Internet Library of Law
and Court Decisions

Chatam International, Inc. v. Bodum, Inc.

Plaintiff, holder of a federally registered trademark in the mark "Chambord" for sale of a liqueur and assorted food products, brought this action under the Anticybersquatting Consumer Protection Act, and for trademark infringement and dilution, against defendant, who holds a federally registered trademark in the mark "Chambord" for the sale of coffee makers. The action was triggered by defendant's registration of the domain name "chambord.com," at which it planned to, but had not yet offered for sale its coffee makers. The court dismissed the action, holding, inter alia, that (a) the ACPA claim failed because defendant had not acted in bad faith in continuing to utilize its federally registered mark for the sale of coffee makers; (b) the trademark infringement claim failed because the initial interest confusion doctrine (a consumer looking for company's As site finds company B's instead) was inapplicable to situations where the parties in question did not offer competing goods; and (c) the dilution act claim failed because plaintiff's mark was not famous at the time defendant commenced its use of the mark.

Plaintiff is the owner of several federally registered marks. It commenced its use of the mark "Chambord Liqueur Royale" in 1975, which it used to market a raspberry liqueur. In 1984, it registered the mark "Chambord" for the sale of liqueur and milk chocolate, and in 1986 and 1988 for the sale of fruit preserves and cake respectively.

As of 1981, defendant's predecessor-in-interest sold coffee makers under the mark "Cafetiere Chambord", and coffee under the mark "Café Chambord Coffee." Plaintiff instituted a trademark infringement action as a result of such use, which was resolved by the entry of a consent decree. The decree prohibited defendant's predecessor-in-interest from continuing to use the mark for the sale of coffee, but accorded defendant the right to use the mark "Chambord" in connection with the sale of coffee makers. In 1983, defendant registered the mark "Cafetiere Chambord" for sale of non-electric coffee makers, claiming that it commenced using the mark for such sales in 1980. In 1991, defendant registered the mark "Chambord" for non-electric coffee makers.

On November 6, 1996, an affiliate of the defendant registered the domain name "chambord.com." Defendant plans to, but has not yet, offered its coffee makers for sale at the site. Defendant also plans to have a link on its web site to that of a third party that sells housewares and teas, but no coffee.

Plaintiff commenced this suit, claiming, inter alia, that defendant's actions violated the Anticybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125, and the Federal Trademark Dilution Act, and constituted trademark infringement. The court, on defendant's motion for summary judgment, rejected plaintiff's claims, and dismissed the suit.

To establish a claim under the ACPA, the plaintiff must establish that defendant improperly registered a domain name subject to trademark protection in bad faith. The statute lists a number of factors to consider in determining if the defendant acted in bad faith, which include the defendant's trademark or other intellectual property rights in the domain name and its prior use of the name in a bona fide offering of goods or services. The ACPA also contains a safe harbor for those who "believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful."

The court rejected plaintiff's ACPA claim, finding that defendant did not act in bad faith given, inter alia, its registered trademark in the mark "chambord," its use of that mark for an extended period of time to sell coffee makers under a consent decree giving it that right, and the fact that defendant had not registered other domain names that allegedly infringed on the rights of other trademark holders.

The court similarly rejected plaintiff's trademark infringement claim. In doing so, the court noted that plaintiff and defendant did not offer competing products. Moreover, the plaintiff did not sell its liqueur product on the Internet.

The validity of the trademark infringement claim turned, held the court, on the appropriate application of the "initial interest confusion" doctrine. Here, a consumer looking for products offered by company A discovers instead the web site of its competitor, Company B. Even though it realizes, once at Company B's site, that it is not the site for company A, this can create a cause of action in company A because the consumer may elect to purchase its competitor's products during the visit.

The court held that the initial interest doctrine was inapplicable to the case at bar because the parties here did not sell competing products. Said the court:

Generally, initial interest confusion is of greatest concern when products are in competition with each other - in those instances, customers may be drawn to a product and identify it with a particular source without realizing until later that it came from elsewhere. Where companies 'are non-competitors, initial interest confusion does not have the same consequences, because there is no substituted product to buy from the junior users, and the senior user does not bear the prospect of harm.' ... Here, a consumer attempting to access an upscale liqueur product is unlikely to be dissuaded, or unnerved, by the sight of coffee makers and other housewares, having first brought up the coffee maker's screen. ... As The Network Network elucidates, Internet surfers are inured to the false starts and excursions awaiting them in this evolving medium.

Lastly, the court rejected plaintiff's claim that defendant's conduct violated the federal trademark dilution act. This act protects the holders of famous marks. To state a violation of this act, however, the plaintiff must establish that its mark became famous before defendant commenced the challenged use of the mark. Here, plaintiff's mark was not famous when defendant first commenced use of the mark to sell coffee makers in 1980. Plaintiff claimed that it nonetheless could satisfy the requirements of the statute because its mark was famous at the time defendant registered the domain name in question. This argument was unavailing, held the court.

The decision in The Network Network observed 'that the statute looks to the mark's fame at the time of the mark's first commercial use [by defendant], not when the first use occurs that the mark's owner finds objectionable. Indeed, if this latter formulation were the rule, the requirement that infringing use begin after the mark becomes famous would be stripped of all meaning.' While there may be appeal to the argument that the operative date should be the registration of the domain name, that rule would be unworkable. It would give owners 'of famous marks the authority to decide when an allegedly diluting use was objectionable, regardless of when the party accused of diluting first began to use the mark.'

The full text of the court's decision can be found on a website maintained by the United States District Court for the Eastern District of Pennsylvania.