Calista Enters. Ltd. v. Tenza Trading Ltd.
| Decision Date | 08 August 2014 |
| Docket Number | Case No. 3:13–cv–01045–SI. |
| Court | U.S. District Court — District of Oregon |
| Parties | CALISTA ENTERPRISES LTD., a Republic of Seychelles Company, Plaintiff, v. TENZA TRADING LTD., a Cyprus Company, Defendant, v. Alexander Zhukov, a Czechoslovakian citizen, Counterclaim–Defendant. |
Valentin David Gurvits and Matthew Shayefar, Boston Law Group, PC, Newton Centre, MA; Sean Ploen, Ploen Law Firm, PC, Minneapolis, MN; Evan Fray–Witzer, Ciampa Fray–Witzer, LLP, Boston, MA; Thomas Freedman Jr., Pearl Law LLC, Portland, OR, of Attorneys for Plaintiff.
Paul N. Tauger and Anna M. Vradenburgh, The Eclipse Group LLP, Irvine, CA; Devon Zastrow Newman, Schwabe, Williamson & Wyatt, P.C., Portland, OR, of Attorneys for Defendant Tenza Trading Ltd.
This is a trademark dispute between two providers of Internet pornography. Plaintiff Calista Enterprises Ltd. (“Calista”) and Defendant Tenza Trading Ltd. (“Tenza”) are businesses that operate websites in the adult-entertainment industry and stream sexually explicit videos. The parties' claims and counterclaims concern U.S. trademark law under the Lanham Act, 15 U.S.C. §§ 1114 –1125, as well as related claims under Oregon law. Calista moves for partial summary judgment on its claim for cancellation of Tenza's registered trademark, Calista's claim for declaration of noninfringement, Tenza's claim for counterfeiting, and for a finding that Tenza's claims are barred by laches. Tenza moves for partial summary judgment on its claims for trademark infringement, counterfeiting, cybersquatting, and for a finding that Calista may not recover money damages. For the reasons below, the Court denies Calista's motion for partial summary judgment and grants in part and denies in part Tenza's motion for partial summary judgment.
A party is entitled to summary judgment if the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party has the burden of establishing the absence of a genuine dispute of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1257 (9th Cir.2001). Although “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ... ruling on a motion for summary judgment,” the “mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient....” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and quotation marks omitted).
Where parties file cross-motions for summary judgment, the court “evaluate[s] each motion separately, giving the non-moving party in each instance the benefit of all reasonable inferences.” A.C.L.U. of Nev. v. City of Las Vegas, 466 F.3d 784, 790–91 (9th Cir.2006) ; see also Pintos v. Pac. Creditors Ass'n, 605 F.3d 665, 674 (9th Cir.2010) (). In evaluating the motions, “the court must consider each party's evidence, regardless under which motion the evidence is offered.” Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir.2011). “Where the non-moving party bears the burden of proof at trial, the moving party need only prove that there is an absence of evidence to support the non-moving party's case.” In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir.2010). Thereafter, the non-moving party bears the burden of designating “specific facts demonstrating the existence of genuine issues for trial.” Id. “This burden is not a light one.” Id. The Supreme Court has directed that in such a situation, the non-moving party must do more than raise a “metaphysical doubt” as to the material facts at issue. Matsushita, 475 U.S. at 586, 106 S.Ct. 1348.
Tenza is the owner of an adult-entertainment website at www.porntube. com. The www.porntube.com website was originally owned by EMC Ideas, Inc. In late 2010, EMC sold the domain name to FUX Ltd., of which Steve Matthyssen is a shareholder. FUX contributed the domain name bought from EMC to the newly formed Tenza, of which FUX is a shareholder. Tenza's domain porntube.com is operated by non-party DreamStar Cash Ltd. (“DreamStar”). DreamStar is managed by Steven Matthyssen who, along with Michael Cardone, is a beneficial co-owner of Tenza.
