PACCAR, Inc. v. TeleScan Technologies, L.L.C.

115 F. Supp. 2d 772 (2000)

PACCAR, INC., Plaintiff,
v.
TELESCAN TECHNOLOGIES, L.L.C., Defendant.

No. 99-76199.

United States District Court, E.D. Michigan, Southern Division.

August 25, 2000.

Thomas G. Cardelli, R. Carl Lanfear, Jr., Cardelli, Hebert & Lanfear, P.C., Royal Oak, MI, David C. Lundsgaard, Graham & Dunn, P.C., Seattle, WA, for plaintiff.

Arnold S. Weintraub, Plunkett & Cooney, Bloomfield Hills, MI, for defendant.

MEMORANDUM AND ORDER GRANTING PRELIMINARY INJUNCTION

COHN, District Judge.

I. Introduction

This is a trademark infringement case. Plaintiff PACCAR, Inc. (PACCAR) owns a number of U.S. trademark registrations for the marks "Peterbilt" and "Kenworth." PACCAR is suing defendant TeleScan Technologies, L.L.C. (TeleScan) for trademark infringement and trademark dilution for TeleScan's use of PACCAR's trademarks within several of TeleScan's web site domain names. Now before the Court is PACCAR's motion for a preliminary injunction^[1] (1) enjoining TeleScan from using the names "Peterbilt" and "Kenworth" in any of TeleScan's domain names, metatags, web pages, or web sites, and (2) causing TeleScan to transfer registration and ownership of the domain names containing "Peterbilt" and "Kenworth" to PACCAR. For the reasons that follow, the motion will be granted.^[2]

II. Facts

A. The parties

1.

PACCAR is a manufacturer of heavy trucks and truck parts under the "Peterbilt" and "Kenworth" trademarks. Peterbilt Motors Company and Kenworth Truck Company, both divisions of PACCAR, have been manufacturing trucks under their respective names for over 50 years. PACCAR has invested substantial amounts of money in developing, marketing, and advertising the Peterbilt and Kenworth marks. PACCAR permits authorized Peterbilt and Kenworth dealers to use the Peterbilt and Kenworth marks in their businesses. PACCAR has not licensed or authorized TeleScan to use the Peterbilt and Kenworth marks.

In addition to its manufacturing business, PACCAR administers a used truck locator service on its web site, found at www.paccar.com>. This service allows consumers to search a database of Peterbilt and Kenworth trucks available for sale from Peterbilt and Kenworth dealers using 12 different search fields including model, year, and location.

2.

TeleScan is the owner of several web sites providing truck locator services, including one found at www.truckscan.com >. Using the truckscan.com web site, consumers can search for new and used trucks either by viewing listings by dealer, or by searching a database of the participating dealers using 11 different search terms. Presumably, the individual dealers pay TeleScan to be included on its web sites and in its databases.

Another of TeleScan's web sites, found at www.telescanequipment.com >, provides consumers with manufacturer-specific links to TeleScan's other web sites such as those found at, inter alia:

www.peterbilttrucks.com >, www.peterbiltnewtrucks.com >, www.peterbiltusedtrucks.com >, www.peterbiltdealers.com >, www.peterbilttruckdealers.com >, www.kenworthnewtrucks.com >, www.kenworthusedtrucks.com >, www.kenworthdealers.com >, and www.kenwor thtruckdealers.com >.

(domain names). See Exhibit A attached.^[3] (For reasons unknown to the Court, these manufacturer-specific web sites appear to be currently out of service.) In addition to being linked to the telescanequipment.com web site, the manufacturer-specific web sites can also be accessed independently by using their domain name address. On the manufacturer-specific web sites, there are links to listings of the particular manufacturer's trucks and dealers. There is also a disclaimer on each manufacturer-specific web site which states: "This website provides a listing service for name brand products and has no affiliation with any manufacturer whose branded products are listed here."

B. Domain names and the Internet

The Ninth Circuit recently gave an excellent description of the Internet and domain names, as follows:

The Internet is a global network of interconnected computers which allow users around the world to communicate and share information. The Web, a collection of information resources contained in documents located on individual computers around the world, is the most widely used and fastest-growing part of the Internet, except perhaps for electronic mail ("e-mail"). With the Web becoming an important mechanism for commerce, companies are racing to stake out their place in cyberspace. Prevalent on the Web are multimedia "web pages" [or web sites] — computer data files written in Hypertext Markup Language ("HTML") — which contain information such as text, pictures, sounds, audio and video recordings, and links to other web pages.

