Dennison Corp. v. Sumpton

• Citation: 189 F.3d 868
• Decision Date: 23 August 1999
• Docket Number: No. 98-55810,98-55810
• Parties: (9th Cir. 1999) AVERY DENNISON CORPORATION, Plaintiff-Counter-Defendant-Appellee, v. JERRY SUMPTON, Individually d/b/a Free View Listings Ltd.; FREE VIEW LISTINGS, LTD., an Unknown Entity, Defendants-Counter-Claimants- Appellants
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 868

189 F.3d 868 (9th Cir. 1999)

AVERY DENNISON CORPORATION, Plaintiff-Counter-Defendant-Appellee, v. JERRY SUMPTON, Individually d/b/a Free View Listings Ltd.; FREE VIEW LISTINGS, LTD., an Unknown Entity, Defendants-Counter-Claimants- Appellants.

No. 98-55810

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted June 8, 1999

Decided August 23, 1999

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] G. Gervaise Davis, III, Davis & Schroeder, Monterey, California, for the defendants-counter-claimants-appellants.

Adrian Mary Pruetz (Argued), and David W. Quinto (On the Briefs), Quinn Emanuel Urquhart Oliver & Hedges, Los Angeles, California, for the plaintiff-counter-defendant-appellee.

Appeal from the United States District Court for the Central District of California; J. Spencer Letts, District Judge, Presiding. D.C> No. CV-97-00407-JSL.

Before: Dorothy W. Nelson, Stephen Reinhardt, and Stephen S. Trott, Circuit Judges.

TROTT, Circuit Judge:

Jerry Sumpton and Freeview Listings Ltd. (together, "Appellants") appeal an injunction in favor of Avery Dennison Corp., entered after summary judgment for Avery Dennison on its claims of trademark dilution under the Federal Trademark Dilution Act of 1995, 15 U.S.C. S 1125(c) (Supp. II 1996) (amending the Lanham Trademark Act of 1946, 15 U.S.C. SS 1051-1127 (1994)), and the California dilution statute, Cal. Bus. & Prof. Code S 14330 (West 1987). The district court published an opinion, 999 F. Supp. 1337 (C.D. Cal. 1998), holding that Appellants' maintenance of domain name registrations for and diluted two of Avery Dennison's separate trademarks, "Avery " and "Dennison." (Note that when referencing Internet addresses, domain-name combinations, e-mail addresses, and other Internet-related character strings, we use the caret symbols ("< >"), in order to avoid possible confusion.) The district court then entered an injunction ordering Appellants to transfer the domain-name registrations to Avery Dennison in exchange for $300 each.

We have jurisdiction under 28 U.S.C. S 1291 (1994). Because Avery Dennison failed to create a genuine issue of fact on required elements of the dilution cause of action, we reverse and remand with instructions to enter summary judgment for Appellants and to consider Appellants' request for attorneys' fees in light of this decision.

I Background

We are the third panel of this court in just over a year faced with the challenging task of applying centuries-old trademark law to the newest medium of communication -- the Internet. (See Brookfield Communications, Inc. v. West Coast Ent. Corp., 174 F.3d 1036 (9th Cir. 1999), and Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998).) Although we attempt to set out the background facts as clearly as possible, the interested reader may wish to review some of the following sources for a more complete understanding of the Internet: Brookfield, 174 F.3d at 1044-45; Intermatic, Inc. v. Toeppen, 947 F. Supp. 1227, 1230-32 (N.D. Ill. 1996); and Marshall Leaffer, Domain Names, Globalization and Internet Commerce, 6 Ind. J. Global Legal Stud. 139, 139-46 (1998).

Two communicative functions of the Internet are relevant to this appeal: the capacity to support web sites and the corollary capacity to support electronic mail ("e-mail"). A web site, which is simply an interactive presentation of data which a user accesses by dialing into the host computer, can be cre- ated by any user who reserves an Internet location -- called an Internet protocol address -- and does the necessary programming. Because an Internet protocol address is a string of integer numbers separated by periods, for example, <129.137.84.101>, for ease of recall and use a user relies on a "domain-name combination" to reach a given web site. The registrar of Internet domain names, Network Solutions, Inc. ("NSI"),¹ maintains a database of registrations and translates entered domain-name combinations into Internet protocol addresses. When accessing a web site, a user enters the character string ,² followed by the reserved domainname combination. The domain-name combination must include a top-level domain ("TLD"), which can be <.com>, <.net>, <.org>, <.gov> or <.edu>, among others, although some, like <.gov> and <.edu>, are reserved for specific purposes. The combination also includes a second-level domain ("SLD"), which can be any word not already reserved in combination with the TLD.³ Once a domain-name combination is reserved, it cannot be used by anybody else, unless the first registrant voluntarily or otherwise relinquishes its registration.

