Playboy Enterprises, Inc. v. Netscape Communications Corporation, Playboy Enterprises International, Inc. v. Excite, Inc.

1020 regard degree or in to the citizenship, I follow citizenship. would her

tion about INS, her, F.3d 487 un- Camargo v. 282 force used to detain and restrain Martinez Katz, 194, 201, that a is (7th Cir.2002), holding question 121 v. 533 U.S. der Saucier Further, if even (2001), 2151, a seizure. 272 is not 150 L.Ed.2d that S.Ct. by can invoked be Amendment Fourth go analysis, and we need not the end had a reasonable officers query, here a But qualified immunity. to further assess Mena inquire, for Ms. to upon which basis I a violation of the Fourth were to assume thieves, gang awith den of in a found was that Mena asserts rights Amendment Ms. largely comprised to be law by the known I grounds,2 then on either of the above life, law, as in immigrants. illegal my colleague Judge Kle- agree would judged degree ato person immunity would be qualified infeld that see, Maryland v. e.g., keep, company “clearly no required because established” — U.S. -, S.Ct. Pringle, violated. right has been (2003), in the nothing and L.Ed.2d I respectfully For these reasons dissent. this com contravenes Amendment Fourth humankind. observation mon force

Second, of excessive the issue of time of the duration because

be close handcuffs on Ms. left officers say that we cannot on this issue But

Mena. not have done officer should

a reasonable alert to be more should instead

so. We safety. for legitimate concerns

the officers’ at the locale of anticipated the arms

Given deadly search, to avoid the need say the Con- should not we

surprise, any ensuring per- precludes

stitution weap- to potential proximity

son found using a finding from ons is restrained ENTERPRISES, INC., PLAYBOY must Law enforcement gun police. on the Plaintiff-Appellant, dangers, unavoidable but certain confront require does not the Constitution v. face avoidable ones.1 NETSCAPE COMMUNICATIONS Third, context there was because CORPORATION, Defendant- regard no of the Constitution violation Appellee. Ms. Mena her posed questions inquiry on Mena did assert that the preoccupation with whether Ms. majority’s 1. The rights. citizenship her She her status violated is pajamas when restrained Mena was in Ms. challenged force in restraint excessive paraded was not point. She besides the purse papers. challenged a search of her pose. The officers humiliating or in naked question that the about her The idea citizen- safety, her for their entitled restrain were ship posed Ms. offended her to Mena constitu- gown wearing a formal or was she whether precedent rights, by analogy to tional our wearing pajamas jeans, whether she profiling prohibiting as a basis a car racial regard major- pants, to the and without sweat Montero-Camargo, stop, see United States attire, which ity’s purported interest in her (9th Cir.2000) (en banc); see 208 F.3d 1122 device, rhetorical here to be mere seems Brignoni-Ponce, U.S. also United States v. wholly of the case. unrelated to the substance (1975), S.Ct. 45 L.Ed.2d 607 unbriefed, extemporaneous, and unwise. International, Playboy Enterprises

Inc., Plaintiff-Appellant, Defendant-Appellee.

Excite, Inc., 00-56648, 00-56662.

Nos. Appeals, Court

United States

Ninth Circuit. Sept. and Submitted

Argued 14, 2004.

Filed Jan. F.Supp.2d also 55

See Felder,

Barry Raysman G. Brown Mill- LLP, stein Angeles, Felder & Steiner Los CA, plaintiff-appellant. for the Riffer, Jeffrey K. Stanely M. Gibson and Bauch, Jeffer, D. Mangels, Jim Butler & LLP, CA, Angeles, Marmaro Los for the defendants-appellees. FLETCHER,

Before: B. T.G. NELSON, BERZON, Judges. Circuit NELSON, T.G. Circuit Judge. Playboy International, Enterprises Inc. (PEI) appeals from the district court’s grant summary judgment in favor of Netscape Corporation Communications Excite, Inc. PEI sued defendants for trademark infringement and dilution. We jurisdiction pursuant have to 28 U.S.C. § 1291. genu- Because we conclude preclude ine issues of material fact sum- mary judgment on both the trademark infringement claims, and dilution we re- verse remand.

