Digital Equip. Corp. v. Altavista Tech., Inc.
| Decision Date | 12 March 1997 |
| Docket Number | No. 96-12192-NG.,96-12192-NG. |
| Citation | 960 F.Supp. 456 |
| Parties | DIGITAL EQUIPMENT CORPORATION, Plaintiff, v. ALTAVISTA TECHNOLOGY, INC., Defendant. |
| Court | U.S. District Court — District of Massachusetts |
Shepard M. Remis, Victoria C. DeMaret, Goodwin, Procter & Hoar, Boston, MA, for Digital Equipment Corp.
Mark Schonfeld, Ieuan-Gael Mahony, Sherburne, Powers & Needham, Boston, MA, for AltaVista Technology, Inc.
TABLE OF CONTENTS
I. INTRODUCTION ....................................................... 458
II. BACKGROUND ......................................................... 459
III. PERSONAL JURISDICTION .............................................. 461
A. Burden Of Proof ................................................ 461
B. Personal Jurisdiction And The Internet ......................... 462
C. Methods Of Determining Personal Jurisdiction ................... 463
D. The Massachusetts Long-Arm Statute ............................. 464
1. ATI's Transaction Of Business In Massachusetts ............. 464
2. ATI's Alleged Tort Caused By Acts In Massachusetts ......... 466
3. Alleged Tort Caused By Acts Outside Massachusetts .......... 467
E. Constitutional Due Process Concerns ............................ 468
1. Relatedness ................................................ 468
2. Purposeful Availment ....................................... 468
3. "Reasonableness" Test (Featuring Gestalt Factors) .......... 470
a. The "Onerous" Burden Of Appearance ..................... 471
b. Massachusetts's Interest In This Lawsuit ............... 471
c. The Convenience Of This Particular Venue ............... 471
d. The Administration Of Justice .......................... 471
e. Some Pertinent Policy Arguments ........................ 471
F. Other Internet Personal Jurisdiction Cases ..................... 472
IV. PRELIMINARY INJUNCTION ............................................. 472
A. Preliminary Injunction Standard ................................ 472
B. Breach Of The Trademark License ................................ 473
1. Terms of the "AltaVista" License Agreement ................. 473
2. ATI's Breach(es) Of The Licensing Agreement ................ 475
C. Trademark Infringement And Unfair Competition .................. 476
1. Similarity Of The Two "AltaVista" Marks .................... 477
2. Similarity Of The Goods And Services ....................... 477
3. Channels Of Trade/Advertising/Marketing .................... 477
4. Actual Confusion ........................................... 477
5. ATI's Intent In Adopting The "AltaVista" Mark .............. 478
6. The Strength Of The "AltaVista" Mark ....................... 478
V. CONCLUSION ......................................................... 478
This case involves a dispute between two corporations over rights and commercial interests on the Internet.1 Both parties operate electronic services and distribute software over the Internet. The plaintiff, Digital Equipment Corporation ("Digital"), has brought suit against defendant AltaVista Technology, Incorporated ("ATI"), for breach of a trademark licensing agreement, trademark and servicemark infringement, unfair competition, and trademark dilution.
Digital owns an Internet and World Wide Web "search-engine" service known as AltaVista.2 Digital purchased ATI's rights in its trademark "AltaVista"; Digital then licensed back to ATI the right to use "AltaVista," in certain defined ways, as part of both ATI's corporate name and its Uniform Resource Locator ("url"), "http://www.altavista.com."3 The license precludes ATI from using AltaVista as "the name of a product or service offering."
Digital seeks a preliminary injunction, claiming that ATI's Web-site breaches its licensing agreement and infringes its trademark rights in "AltaVista." ATI opposes Digital's motion on the merits and moves to dismiss for lack of personal jurisdiction.
First, I find that this Court has jurisdiction over ATI, whose Web-site, in the context of the specific facts of this case, meets both the statutory and constitutional standards. Second, I find that Digital has met the requisite standards for a preliminary injunction.
ATI is hereby ENJOINED from using the trademark AltaVista in any way that does not comport with the specific terms of the licensing agreement, as set forth in the opinion below and the accompanying Order.