In May of 2005, the www.porntube.com website began streaming pornographic videos. Content on Tenza's website is uploaded by content producers. Tenza's business model is to route traffic to its website and generate revenue through two methods: (1) third-party advertising displayed on the website; and (2) payments from the content producers when visitors click on a hyperlink to the content producer's website and make a purchase from that content producer. In order to promote visitors to its website, Tenza markets itself by using “search engine placement services” to maximize the times when Tenza's website appears among the top results on a search engine in response to user searches. Tenza also sponsors events, such as race cars in major races, to promote its website. Tenza's primary marketing tool, however, is its affiliate program, whereby operators of other adult-entertainment websites (“Affiliates”) include links on their websites so that visitors to those websites may “click through” to reach Tenza's website. Tenza then tracks each “click through” and compensates Affiliates on a per-click-through basis. Tenza's website has a Global Alexa ranking, which estimates the popularity of a website based on the number of visitors and the number of page views on a site, of 1,110 globally and a ranking of 1,182 in the United States.2
Tenza also has a trademark registration for the word mark “PORNTUBE,” registration number 3,936,197 (“the '197 Registration”). Tenza's predecessor in interest, EMC, filed an application for the '197 Registration on October 29, 2008. Tenza bought the rights to the pending application in late 2010 for $30,000. The application recited a date of first use of the “PORNTUBE” word mark of May 2005. After publication in the Official Gazette of the U.S. Patent & Trademark Office (“PTO”), WMM Holdings, LLC (“WMM”) filed an objection to the application for the '197 Registration. The objection was dismissed after Tenza entered into a consent and coexistence agreement with WMM. The PTO issued the '197 Registration on March 29, 2011 without further objection.
Calista owns and operates several websites that that “categorize” and link to third-party websites that stream pornographic videos. Calista's sole owner and employee is Alexander Zhukov, a named counterclaim defendant in this action.3 Several other corporations work with Calista on its websites, including Oklax Inc. (which manages the domain name register accounts for the domain names in dispute in this litigation), Wiblax Ltd. (which serves as a payment agent for Calista), and AlexZ–Traffic s.r.o. (which develops software and templates used on Calista's websites).
Calista's relationship with DreamStar began in September of 2009. DreamStar and Mr. Matthyssen invited Calista to participate in the “webmaster affiliate program” for an adult-entertainment video website called 4tube.com. As an affiliate of the 4tube.com webmaster program, DreamStar paid Calista a commission to send traffic to 4tube.com. In February of 2010, Mr. Matthyssen also asked Calista to join the webmaster affiliate program for a new website called fux.com. On January 3, 2011, Mr. Matthyssen asked Calista to join the webmaster affiliate program for www.porntube.com (“Tenza Webmaster Program”). Calista participated in the Tenza Webmaster Program from January 3, 2011 through March 28, 2013. Calista was one of the most productive affiliates in the Tenza Webmaster Program.
Calista registered a number of domains containing the words “porn,” “tube,” or “porn” and “tube” in various combinations. Some of these domain names were used as a part of Calista's participation in the 4tube.com webmaster affiliate program, the fux.com webmaster affiliate program, and the Tenza Webmaster Program.
Calista registered its first domain name that included the word “porntube,” www.freshporntube.com, in June of 2009. Between that time and before January 2011, Calista owned and operated 15 websites with domain names containing both “porn” and “tube” in various combinations. Between January of 2011 and August of 2013, Calista developed and operated at least an additional 17 domain names containing some permutation of the '197 Registration. In total, Calista has at least 14 domain names that include the '197 Registration verbatim, including: freshporntube.com, goldporntube.com, lustporntube.com, bonusporntube.com, boxporntube.com, directporntube.com, largeporntube.com, pipeporntube.com, bookporntube.com, 69porntube.com, kissporntube.com, royal porntube.com, cubeporntube.com, and goldporntube.xxx. Shayefar Decl. Ex. 15 at 4, Dkt. 98–7 at 27.4
On March 25, 2013, Tenza initiated a proceeding under the Uniform Domain Name Dispute Resolution Policy (“UDRP”) of the Internet Corporation for Assigned Names and Numbers (“ICANN”). In that UDRP action, Tenza sought the transfer to Tenza of 13 domain names, which Calista contends it owns, based on their substantial similarity to and alleged infringement of...
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