaintiffs' trademarks in domain names diluted plaintiffs' "ability to identify and distinguish their goods and services," and "put Plaintiffs' names and reputations at the mercy of Defendant." The instant case presents a similar situation.
JSL argues that there is no likelihood that JSL's eVisa mark will dilute the Visa mark because JSL uses eVisa in a different area of commerce. This argument is contrary to the express language of the FTDA. The FTDA makes clear that the meaning of the term "dilution" is the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of competition between the owner of the mark and other parties. See 15 U.S.C. § 1127;see also Panavision, 141 F.3d at 1326 (dilution is actionable regardless of the presence or absence of competition between the parties).
The Court finds that the eVisa mark is likely to dilute the Visa mark. As set forth above, based on the facts, Visa International has established a likelihood of dilution under the Ninth Circuit test. Thus, having established that all of the requirements of the statute are satisfied, Visa International is entitled to an injunction under Section 43(c) of the Lanham Act.
B. CYBERSQUATTING CLAIM
JSL filed a Motion for Partial Summary Judgment on Visa International's claim for cybersquatting and Visa International subsequently counter moved for summary judgment on the claim. The Anti-Cybersquatting Consumer Protection Act ("ACPA") was signed into law in 1999. The ACPA was enacted "to protect consumers and American businesses, to promote the growth of online commerce, and to provide clarity in the law for trademark owners by prohibiting the bad-faith and abusive registration of distinctive marks as Internet domain names with the intent to profit from the goodwill associated with such marks ¶ a practice commonly referred to as 'cybersquatting.'" See Sporty's Farm L.L.C. v. Sportsman's Market, Inc., 202 F.3d 489, 495 (D. Conn. 2000) (quoting and citing S.Rep. No. 106-140, at 4).
The ACPA provides that "a court may order the forfeiture or cancellation of [a] domain name or the transfer of [a] domain name to the owner of the mark," 15 U.S.C. § 1125(d)(1)(C), if the domain name was "registered before, on, or after the date of the enactment of this Act." Pub.L. No. 106-113, § 3010. The relevant sections of the Anti-Cybersquatting Consumer Protection Act provide that:
(1)(A) A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person
(i) has a bad faith intent to profit from that mark, including a personal name which is a protected mark under this section; and
(ii) registers, traffics in, or uses a domain name that —
(I) in the case of a mark that is distinctive s at the time of registration of the domain name, is identical or confusingly similar to that mark; [or]
(II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark . . .15 U.S.C. § 1125(d).
In this case, the Defendant did register a domain name that 15, at the least, confusingly similar to or dilutive of the Visa mark. However, Defendant contends that Plaintiff cannot make a showing of bad faith and, therefore, Defendant argues summary judgment in favor of Defendant is appropriate on this issue.
The ACPA provides a non-exhaustive list of nine factors to be considered in determining whether a person or business had a bad-faith intent to profit from a mark. The nine factors follow:
(I) the trademark or intellectual property rights of the person, if any, in the domain name;
(II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;
(III)the person's prior use, if any, of the domain name in connection with the bona fide offering of goods or services;
(IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name;
(V) the person's intent to divert consumers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as the source, sponsorship, affiliation, or endorsement of the site;
(VI) the person's offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person s prior conduct indicating a pattern of such conduct;
(VII) the person's provision of material and misleading false contact information when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct;
(VIII) the person's registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and
(IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous.15 U.S.C. § 1125(d)(1)(B)(i).
In this case, the Plaintiff has presented evidence that could lead to the conclusion that the Defendant has acted in bad faith under a number of the statutory factors. However, a bad faith intent "shall not be found in any case in which the court determines that the person believed or had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful." 15 U.S.C. § 1125(d)(B)(ii).
The Defendant has provided an explanation of why he registered theevisa.com domain name. In his deposition, Defendant stated that the name eVisa originated with "Eikaiwa Visa," an English language school he owned and operated in Japan. The name Eikaiwa Visa eventually became eVisa. Defendant registered evisa.com on August 27, 1997. Defendant also sought a legal opinion regarding whether he had a lawful right to use the evisa.com domain name. JSL sought legal advice from attorney Parker Bagley. Bagley provided Defendant with a letter stating that in Mr. Bagley's professional opinion, JSL's use of eVisa was lawful.
In light of the Defendant's deposition and opinion letter from a reputable trademark attorney, there remains an unresolved issue of material fact regarding whether the Defendant had a reasonable belief that his conduct was lawful. Therefore, the Court will deny both the Defendant's motion for summary judgment on cybersquatting and Plaintiff's counter motion for summary judgment on cybersquatting.
C. TRADEMARK INFRINGEMENT
The Defendant has filed a Motion for Partial Summary Judgment on Plaintiff's claim of trademark infringement based "upon VISA's alleged ownership of the 'e-Visa' trademark." Defendant argues that Plaintiff cannot make a showing of actual use of the mark in commerce, which is necessary to establish ownership of the mark. Plaintiff argues that the undisputed facts establish that its e-Visa mark is used in commerce. Upon review, the Court finds that a genuine issue of material fact exists about whether the e-Visa mark has been used in commerce. Accordingly, the Court will deny the Defendant's Motion for Partial Summary Judgment.
V. REMEDIES
Based on the Court's finding that JSL violated the FTDA, the Court will now address the appropriate remedies in this case. Federal law provides protection against trademark dilution: "The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use in commerce of a mark or trade name . . . ." 15 U.S.C. § 1125(c)(1). Additionally, "[a]ctual success on the merits of a claim is required for a permanent injunction." Avery Dennison, 189 F.3d at 881 (citing Walters v. Reno, 145 F.3d 1032, 1048 (9th Cir. 1998). Accordingly, because this Court finds that Defendant's conduct dilutes, or is likely to dilute Visa International's Visa mark, the Court will enjoin JSL from using the eVisa mark and the evisa.com domain name.
VI. CONCLUSION
Pursuant to Rule 56(c), the Court renders a judgment forthwith only if the pleadings and evidentiary submissions, "if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Regarding plaintiff's dilution claim, no genuine issue as to any material fact exists. Additionally, after considering the relevant substantive law, the Court finds that the Plaintiff is entitled to judgment as a matter of law on its dilution claim. Therefore, Plaintiff Visa International's Motion for Summary Judgment (Docket #39) on dilution will be GRANTED.
Regarding Defendant JSL's Motion for Partial Summary Judgment (Docket #47) on Visa International's claim of trademark infringement, the Court finds that a genuine issue of material fact exists and the motion is, therefore, DENIED. Additionally, the Court finds that a genuine issue of material fact exists regarding Defendant JSL's Motion for Partial Summary Judgment (Docket #80) on Visa International's claim for cybersquatting and Visa International's Counter Motion for Summary Judgment on Cybersquatting (Docket #86). Accordingly, both motions (Docket #80 #86) are DENIED. IT IS FURTHER ORDERED, the Court hereby enjoins Defendant from using or registering the eVisa mark and from using the evisa.com domain name. Defendant shall forthwith deactivate the Web site atevisa.com.