In December, 1995, Digital, a Massachusetts corporation, launched an Internet search service using the servicemark "AltaVista." Since that time, Digital's AltaVista Internet search service has become one of the leading search services on the Internet and, indeed, one of the most frequently visited sites on the World Wide Web ("Web"). Currently, Digital's AltaVista Web-site receives millions of "hits" (or visits) per day. Digital also markets and sells computer software products and services related to the Internet under names such as AltaVista Directory, AltaVista Firewall, AltaVista Forum, AltaVista Mail, etc. Its marketing strategy, however, did not then include soliciting advertising revenues from advertisers on its Web-site.
At the same time, Digital claims two sources for its right to use the service and trademark "AltaVista": its own use of the mark under common law, and its acquisition by assignment of ATI's trademark rights in AltaVista.
ATI is a California corporation, formerly known as Tree Full of Owls, Inc.; it changed its name to AltaVista Technology, Inc., by amendment to its Articles of Incorporation, in May of 1994. In March of 1996, Digital paid for an assignment of ATI's rights to the trademark AltaVista; it immediately licensed-back to ATI the right to use AltaVista both as part of ATI's corporate name, AltaVista Technology, Inc., and as part of ATI's Web-site address "www.altavista.com." The license agreement, however, precludes ATI from using "AltaVista" as "the name of a product or service offering."
The scope and meaning of this license are hotly contested by the parties. ATI contends that its agreement with Digital was formed with the specific intention of allowing it to benefit from the popularity of Digital's AltaVista, and the strong brand identity the "AltaVista" search service had created. In contrast, Digital maintains that ATI's licensing agreement strictly limited ATI's ability to use "Altavista"—as part of its corporate name and its url—and not as "the name of a product or service offering."
Consistent with its broad interpretation of the agreement, ATI dramatically changed the appearance of its Web-site,4 moving it markedly closer to the appearance of Digital's AltaVista Web-site.5 By the time this lawsuit was brought by Digital, ATI's Website looked like, and could effectively function as, Digital's AltaVista search service.
As of May 22, 1996, less than two months after the Digital-ATI agreement, a visitor to "www.altavista.com," ATI's Web-site, would see the word "AltaVista" by itself at the top of the page, apparently not attached to ATI's corporate name. One would see an offer of free ATI software. Using a link,6 one could "click"7 to receive "demo versions of AltaVista software."8 One would also have been offered a link to an unnamed "Search Engine" where one could "Search the Internet ..." This link was to Digital's AltaVista search service.
By August 8, 1996, ATI's page changed again. Again, the visitor would see the word "AltaVista" at the top of the page, again not as part of ATI's corporate name. Below that there was a banner ad9 selling an unrelated party's products. This time, however, directly beneath the "Search Engine" line were the words "Digital's Alta Vista," rather than merely "Search the Internet ..."
On the same date as these changes were implemented, Digital's trademark counsel, Lawrence Robins ("Robins") sent ATI's president, Jack Marshall, a letter claiming that the appearance of ATI's Web-site constituted a breach of Clause 1.1 of their license agreement. The letter states:
Use of the "AltaVista" logo, without the additional language "Technologies, Inc." is a violation of Paragraph 1.1 of the Agreement. The sole license granted therein is to use "AltaVista" as part of the corporate name "AltaVista Technologies, Inc." and as part of the url "http://www.altavista.com."
Robins claimed that any use by ATI of "Altavista," including using it as the name of a product or service on ATI's Web-site, and apart from its use as part of ATI's corporate name and as the url of ATI's Web-site, constituted a breach of Clause 1.1.
Clause 1.1 of the license agreement says: Digital hereby grants to ATI a nonexclusive, nontransferable license to use the trademark "ALTAVISTA" (the "Mark") as part of the corporate name "Altavista Technologies, Inc." and as part of the url "http://www.altavista.com," and in accordance with and subject to the terms and conditions of this Agreement, provided that nothing in this agreement shall prohibit Digital or any of its direct or indirect majority-owned subsidiaries from using the Mark or from offering products or services under such Mark to third parties. This License does not grant ATI the right to use the Mark as the name of a product or service offering.
At the same time, Robins put ATI on notice of the possible termination of their license agreement pursuant to Clause 3.1. Clause 3.1 of the licensing agreement deals with quality control: "all products sold and services rendered while using the Mark shall be ... of such style, appearance and quality as to protect and enhance the Mark and the goodwill associated therewith."10
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