America Online, Inc. v. At & T Corp., Civ.A.98-1821-A.

• Decision Date: 13 August 1999
• Docket Number: No. Civ.A.98-1821-A.,Civ.A.98-1821-A.
• Citation: 64 F.Supp.2d 549
• Court: U.S. District Court — Eastern District of Virginia
• Parties: AMERICA ONLINE, INC., Plaintiff, v. AT & T CORP., Defendant.

64 F.Supp.2d 549

AMERICA ONLINE, INC., Plaintiff, v. AT & T CORP., Defendant.

No. Civ.A.98-1821-A.

United States District Court, E.D. Virginia, Alexandria Division.

August 13, 1999.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Alice Stevens Fisher, Latham & Watkins, Washington, DC, Randall J. Boe, Dulles, VA, Craig Crandall Reilly, Richards, McGettigan, Reilly & West, PC, Alexandria, VA, for Plaintiff.

Terence P. Ross, Gobson, Dunn & Crutcher, Washington, DC, William Michael Merone, Kenyon & Kenyon, Washington, DC, for Defendant.

MEMORANDUM OPINION

HILTON, Chief Judge.

This matter comes before the Court on Defendant's Motion for Summary Judgment as to their six declaratory judgment counterclaims seeking the Court's declaration that the marks at issue in this case are invalid. On June 16, 1999, this Court held a Status Conference and indicated to the parties that Summary Judgment would be entered in favor of AT & T concerning YOU HAVE MAIL, IM, and BUDDY LIST®. Thereafter, counsel for both AOL and AT & T agreed that AOL's claim concerning use of the mailbox logo should be withdrawn, as AT & T discontinued its use of the logo prior to the time that this suit was filed. Concerning the YOU'VE GOT MAIL mark, the Court allowed the parties further time to more fully brief whether or not the claim had become moot due to the Court's ruling on YOU HAVE MAIL.

Plaintiff America Online, Inc. ("AOL") operates the world's largest interactive online service (the "AOL Service"). More than sixteen million people subscribe to, and are members of, the AOL Service. For a basic monthly fee, the AOL Service enables its members to disseminate and receive information by means of computer modem connections to AOL's computer network. The AOL Service also gives its members access to the Internet, which is a worldwide network of interconnected computer networks. AOL provides access to the Internet to more people than any other Internet access provider in the United States.

For nearly a decade, AOL has been using YOU HAVE MAIL and YOU'VE GOT MAIL in connection with its automatic electronic mail (hereinafter "e-mail") notification services for AOL Service members. In early 1997, AOL began using an old-fashioned U.S. mailbox, with a red flag that pops up when a user has new e-mail, as a logo in connection with its automatic e-mail notification services.

Whenever a member starts an online session and has new e-mail, the folksy, cheerful spoken words YOU'VE GOT MAIL (recorded by Elwood H. Edwards, Jr., in 1989) are immediately heard. At the same time that this voice sounds, a logo of an old-fashioned mailbox with a red signal flag pointing upwards appears prominently on the member's computer screen above the phrase YOU HAVE MAIL (in the United Kingdom, AOL substitutes "POST" for "MAIL," because British English refers to "mail" as "post"). This same audio and visual display repeats itself whenever the member receives additional new e-mail during the course of an online session. Each of these three service marks (YOU HAVE MAIL, YOU'VE GOT MAIL, and the mailbox logo) announces the AOL member's arrival at the front door of the AOL Service. AOL contends that these prominent features have thereby become hallmarks of the entire AOL Service. AOL has applied for U.S. Federal trademark registrations for its YOU HAVE MAIL with mailbox design mark and YOU'VE GOT MAIL mark, though the U.S. Patent & Trademark Office ("PTO") has yet to approve registration of these service marks.

BUDDY LISTS® is the brand for a service provided by AOL that provides real-time chat between two or more persons who are simultaneously using the AOL Service. Using this service, members can also learn when pre-selected users are online and available for real-time chat. AOL has been providing this one-to-one real-time chat service continuously since early 1997. AOL and its members call the real-time chat component of the BUDDY LISTS® service the "IM" (pronounced "eye em") feature.

AOL registered its BUDDY LISTS® service mark (U.S.reg. No. 2,167,048) on the Principal Register of the PTO on June 23, 1998, for computer services; namely, providing multiple user access to computer networks and bulletin boards for the transfer and dissemination of a wide range of information. AOL's BUDDY LISTS® mark has been and continues to be used for this purpose, and the registration remains in full force and effect. IM has not been registered by the PTO.

Defendant AT & T Corp. ("AT & T") provides Internet access to subscribers through its "AT & T WorldNet Service" for a monthly fee, as well. On November 20, 1998, AT & T announced to its AT & T WorldNet beta site members that it was testing an "automatic e-mail notification" feature.

