Internet Law

By Martin H. Samson    

April 20, 2005   

 Davidoff Malito & Hutcher LLP      

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Use Of Trademark In Non-Commercial Gripe Site's Domain Does Not Constitute  Trademark Infringement Or Dilution, Bosley Medical Institute, Inc., et al. v. Michael Steven Kremer, No. 04-55962 (9th Cir., April 4, 2005)

The Ninth Circuit holds that the use of another’s trademark as the domain name for a non-commercial gripe site does not constitute trademark infringement or dilution in violation of the Lanham Act.  To run afoul of the Lanham Act, a mark must be used in connection with the sale of goods or services.  A web site which is merely critical of another’s goods or services does not fit this bill.  The Ninth Circuit accordingly affirmed the District Court’s grant of summary judgment, dismissing plaintiff’s trademark infringement and dilution claims.


The Ninth Circuit reversed, however, so much of the District Court’s decision which dismissed plaintiff’s Anticybersquatting Consumer Protection Act (“ACPA”) claim.  The ACPA does not have a commercial use requirement, and, accordingly, establishing that the mark was used as the domain for a non-commercial gripe site does not absolve the griper from potential liability under the ACPA.  Because that was the basis on which the lower court dismissed plaintiff’s ACPA claim, its dismissal was reversed.  The matter was remanded to the District Court to determine whether defendant used the mark with a bad faith intent to profit therefrom, in violation of the ACPA.

The Ninth Circuit holds that the use of another’s trademark as the domain name for a non-commercial gripe site does not constitute trademark infringement or dilution in violation of the Lanham Act.  To run afoul of the Lanham Act, a mark must be used in connection with the sale of goods or services, which does not occur on a web site merely critical of another’s goods or services.   


Such a use may, however, give rise to a claim under the Anticybersquatting Consumer Protection Act if done with a bad faith intent to profit thereon.  Such is the case, holds the Ninth Circuit, because the ACPA does not have a commercial use requirement.  Accordingly, establishing that the mark was used as the domain for a non-commercial gripe site does not absolve the griper from potential liability under the ACPA .


Dissatisfied Consumer Launches  Non-Commercial Gripe Site   


Defendant Michael Kremer (“Kremer”) was dissatisfied with the hair restoration services he was provided by plaintiff Bosley Medical Institute (“Bosley Medical”).  As a result, he launched a web site at the domain that was highly critical of plaintiff and its services.  “Bosley Medical” is a registered trademark owned by plaintiff, which it uses to market its hair restoration services.


Kremer did not sell or offer to sell any products at this site, nor did he derive any revenue from its operation.  No advertisements were displayed on this site.  The only links on the site were to the website of the lawyers representing Kremer, and to another site Kremer operated at  This second site, in turn, contained a link to a newsgroup which contained advertisements for plaintiff’s competitors.


After acquiring the domain, but prior to the launch of his website, Kremer sent Bosley Medical a letter urging them to engage in settlement discussions.  Failing that, Kremer would publicize his negative views about Bosley Medical on the Internet.  The letter did not contain an express offer to sell the domain to plaintiff.


Bosley Medical responded by commencing this suit, asserting, inter alia, claims for trademark infringement and dilution under the Lanham Act, as well as a claim that defendant’s use of the mark violated the ACPA.


Non-Commercial Use Neither Infringes Nor Dilutes 


Kremer moved for summary judgment, arguing that the non-commercial use of plaintiff’s mark in his web site did not run afoul of the Lanham Act.  The Ninth Circuit agreed.


To establish an infringement claim under the Lanham Act, the trademark owner must demonstrate a use of his mark “in commerce . . . in connection with the sale, offering for sale, distribution or advertising of any goods or services . . .”.  15 U.S.C. §1114(1)(a).  The Ninth Circuit held an “analogous” requirement is found in the Federal Trademark Dilution Act’s (“FTDA”) strictures against “another person’s commercial use in commerce of a mark or trade name . . .”.  15 U.S.C. §1125(c)(1).


The Ninth Circuit held such a requirement was lacking in a non-commercial gripe site.  Kremer derived no revenue from the operation of his site, which contained no advertisements, nor offered any products for sale.  It merely contained information critical of Bosley Medical.


The Court held that neither Kremer’s links to his lawyer’s site, nor his links to a sister site which contained a link to a newsgroup that displayed competitors’ advertising, rendered his site commercial.  Said the Court: 


Kremer’s website contains no commercial inks, but rather contains links to a discussion group, which in turn contains advertising.  This roundabout path to the advertising of others is too attenuated to render Kremer’s site commercial.  At no time did Kremer’s site offer for sale any product or service or contain paid advertisements from any other commercial entity. 


