Interstellar Starship Services v. Epix, Inc.

• Decision Date: 03 January 2001
• Docket Number: No. CIV. 97-107-JO.,CIV. 97-107-JO.
• Citation: 125 F.Supp.2d 1269
• Parties: INTERSTELLAR STARSHIP SERVICES, Plaintiff, v. EPIX INCORPORATED, an Illinois corporation, Defendant.
• Court: U.S. District Court — District of Oregon

125 F.Supp.2d 1269

INTERSTELLAR STARSHIP SERVICES, Plaintiff, v. EPIX INCORPORATED, an Illinois corporation, Defendant.

No. CIV. 97-107-JO.

United States District Court, D. Oregon.

January 3, 2001.

COPYRIGHT MATERIAL OMITTED

Michael M. Ratoza, Michael Dell Long, Laura Caldera Taylor, Ratoza Long, Lynn S. Walsh, Portland, OR, for Plaintiff.

Peter E. Heuser, Stephen F. Gass, Kolisch Hartwell Dickinson McCormack & Heuser, Portland, OR, Sheldon L. Epstein, Law Office of Sheldon L. Epstein, Wilmette, IL, for Defendant.

OPINION AND ORDER

ROBERT E. JONES, District Judge.

Interstellar Starship, Inc. ("plaintiff"), an Oregon corporation, brings this action against Epix, Inc. ("defendant"), a Delaware corporation with its principal place of business in Buffalo Grove, Illinois, seeking a declaration that plaintiff's use of the Internet domain name "epix.com" does not infringe upon defendant's registered trademark, "EPIX". Defendant brings counterclaims against plaintiff and its sole owner and officer, Mr. Michael Tchou ("Tchou"), alleging federal trademark infringement (15 U.S.C. § 1114), unfair competition (15 U.S.C. § 1125(a)), Oregon trademark dilution (ORS 647.107 and under the common law), Oregon trademark infringement (ORS 647.095 and under the common law), and cybersquatting (15 U.S.C. § 1125(d)). A bench trial was held December 15, 18 and 19, 2000. The court took the matter under advisement. For the reasons below, the court finds for plaintiff in part and for defendant in part.

BACKGROUND¹

This case was filed January 21, 1997. Both sides moved for summary judgment on the sole issue of whether plaintiff's use of "epix.com" infringed on defendant's trademark. The court found no evidence of actual confusion and no evidence of bad faith on the part of plaintiff. The court also found that plaintiff did not use "epix.com" in the same category (as defined by the United States Patent and Trademark Office) as defendant's trademark registration. On those bases, the court granted summary judgment in favor of plaintiff, on November 20, 1997. Interstellar Starship Services, Ltd. v. EPIX, Inc., 983 F.Supp. 1331 (D.Or.1997). Defendant appealed. The Ninth Circuit, finding that this court erred when it decided factual issues in a summary judgment, reversed and remanded for trial. Interstellar Starship Services, Ltd. v. Epix, Inc., 184 F.3d 1107 (9th Cir.1999).

On January 27, 2000, defendant moved for leave to add a claim under the newly enacted federal Anti-cybersquatting and Consumer Protection Act ("ACPA"), Pub. L.No. 106-113, §§ 3001-3010, 113 Stat. 1537, 537-43 (1999), codified at 15 U.S.C § 1125(d)(1999). Leave was granted and defendant filed an Amended Answer and Counterclaim on February 10, 2000. In addition to injunctive relief, defendant seeks lost profits, attorney fees and costs, $100,000 statutory damages under the ACPA, $10,000 statutory damages for Oregon trademark registration infringement, and treble damages for willful infringement by plaintiff and Tchou.

This case was transferred from Judge Frye to Judge Jones on March 1, 2000. On May 22, 2000, after plaintiff's former counsel failed to keep a firm trial date for the second time, the court ordered plaintiff to transfer ownership of the "epix.com" web site to defendant pending a final resolution of this dispute. Plaintiff subsequently added a request for return of the "epix.com" domain name to its prayer for relief.

JURISDICTION

This court has jurisdiction pursuant to 28 U.S.C. § 1331, 28 U.S.C. 1338(a), 28 U.S.C. § 2201, and 28 U.S.C. § 1367(a). Venue is proper in this District under 28 U.S.C. § 1391(b) and (c).

