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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Northland Insurance Companies v. Blaylock

115 F. Supp.2d 1108, Civ. No. 00-308 (DSD/JMM) (D. Minn. September 25, 2000)

Court denies plaintiff's application for a preliminary injunction, enjoining defendant from operating a web site critical of plaintiff and its business practices at the domain

Defendant owned a yacht that he insured with plaintiff Northland Insurance Companies ("Northland"). Defendant filed a claim under this policy to recover for damage to the yacht. A dispute over this claim resulted in litigation. Defendant prevailed, but only recovered an amount equal to the jurisdictional limit of the court in which he filed his claim, which was less than the amount of damage he claimed to have sustained. Still aggrieved, defendant created the web sites at issue.

Operated at the domains and, these sites house complaints and criticisms of plaintiff's business. Users who visits these sites are greeted, on the first page, with "Northland Insurance Companies ... Another Opinion! ... If you feel you have been ABUSED at the hands of Northland Insurance please click the link above. You're not alone." The link takes the user to web pages which describe defendant's complaints about plaintiff, provide an extensive history of the parties' legal dispute over the yacht claim, and contain a series of links, including a link to defendant's attorney. Defendant did not, however, offer anything for sale on these web sites.

Claiming that defendant's actions constituted trademark infringement and dilution, as well as a violation of the Anticybersquatting Consumer Protection Act ("ACPA"), plaintiff brought suit, and moved for a preliminary injunction enjoining defendant, inter alia, from continuing to operate the web sites at issue. Finding that plaintiff had not established the requisite likelihood of prevailing on the merits of its claims, the court denied plaintiff's application for injunctive relief.

To prevail on its trademark infringement claim, plaintiff must show that "defendant's ... use of [plaintiff's] mark is likely to cause confusion" with consumers. The court held that, given the nature of defendant's sites, which are highly critical of plaintiff and its business practices, consumers were not likely to be confused as to the source of these sites, or believe that they were was created by or affiliated with plaintiff. Said the court:

The court sees no evidence at this preliminary stage that any reasonable member of the buying public would be likely to conclude that defendant's web site is affiliated with, connected to, sponsored by, or otherwise comes from the plaintiff. It is immediately apparent that defendant's site bears no relationship to plaintiff's business other than as a source of consumer criticism of plaintiff's business. In other words, these is no indication that any reasonable person who was seeking plaintiff's services via the Internet would mistake defendant's site as being affiliated with or sponsored by plaintiff.

In reaching this conclusion, the court rejected plaintiff's claim that such consumer confusion was established by application of the doctrine of "initial interest confusion," which arose by diverting users seeking plaintiff to defendant's site by virtue of defendant's use of plaintiff's mark in that site's domain name. The court noted that "in the instances where courts have found 'initial interest confusion' as an indicator of the 'likelihood of confusion' element of trademark infringement, the courts have also found that the defendant had a commercial incentive or motive in using plaintiff's mark to attract 'initial interest.' That is, 'initial interest confusion' existed when the defendant stood to materially or financially gain from said initial confusion by trading in on the value of plaintiff's mark to initially attract customers." Finding that the evidence at this stage of the proceeding was insufficient to establish that defendant will gain financially from the operation of the sites at issue, the court found the initial interest confusion doctrine inapplicable to the case at bar.

It should be noted that the court did not render a final determination on this question. Plaintiff claimed that defendant had created the web sites at issue as leverage to obtain the money defendant believed was still due on his insurance claim. In addition, while defendant had not initiated any communication with plaintiff offering to sell it the domain, defendant had, in rejecting an offer by plaintiff to purchase it, indicated that plaintiff had "way undervalued" the domain. The court noted that "this evidence is insufficient to draw an inference of defendant's intent to commercially benefit from the use of this web site. At best, an issue of fact exists here to be determined at a later stage of this litigation."

The court also found that plaintiff was not likely to prevail on its trademark dilution claim. To prevail on such a claim, the plaintiff must show that defendant used plaintiff's mark in commerce. "Noncommercial use is excepted under the statute." Because, on the record before the court, "there is no indication of commercial use," the court held that plaintiff had not shown sufficient likelihood of prevailing on the merits of its dilution claim to be entitled to the requested injunctive relief.

Lastly, the court held that plaintiff had not shown that it was likely to prevail on its ACPA claim, because it had not shown that defendant used, registered or trafficked in a domain name containing plaintiff's mark with a bad faith intent to profit from the sale of the domain name. Said the court:

Plaintiff ... argues that an inference can be made that defendant's intent is to use this Internet domain name as leverage to extract a sum of money that will help compensate him for his perceived losses from the underlying insurance settlement. While this argument has some merit, at this preliminary stage of the litigation, this court cannot conclude that plaintiff is likely to prevail on the merits of an ACPA claim because the record does not sufficiently reflect a bad faith intent to profit. ... Defendant has never expressly offered to sell the domain site to plaintiff and has never used the web site for anything other than commentary.
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