In reaching this result, the Court rejected Bosley Medical’s contention that Kremer’s use of its mark was commercial because it prevented users from obtaining plaintiff’s goods and services.  This argument had found favor with the Fourth Circuit in People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359 (4th Cir. 2001).


The appropriate inquiry, held the Court, was instead whether Kremer offers competing services.  Failing that, his use of plaintiff’s mark was not one against which the Lanham Act was designed to protect.  Said the Court: 


[T]he appropriate inquiry is whether Kremer offers competing services to the public.  Kremer is not Bosley’s competitor; he is their critic.  His use of the Bosley mark is not in connection with a sale of goods or services — it is in connection with the expression of his option about Bosley’s goods and services.


The dangers that the Lanham Act was designed to address are simply not at issue in this case.  The Lanham Act, expressly enacted to be applied in commercial contexts, does not prohibit all unauthorized uses of a trademark.  Kremer’s use of the Bosley Medical mark simply cannot mislead consumers into buying a competing product — no customer will mistakenly purchase a hair replacement service from Kremer under the belief that the service is being offered by Bosley.  Neither is Kremer capitalizing on the good will Bosley has created in its mark.  Any harm to Bosley arises not from a competitor’s sale of a similar product under Bosley’s mark, but from Kremer’s criticism of their services.  Bosley cannot use the Lanham Act either as a shield from Kremer’s criticism, or as a sword to shut Kremer up. 

Anticybersquatting Consumer Protection Act Claim Reinstated


The Court held that the Anticybersquatting Consumer Protection Act (“ACPA”) did not impose the same commercial use requirement.  The Court rejected Kremer’s argument that such a commercial use requirement was found in the language of 15 U.S.C. §1125(c)(4).  While that language states that a “noncommercial use of the mark” “shall not be actionable under this section,” the Court held this language inapplicable to ACPA claims.  The Court rested its decision, in part, on the ACPA’s prohibitions against the registration of another’s mark with a bad faith intent to profit thereon, as well as the Act’s listing of noncommercial use as only one factor to be used by the Court in analyzing whether the defendant acted in bad faith.  Because the lower court held to the contrary, its decision was reversed, and plaintiff’s ACPA claims remanded for a determination of whether Kremer acted in bad faith, in light, inter alia, of his pre-launch letter threatening to publish his criticisms of Bosley Medical if his dispute was not settled. 


Finally, the Ninth Circuit reversed the District Court’s grant of Kremer’s motion to dismiss under California’s SLAPP statute.  Said the Court: 


An infringement lawsuit by a trademark owner over a defendant’s unauthorized use of the mark as his domain name does not necessarily impair the defendant’s speech rights. 


Here are summaries of the most recent cases that have appeared in Internet Law Update.  If you missed one of these issues, simply request it in a reply to this email and we will forward it on to you.  

Court Allows Trademark Infringement Action Arising Out Of Alleged Use Of Defendant's Marks To Trigger Display Of Third Party Sponsored Links In Search Engine Results To Proceed, Google Inc. v. American Blind & Wallpaper Factory, Inc., Case No. C03-05340-F (N.D. Cal., March 30, 2005).  Court denies motion to dismiss trademark infringement and dilution claims asserted by American Blind arising out of Google’s alleged use of American Blind’s trademarks to trigger the display of third party advertisements in search engine results for those marks.  The Court declined at this stage of the proceedings to hold that use of American Blind’s trademarks in this fashion was insufficient to give rise to trademark infringement or dilution claims because it did not constitute a use of the marks to identify the source of goods or services supplied by Google.   



Linking To Infringing Images May Give Rise To Copyright Infringement Batesville Services, Inc., et al. v. Funeral Depot, Case No. 1:02-cv-1011-DFH-TAB (S. D. Ind., November 10, 2004). Court holds that defendant Funeral Depot may be infringing plaintiffs’ copyright in advertising materials by placing small thumbnail images of those copyrighted materials on defendant’s website linked to allegedly infringing full size copies of those same materials defendant arranged to have placed on a third party’s website.  While this website is owned by one of plaintiffs’ authorized dealers, visitors to the web pages containing the challenged images view defendant Funeral Depot’s contact information, as well as prices for these caskets set by defendant.  Because issues of fact existed as to whether the third party dealer had an implied license to use the advertising materials in this fashion, the Court could not determine if defendant was infringing plaintiff’s copyright on the parties’ respective summary judgment motions. 


