Intermatic Inc. v. Toeppen
| Decision Date | 26 November 1996 |
| Docket Number | No. 96 C 1982.,96 C 1982. |
| Citation | 947 F.Supp. 1227 |
| Parties | INTERMATIC INCORPORATED, Plaintiff, v. Dennis TOEPPEN, Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
John K. Lucas, Barbara A. Larsen, Brinks Hofer Gilson & Lione, Chicago, IL, for Plaintiff.
Joseph D. Murphy, Meyer, Capel, Hirschfeld, Muncy, Jahn & Aldeen, P.C., Champaign, IL, for Defendant.
The court has carefully reviewed Magistrate Judge Denlow's report and recommendation ("R&R"), the objections of defendant Toeppen, and the responses of plaintiff Intermatic Inc. Toeppen's main objection is that the R&R failed to consider whether a domain name has the inherent attribute of a trademark. Defendant's objection rests on the underlying fact that the internet is a new medium of communication. Although it is a new medium, courts must still apply traditional trademark law, while also considering the policy implications. Magistrate Judge Denlow's R&R does just that. By applying the law of trademarks to the internet, Magistrate Judge Denlow strikes an appropriate balance between trademark law and the attendant policy concerns raised by the defendant. See Panavision International, L.P. v. Toeppen, No. 96 C 3284, 1996 WL 653726 (C.D. Cal. Nov. 5, 1996).
Additionally, the court grants Intermatic's motion to strike the declaration of Patricia L. Gruber because a party may not hold back in the proceeding before the magistrate judge on the basis that additional affidavits or exhibits will be submitted to the district judge. The referral of the motion to the magistrate requires all parties to make the same presentation they would have submitted to the district judge. See Schaap v. Executive Industries, Inc., 760 F.Supp. 725, 728 n. 3 (N.D.Ill. 1991); Anna Ready Mix, Inc. v. N.E. Pierson Const. Co., 747 F.Supp. 1299, 1303 (S.D.Ill.1990)(citing Paterson-Leitch Company, Inc. v. Massachusetts Municipal Wholesale Electric Company, 840 F.2d 985, 990-91 (1st Cir.1988)); 7 James Wm. Moore, Moore's Federal Practice ¶ 72.04, p. 72-63 (2d ed. Sept. 1996). Assuming arguendo that the court allowed the declaration of Patricia L. Gruber to stand it would not change the court's decision.
Magistrate Judge Denlow's report and recommendation dated October 28, 1996 is adopted in full and supplemented by this Minute Order. Intermatic's motion for summary judgment is granted in part as to counts III and IV, denied as to counts I, II, V, VI, and VII, and Toeppen's motion for summary judgment is denied as to all counts. The court also grants Intermatic's motion to strike the declaration of Patricia L. Gruber. The parties are instructed to discuss settlement before the next status hearing scheduled in this case.
Welcome to cyberspace! This case presents the Court with the increasingly important issue of whether and how federal and state trademark laws apply to govern names selected by users for their Internet website. As the Internet grows in prominence as a venue for business, the courts will be called upon to apply traditional legal principles to new avenues of commerce. This is such a case.
Plaintiff Intermatic Incorporated ("Intermatic"), brings this action in seven counts against defendant Dennis Toeppen ("Toeppen"). Intermatic alleges that Toeppen's use of the Internet domain name "intermatic.com" violates sections 32(1) (Federal Trademark Infringement) (count I), 43(a) (Federal Unfair Competition) (count II), and 43(c) (Federal Trademark Dilution Act of 1995) of the Lanham Act (count III). 15 U.S.C. § 1114(1); 15 U.S.C. § 1125(a); and 15 U.S.C. § 1125(c) respectively. Intermatic also alleges that Toeppen's conduct violates the Illinois Anti-Dilution Act, 765 ILCS 1035/1 et. seq. (count IV); the common law of unfair competition (count V); the Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 et. seq. (count VI); and the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2. (count VII). Toeppen denies that his conduct is unlawful.
Intermatic and Toeppen have filed cross-motions for summary judgment on all seven counts. The Court held extensive oral argument on August 29, 1996 and has reviewed the briefs, stipulations, affidavits and exhibits submitted by the parties. For the reasons set forth below, the Court recommends that Intermatic's motion for summary judgment be granted as to counts III and IV (the "Dilution counts") and be denied as to the remaining counts. The Court recommends that Toeppen's motion be denied as to all counts.
