Nissan Motor Co. v. Nissan Computer Corp.

• Decision Date: 06 August 2004
• Docket Number: No. 03-55017.,No. 03-55236.,No. 03-55144.,No. 02-57148.,02-57148.,03-55236.,03-55017.,03-55144.
• Citation: 378 F.3d 1002
• Parties: NISSAN MOTOR CO., a Japanese corporation; Nissan North America, Inc., a California corporation, Plaintiffs-Appellees, v. NISSAN COMPUTER CORPORATION, a North Carolina corporation, Defendant-Appellant, and The Internet Center Inc., a North Carolina corporation, Defendant. Nissan Motor Co., a Japanese corporation; Nissan North America, Inc., a California corporation, Plaintiffs-Appellants, v. Nissan Computer Corporation, a North Carolina corporation, Defendant-Appellee, and The Internet Center Inc., a North Carolina corporation, Defendant. Nissan Motor Co., a Japanese corporation; Nissan North America, Inc., a California corporation, Plaintiffs-Appellees, v. Nissan Computer Corporation, a North Carolina corporation; The Internet Center Inc., a North Carolina corporation, Defendants-Appellants. Nissan Motor Co., a Japanese corporation; Nissan North America, Inc., a California corporation, Plaintiffs-Appellants, v. Nissan Computer Corporation, a North Carolina corporation; The Internet Center Inc., a North Carolina corporation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

378 F.3d 1002

NISSAN MOTOR CO., a Japanese corporation; Nissan North America, Inc., a California corporation, Plaintiffs-Appellees, v. NISSAN COMPUTER CORPORATION, a North Carolina corporation, Defendant-Appellant, and The Internet Center Inc., a North Carolina corporation, Defendant.

Nissan Motor Co., a Japanese corporation; Nissan North America, Inc., a California corporation, Plaintiffs-Appellants, v. Nissan Computer Corporation, a North Carolina corporation, Defendant-Appellee, and The Internet Center Inc., a North Carolina corporation, Defendant.

Nissan Motor Co., a Japanese corporation; Nissan North America, Inc., a California corporation, Plaintiffs-Appellees, v. Nissan Computer Corporation, a North Carolina corporation; The Internet Center Inc., a North Carolina corporation, Defendants-Appellants.

Nissan Motor Co., a Japanese corporation; Nissan North America, Inc., a California corporation, Plaintiffs-Appellants, v. Nissan Computer Corporation, a North Carolina corporation; The Internet Center Inc., a North Carolina corporation, Defendants-Appellees.

No. 02-57148.

No. 03-55236.

No. 03-55017.

No. 03-55144.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 7, 2004.

Filed August 6, 2004.

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Neil D. Greenstein, Techmark, San Jose, CA, for defendant-appellant and cross-appellee Nissan Computer Corporation.

Bruce R. Fertel, Fertel & Associates, Beverly Hills, CA, and Joseph A. Hearst (argued), Berkeley, CA, for defendant-appellant and cross-appellee The Internet Center, Inc.

Wayne M. Barsky and Julian W. Poon (argued), Gibson, Dunn & Crutcher LLP, Los Angeles, CA, for plaintiffs-appellees and cross-appellants Nissan Motor Co., Ltd., and Nissan North America, Inc.

Paul Alan Levy, Alan B. Morrison, and Allison M. Zieve, Public Citizen Litigation Group, Washington, DC, for amicus curiae Public Citizen.

Appeals from the United States District Court for the Central District of California; Dean D. Pregerson, District Judge, Presiding. D.C. No. CV-99-12980-DDP.

Before: TROTT, RYMER, and THOMAS, Circuit Judges.

RYMER, Circuit Judge:

This appeal raises a number of trademark issues arising out of the use by Uzi Nissan of his last name for several business enterprises since 1980, his use beginning in 1991 of "Nissan" as part of the name of a North Carolina computer store he owned — Nissan Computer Corp. — and his registration in 1994 of "nissan.com" as a domain name and website for advertising various products including for a period in 1999, automobile-related products and services. Nissan Motor Co., Ltd., a Japanese automobile manufacturer that registered the mark "NISSAN" in 1959, and its subsidiary, Nissan North America, Inc., began using that name, rather than "DATSUN," to identify and market their vehicles in the United States in 1983. They filed this action in 1999 complaining that "nissan.com" diluted the NISSAN mark under the Federal Trademark Dilution Act (FTDA), 15 U.S.C. § 1125(c), as well as the California analogue, Cal. Bus. & Prof.Code § 14330, and infringed it under the Lanham Act, 15 U.S.C. § 1114.

In a series of summary judgment rulings, the district court held that Nissan Computer's automobile-related advertising constituted trademark infringement on the basis of initial interest confusion, but that non-automobile-related advertising did not. The court determined that Nissan Motor's dilution suit was not barred by laches, that Nissan Computer's first commercial use of "nissan" was in 1994 when it registered the website "nissan.com" because that was the only use identical to the NISSAN mark, that by then Nissan Motor's NISSAN mark had become famous, and that Nissan Computer's use of "nissan.com" dilutes the quality of Nissan Motor's mark. Accordingly, the court enjoined Nissan Computer (and its alter ego, The Internet Center Inc.) from posting any commercial content at nissan.com and from placing links to other websites that contain disparaging remarks or negative commentary about Nissan Motor.

