Lockheed Martin Corp. v. Network Solutions, Inc.

Citation985 F.Supp. 949
Decision Date17 November 1997
Docket NumberNo. CV 96-7438 DDP (ANX).,CV 96-7438 DDP (ANX).
CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
PartiesLOCKHEED MARTIN CORPORATION, Plaintiff, v. NETWORK SOLUTIONS, INC., and Does 1-20, Defendants.

David Quinto, Grady L. White, Sandra L. Rierson, Paul S. Chan, Quinn, Emanuel, Urquhart & Oliver, Los Angeles, CA, for Lockheed Martin Corp.

Edward G. Poplawski, Gregory S. Cordrey, Pretty, Schroeder & Poplawski, Los Angeles, CA, Philip L. Sbarbaro, (of Counsel), Hanson and Molloy, Washington, DC, for Network Solutions, Inc.

Order Granting Defendant's Motion for Summary Judgment

PREGERSON, District Judge.

The motion by defendant Network Solutions, Inc. ("NSI") for summary judgment came before the Court on October 6, 1997. After reviewing and considering the materials submitted by the parties and hearing oral argument, the Court grants the motion in its entirety.

I. Background

The issue presented by this litigation is whether NSI violated federal trademark law by accepting registrations of Internet domain names that are identical or similar to Lockheed Martin Corporation's ("Lockheed") SKUNK WORKS service mark. Lockheed asserts that NSI directly infringed and diluted its mark by accepting the registrations. Lockheed also asserts that NSI is liable as a contributory infringer because NSI did not comply with Lockheed's demands to cancel the registrations.

As to direct infringement, the Court concludes that NSI has not used Lockheed's service mark in connection with the sale, offering for sale, distribution or advertising of goods or services, and therefore cannot be liable for infringement under 15 U.S.C. § 1114(1)(a) or for unfair competition under 15 U.S.C. § 1125(a).

As to dilution, the Court finds that NSI has not made a commercial use of domain names as trademarks, and therefore cannot satisfy the commercial use element of dilution under 15 U.S.C. § 1125(c).

As to contributory infringement, there are two potential bases for liability. First, a defendant is liable if it intentionally induced others to infringe a mark. Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 853-54, 102 S.Ct. 2182, 2188, 72 L.Ed.2d 606 (1982); Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir.1996). Second, a defendant is liable if it continued to supply a product to others when the defendant knew or had reason to know that the party receiving the product used it to infringe a mark. Inwood, 456 U.S. at 853-54, 102 S.Ct. at 2188; Fonovisa, 76 F.3d at 264.

Lockheed has not presented evidence that NSI induced others to infringe Lockheed's service mark. Therefore, NSI is not liable under the first basis.

As to the knowledge basis, the Court concludes that NSI's limited role as a registrar of domain names coupled with the inherent uncertainty in defining the scope of intellectual property rights in a trademark militates against finding that NSI knew or had reason to know of potentially infringing uses by others. Furthermore, contributory infringement doctrine does not impose upon NSI an affirmative duty to seek out potentially infringing uses of domain names by registrants.

A. The Parties

For over 50 years, plaintiff Lockheed and its predecessors have operated "Skunk Works," an aerospace development and production facility. Lockheed owns the federally registered "SKUNK WORKS" service mark.

Defendant NSI is a publicly traded corporation with its principal place of business in Herndon, Virginia. Under a contract with the National Science Foundation, NSI is the exclusive registrar of most Internet domain names.

B. The Internet

The Internet is an international "super-network" connecting millions of individual computer networks and computers. The Internet is not a single entity. It is a highly diffuse and complex system over which no entity has authority or control. See generally American Civil Liberties Union of Georgia v. Reno, 929 F.Supp. 824, 830-45 (E.D.Pa.1996), aff'd, ___ U.S. ___, 117 S.Ct. 2329, 138 L.Ed.2d 874 (1997). Although the Internet is now widely known for one of its ways of presenting information—the World Wide Web ("Web")—the Internet supports many other forms of communication. The Internet allows one-to-one communication via electronic mail ("e-mail"). In addition, one person can reach many other users through bulletin board services, newsgroups and numerous other Internet-based means of communication. Id. at 834. All of these forms of Internet communication depend on the use of domain names to locate specific computers and networks on the Internet.