Each web page has a corresponding domain address, which is an identifier somewhat analogous to a telephone number or street address. Domain names consist of a second-level domain — simply a term or series of terms (e.g., westcoastvideo) — followed by a top-level domain, many of which describe the nature of the enterprise. Top-level domains include ".com" (commercial), ".edu" (educational), ".org" (non-profit and miscellaneous organizations), ".gov" (government), ".net" (networking provider), and ".mil" (military). Commercial entities generally use the ".com" top-level domain, which also serves as a catchall top-level domain.... Each web page must have a unique domain name....

Using a Web browser, such as Netscape's Navigator or Microsoft's Internet Explorer, a cyber "surfer" may navigate the Web — searching for, communicating with, and retrieving information from various web sites. A specific web site is most easily located by using its domain name. Upon entering a domain name into the web browser, the corresponding web site will quickly appear on the computer screen. Sometimes, however, a Web surfer will not know the domain name of the site he is looking for, whereupon he has two principal options: trying to guess the domain name, or seeking the assistance of an Internet "search engine" [such as Yahoo!].

Oftentimes, an Internet user will begin by hazarding a guess at the domain name, especially if there is an obvious domain name to try. Web users often assume, as a rule of thumb, that the domain name of a particular company will be the company name followed by ".com".... Sometimes, a trademark is better known that the company itself, in which case a Web surfer may assume that the domain address will be "`trademark'.com"....

A Web surfer's second option when he does not know the domain name is to utilize an Internet search engine, such as Yahoo, Altavista, or Lycos. When a keyword is entered, the search engine processes it through a self-created index of web sites to generate a (sometimes long) list relating to the entered keyword. Each search engine uses its own algorithm to arrange indexed materials in sequence, so the list of web sites that any particular set of keywords will bring up may differ depending on the search engine used. Search engines look for keywords in places such a domain names, actual text on the web page, and metatags. Metatags are HTML code intended to describe the contents of the web site. There are different types of metatags, but those of principal concern to us are the "description" and "keyword" metatags. The description metatags are intended to describe the web site; the keyword metatags, at least in theory, contain keywords relating to the contents of the web site. The more often a term appears in the metatags and in the text of the web page, the more likely it is that the web page will be "hit" in a search for that keyword and the higher on the list of "hits" the web page will appear.

Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1044-45 (9th Cir.1999) (internal citations omitted).

III. Analysis

A. Likelihood of Confusion

PACCAR asserts claims for trademark infringement and trademark dilution under the Lanham Act, 15 U.S.C. § 1114 and § 1125.

1. Trademark Infringement

a. Standard

"The touchstone of liability under § 1114 is whether the defendant's use of the disputed mark is likely to cause confusion among consumers regarding the origin of the goods offered by the parties." Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Ctr., 109 F.3d 275, 280 (6th Cir.1997). This is determined by a consideration of the following factors: (1) strength of the plaintiff's mark, (2) relatedness of the goods or services, (3) similarity of the marks, (4) evidence of actual confusion, (5) marketing channels used, (6) likely degree of purchaser care, (7) defendant's intent in selecting its mark, and (8) likelihood of expansion of the product lines. Frisch's Restaurants, Inc. v. Elby's Big Boy of Steubenville, Inc., 670 F.2d 642, 648 (6th Cir.1982). These factors must be considered together and "imply no mathematical precision." Wynn Oil Co. v. Thomas, 839 F.2d 1183, 1186 (6th Cir. 1988). In fact, "a plaintiff need not show that all, or even most of the factors listed are present in any particular case to be significant." Id. The ultimate question is merely "whether relevant consumers are likely to believe that the products or services offered by the parties are affiliated in some way." Daddy's Junky Music, supra at 280.

b. Strength of Marks

Peterbilt and Kenworth are very strong marks which have been used nationwide to indicate a certain manufacturer of trucks for decades. The marks were derived as variations of the names of the original developers and fall into the categories of fanciful and arbitrary. See Daddy's Junky Music, supra at 280 ("Fanciful or arbitrary marks are the strongest and most distinctive"). Also, defendant does not challenge the strength or distinction of the Peterbilt and Kenworth marks. Thus, PACCAR's marks are entitled to the highest protection.

c. Similarity of Marks

TeleScan's domain names are very similar to PACCAR's marks. In each domain name, there is an exact character match to both the Peterbilt and Kenworth marks (e.g.peterbilt trucks.com, kenworth usedtrucks.com). Moreover, the mere addition of characters following the marks does not eliminate the likelihood of confusion here.

