616 F.3d 974 (9th Cir. 2010), 10-55069, Advertise.com, Inc. v. AOL Advertising, Inc.

Docket Nº:10-55069, 10-55071.
Citation:616 F.3d 974
Opinion Judge:B. FLETCHER, Circuit Judge:
Party Name:ADVERTISE.COM, INC., Plaintiff-Appellant, v. AOL ADVERTISING, INC., FKA Platform-A, Inc.; AOL Inc., Defendants-Appellees. Advertise.com, Inc., Plaintiff-Appellant, v. AOL Advertising, Inc., FKA Platform-A, Inc.; AOL Inc., Defendants-Appellees.
Attorney:Jerome B. Falk, Jr., Blake J. Lawit, Sarah J. Givan, Steven L. Mayer, Howard Rice Nemerovski Canady Falk & Rabkin, San Francisco, CA; and Andrew Selesnick, Todd Stitt, Torin A. Dorros, Brett A. Garner, Michelman & Robinson LLP, Encino, CA; S. Lloyd Smith, Buchanan Ingersoll & Rooney PC, Alexandri...
Judge Panel:Before: BETTY B. FLETCHER and RICHARD A. PAEZ, Circuit Judges, and DAVID A. EZRA, District Judge.[*]
Case Date:August 03, 2010
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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616 F.3d 974 (9th Cir. 2010)

ADVERTISE.COM, INC., Plaintiff-Appellant,

v.

AOL ADVERTISING, INC., FKA Platform-A, Inc.; AOL Inc., Defendants-Appellees.

Advertise.com, Inc., Plaintiff-Appellant,

v.

AOL Advertising, Inc., FKA Platform-A, Inc.; AOL Inc., Defendants-Appellees.

Nos. 10-55069, 10-55071.

United States Court of Appeals, Ninth Circuit.

August 3, 2010

Argued and Submitted May 6, 2010.

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Jerome B. Falk, Jr., Blake J. Lawit, Sarah J. Givan, Steven L. Mayer, Howard Rice Nemerovski Canady Falk & Rabkin, San Francisco, CA; and Andrew Selesnick, Todd Stitt, Torin A. Dorros, Brett A. Garner, Michelman & Robinson LLP, Encino, CA; S. Lloyd Smith, Buchanan Ingersoll & Rooney PC, Alexandria, VA, for the appellant.

Lee J. Eulgen, Lawrence E. James, Jr., Hillary I. Schroeder, Angela R. Elbert, Sarah E. Smith, Neal, Gerber & Eisenberg LLP, Chicago, IL; Karin G. Pagnanelli, Mitchell Silberberg & Knupp LLP, Los Angeles, CA; and Kannon K. Shanmugam, Christopher R. Hart, Allison B. Jones, Williams & Connolly LLP, Washington, D.C., for the appellees.

Appeal from the United States District Court for the Central District of California, Valerie Baker Fairbank, District Judge, Presiding. D.C. Nos. 2:09-cv-05983-VBF-CW, 2:09-cv-07374-VBF-CW.

Before: BETTY B. FLETCHER and RICHARD A. PAEZ, Circuit Judges, and DAVID A. EZRA, District Judge.[*]

OPINION

B. FLETCHER, Circuit Judge:

Advertise.com, Inc., appeals the district court's entry of a preliminary injunction barring it from using a designation or trade name that is confusingly similar to Appellees' (" AOL" ) ADVERTISING.COM mark. We have jurisdiction under 28 U.S.C. § 1292(a)(1). We reverse and vacate the preliminary injunction in part.

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Facts and Procedural History

AOL owns trademark registrations covering certain stylized representations of the mark ADVERTISING.COM. While AOL's applications for those registrations were pending before the United States Patent and Trademark Office (" PTO" ), the PTO requested that AOL disclaim the standard text version of ADVERTISING.COM to obtain registration of the stylized representations of that term. AOL refused to disclaim the standard text version of the mark, maintaining that although it did not claim exclusive rights to the term " advertising," the standard text version of ADVERTISING.COM mark was distinctive and protectable.1 AOL's registrations eventually issued without the requested disclaimer.

On August 17, 2009, AOL filed a complaint against Advertise.com in the Eastern District of Virginia and shortly thereafter filed a motion for a preliminary injunction. AOL alleged that Advertise.com had infringed AOL's trademark rights by using the designation ADVERTISE.COM and by using a stylized version of that designation that was confusingly similar to AOL's stylized ADVERTISING.COM marks. The case was transferred to the Central District of California and the motion for a preliminary injunction was re-filed.

The district court enjoined Advertise.com from using " any design mark or logo that is confusingly similar to the stylized forms of AOL's ADVERTISING.COM marks" and from using the designation and trade name ADVERTISE.COM or any other name confusingly similar to ADVERTISING.COM. Advertise.com was not enjoined from using its website address " advertise.com." The court found that AOL was likely to show that the ADVERTISING.COM marks, including the standard text mark, are descriptive and therefore protectable under trademark law. Because it found that the other preliminary injunction factors also weighed in favor of AOL, the district court granted the injunction. The district court denied a stay of the injunction pending appeal, but a Ninth Circuit panel granted a stay as to the portion of the injunction prohibiting Advertise.com from using the designation or trade name ADVERTISE.COM.