I. FACTS practice case involves a “key- This called ing” that defendants use on their Internet engines. Keying search allows advertisers target individuals with certain interests by linking pre-identified advertisements to example, terms. To take an innocuous person who searches for a term related to page the search results complies, searcher likely customer for may be a gardening him com- and the searcher finds disappears, a seed selling seeds. company website. PEI to have its advertisement herself at the advertiser’s might pay pany re- presented enter terms uncontroverted evidence when searchers displayed rates,” a fee to paying After monitor “click the ratio gardening. lated have its defendants, company could between the number of times searchers listing page on the advertisements click on banner ads and the number of gardening-related the search results Defendants use times the ads are shown. “keyed” garden- terms: the ad would click rate statistics to convince advertisers ap- Advertisements ing-related terms. keyword contracts. The to renew their called pages result pearing rate, on search higher the click the more successful along the they run “banner ads” because they ad. deem a banner a page of a much like banner.1 top or side defendants, asserting sued have various lists of terms using PEI’s marks in a manner were they key advertisers’ banner ads. to which them. The infringed upon and diluted in this include the one at issue Those lists a request district court denied PEI’s for case, to sex containing terms related a list injunction, and this court af- preliminary Among entertainment. and adult-oriented disposition.4 an On unpublished firmed in in this list are two for over-400 terms the remand, parties the filed cross-motions “playboy” trademarks: which PEI holds court summary judgment. The district require “playmate.”2 Defendants summary judgment favor of granted link ads companies to their adult-oriented defendants. We reverse. Thus, when a user

to this set of words. II. STANDARD OF REVIEW or one of “playmate,” types “playboy,” terms, companies’ listed those the other grant the district court’s We review results ads on the search banner summary judgment Viewing de novo.5 the page.3 light most favorable to evidence the PEI, all reasonable infer- drawing that the adult-

PEI introduced evidence favor, in PEI’s we must determine ences displayed ads on defen- oriented banner any genuine there are issues whether pages results are often dants’ search fact and whether the district material confusingly la- graphic in nature and are addition, correctly applied the relevant sub- court at all. or not labeled beled moving party stantive law.6 The dispute not that buttons on parties the do —in case, the “initial the defendants —bears here.” a say ads “click When the banner any the list to link to the click on item in keyed. Some adver- can all banner ads are 1. Not only organization Defen- buy space ads but listed. for their banner website of tisers displayed randomly. pay pages ads the terms to have their results dants’ search un-target- cost because are "playmate” Such ads less links to "playboy” and include less effective. ed and are therefore considered PEI’s websites. generally un-trade- 2. The other terms Enters., Playboy Netscape Communi 4. Inc. v. enter- words associated with adult marked (C.D.Cal.), F.Supp.2d Corp., cations tainment, (sex, expected ranging from 1999). (9th aff'd, Cir. 202 F.3d 278 etc.) anatomy, parts to the dis- of the human turbing (gangbangers). Smith, Lopez v. 5. Cir.2000). page rele- results lists websites 3. The search pursuant to the vant to the search terms engine's computer program. A user search genuine for the court conclude that a issue of material identifying burden of Finally, parties fact dis- on file that it does exist. the materials portions of any pute any ap- whether affirmative defenses the absence of believes demonstrate ply. apply. fact.”7 If the conclude that no defenses of material We issue genuine burden, dispute in turn. initial will address each meets its We moving party non-moving party to to the shifts burden Theory liability. forth, or as by affidavit otherwise “set 56, 'specific show- Rule provided directly Whether defendants are facts tri- genuine issue for is ing that there merely contributorily proves to liable ” 8 weigh the evidence or may However, al.’ We tricky question. we need not truth of matter but determine question here. We conclude decide there a whether only determine directly are either or con- for trial.9 issue tributorily theory, liable. Under either PEI’s case we need proceed.