In Minnesota Mining & Mfg. Co. v. Taylor, 21 F. Supp. 2d 1003 (D.Minn.1998), the court granted a preliminary injunction against the unauthorized use of the trademark "Post-It," in the domain names, ipost-it.com and post-its.com. Similarly, in Playboy Enterprises, Inc. v. Asiafocus Intern., Inc., 1998 WL 724000 (E.D.Va. April 10, 1998) (unpublished), the domain names, playmates-asian.com and asian-playmates.com, were held to infringe upon and dilute the "Playmate" trademark. The district court stated: "although the defendants' use of the term `playmate' as the main component of the domain names ... did not exactly duplicate [plaintiff's] mark, minor differences between the registered mark and the unauthorized use of the mark do not preclude liability under the Lanham Act." Id. at *17. See also, Lozano Enter. v. La Opinion Publ. Co., 44 U.S.P.Q.2d (BNA) 1764 (C.D.Cal.1997) (granting preliminary injunction against domain names, laopinion-sa.com and laopinion-losangeles.com, as likely to infringe upon and dilute the trademark "La Opinion."); Ford Motor Co. v. Ford Fin. Solutions, Inc., 103 F. Supp. 2d 1126 (N.D.Iowa 2000) (holding domain name, fordfinancialservice.com, to infringe and dilute "Ford" and "Ford Financial" trademarks). Also, in a recent Uniform Domain Name Dispute Resolution Policy (UDRP)^[4] proceeding, the domain names, kenworthtruck.com and kenworthalley.com, were determined to be likely to cause confusion with PACCAR's marks. See PACCAR Inc. v. Enyart Assoc., WIPO Arbitration and Mediation Center, Case No. D2000-0289 (May 26, 2000).

Further, the Court of Appeals for the Sixth Circuit has recognized, outside of the domain name context, that slight modifications to a trademark do not necessarily preclude infringement. In Induct-O-Matic Corp. v. Inductotherm Corp., 747 F.2d 358, 363-64 (6th Cir.1984), the Sixth Circuit held that the addition of a descriptive term like "matic" does not distinguish the "induct-o-matic" from the trademark "inducto," and that the two were therefore "deceptively similar."

Here, like in Induct-O-Matic, supra, the additions of "truck," "newtrucks," or "usedtrucks" to the marks Peterbilt or Kenworth, do not distinguish TeleScan's domain names from PACCAR's marks. Because Peterbilt and Kenworth are so closely associated with trucks, "peterbilttrucks.com" is not appreciably different from "peterbilt.com."^[5]

d. Relatedness of Goods and Service

The goods and services provided by PACCAR and TeleScan are closely related. TeleScan's contention, that it is not in competition with anything that PACCAR provides because PACCAR is not in the business of selling used trucks, is not well received. PACCAR and TeleScan both offer a used-truck locator database through the Internet. Also, TeleScan employs the domain names specifically to provide services related to PACCAR's products — locating new and used Peterbilt and Kenworth trucks for sale.

e. Actual Confusion

There has been no submission of any evidence showing actual confusion here. However, while the presence of actual confusion in a case is strong evidence for the plaintiff, the absence of such evidence is not dispositive. See Kraft General Foods, Inc. v. Allied Old English, 831 F. Supp. 123, 130 (S.D.N.Y.1993); Wynn Oil, supra, 839 F.2d 1183, 1188.

f. Marketing Channels

Both PACCAR and TeleScan market their goods and services through the Internet, which increases the likelihood of confusion between the two marks. As was noted by the Ninth Circuit in Brookfield, supra, simultaneous use of the Internet as a marketing and advertising tool renders it more likely that customer confusion will result. Because of the ease in which the Internet allows users to surf for information, "Web surfers are more likely to be confused as to the ownership of a web site than traditional patrons of a brick-and-mortar store would be of a store's ownership." Brookfield, supra at 1057. Also, because the marks Peterbilt and Kenworth are in the domain names of TeleScan's web sites, as opposed to simply being shown on the web page itself, a consumer is likely to mistakenly believe that PACCAR sponsored the web site and database, or that they are related companies. Id.

