243 F.3d 812 (4th Cir. 2001), 99-2138, Am. Online v. AT&T Corp.

Docket Nº:99-2138.
Citation:243 F.3d 812
Party Name:AMERICA ONLINE, INCORPORATED, Plaintiff-Appellant, v. AT&T; CORPORATION, Defendant-Appellee.
Case Date:February 28, 2001
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

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243 F.3d 812 (4th Cir. 2001)



AT&T; CORPORATION, Defendant-Appellee.

No. 99-2138.

United States Court of Appeals, Fourth Circuit

February 28, 2001

Argued: October 30, 2000.

Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria.

Claude M. Hilton, Chief District Judge. (CA-98-1821-A)

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[Copyrighted Material Omitted]

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COUNSEL: ARGUED: Maureen Ellen Mahoney, LATHAM & WATKINS, Washington, D.C., for Appellant. Laura A. Kaster, AT&T; CORPORATION, Basking Ridge, New Jersey, for Appellee. ON BRIEF: Everett C. Johnson, Jr., Minh N. Vu, LATHAM & WATKINS, Washington, D.C.; Richard A. Cordray, Grove City, Ohio; Paul T. Cappuccio, Randall J. Boe, Laura E. Jehl, AMERICA ONLINE, INC., Dulles, Virginia, for Appellant. Howard Spierer, Judith A. Archer, AT&T; CORPORATION, Basking Ridge, New Jersey; Edward T. Colbert, KENYON & KENYON, Washington, D.C.; Carter C. Phillips, SIDLEY & AUSTIN, Washington, D.C.; Constantine L. Trela, Jr., SIDLEY & AUSTIN, Chicago, Illinois, for Appellee.

Before NIEMEYER and LUTTIG, Circuit Judges, and Alexander WILLIAMS, Jr., United States District Judge for the District of Maryland, sitting by designation.

Affirmed in part, vacated in part, and remanded by published opinion. Judge Niemeyer wrote the opinion, in which Judge Williams joined. Judge Luttig wrote a concurring and dissenting opinion.


NIEMEYER, Circuit Judge:

America Online, Inc. ("AOL") commenced this action against AT&T; Corporation ("AT&T;") for AT&T;'s alleged infringements of three trademarks that AOL claims in connection with its Internet services -"Buddy List," "You Have Mail," and "IM." The district court entered summary judgment in favor of AT&T; with respect to each mark, concluding that, as a matter of law, the alleged marks are generic and cannot be enforced as the exclusive property of AOL. For the reasons that follow, we conclude that the question whether "Buddy List" is a valid mark raises disputed issues of material fact and therefore cannot be resolved on summary judgment. With respect to the two other claimed marks, we affirm for the reasons given herein.


Founded in 1985, AOL is now the world's largest Internet service provider, claiming more than 18 million members who pay a monthly fee for its services.

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These services include the facility to transmit and receive electronic mail ("e-mail") and a means to establish real-time communication ("chat") through "instant messaging."

In connection with its chat service, AOL uses "Buddy List" and "IM" to describe features of the service. The"Buddy List" enables the subscriber to create a list of identified screen names employed by other users with whom the subscriber wishes to communicate and displays which of those pre-selected users is currently using the AOL service. If a "Buddy" is identified by the"Buddy List" as online, the subscriber may then click a button labeled "IM," which are the initials of "instant messaging," and initiate a real-time chat session with the subscriber so identified on the "Buddy List." AOL has used "Buddy List" and "IM" since at least 1997. It has promoted these terms extensively, and it asserts now that it has a proprietary interest in them. In addition, with respect to "Buddy List," AOL obtained a certificate of registration on June 23, 1998, from the Patent and Trademark Office, indicating that the mark has been registered on the Principal Register and that AOL has used the mark as a service mark since August 31, 1995.

Also, in connection with its e-mail service, AOL advises its subscribers that they have received e-mail by displaying the words "You Have Mail," by playing a recording that announces, "You've got mail," and by depicting an icon of a traditional mailbox with the red flag raised. AOL contends that it has used these marks to describe its e-mail service since 1992, that it has promoted them extensively, and that it now has a proprietary interest in them.