III. DISCUSSION not decide this issue. Infringement Trademark A. 2. PEI’s case for trademark in- regard to PEI’s trademark With infringement. claim, on parties disagree the fringement in- “core element of trademark First, parties dispute points. three confusion, fringement,” the likelihood of contributory theory or a whether a direct lies at the center of this case.10 No dis- to defendants’ actions. liability applies require- other pute regarding exists potential- defendants are We conclude by set forth the statute: PEI ments theory one and that we ly under liable in clearly question holds the marks Second, which one. need decide not in defendants used the marks commerce11 whether PEI parties disagree regarding permission.12 without PEI’s that a successfully shown is- has regarding strongest argument material fact exists PEI’s for a sue of resulting confusion likelihood of confusion is for a certain kind likelihood of consumer use of PEI’s marks. We of confusion: initial interest confusion.13 from defendants’ Serv., v. Pac. Elec. the circumstances of this case. 15 U.S.C. 7. T.W. Elec. Inc. Contractors 626, (9th s'n, Cir.1987). jurisdic (defining § 809 F.2d 1127 "commerce” As purposes tional as "all commerce which lawfully regulated by Congress”); 56(e)). be see (quoting 8. Fed.R.Civ.P. Co., 280, Steelev. Bulova Watch 344 U.S. 283- 84, 252, (1952). 73 S.Ct. 97 L.Ed. 319 In Corp., v. Gen. Motors 85 F.3d 9. Abdul-Jabbar "commerce,” defining 15 U.S.C. addition 407, (9th 1996). Cir. § defines "use in commerce.” 15 1127 also applies § U.S.C. 1127. That latter definition Communications, 10. Inc. v. West Brookfield plaintiff required to the use a must make in Corp., Entm’t 174 F.3d Coast mark, rights order to have in as defined Cir.1999). California trademark law Because Motion, Planetaty § 15 U.S.C. 1051. See Inc. “substantially congruent,” we do claims are Inc., Techsplosion, v. 261 F.3d 1194 — 95 separately opinion, not in this examine them (11th Cir.2001). It does enter our into just court did not. Denbicare as the district jurisdictional analysis. Inc., Us, Toys R U.S.A.Inc. (internal (9th Cir.1996) quotation marks 1114(l)(a). § omitted). 12. 15 U.S.C. Indeed, we insufficient evidence to find jurisdiction over trademark cases Federal Clause, any summary judgment on other theo- sweeps as defeat rests on the Commerce clearly encompasses broadly possible, ry- as “MovieBuff,” con- trademarked is customer the term how- Initial interest confusion ever, in a com- and sued that creates initial interest West Coast trademark fusion infringement.20 be- The court in product.14 Although dispelled ruled favor of petitor’s occurs, initial interest Brookfield. It reasoned that an actual sale Internet users fore “.com”) capitalizes entering (plus on the Brookfield’s mark impermissibly confusion searching a mark and is or for Brookfield’s mark goodwill associated with infringe- engines using metatags, therefore actionable trademark search would find themselves at Al- ment.15 West Coast’s website. “realize, though they might immediately that, by keying PEI asserts adult-orient- ‘moviebuff.com,’ upon accessing trademarks, advertisements to PEI’s ed operated by have reached a site West initial actively create interest Brookfield,” wholly Coast and unrelated to manner. following confusion in the Be- originally some customers who were seek- im- cause advertisements banner “may perfectly Brookfield’s website marks, mediately type after users PEI’s (espe- content with West Coast’s database likely to be PEI asserts that users are cially as it charge).”21 is offered free of of un- regarding sponsorship confused Because those customers would found have labeled banner advertisements.16 addi- West Coast’s site due to West Coast’s tion, many of the advertisements instruct “misappropriation goodwill” of Brookfield’s to “click here.” Because of their users mark, court concluded that instruction, confusion, users follow the summary judgment.22 Brookfield withstood to a PEI believing they will be connected “immediately if cite. Even realize case, In this PEI claims that defen upon accessing” competitor’s site dants, conjunction advertisers, “wholly they have reached a site unrelated misappropriated goodwill have PEI’s, damage to” the has been done: by leading PEI’s marks Internet users to confusion, Through initial consumer the competitors’ just websites as West Coast gained “will still have a custom- competitor misappropriated goodwill video the of the by appropriating goodwill er consumers, Brookfield’s mark. Some ini mark.”17 developed has in its [PEI] [ ] sites, tially seeking may initially PEI’s be theory strongly PEI’s lieve that unlabeled banner advertisements resembles theory adopted by this court are links to PEI’s sites or sites affiliated Brookfield Communications, they Inc. v. West Coast En- with PEI. Once follow the instruc here,” Brookfield, tions to “click access the Corporation,18 tertainment site, they may En- well realize that company, a video rental West Coast However, a Corporation, planned using PEI-sponsored tertainment not at site. they may perfectly happy to remain on “moviebuff.com” as domain name site, competitor’s just as the using website and similar term Brookfield searchers initial- metatags for the site.19 Brookfield had court surmised some 1999). Brookfield, 18. F.3d Cir. 14. 174 F.3d at 1062-63.

15. Id. at 1057. 19. Id. at 1042. clearly 16. Note that if a banner advertisement 20. at 1043. Id. or, better, overtly identified its source even own, compared products sponsor's PEI to the 21. Id. 1057. theory. no confusion would occur under PEI’s Brookfield, 17. 174 F.3d at 1057. 22. happily provides strong support Brookfield’s site would for the likelihood