Moreover, the presence of a disclaimer on TeleScan's web sites does not remedy any infringement caused by an improper domain name. An infringing domain name has the potential to misdirect consumers as they look for web sites associated with the owner of a trademark. See Green Products Co. v. Independence Corn By-Products Co., 992 F. Supp. 1070, 1077 (N.D.Iowa 1997). A disclaimer that purports to disavow association with the trademark owner after the consumer has reached the site comes too late; the customer has already been misdirected. This problem, denoted as "initial interest confusion," and recognized by at least one case in this district, see Blockbuster Entertainment Group v. Laylco, Inc., 869 F. Supp. 505, 513 (E.D.Mich.1994) (J. Edmunds), is a form of confusion protected by the Lanham Act. Brookfield, supra at 1062-63.

g. Customer Care

Despite TeleScan's argument that truck dealers, per se, are sophisticated purchasers who will not be easily confused, the relevant customer in this circumstance is an average Internet user, not a sophisticated truck dealer. This is because the type of confusion engendered by infringing domain names results because "Internet users do not undergo a highly sophisticated analysis when searching for domain names." Green Products Co., supra at 1079. Accordingly, the degree of customer care here favors a likelihood of confusion.

h. TeleScan's Intent

(i)

TeleScan contends that it did not adopt PACCAR's trademarks to intentionally cause confusion, or for the sole purpose of selling it to a rightful trademark owner.^[6] Rather, it argues that it uses the marks Peterbilt and Kenworth in a purely descriptive sense — the domain names simply describe what is on their respective web sites (e.g. the peterbiltusedtrucks.com web site contains a listing of used Peterbilt trucks for sale). TeleScan analogizes its use of the Peterbilt and Kenworth marks in its domain names to classified advertising. Relying heavily on Volkswagenwerk, Aktiengesellschaft v. Church, 411 F.2d 350 (9th Cir.1969), where the Ninth Circuit held that use of a trademark in advertising a repair service constituted a fair use, TeleScan argues that its use of PACCAR's trademarks is a fair use under trademark law.

TeleScan's analogy, as revealed by its statement, "Thus, the Defendant's use of Plaintiff's trademark in its web page to sell products of truck dealers is fair use," is defective. Defendant's brief in response at p. 7 (emphasis added). Here, TeleScan goes beyond merely using the Peterbilt and Kenworth marks on its web page; it uses them in its domain name. Due to the nature of the Internet, and the way in which Internet surfers search for information on the Web, a domain name is significantly different than a classified advertisement. The use of the name of a truck in a classified advertisement communicates information as to the source of the truck, not information as to the seller of the truck. Words in domain names, however, do communicate information as to the nature of the entity sponsoring the web site. See Brookfield, supra at 1055. Using the name Peterbilt or Kenworth in a domain name sends a message to Internet users that the web site is associated with, or sponsored by the company owning the trademarks Peterbilt and Kenworth. See Patmont Motor Werks, Inc. v. Gateway Marine, Inc., 1997 WL 811770, *4 n. 6 (N.D.Cal. Dec. 18, 1997) (unpublished) (specifically distinguishing a defendant's use of a trademark on its web site from a situation where the trademark appeared in a domain name). TeleScan's arguments essentially confuse the nature of what its domain names describe; the domain names here describe the web site, not the trucks. Consequently, it is not a fair use.