Advertise.com appeals the district court's decision to grant the preliminary injunction, arguing primarily that the standard text mark ADVERTISING.COM is generic. Advertise.com, however, does not contest that part of the preliminary injunction that enjoined it from using any design mark that was confusingly similar to AOL's stylized marks.

DISCUSSION

We review the district court's grant of a preliminary injunction for abuse of discretion. Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 876 (9th Cir.2009). The district court " should be reversed if [it] based its decision on an erroneous legal standard or on clearly erroneous findings of fact." Stormans, Inc. v. Selecky, 586 F.3d 1109, 1119 (9th Cir.2009) (quotation marks omitted). " A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Marlyn Nutraceuticals, 571 F.3d at 877 (quotation marks omitted). The issue of substance in

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this appeal is whether the district court correctly determined that AOL was likely to succeed on the merits. That issue is controlled by whether the district court correctly determined that ADVERTISING.COM is a descriptive mark. Because ADVERTISING.COM is a registered trademark, " a presumption of validity places the burden of proving genericness upon the defendant," Advertise.com. Filipino Yellow Pages, Inc. v. Asian Journal Publ'ns Inc., 198 F.3d 1143, 1146 (9th Cir.1999).

Generic terms are those that refer to " the genus of which the particular product or service is a species," i.e., the name of the product or service itself. Id. at 1147. " To determine whether a term [is] generic, we look to whether consumers understand the word to refer only to a particular producer's goods or whether the consumer understands the word to refer to the goods themselves." Yellow Cab Co. v. Yellow Cab of Elk Grove, Inc., 419 F.3d 925, 929 (9th Cir.2005). A descriptive mark describes the qualities or characteristics of a product. See KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 408 F.3d 596, 602 (9th Cir.2005). Generic terms cannot be valid marks subject to trademark protection, whereas a descriptive mark can be valid and protectable if it has acquired " secondary meaning." Filipino Yellow Pages, 198 F.3d at 1147. " Whether a mark is generic is a question of fact." Yellow Cab Co., 419 F.3d at 929 (quotation marks omitted).

" Context is critical to a distinctiveness analysis.... [and the level of distinctiveness of a mark] can be determined only by reference to the goods or services that [the mark] identifies." Lahoti v. VeriCheck, Inc., 586 F.3d 1190, 1201 (9th Cir.2009) (quotation marks omitted). Because the parties do not dispute it on appeal, we accept the district court's finding that there

are two core facets to AOL's service offerings under its ADVERTISING.COM marks: (1) courting web publishers in order to provide them with a suite of services including placement of third-party ads on the publisher's site, with the publisher receiving a share of the revenue generated from such placements, and (2) selling online advertising space and other services such as marketing campaign management services and research services to web marketers.

The parties likewise appear to agree that the genus of these services is " online advertising" or " internet advertising." AOL's brief, for example, consistently refers to the type of services it offers under the ADVERTISING.COM mark as " online-advertising services" and refers to the " online-advertising genus." In addition to reflecting the nature of AOL's services as described by the district court, taking " online advertising" as the genus reflects how AOL and third parties have portrayed the services offered under the mark.

With this context in mind, we consider whether ADVERTISING.COM conveys only the " genus of which [AOL's] particular [service] is a species" or whether it is descriptive because it " directly describe[s] the qualities or features of the product." One Indus., LLC v. Jim O'Neal Distrib., 578 F.3d 1154, 1164 (9th Cir.2009) (quotation marks omitted). Although the distinctiveness inquiry considers the impression conveyed by the mark as a whole, see Filipino Yellow Pages, 198 F.3d at 1148, 1150, we are permitted to begin our inquiry by separately viewing the component parts of the mark. See Lahoti, 586 F.3d at 1201. Accordingly, our first step is to consider the impression conveyed by " advertising" and " .com," taken separately. " Advertising" is concededly generic and is defined as " the action of calling something (as a commodity for sale, a service offered or desired) to the attention of the public

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esp. by means of printed or broadcast paid announcement." Webster's Third New International Dictionary 31 (2002). The term " .com" is a top-level domain indicator (" TLD" ), In re Oppedahl & Larson LLP, 373 F.3d 1171, 1173 (Fed.Cir.2004), and reflects an online commercial organization or refers " generically to almost anything connected to business on the internet." Taken separately, it is clear that " advertising" and " .com" reflect only the genus of the services offered.

This does not, however, end our inquiry. Although these definitions persuasively suggest that ADVERTISING.COM is understood as generic by the consuming public and we give them significant weight, see Filipino Yellow Pages, Inc., 198 F.3d at 1148, our cases establish that we look to the mark as a whole and that the combination of generic terms may, in some instances, result in a distinctive mark. AOL contends that it is likely to prevail on the merits because the composite of these two generic terms is descriptive and Advertise.com did not provide sufficient evidence of genericness to rebut the presumption of validity.

We disagree. We begin with our familiar " who-are-you/what-are-you"...

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