Intermatic is a Delaware corporation having a place of business in Spring Grove, Illinois. Intermatic has been doing business under the name INTERMATIC since 1941. Intermatic has 37 offices throughout the United States and has been in business in Illinois since 1892. Intermatic is a manufacturer and distributor of a wide variety of electrical and electronic products, including computerized and programmable timers and other devices which are sold under the name and trademark INTERMATIC.
Intermatic's sales and advertising of INTERMATIC labeled products have been continuous since the 1940's. (SF ¶ 6).1 In the last 8 years, its sales in the U.S. have exceeded $850 million. Id. Intermatic's products prominently bear the INTERMATIC name and trademark, and well over 100 million units have been installed in homes and businesses throughout the United States. (SF ¶¶ 6, 9).
Advertising and promotional expenditures for products bearing the INTERMATIC mark for the last 8 years have exceeded $16 million. (SF ¶ 7). Intermatic's co-op advertising consists of approximately 700 print ads per year, with each displaying the INTERMATIC mark. Intermatic also advertises and promotes its INTERMATIC products, mark and name by way of trade shows throughout the United States, magazines, point-of-purchase displays, brochures, radio, and television. (12 M ¶¶ 12, 31, 32).
Defendant Toeppen resides in Champaign, Illinois, where he operates an Internet service provider business known as Net66. Toeppen has registered approximately 240 Internet domain names without seeking the permission from any entity that has previously used the names he registered, because he contends that no permission was or is necessary. Among the domain names which he has registered are the following well known business names:
deltaairlines.com greatamerica.com
britishairways.com neiman-marcus.com
crateandbarrel.com northwest airlines.com
ramadainn.com ussteel.com
eddiebauer.com unionpacific.com
One of Toeppen's business objectives is to profit by the resale or licensing of these domain names, presumably to the entities who conduct business under these names.
Intermatic owns five incontestable trademark registrations issued by the U.S. Patent and Trademark Office for its INTERMATIC mark. (SF ¶ 4, Ex. 2). Intermatic is the exclusive owner of the INTERMATIC trademark and trade name, and there are no known third party uses of INTERMATIC in the U.S. (SF ¶¶ 4, 11, Ex. 2). Prior to registering the intermatic.com domain name, Toeppen had never used the term intermatic for any purpose.
The Internet is a vast and expanding network of computers and other devices linked together by various telecommunications media, enabling all the computers and other devices on the Internet to exchange and share data.
The Internet provides information about a myriad of corporations and products, as well as educational, research and entertainment information and services. An estimated 30 million people worldwide use the Internet with 100 million predicted to be on the "net" in a matter of years.2
A computer or device that is attached to the Internet is often referred to as a "host." In order to facilitate communications between hosts, each host has a numerical IP (Internet protocol) address.3 The IP address is comprised of four groups of numbers separated by decimals. For example, the IP address of one of Toeppen's host computers is 206.139.80.66. Each host also has a unique "fully qualified domain name." The "fully qualified domain name" may not be repeated in the Internet. In the case of 206.139.80.66, the "fully qualified domain name" is "winslow.net66.com".
In its most generic form, a fully qualified domain name consists of three elements. Taking "winslow.net66.com" as an example, the three elements are the hostname ("winslow"), a domain name ("net66") and a top level domain ("com"). A given host looks up the IP addresses of other hosts on the Internet through a system known as domain name service.
Domain name service is accomplished as follows: The Internet is divided into several "top level" domains. For example, "edu" is a domain reserved for educational institutions, "gov" is a domain reserved for government entities and "net" is reserved to networks. Although "com" is short for "commercial," it is a catchall domain and the only one generally available to Internet users that have no special attributes i.e., they are not a school or a government office or a network. Each domain name active in a given top-level domain is registered with the top level server which contains certain hostname and IP address information.
In order to access the Internet, most users rely on programs called "web browsers." Commercially available web browsers include such well-known programs as Netscape and Mosaic. If an Internet user desires to establish a connection with a web page hosted at winslow.net66.com, the Internet user might enter into a web browser program the URL "http: www.net66.com." (URL stands for uniform resource locator.) The first element of the URL is a transfer protocol (most commonly, "http" — standing for hypertext transfer protocol). The remaining elements of this URL (in this case, "www" — standing for World Wide Web — and "n...
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