945 F.Supp. 1296 (C.D.Cal. 1996), CV 96-3284, Panavision Intern., L.P. v. Toeppen

Docket Nº:CV 96-3284 DDP (JRx).
Citation:945 F.Supp. 1296
Party Name:40 U.S.P.Q.2d 1908 PANAVISION INTERNATIONAL, L.P., a Delaware Limited Partnership, Plaintiff, v. Dennis TOEPPEN, an individual, Network Solutions, Inc., a District of Columbia Corporation, and DOES 1-50, Defendants.
Case Date:November 05, 1996
Court:United States District Courts, 9th Circuit, Central District of California
 
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945 F.Supp. 1296 (C.D.Cal. 1996)

40 U.S.P.Q.2d 1908

PANAVISION INTERNATIONAL, L.P., a Delaware Limited Partnership, Plaintiff,

v.

Dennis TOEPPEN, an individual, Network Solutions, Inc., a District of Columbia Corporation, and DOES 1-50, Defendants.

No. CV 96-3284 DDP (JRx).

United States District Court, C.D. California.

Nov. 5, 1996

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[Copyrighted Material Omitted]

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William E. Thomson, Jr., Ivy Kagan Bierman, Sean A. Luner, Kaye Scholer Fierman Hays & Handler, Los Angeles, CA, for Panavision International LP.

Bruce W. Hamby, Orange, CA, Joseph D. Murphy, Meyer, Capel, Hirschfeld, Muncy, Jahn & Aldeen, Champaign, IL, for Dennis Toeppen.

Edward G. Poplawski, Suzanne R. Jones, Pretty Schroeder Brueggeman & Clark, Los Angeles, CA, for Network Solutions, Inc.

PREGERSON, District Judge.

Plaintiff Panavision's motion for summary judgment against defendant Dennis Toeppen for federal and state trademark dilution, federal trademark infringement, and federal unfair competition came before the Court on October 7, 1996. Toeppen's cross motion for summary judgment came before the Court on October 21, 1996. After reviewing and considering the materials submitted by the parties and hearing oral argument, the Court grants in part and denies in part both motions.

I. BACKGROUND

The issue presented by this litigation is whether the defendant violated federal or California state law by intentionally registering the plaintiff's trademarks as his Internet domain names for the purpose of exacting payment from the plaintiff in exchange for the termination of the registrations of the domain names. The Court concludes that the defendant's conduct dilutes the plaintiff's trademarks in violation of the Federal Trademark Dilution Act of 1995, 15 U.S.C. § 1125(c), and the California dilution statute, Cal.Bus. & Prof.Code § 14330. Accordingly, the Court grants the plaintiff's motion for summary judgment and enjoins the defendant from further violations of the dilution statutes.

Plaintiff Panavision International, L.P. ("Panavision") is a Delaware limited partnership with its principal place of business in Los Angeles, California. Panavision owns several federally registered trademarks, including "Panavision" and "Panaflex" (the "Panavision marks"), which it uses in connection

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with its theatrical motion picture and television camera and photographic equipment business.

Defendant Dennis Toeppen ("Toeppen") is an individual residing in Illinois. Toeppen owns several web sites, including the two at issue in this case, "panavision.com" and "panaflex.com."

Defendant Network Solutions, Inc. ("NSI") is a District of Columbia corporation with its principal place of business in Herndon, Virginia. NSI registers Internet domain names. NSI is not involved in the instant summary judgment motions.

The Internet is an international computer "super-network" of over 15,000 computer networks used by approximately 30 million individuals, corporations, organizations, and educational institutions worldwide. See generally American Civil Liberties Union v. Reno, 929 F.Supp. 824, 830-848 (E.D.P.A.1996) (discussing the Internet). In recent years, businesses have begun to use the Internet to provide information and products to consumers and other businesses.

Every computer that has access to the Internet has a unique address. All Internet addresses consist of four groups of digits separated by periods that indicate the network, subnetwork, and local address. For example, an Internet address might read "231.35.1.19". This address is referred to as the "IP address."