(ii)

The undisputed evidence also indicates that even if TeleScan did not adopt the domain names with the purposeful intent to deceive the public, it certainly intended to derive a benefit from the reputation of the Peterbilt and Kenworth marks. See Brookfield, supra at 1059. Simply using a contested mark with knowledge of the protected mark at issue can support a finding of intentional copy. Daddy's Junky Music, supra at 286. Here, TeleScan put the words Peterbilt and Kenworth into its domain names solely because they were associated with Peterbilt and Kenworth trucks. Also, looking at the web pages themselves, the words Peterbilt and Kenworth are used repetitively, in both the main title and in a "wallpaper" that underlies the entire page, and are displayed in fonts that are similar to the fonts in PACCAR's trademarks (i.e. cursive script for Peterbilt and block script for Kenworth). Moreover, the words Peterbilt and Kenworth are included in the metatags^[7] of the web sites, which makes it more likely an Internet search engine will "hit" the web sites in response to searches using Peterbilt or Kenworth as keywords. Thus, TeleScan's use of the Peterbilt and Kenworth marks in its domain names, and metatags, increase the likelihood that someone looking for a Peterbilt or Kenworth truck specifically, will come upon TeleScan's web sites first, thereby increasing the value of its web site.

i. Expansion into Product Lines

Both parties already occupy the same field of locating used-trucks via the Internet, so this factor is irrelevant.

j. Summary

In sum, there is a strong likelihood of confusion present here. As such, PACCAR has adequately proven its trademark infringement claim.

2. Trademark Dilution

Trademark dilution is defined as the "lessening of the capacity of a famous mark to identify and distinguish goods or services...." 15 U.S.C. § 1127. A finding of a likelihood of confusion is not a necessary element for a claim of trademark dilution. Id.; 15 U.S.C. § 1125. Rather, the harm is "the inability of the victim to control the nature and quality of the defendant's goods." Intermatic, Inc. v. Toeppen, 947 F. Supp. 1227, 1240 (N.D.Ill.1996). In the context of domain names, it has been held that the use of another's trademark in a domain names "dilutes" the trademark by placing the trademark owner "at the mercy" of the web site operator. See Panavision Int'l v. Toeppen, 141 F.3d 1316 (9th Cir.1998). The web site operator is able to decide what messages, goods, or services are associated with the web site and by extension, with the trademark.

TeleScan's only response to PACCAR's claim of trademark dilution is that there is no tarnishment or blurring of PACCAR's marks because the goods TeleScan sells are manufactured by PACCAR. Again, TeleScan's argument misses the point. The issue is the web site itself, not the trucks. Here, there is sufficient evidence to believe that a consumer may mistakenly associate TeleScan's web sites with PACCAR's trademarks. Since PACCAR has no power to influence or control what appears on TeleScan's web sites, it is effectively "at the mercy" of TeleScan. Thus, TeleScan's use of PACCAR's trademarks in TeleScan's domain names is trademark dilution.^[8]

B. Injury/Harm

In cases, such as here, where a likelihood of confusion is found, injury on the part of the trademark holder is presumed. Circuit City Stores, Inc. v. CarMax, Inc., 165 F.3d 1047 (6th Cir.1999). Also, as noted previously, for at least one week prior to the date of this memo, TeleScan's web sites utilizing the Peterbilt and Kenworth names, were out of service. As such, this would indicate that TeleScan can function adequately without the contested domain names, and corresponding web sites. Moreover, some authority suggests that the use of trademarks in the post-domain path of a URL is acceptable (e.g.http://www.telescan.com/peterbilt>). See Patmont Motor, supra at *4, n. 6. Thus, TeleScan could potentially maintain the same list of Peterbilt dealers, supported by its telescan.com web site, without using Peterbilt or Kenworth in the domain name itself. Therefore, the permanent injunction will not seriously or irreparably harm TeleScan.

C. Public Interest

It is in the public's interest to protect consumers from confusion and protect the right of a trademark owner to control its own product's reputation. Blockbuster Video, supra at 516 (citing United States v. Hon, 904 F.2d 803, 806 (2d Cir.1990)). Accordingly, it is in the public's interest to prevent Internet users' confusion over the contested web sites.

IV. Conclusion

For the reasons stated above, which constitute the Court's Findings of Fact and Conclusions of Law, PACCAR's motion for a preliminary injunction is GRANTED as follows:

(1) TeleScan shall immediately take whatever steps are necessary, at its own expense, to CEASE AND DESIST from using the following domain names, currently registered with Network Solutions, Inc., in any fashion or for any purpose:

(a) peterbilttrucks.com

(b) peterbiltnewtrucks.com

(c) peterbiltusedtrucks.com

(d) peterbiltdealers.com

(e) peterbilttruckdealers.com

(f) kenworthnewtrucks.com

(g) kenworthusedtrucks.com

(h) kenworthdealers.com

(i) kenworthtruckdealers.com

(2) TeleScan shall immediately take all actions necessary to TRANSFER registration and ownership of the domain names, listed in sub-paragraph (1), to PACCAR;

