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Intermatic Inc. v. Toeppen

Plaintiff Intermatic Incorporated is the owner of the federal trademark "Intermatic," which it uses to sell a wide variety of electronic products. Defendant is a resident of Illinois referred to by the court as a "cyber squatter." Defendant, without plaintiff's permission, registered the domain name "intermatic.com" on which he ran a web site featuring a map of Champaign-Urbana. For the purposes of its decision, the court determined that the site was not used to advertise or sell any products. Defendant admitted, however, that he had registered the domain name for the purpose of selling and/or licensing it to plaintiff. When defendant refused to voluntarily relinquish the name to plaintiff, this suit followed.

Plaintiff charged that defendant's conduct constituted federal trademark infringement and unfair competition, as well as a violation of the federal trademark dilution act. In addition, plaintiff asserted that defendant's conduct ran afoul of Illinois Antidilution Act, Uniform Deceptive Practices Act and Consumer Fraud and Deceptive Business Act, and constituted common law unfair competition.

The parties cross-moved for summary judgment. The court recommended that plaintiff's motion with respect to the antidilution claims be granted, and that defendant be enjoined both from using Intermatic in a domain name and preventing plaintiff from using the same in its domain name.

The court determined that defendant's conduct violated the state and federal anti-dilution statutes. To establish such a claim, the court stated that plaintiff must show that its mark is famous (which was conceded) and that the defendant is engaging in a commercial use of the mark in commerce which is causing prohibited dilution of the mark.

The court concluded that defendant's use of the mark was commercial even though the website featured nothing more than a map, and sold no products. The use of the mark in a URL with a .com top level domain name did not mandate such a finding (as such top level domain names are given to both commercial and noncommercial sites). However, "Toeppen's intention to arbitrage the 'intermatic.com' domain name constitutes a commercial use. ... Toeppen's desire to resell the domain name is sufficient to meet the 'commercial use' requirement of the Lanham Act." As far as dilution is concerned, the court concluded that "the fact that 'intermatic.com' will be displayed on every aspect of the web page [via a browser] is sufficient to show that Intermatic's mark will likely be diluted." Dilution is intended to prevent the association of plaintiff's mark with anything it does not want it associated with, even something as innocuous as a map of Champaign-Urbana Illinois.

The Magistrate Judge recommended that the parties' cross motions with respect to all other claims be denied. The court concluded that there were issues of fact as to whether defendant's use of intermatic.com in a noncommercial site would cause a likelihood of consumer confusion, a prerequisite to the trademark infringement, unfair competition and deceptive practice claims. The court, in reaching this conclusion, noted that no evidence of actual consumer confusion had been presented. Plaintiff was not operating a web site and defendant was not selling any products. Further, there was a question of fact as to whether surfers who typed "intermatic.com" and found a map of Champaign-Urbana would associate it with the plaintiff.