DISCUSSION

A. Standard

In actions for infringement and dilution, plaintiff (in this case defendant-counterplaintiff, Epix, Inc.) has the burden of proof. A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210 (3rd Cir.2000). Once a plaintiff carries that burden, to receive damages the plaintiff must meet only a minimal burden of proof in order to trigger a rebuttable presumption that the defendant's revenues are entirely attributable to the infringement. The burden then shifts to the defendant to demonstrate what portion of its profits are not traceable to the infringement. Cook v. Robbins, 232 F.3d 736, 741 (9th Cir.2000). The Lanham Act permits an award of attorneys' fees to the prevailing party in "exceptional cases." 15 U.S.C. § 1117(a). Generally, a trademark case is exceptional for purposes of an award of attorneys' fees when the infringement is malicious, fraudulent, deliberate or willful. Gracie v. Gracie, 217 F.3d 1060, 1068 (9th Cir.2000). The court may also award, in cases of willful infringement, up to three times plaintiff's damages or three times defendant's profits, subject to the principles of equity. 15 U.S.C. § 1117(a).

B. Trademark infringement (15 U.S.C. § 1114(1)(a)), unfair competition (15 U.S.C. § 1125(a)), and Oregon trademark infringement (ORS 647.095)

A claim for federal trademark infringement may be brought against any person who shall, without the consent of the holder of the registered trademark,

use in commerce any reproduction, counterfeit, copy or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake or to deceive;

15 U.S.C. § 1114(1)(a). The test for unfair competition and Oregon trademark infringement is exactly the same as for trademark infringement, that is "whether the purchaser is likely to be deceived or confused by the similarity of the marks." 184 F.3d at 1110.

Plaintiff does not dispute that defendant owns the registered trademark "EPIX," which was registered on the Principal Register of the United States Patent and Trademark Office ("PTO"), in Class 9, for "printed circuit boards and computer programs for image acquisition, processing, display and transmission," in October, 1990. Ex. 35. Nor does plaintiff dispute that defendant registered its "EPIX" trademark with the State of Oregon, for goods and services related to "printed circuit boards, electronic components and computer programs for image acquisition," on June 17, 1997. Ex. 206. At no time did defendant give plaintiff or Tchou permission to use the "EPIX" trademark.

In determining the likelihood that consumers will mistakenly associate plaintiff's web site with defendant's trademark, the court considers the eight so-called "Sleekcraft factors":²

(1) similarity of the conflicting designations;

(2) relatedness or proximity of the two companies' products or services;

(3) strength of the "EPIX" mark;

(4) marketing channels used by both parties;

(5) degree of care likely to be exercised by purchasers in selecting goods;

(6) plaintiff's intent in selecting its mark;

(7) evidence of actual confusion;

(8) likelihood of expansion in product lines.

AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir.1979). The court will discuss the evidence related to each factor, below.

1. Similarity of the conflicting designations

Tchou testified that "epix.com"³ is readily distinguishable from defendant's trademark. He claims that he does not use the term "epix" without the ".com" suffix, and that the suffix imparts a different meaning. Further, Tchou pronounces "epix" with a long "e" sound, whereas defendant pronounces the word with a soft "e", as in the plural of "epic".

The differences Tchou relies on are not readily discernable to the reasonable consumer. Pronunciation is indistinguishable in printed advertisements. Furthermore, the reasonable consumer has no way of knowing from its web address that plaintiff desires to be known as "epix.com" and not as "EPIX." Because domain names are not case-sensitive, distinctions between "EPIX" and "epix" are also illusory. The court finds that plaintiff's and defendant's trademarks are very similar.⁴

2. Relatedness or proximity of the two companies' products or services

Defendant markets a wide array of products related to image acquisition, processing, display and transmission. Defendant's primary business is designing, testing and marketing of "frame grabbers," — printed circuit boards that allow a computer to capture, digitally process and display images from video cameras and other sources. Defendant also writes software, which it sells separately or packages with its imaging hardware. Defendant usually sells its circuit boards as an aftermarket upgrade for personal computers, although defendant also occasionally sells computers pre-packaged with its hardware.

Defendant provides consulting services and imaging services ancillary to its product sales. Epix engineers perform on-site evaluations of potential client's software and hardware needs. Defendant designs and tests new hardware for others on a case-by-case basis. Defendant has also provided image processing services upon customer request.

It is difficult to say what products and services plaintiff offered at its web site. Plaintiff did not explicitly offer any goods or service for sale, although one web page claimed that the web site was used for business purposes. Ex. 129A. The site has some characteristics of a serious business venture and some characteristics of a personal scrapbook.

Without doubt, the "epix.com" web site was used to display pictures of actors from the "Clinton Street Cabaret" dressed as characters from the Rocky Horror Picture Show.⁵ The web site included a calendar of events and other information of interest to devoted fans.

Tchou also used the "epix.com" site to promote himself. Several pages displayed photos of identification badges that he made for members of the Clinton Street Cabaret and a rival acting group, "Sibling Rivalry." Those badges bear his six-colored "EPIX.COM" logo in the lower right-hand corner.

Tchou published a web page entitled "Questions and Answers to epix.com" containing what...