A web site can be programmed for multiple purposes. Some merchants maintain a form of "electronic catalog" on the Internet, permitting Internet users to review products and services for sale. A web site can also be programmed for email, where the provider licenses e-mail addresses in the format , with selected by the e-mail user. A person or company maintaining a web site makes money in a few different ways. A site that aids in marketing goods and services is an asset to a merchant. E-mail providers make money from licensing fees paid by e-mail users. Money is also made from advertising and links to other web sites.

II Facts

Sumpton is the president of Freeview, an Internet e-mail provider doing business as "Mailbank." Mailbank offers "vanity" e-mail addresses to users for an initial fee of $19.95 and $4.95 per year thereafter, and has registered thousands of domain-name combinations for this purpose. Most SLDs that Mailbank has registered are common surnames, although some represent hobbies, careers, pets, sports interests, favorite music, and the like. One category of SLDs is titled "Rude" and includes lewd SLDs, and another category, titled "Business," includes some common trademark SLDs. Mailbank's TLDs consist mainly of <.net>; and <.org>, but some registered domain name combinations, including most in the "Business" and "Rude" categories, use the TLD <.com>. Mailbank's surname archives include the domain-name combinations and .

Avery Dennison sells office products and industrial fasteners under the registered trademarks "Avery" and "Dennison," respectively. "Avery" has been in continuous use since the 1930s and registered since 1963, and "Dennison" has been in continuous use since the late 1800s and registered since 1908. Avery Dennison spends more than $5 million per year advertising its products, including those marketed under the separate "Avery" and "Dennison" trademarks, and the company boasts in the neighborhood of $3 billion in sales of all of its trademarks annually. No evidence indicates what percentage of these dollar figures apply to the "Avery" or "Dennison" trademarks. Avery Dennison maintains a commercial presence on the Internet, marketing its products at and , and maintaining registrations for several other domain-name combinations, all using the TLD <.com>.

Avery Dennison sued Appellants, alleging trademark dilution under the Federal Trademark Dilution Act and California Business and Professional Code S 14330. Avery Dennison also sued NSI, alleging contributory dilution and contributory infringement. The district court granted summary judgment to NSI on Avery Dennison's claims. The district court then concluded as a matter of law that the disputed trademarks were famous and denied summary judgment to Appellants and granted summary judgment to Avery Dennison on its dilution claims, entering an injunction requiring Appellants to transfer the registrations to Avery Dennison. 983 F. Supp. at 1342.

III Trademark Law

Trademark protection is "the law's recognition of the psychological function of symbols." Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203, 205 (1942). Two goals of trademark law are reflected in the federal scheme. On the one hand, the law seeks to protect consumers who have formed particular associations with a mark. On the other hand, trademark law seeks to protect the investment in a mark made by the owner. Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 163-64 (1995).

Until recently, federal law provided protection only against infringement of a registered trademark, or the unregistered trademark analog, unfair competition. See SS 32 & 43(a) of the Lanham Trademark Act of 1946, as amended, 15 U.S.C. SS 1114, 1125(a) (1994). These causes of action require a plaintiff to prove that the defendant is using a mark confusingly similar to a valid, protectable trademark of the plaintiff's. Brookfield, 174 F.3d at 1046.

Many states, however, have long recognized another cause of action designed to protect trademarks: trademark dilution. Lori Krafte-Jacobs, Comment, Judicial Interpretation of the Federal Trademark Dilution Act of 1995 , 66 U. Cin. L. Rev. 659, 660-62 (1998) (discussing the evolution of the dilution doctrine). With the 1995 enactment of the Federal Trademark Dilution Act, dilution became a federal-law concern. Unlike infringement and unfair competition laws, in a dilution case competition between the parties and a likelihood of confusion are not required to present a claim for relief. See 15 U.S.C. S 1127 (Supp. II 1996) (definition of "dilution"); Leslie F. Brown, Note, Avery Dennison Corp. v. Sumpton, 14 Berkeley Tech. L.J. 247, 249 (1999). Rather, injunctive relief is available under the Federal Trademark Dilution Act if a plaintiff can establish that (1) its mark is famous; (2) the defendant is making commercial use of the mark in commerce; (3) the defendant's use began after the plaintiff's mark became famous; and (4) the defendant's use presents a likelihood of dilution of the distinctive value of the mark. Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1324 (9th Cir. 1998) (interpreting 15 U.S.C. S 1125(c)(1)).

California's dilution cause of action is substantially similar, providing relief if the plaintiff can demonstrate a "[l]ikelihood of injury to business reputation or of dilution of the distinctive quality of a mark . . ....