Every Internet address also has a unique alphanumeric equivalent to its IP address referred to as its "domain name." Domain names consist of a string of "domains" separated by periods. Most business domain names consist of two domains. First, there is the "top-level" domain, which indicates the type of organization using the name. Commercial entities use the ".com" top-level domain name, while other top-level domain names include ".net," which is used by networks, and ".edu," which is used by educational organizations. Next, there is the "second-level" domain, which is frequently the name of the company (or a derivative thereof) that maintains the Internet site (commonly referred to as a "web site"). In short, one purpose of domain names is to identify the entity that owns the web site.

The other primary purpose of domain names is to allow Internet users to locate web sites quickly and easily. If an Internet user knows the name of another user's web site, he or she can easily contact the site. If the user does not know the domain name, the user can search for the site using an Internet "search engine." Search engines search the Internet using "key words" selected by the searching party. A key word search will typically produce a list of the web sites that use the key words. Key word searches will frequently yield thousands of web sites. The user can access the web sites through programs called "web browsers" (some web browsers have built-in search engines). The length and success of this process is dependent upon the searching party's ability to deduce the correct key word or words and the number of other web sites that use the same key words.

Because users may have difficulty accessing web sites or may not be able to access web sites at all when they do not know (or cannot deduce) the proper domain name, businesses frequently register their names and trademarks as domain names. Therefore, having a known or deducible domain name is important to companies seeking to do business on the Internet, as well as important to consumers who want to locate those businesses' web sites.

NSI does not make an independent determination of an applicant's right to use a domain name. However, since at least November 23, 1995, NSI has required applicants, including Toeppen, to make certain representations and warranties, including: (1) that the applicant's statements in the application are true and the applicant has the right to use the requested domain name; (2) that the use or registration of the domain name does not interfere with or infringe the rights of any third party with respect to trademark, service mark, trade name, company name or any other intellectual property right; and (3) that the applicant is not seeking to use the domain name for any unlawful purpose, including tortious interference with contract or prospective business advantage,

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unfair competition, injuring the reputation of another, or for the purpose of confusing or misleading a person, whether natural or incorporated.

In December of 1995, Toeppen applied for and received registration of the Internet domain name "panavision.com." Toeppen is not, and never has been, authorized to use any Panavision marks.

After registering the "panavision.com" domain name, Toeppen established a web site displaying aerial views of Pana, Illinois. At no time did Toeppen use the "panavision.com" name in connection with the sale of any goods or services.

Like many businesses, Panavision recently decided to do business on the Internet. When Panavision attempted to establish a web site under its own name, it discovered that Toeppen had registered "panavision.com" as his domain name. Therefore, Panavision was unable to register and use its trademark as an Internet domain name.

When Panavision notified Toeppen of its desire to use the "panavision.com" domain name, Toeppen demanded $13,000 to discontinue his "use" of the domain name. Panavision refused Toeppen's demand. Toeppen then registered Panavision's "Panaflex" trademark as the domain name "panaflex.com." The "panaflex.com" web site contains only the word "hello." NSI has placed both domain names "on hold" pending the outcome of this litigation.

Panavision asserts, and Toeppen does not deny, that he is also a defendant in trademark actions brought by American Standard, Inc. and Intermatic, Inc. because of Toeppen's registration of "americanstandard.com" and "intermatic.com" as domain names and demands for money to relinquish control of the names. Toeppen is also the registered owner of several other domain names that are based on trademarks and trade names, including: aircanada.com, anaheimstadium.com, arriflex.com (Arriflex is Panavision's main competitor), australiaopen.com, camdenyards.com, deltaairlines.com, eddiebauer.com, flydelta.com, frenchopen.com, lufthansa.com, neiman-marcus.com, northwestairlines.com, and yankeestadium.com.

Panavision asserts that Toeppen's "business" is to register well known marks and exact payment from the mark's owners, including Panavision.

On May 7, 1996, Panavision brought claims against Toeppen and NSI in the Central...

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