AT&T;, a competing Internet service provider, uses marks or phrases similar to those claimed by AOL in connection with its service to subscribers. It uses the terms "Buddy List," "You have Mail!," and "I M Here."

In December 1998, AOL commenced this action, seeking preliminary and permanent injunctive relief against AT&T; to prohibit it from using marks similar to those asserted by AOL. In its complaint, it alleged that AT&T;'s use of similar marks violated the trademark dilution provisions of the Lanham Act, 15 U.S.C. S 1125(c), and infringes AOL's marks in violation of 15 U.S.C. S 1114. In addition, it demanded an accounting of AT&T;'s profits, damages, punitive damages, attorneys fees, and costs. In its answer, AT&T; contended, among other things, that AOL's asserted marks were"common, generic terms for the e-mail, instant messaging, communication, and related services." It filed a counterclaim seeking a declaratory judgment that AOL's marks are not valid trademarks and requesting an order directing the Patent and Trademark Office to cancel the registration for "Buddy List."

The district court denied preliminary injunctive relief and, following discovery, granted AT&T; summary judgment on the ground that all three of the claimed marks were generic and therefore incapable of functioning as trademarks. The court also directed that a copy of its order be sent to the Commissioner of Patents and Trademarks "in order to effect the cancellation of the BUDDY LIST mark." The district court rested its decision on evidence in the record obtained from third-party sources, including Internet dictionaries, published users' guides to both the Internet and to AOL services, use of the alleged marks by competitors, and use by AOL of the alleged marks in a manner suggesting their generic character. Although AOL proffered survey evidence in support of its contention that the marks "You Have Mail" and "Buddy List" were protected trademarks, the court considered the survey evidence irrelevant because it had concluded that the marks were generic and that words used generically cannot become trademarks by association.

AOL's contentions on appeal break down into two general arguments. First, it argues that the district court erred when it concluded that "Buddy List" is generic,

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despite the fact that it is a federally registered trademark. It asserts that because the trademark office is an expert agency to whom Congress has delegated power to administer the Lanham Act, its decision to register "Buddy List" should be accorded deference under the doctrine of Chevron v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Second, AOL contends that the district court, in concluding that the marks are generic, failed to apply the "primary significance" test correctly insofar as the court focused on usage of the mark in published sources rather than on the perceptions of the relevant consuming public, which were evidenced by AOL's surveys.

II. "Buddy List"

AOL's principal argument for the validity of "Buddy List" as a "suggestive" mark rests on the significance of its having obtained a certificate of registration from the Patent and Trademark Office ("PTO"). It argues that the district court erred in failing to give deference to the expert decision of the PTO to register the mark without requiring evidence of secondary meaning.

To address this argument, we must first recognize the statutory background against which a certificate of registration issues. When the Commissioner of Patents and Trademarks, in furtherance of an application of a registrant, lists a mark on the Principal Register, he issues a certificate of registration which provides the registrant with prima facie evidence of (1) the validity of the mark and its registration; (2) the registrant's ownership; and (3) the registrant's "exclusive right" to use the mark on or in connection with the goods and services specified in the certificate of registration. See 15 U.S.C. S 1057(b). And the Commissioner does not register a mark unless it meets the requirements established by statute. See, e.g., 15 U.S.C. SS 1051-1057, 1064. With a certificate of registration, therefore, the registrant obtains prima facie evidence that its mark is not generic in the eyes of the relevant public, see 15 U.S.C. S 1064(3), and that its mark is not "merely" descriptive, but at a minimum is descriptive and has obtained secondary meaning, see 15 U.S.C.S 1052(e). The Commissioner need not require evidence of secondary meaning if the applied for mark is inherently distinctive by being suggestive, arbitrary, or fanciful. See PTO, U.S. Dep't of Commerce, Trademark Manual of Examining Procedure S 1209.01, at 1200-106 (2d ed. rev. 1.1 1997); see also Pizzeria Uno Corp. v. Temple, 747 F.2d 1522, 1527 (4th Cir. 1984) (classifying marks into four broad categories of ascending strength or distinctiveness: (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful).

AOL argues that the district court erred in failing to accord deference to this administrative proceeding before the PTO by which the Commissioner issued a certificate of registration, thus indicating that it owns a valid suggestive mark...

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