On December 15, 1998, AT & T issued a press release stating that it had "added a You Have Mail! notification window that will pop up whenever a member visits the AT & T WorldNet home page." AT & T's press release also revealed a new "I M Here instant massaging technology ... Members can email the AT & T I M Here instant message software to their friends and then create a buddy list containing the online addresses for these people." AOL learned of AT & T's plan to offer a You Have Mail! branded automatic e-mail notification service and I M Here branded real-time chat service on or about December 15, 1998.

On December 16, 1998, AOL sent an e-mail to AT & T stating: "AOL has been using the YOU HAVE MAIL (word) and YOU'VE GOT MAIL (word and sound) marks for nearly a decade. Applications to register these marks with the PTO and in a number of foreign countries are currently pending. AOL has used these marks as hallmarks of AOL's online service, on a broad range of merchandised products and in connection with Warner Brothers' `You've Got Mail' movie which is being released this week." This e-mail also expressed AOL's concern over AT &amp T's adoption of an I M Here branded real-time chat service.

As of December 17, 1998, AT & T had launched its new automatic e-mail notification service, calling it a You Have Mail! feature. The AT & T web page describing this feature is entitled YOU HAVE MAIL! in large bold print, and the text on this page read: "The `You Have Mail!' feature provides an automatic e-mail notification when you visit the AT & T WorldNet Service home page. A pop-up window tells you how many messages are in your e-mail inbox and gives you easy access to our web-based e-mail interface. In addition, you're able to access other AT & T WorldNet Service functions and view the latest web site features. Using `You Have Mail' does not affect your ability to use your e-mail software to download messages whenever you wish." When a user has e-mail, the AT & T pop-up window text reads: "Hi, [NAME]! You have [#] messages." The pop-up window mentioned by AT & T has a title bar that reads: "AT & T WorldNet Service — You Have Mail." As of December 17, 1998, the public website promotion for the new serviced included the words "You Have Mail!" next to a picture of an old-fashioned U.S. mailbox.

On or before December 17, 1998, AT & T also launched its new real-time chat service, calling it the I M Here service. This service has a buddy list real-time chat component. AT & T's description of its new real-time chat service ("The easiest way to request to add someone to your Buddy List is from an active Community in the I M Here Navigator window") was being made available worldwide via the Internet as of December 17, 1998.

On December 18, 1998, AOL sent a letter, via fax and certified mail, to AT & T, demanding that AT & T cease and desist from using a "You Have Mail!" brand, oldfashioned U.S. mailbox logo, and IM brand in connection with its automatic e-mail notification service and real-time chat service. On December 21, 1998, AOL, having identified what it characterizes as AT & T's "misuse" of AOL's BUDDY LIST® mark, sent another cease and desist letter to AT & T demanding AT & T cease its infringing and diluting use of AOL's BUDDY LIST® mark. On or about December 18, 1998, AT & T removed the old-fashioned U.S. mailbox logo from its "You Have Mail!" feature area of its website. The words "You Have Mail!," used as a brand, remain, as do the IM and BUDDY LIST® brands.

On December 18, 1998, a new Warner Bros. movie entitled "You've Got Mail" opened nationwide. AOL licensed its YOU HAVE MAIL word, YOU'VE GOT MAIL spoken mark, mailbox logo, IM mark, and BUDDY LIST® mark to Warner Bros. for use in connection with this movie. All of these marks are frequently seen and heard in the film.

On December 22, 1998,¹ AOL filed the instant action against AT & T. This is an action against AT & T for its: (a) unauthorized appropriation, use, infringement, blurring and tarnishment of AOL's common-law service marks YOU HAVE MAIL, YOU'VE GOT MAIL, mailbox logo, and IM; and (b) unfair, infringing and diluting uses of AOL's Federally-registered service mark BUDDY LIST®. The Amended Complaint lists seven counts: (1) Federal Trademark Dilution under 15 § U.S.C. 1125(c) (YOU HAVE MAIL, mailbox logo, and YOU'VE GOT MAIL); (2) Federal Tradermark Dilution under 15 U.S.C. § 1125(c) (IM and BUDDY LIST®); (3) Trademark Infringement under 15 U.S.C. § 1114 (BUDDY LIST®); (4) Unfair Competition and False Designation of Origin under 15 U.S.C. § 1125(a) (You Have Mail!); (5) Unfair Competition and False Designation of Origin under 15 U.S.C. § 1125(a) (I M Here and Buddy List); (6) Unfair Competition and False Designation of Origin under 15 U.S.C. § 1125(a) (Overall impression); and (7) Interference with Prospective Economic Advantage. AT & T filed an Amended Answer to the Amended Complaint, and filed Counterclaims seeking a Declaratory Judgment. In essence, AT & T asks the Court to declare that YOU HAVE MAIL, YOU'VE GOT MAIL, IM, BUDDY LIST®, and the mailbox drawing are generic, and hence not protected trademarks. Also, AT & T asks that the Court declare that AT & T's use of the marks does...