Internet Library of Law
and Court Decisions

First Jewellery Company of Canada, Inc., et al v. Internet Shopping Network LLC

Court grants a preliminary injunction, enjoining defendant, after a sixty day period, from continuing to operate a web site at a domain which contains a variant spelling of plaintiff's federally registered trademark.

Plaintiffs own the federally registered trademark First Jewellery, which they use in connection with their business of selling jewelry at wholesale to jewelry retailers in both Canada and the United States. Plaintiff does not sell its products at retail. Jewellery is a British variant of the word Jewelry. Plaintiffs first registered their trademark in 1990.

Defendant Internet Shopping Network LLC operates a web site at the domain "firstjewelry.com" at which it sells jewelry products at retail to the public. Defendant commenced its use of this domain on or about June 23, 1999.

Plaintiffs moved for a preliminary injunction enjoining defendant from continuing to operate a web site at the firstjewelry.com domain. Finding that plaintiffs had succeeded in establishing a likelihood that they would prevail on their claim that defendant's activities infringed their mark, the court granted the injunction on the terms discussed below.

To prevail on a claim of trademark infringement under the Lanham Act "a plaintiff has two obstacles to overcome: the plaintiff must prove that its mark is entitled to protection and, even more important, that the defendant's use of its own mark will likely cause confusion with plaintiff's mark." The court found that plaintiff was the owner of a valid federally registered mark entitled to protection.

The court also determined that plaintiff had shown that defendant's use was likely to cause confusion. The court reached this conclusion despite its determination that plaintiffs' mark was a weak suggestive mark, and that defendant had not selected its domain name in a bad faith attempt to profit on plaintiffs' mark and goodwill.

The court rested its determination principally on the fact that defendant's use was likely to cause plaintiffs' wholesale customers to believe that plaintiffs had opened a retail outlet at which they would directly compete with them. The court also pointed to the fact that while defendant did not adopt the name in bad faith, it failed to engage in the simple precaution of performing a trademark search before it commenced its use of the domain.

Defendant argued that the court should not issue the requested relief because the hardship defendant would suffer if the requested injunction was granted would far outweigh the harm plaintiff would suffer if the motion were denied. Defendant pointed to the fact that it had spent over nine months and millions of dollars designing, launching and advertising its site, and that much of the value of this promotional work would be lost if defendant were forced to move its site. The court recognized that in certain circumstances courts have refrained from issuing injunctions where the harm to the junior infringing user of the mark far outweighs that of the senior user. However, the court held that that was not true of the case at bar. Rather, "there is no evidence to suggest that the harm that will befall plaintiffs will be 'far outweighed' by the harm that will befall ISN in having to modify its domain name."

Defendant also argued that plaintiffs' delay in seeking injunctive relief should result in the denial of its application. Again, the court rejected defendant's argument, finding that "plaintiffs sent a cease and desist letter promptly after discovery of [defendant's] use of www.firstjewelery.com, and obtained an order to show cause less than nine weeks later." Of interest is the court's comment that "the owner of a registered mark would not necessarily expect that it was likely to be infringed on the Internet and so police the Internet ..." for infringing uses.

Nonetheless, defendant's arguments caused the court to modify the relief it granted plaintiffs. Instead of an immediate injunction, the court granted defendant 60 days to change the domain name of its site, provided that in the interim, it posted on the home page of its web site a disclaimer stating that the defendant's operation is not affiliated with First Jewelery.