Neither side is entirely happy and both appeal. On the main issues, we hold:

Initial interest confusion exists as a matter of law as to Nissan Computer's automobile-related use of "nissan.com" because use of the mark for automobiles captures the attention of consumers interested in Nissan vehicles. To this extent "nissan.com" trades on Nissan Motor's goodwill in the NISSAN mark and infringes it, but other uses do not because there is no possibility of confusion as to them.

Even though the NISSAN mark was distinctive and incontestable within five years of registration, it must also have become "famous" before Nissan Computer's first commercial use in order to be entitled to protection against dilution. The first use for purposes of the FTDA is that use which is arguably offending, here, "Nissan Computer," because any commercial use of a famous mark is diluting regardless of whether it is confusing or combined with other identifiers. As such a use occurred in 1991, and because the district court believed that triable issues of fact exist about fame of the NISSAN mark before 1994, summary judgment on the dilution claim cannot be sustained.

Finally, to enjoin Nissan Computer from providing visitors to nissan.com a link to sites with disparaging or negative commentary about Nissan Motor is a content-based restriction on non-commercial speech that is inconsistent with the First Amendment.

As a result of our conclusion on these and other issues, we affirm in part (on the infringement claim), reverse in part (on the dilution claim), and remand.

I

It is uncontroverted that Nissan Motor Co. and its subsidiary Nissan North America, Inc. (collectively, Nissan Motor) have marketed and distributed automobiles in the United States since 1960. Nissan Motor registered the NISSAN mark for ships and vehicles on the Principal Register in 1959. Vehicles were sold in the United States under the name "Datsun" until 1983, when Nissan Motor began marketing its vehicles under the name "Nissan." For a while the two names were used together, but since 1985 only the "Nissan" name has been used.

Uzi Nissan used his last name for various businesses, including "Nissan Foreign Car Mobile Repair Service" (1980), an import/export business "Nissan International, Ltd." (1987), and "Nissan Computer Corp." established in 1991 to engage in the business of computer sales and services. On June 4, 1994, Nissan Computer registered the domain name nissan.com and established a website at that address to advertise its computer-related goods and services. In July 1995 Nissan Motor sent Nissan Computer a letter expressing "great concern" about use of the word "Nissan" in Nissan Computer's domain name; Nissan Computer made no response and nothing further happened until Nissan Motor contacted Uzi Nissan in October 1999.

Meanwhile, Nissan Computer registered "nissan.net" to offer services as an Internet Service Provider in 1996. In August 1999, it altered the nissan.com website by adding a new logo with the name "nissan.com," sold space for advertising, and registered with a website for banner advertising. Nissan Computer received a payment for each time a user clicked through to an advertiser's website. The first links (in August and September) were for goto.com, Barnes & Noble, CNet.com and Netradio.com. Automobile-related ads appeared in late September. Within several weeks Nissan Computer signed up cartrackers.com, priceline.com, tunes.com, askjeeves.com, directhit.com, safari.com, lycos.com, asimba.com, ameritech.com, and about.com; by December, 1stopauto.com, hotlinks.com, shabang.com, fastweb.com, remarq.com, carprices.com and stoneage.com had been added.

In October 1999, Nissan Motor told Uzi Nissan that it wished to purchase nissan.com, but negotiations came to naught. This action was filed against Nissan Computer on December 10, 1999. The complaint asserts claims for trademark dilution in violation of federal and state law; trademark infringement; domain name piracy; false designation of origin; and unfair competition. Nissan Motor moved for a preliminary injunction, which the district court granted in a published opinion, Nissan Motor Co., Ltd. v. Nissan Computer Corp., 89 F.Supp.2d 1154 (C.D.Cal.2000), and which we affirmed. The injunction ordered Nissan Computer to post prominent captions on the first web page of the nissan.com and nissan.net websites identifying them as affiliated with Nissan Computer Corporation and disclaiming affiliation with Nissan Motor, and to refrain from displaying automobile-related information, advertisements, and links.

In March 2000, Nissan Computer posted a link on nissan.com and nissan.net that stated "Nissan Motor's Lawsuit Against Nissan Computer." Clicking this link transferred the user to ncchelp.org. A banner at ncchelp.org stated "We Are Being Sued!!!"; and included links entitled (1) "story," which contained Uzi Nissan's description of this litigation, (2) "FAQ," (3) "news," which contained links to media reports, (4) "people's opinions," which contained emails received by Uzi Nissan, and (5) "how you can help," which contained links via banner advertising, including a link to a site operated by The Internet Center (TIC), which had auto-related advertising. TIC was owned and operated by Uzi Nissan, and was added as a defendant in Nissan Motor's First Amended Complaint.

The district court resolved the action on cross-motions for summary judgment. In summary, the court held that TIC was an alter ego of Nissan Computer and that both TIC and Nissan Computer are liable for trademark infringement on account of their use of the NISSAN mark for automobile-related links and for dilution. The court inferred from Nissan Computer's altering the website in August 1999 to display auto-related advertising that it intended to confuse consumers. The court granted Nissan Computer's motion for summary judgment on...