For commercial users, the Web is the most important part of the Internet. Unlike previous Internet-based communications formats, the Web is easy to use for people inexperienced with computers. Information on the Web can be presented on "pages" of graphics and text that contain "links" to other pages either within the same set of data files ("Web site") or within data files located on other computer networks. Users access information on the Web using "browser" programs. Browser programs process information from Web sites and display the information using graphics, text, sound and animation. Because of these capabilities, the Web has become a popular medium for advertising and for direct consumer access to goods and services. At the same time, the Web, like the rest of the Internet, is an important medium of non-commercial communications. The Web has made it easier for individuals and small organizations to publish information to the general public. Publication on the Web simply requires placing a formatted file on a host computer.

Web standards are sophisticated and flexible enough that they have grown to meet the publishing needs of many large corporations banks, brokerage houses, newspapers and magazines which now publish "online" editions of their material, as well as government agencies, and even courts, which use the Web to disseminate information to the public. At the same time, Web publishing is simple enough that thousands of individual users and small community organizations are using the Web to publish their own personal "home pages," the equivalent of individualized newsletters about that person or organization, which are available to everyone on the Web.

Id. at 837. Much of the Web's usefulness derives from its use of links. A link is an image or a short section of text referring to another document on the Web. A user interested in accessing the referenced document selects the link, causing the document to be displayed automatically, along with a new set of links that the user may follow. Id. at 836.

While the linked structure of the Web is well-suited to allow users to browse among many sites, following whatever links happen to draw their interest, it is poorly suited for users who want to find a single Web site directly. Users searching for a specific Web site have two options. First, if users know or can deduce the address of a Web site, they can type the address into a browser and connect directly to the Web site as if dialing a telephone number. Panavision Int'l, L.P. v. Toeppen, 945 F.Supp. 1296, 1299 (C.D.Cal. 1996). More often, users do not know the exact address and must rely on "search engines" available on the Web to search for key words and phrases associated with the desired Web site. Because of the quantity of information on the Web, searches often yield thousands of possible Web sites. Such a cumbersome process is rarely satisfactory to businesses seeking to use the Web as a marketing tool. Instead, businesses would prefer that customers simply be able to find a Web site directly using a corporate name, trademark or service mark. Panavision, 945 F.Supp. at 1299.

1. The Domain Name System

Web sites, like other information resources on the Internet, are currently addressed using the Internet "domain name system." A numbering system called the "Internet Protocol" gives each individual computer or network a unique numerical address on the Internet. The "Internet Protocol number," also known as an "IP number," consists of four groups of digits separated by periods, such as "192.215.247.50." For the convenience of users, individual resources on the Internet are also given names. Specialized computers known as "domain name servers" maintain tables linking domain names to IP numbers.

Domain names are arranged so that reading from right to left, each part of the name points to a more localized area of the Internet. For example, in the domain name "cacd.uscourts.gov," "gov" is the top-level domain, reserved for all networks associated with the federal government. The "uscourts" part specifies a second-level domain, a set of the networks used by the federal courts. The "cacd" part specifies a subnetwork or computer used by the United States District Court for the Central District of California.

If a user knows or can deduce the domain name associated with a Web site, the user can directly access the Web site by typing the domain name into a Web browser, without having to conduct a time-consuming search. Because most businesses with a presence on the Internet use the ".com" top-level domain, Internet users intuitively try to find businesses by typing in the corporate or trade name as the second-level domain name, as in "acme.com." Second-level domain names, the name just to the left of ".com," must be exclusive. Therefore, although two companies can have nonexclusive trademark rights in a name, only one company can have a second-level domain name that corresponds to its trademark.1 For example, Juno Lighting, a maker of lamps, sought to establish a Web site with the address "juno.com," a domain name already in use by Juno Online Services, which uses the domain name as part of e-mail addresses for hundreds of thousands of e-mail customers. See Juno Online Servs., L.P. v. Juno Lighting, Inc., 979 F.Supp. 684 (N.D.Ill.1997). In short, the exclusive quality of second-level domain names has set trademark owners...

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