Internet Library of Law
and Court Decisions

America Online, Inc. v. AT&T Corp.

On defendant AT&T's motion for summary judgment, the court held that plaintiff America Online, Inc.'s ("AOL") trade and service marks "You Have Mail," "IM" and "Buddy List" are generic and accordingly not entitled to trademark protection. As a result, the court determined that AT&T could continue to use these marks over AOL's objection in the operation of a competing service.

AOL, the Internet Service Provider, uses the phrase "You Have Mail" to notify its subscribers of their receipt of new e-mail. At the start of each new online session, an AOL subscriber who has received e-mail since his last online session is greeted both by the words "You Have Mail" and by a picture of an old fashion mail box, with the red signal flag raised. (For those of you who have always wanted to know, the voice you hear reciting "You Have Mail" is that of Elwood H. Edwards, Jr.).

AOL'S use of "Buddy List" and "IM" were succinctly explained by the court:

BUDDY LIST (R) is the brand for a service provided by AOL that provides real-time chat between two or more persons who are simultaneously using the AOL Service. ... AOL and its members call the real-time chat component of the BUDDY LIST (R) service the "IM" (pronounced "eye em") feature.

AOL held a federal service mark registration for the service mark "Buddy List." At the time the suit was commenced, AOL had pending an application for trademark registration for "You Have Mail."

AT&T operates a competing service which, like AOL, offers subscribers Internet access. As part of its service, AT&T offers a feature it describes as "You Have Mail!" which provides AT&T subscribers with notification of their receipt of e-mail. AT&T also provides subscribers with a service it describes as "IM Here." AT&T uses this phrase to describe a service which both notifies its subscribers when those on its "buddy list" are online, and allows subscribers to engage in real-time chats with their "buddies."

Arguing that AT&T's use of the phrases "You Have Mail," "IM" and "Buddy List" infringed and diluted its marks, AOL brought suit under the Lanham Act. AT&T counterclaimed for a declaratory judgment affirming the validity of its conduct on the grounds AOL's marks are generic and not entitled to trademark protection.

On defendant AT&T's motion for summary judgment, the court found that each of the marks was generic and not entitled to trademark protection. The court reached the conclusion as a result of its application of the "primary significance test." Marks are categorized into four classes -- (1) fanciful or arbitrary, (2) suggestive, (3) descriptive and (4) generic.

Generic marks never qualify for the protections of the Lanham Act; are not registrable; and a registered mark can be canceled at any time upon finding that the mark is, or has become, generic.

According to the court, the primary significance test is used to determine the class into which a mark falls.

Under this test, a plaintiff who is seeking to establish a valid trademark must show "that the primary significance of the term in the minds of the consuming public is not the product but the producer." Id. McCarthy recommends the following evidence to be used to determine the primary significance of a mark: (1) competitors' use of the mark, (2) plaintiff's use o the mark, (3) dictionary definitions, (4) media usage, (5) testimony of persons in the trade and (6) consumer surveys. 2 McCarthy 12:13 at 12-26 to 12-34.

Applying the "primary significance test," the court found each of these three marks to be generic. The court found that AOL, its competitors, people in the trade and the media all use the phrase "mail" to describe "e-mail." As such, AOL's mark "You Have Mail" become a generic mark describing the service being provided, and not its source. Said the court:

The undisputed facts establish that AOL uses the YOU HAVE MAIL mark generically. AOL uses YOU HAVE MAIL to inform its users of the fact that they have e-mail, which is also known as mail When a common word or phrase is used as a mark for its ordinary meaning, the mark is generic.

Applying a similar analysis, the court found that the mark "IM" was also generic. Again, the court pointed to the use by AOL, its competitors and the trade of the mark to mean "instant messages." As such, the mark "IM" became a generic description of the service provided by AOL, and not its source.

The conclusion is that IM stands for "instant message" (as AOL admits) and because the primary significance of "instant message" is to stand for an "instant message," the term IM reflects the genus, not the species. Accordingly, summary judgment in favor of AT&T is appropriate as IM is generic.

Lastly, the court found that "in the Internet context" the service mark "Buddy List" as used by AOL's competitors, the trade, and the media, "means a list of individuals whose online status the user wishes to monitor." As AOL used it to describe just such a service, the mark was generic and not entitled to protection.

In reaching these conclusions, the court rejected AOL's argument that the marks at issue were not generic because AT&T could describe its activities without their use. Indeed, according to AOL, AT&T had considered over 100 alternative phrases to describe its e-mail notification service before deciding to use "You Have Mail. Said the court:

The weight of the authority clearly shows, however, that the Court's primary concern should not be the availability of alternative terms, but rather whether the term/phrase is generic under the primary significance test.

The court also ignored any evidence of secondary meaning AOL had built up by its advertisement and use of "You Have Mail." Said the court:

[E]ven if a producer or provider has achieved secondary meaning in its generic mark through promotion and advertising, the generic mark is still not entitled to protection because to allow protection would "deprive competing manufacturers of the product of the right to call an article by its name."

The full text of the court's decision can be found on a web site maintained by the Tech Law Journal.