Apple Allowed To Proceed With Subpoena Seeking Blogger's Source, Apple Computer v. Doe 1, et al., Case No. 1-04-CV-032178 (Superior Ct., Ca., March 11, 2005). Court denies bloggers’ motion to quash a subpoena served by Apple Computer on an e-mail service provider, which subpoena sought materials that would identify the individual(s) who transmitted trade secret information about an Apple product to PowerPage, which information PowerPage subsequently published on its blog/website.  The Court held that the bloggers were not entitled to such relief under either California’s ‘Shield Law’ or the First Amendment.  The former only protects journalists from being found in contempt for failing to produce information, while the latter cannot be used to prevent the disclosure of information related to criminal activity such as that at issue here, the disclosure of trade secrets. 


Gripe Site Operator Loses Rights To "Your" DomainGlenn Harrison v. Microfinancial, Inc., Civil Action No. 03-11437-GAO, 2005 U.S. Dist. Lexis 2804 (D. Mass., February 24, 2005). ourt finds that a disgruntled customer violated the Anticybersquatting Consumer Protection Act by registering a domain name containing defendant Microfinancial’s trademark, at which domain plaintiff operated a website critical of defendant.  The Court determined that plaintiff had registered the domain name with a bad faith intent to profit therefrom, in large part because plaintiff had offered to transfer the domain to Microfinancial if it redressed the grievances he and others had with the company.


Unauthorized Use Of Spyware To Capture Online Communications Violates Florida Law, Beverly Ann O’Brien v. James Kevin O’Brien, Case No. 5D03-3484 (Dist. Crt. App., Fla., February 11, 2005). Court holds that the unauthorized use of a spyware program to capture screen shots of a husband’s online communications violates Florida’s Security of Communications Act, modeled after the Federal Wiretap Act, 18 U.S.C. Section 2501, et seq.  An intermediate Florida appellate court accordingly affirms the trial court decision to bar the wife from introducing these screen shots into evidence in her divorce proceeding with her husband. 



DMCA And CDA Immunize Amazon From Copyright Infringement And Other Claims Arising Out Of Unauthorized Sale By Nonaffilated Vendors Of Copyrighted Images,  Corbis Corporation v., Inc., et al., No. CV03-1415L (W.D. Wash., December 21, 2004). Digital Millennium Copyright Act immunizes Amazon from copyright infringement damage claims arising out of the unauthorized sale by nonaffiliated vendors on of plaintiff’s copyrighted and/or licensed photographs.  In reaching this result, the Court held that Amazon qualified for protection under 17 U.S.C. § 512(c), which protects service providers from liability for copyright infringement by reason of their storage of infringing materials at the direction of a third party.  The Court further held that the Communications Decency Act immunizes Amazon from Washington State law Consumer Protection Act and tortious interference with business relations claims arising from such sales.  Finally, the Court held that issues of fact precluded dismissal of copyright infringement claims plaintiff asserted arising out of the alleged use of one of its copyrighted images in an advertisement on a separate website owned by Amazon.


"Sponsored Links" Displayed By Search Engine Infringe If They Contain Searched For Trademark, And Do Not If Such Trademarks Are Absent,  Government Employees Insurance Company v. Google, Inc., Civ. Action No. 1:04cv507 (E.D., Va., December 15, 2004). In a bench ruling, Court holds that the display by search engine giant Google of third party ads denominated “sponsored links” triggered by the entry of a trademark as a search term runs afoul of the Lanham Act when the “sponsored links” contain the searched-for trademark, but does not when the “sponsored links” do not contain such trademarks. The Court did not resolve the issue of Google’s potential liability for the display of such third party ads, noting that Google had a policy prohibiting its advertisers from displaying “sponsored links” containing trademarks of third parties used as the triggering search term.  It should also be noted that the Court’s finding that consumers would not be confused by “sponsored links” that did not contain a trademark was based, in large part, on its rejection of the particular survey evidence presented by the mark holder on this issue. 


Last Week's Winners.
Congratulations to Tina D., Wendy L.,  Saraann P. and Kohel H.  for correctly answering last week's hard quiz - This is the only movie I can think of where a one word clue allows you easily to identify it.  No you say?  Wanna bet?  So here's the word - "Yo."  Name this movie and its stars.  Rocky (1976) starring Sylvester Stallone as Rocky Balboa, Talia Shire as Adrian, Burt Young as Paulie, Carl Weathers as Apollo Creed and Burgess Meredith as Mickey. 

This Week's Quiz.
Now for this week's quiz -   A murderess is afoot. Your job, in this movie, is to figure out who it is.  The murder follows the script laid out in an author's book, which makes her a suspect.  But then again, it could have been the good doctor who did it, given her obsession with the author and all who know her.  Only the location of an ice pick at the movie's end lets you know which one did it for sure. Name this movie and its stars.  


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