(3) TeleScan is ENJOINED from using the Peterbilt and Kenworth trademarks, or any colorable imitation thereof, in any domain name or web page metatag;

(4) TeleScan is ENJOINED from using the Peterbilt or Kenworth trademarks, or any colorable imitation thereof, on its own web page(s) in a way such that it is likely to cause confusion on the part of consumers that the web page is associated with PACCAR, Peterbilt or Kenworth, including the use of the trademarks as the title or as "wallpaper" background of a web page.

(5) TeleScan shall POST this Order on its web site(s) and give notice of it to all its customers, correspondents, members, and subscribers.

(6) TeleScan shall FILE with the Court and serve upon PACCAR's counsel, within 30 days, a report in writing and under oath setting forth in detail the manner and form in which TeleScan has complied with the requirements of this injunction.

The preliminary injunction does not extend to TeleScan's use of the Peterbilt and Kenworth trademarks on its own web page(s) in any other way consistent with this injunction.

A separate paper styled "Preliminary Injunction" will be filed simultaneously with this Order.

SO ORDERED.

Exhibit A

NOTES

[1] PACCAR's motion was initially for a preliminary injunction. However, at the motion hearing held on August 16, 2000, the parties agreed that there are no remaining issues following a decision favorable to the plaintiff on its motion. Therefore, pursuant to Fed. R.Civ.P. 65(b), the Court treated the hearing on PACCAR's motion for preliminary injunction as a trial on the merits and prepared this Order in the fashion of, and using the standards for, a permanent injunction.

Subsequently, TeleScan indicated, in a letter to the Court, that it now believes that there are further issues to be decided in the case. Accordingly, the Court treats PACCAR's motion as only a preliminary injunction and will set a status conference to chart the future course of the case.

[2] Although PACCAR originally sought to enjoin all use of the Peterbilt and Kenworth trademarks on TeleScan's web pages, as the Court explains further infra at Part III.B and PACCAR later conceded at oral argument, there are non-infringing, and non-diluting ways to use the trademarks on a web page.

[3] Exhibit A consists of the printed display of the homepage of each respective domain name web page, as well as the printed display of the HTML source codes, which includes the metatags, for each web page.

[4] Operated by the World Intellectual Property Organization (WIPO), the WIPO Arbitration and Mediation Center mediates and arbitrates cases involving Internet domain name disputes. These proceedings are decided based upon the Uniform Domain Name Resolution Policy (UDRP) adopted by the Internet Corporation for Assigned Names and Numbers (ICANN) on August 26, 1999. For more information on the WIPO, see its web site at www.wipo.org>.

[5] Numerous cases have held that the exact use of a trademark in a domain name is an infringement on the mark. See e.g., Brookfield, supra, 174 F.3d 1036 (holding moviebuff.com as infringing upon "Movie Buff" trademark); OBH, Inc. v. Spotlight Magazine, Inc., 86 F. Supp. 2d 176 (W.D.N.Y., 2000) (holding thebuffalonews.com to infringe and dilute the trademark, "The Buffalo News.")

[6] Better known as "cybersquatting."

[7] Again, metatags are HTML code intended to describe the contents of the web site. Web browsers search a web site's metatags in response to a user's search request.

[8] TeleScan's remaining arguments are baseless and only warrant a brief mention. First, TeleScan briefly mentions the "first sale doctrine," whereby a purchaser who does no more than stock, display, and resell a producer's product under the producer's trademark, violates no trademark law. However, it fails to explain how the doctrine applies in this situation, where, by using PACCAR's trademarks in its domain names, TeleScan goes well beyond stocking, displaying, or reselling. Second, TeleScan implies, but does not clearly articulate, a potential defense of laches based on PACCAR's purported acquiescence to TeleScan's disclosure of some of its future Internet plans to a PACCAR employee. TeleScan fails to provide any authority for such a defense, even assuming its facts to be credible. Finally, TeleScan makes much of another company's use of the domain name, kenworthtrucks.com, however, it fails to demonstrate how a misuse by an unrelated party excuses TeleScan's own infringement.