ly seeking reason, For that site. The Internet of confusion.27 we turn remain on Coast’s West to an of because of first examination factor four: evi- have reached the site user will of actual dence confusion. of PEI’s mark. Such use defendants’ use actionable.23 a. Factor Evidence I: of analogies sug- Although Brookfield Actual Confusion. PEI will be able to show a gest PEI expert study introduced estab- of confusion sufficient to defeat likelihood strong lishes a likelihood of initial interest summary judgment, we must test PEI’s among confusion consumers. factor theory using this circuit’s well-established probably four alone suffices to reverse the test for the likelihood of confu- eight-factor grant summary judgment. of Accordingly, turn to sion to be certain. we Ford, expert, PEI’s Dr. concluded that a that test now. statistically significant of Internet number an employs The Ninth Circuit searching “playboy” users for the terms test, originally set forth in eight-factor PEI, “playmate” would think that oí- Boats,24 to AMF deter Inc. Sleekcraft affiliate, sponsored an banner ads contain- likelihood of confusion. The mine the adult content on the eight factors are: page. study partici- search results When mark; strength 1. of the pants were shown search results for the goods; 2. of the proximity “playboy,” term 51% believed that marks; similarity 3. of sponsored or was otherwise associated confusion; actual 4. evidence of the adult-content ad banner dis- used; marketing channels 5. played.28 shown When results type goods degree of and the of care “playmate,” term held the 31% same be- likely purchaser; to be exercised Using lief. control Dr. groups, Ford also partici- concluded that for 29% those intent in selecting 7. defendant’s pants viewing “playboy” searches and mark; 22% searches, viewing “playmate” those expansion prod- likelihood confusion stemmed from the targeting uct lines.25 the banner advertisements. The individu- context, In the Internet courts must be random, als were not confused un-tar- factors, applying flexible in the as some geted advertisements. Moreover, apply.26 not some factors than Dr. important proce- are more others. For ex- Defendants criticize Ford’s ample, showing They a of actual confusion dures and conclusions. offer their data, among significant interpretations signif- numbers of consumers of his with own persuasive proof 23. Id. at 1062-65. actual confusion constitutes likely.... enough that future confusion is If 341, (9th Cir.1979). 24. 599 F.2d 348-49 confused, actually people have been a then people are likelihood that confused is estab- 25. Id. lished.”) (internal omitted). quotation marks case, Brookfield, 26. at 174 F.3d 1054. In this only we conclude that the final factor—the 28. Surveys commonly pro introduced as expansion product likelihood of of lines—does bative evidence of actual confusion. See apply. not Inc., Schering Corp. v. 189 F.3d Pfizer Int’l, Bicycle Corp., (2d Cir.1999). 27. Inc. v. Thane Trek (9th Cir.2002) ("Evidence F.3d of consumers, a among generates thus exists confusion. Defen- rates of icantly lower actual of material fact on the genuine of issue identifying probabilities cite cases dants issue. confusion minimis and less as de of 7.6% confusion results that Dr. Ford’s argue and then at the heart Because actual confusion is as well. minimis confusion de showed analysis,30Dr. the likelihood of confusion of methods and of Dr. Ford’s critique Their report probably precludes alone Ford’s a mo- the basis of formed interpretations In the of summary judgment. interest testimony and expert his tion to exclude however, being thorough, we will examine The dis- the district court. report before factors. the other seven On Sleekcraft however, motion, court denied trict balance, PEI. support also the evi- introduction of allowed the and Strength the Mark. b. Factor One:

dence. strong PEI has established that second- criticism of may have valid Defendants ary meanings descriptive for its marks ex- conclusions, and Dr. Ford’s methods ist, material genuine and that a issue of may justify reducing critique their it created the fact exists as to whether Dr. Ford’s ex- eventually afforded weight Thus, meanings.31 the first secondary evidentia- The district court’s report. pert factor favors PEI. how- appeal, us on ry ruling is not before Sleekcraft at evidence ever, weighing admissible At defendants concede that point, this ar- Defendants’ stage improper.29 secondary the marks for their use point prove that the guments meanings.32 they concede regarding ac- meanings. They material fact exists secondary issue of marks have Dr. regarding presence only argument offer a weak tual confusion. uncontradicted) (but re- strength meanings.33 of the Given criticized Ford’s pre- the terms that a defendants themselves use strong conclusions port, with its they believe that Internet cisely confusion because of initial interest high likelihood secondary Abdul-Jabbar, evaluating strength 85 F.3d 410. 29. mark, meaning we note that such evi of a Thane, hand, 305 F.3d at 902. ways. On the one 30. dence can cut both might third-party tend use of mark extensive (noting Sleekcraft, F.2d at 349 n. 12 likely to associate that consumers are to show that, party that it has creat- once a establishes meanings companies other the mark meaning, protection secondary "the afford- ed See, Corp. e.g.,Amstar than the markholder's. degree Inc., be commensurate with the Pizza, ed should 259-60 v. Domino's However, proven”). 1980). consumer association asso if consumers Cir. markholder, nd the the mark with ciate Indeed, argue they use the marks secondary meaning, despite ex markholder’s meaning, as defendants did primary for their use, third-party uses third-party tensive below, obviously do is absurd. strength the associ to show the would tend example, "playmate,” use term Finally, by the ation created markholder. espe- companion, dictionary definition: "a and the markets in which the markholder child, games play.” WEB- cially in and of parties the must be consid third use mark DICTIONARY, Wolfe, 3d NEW WORLD F.2d STER’S Nat’l Lead Co. v. ered. See Cir.1955) (1988). (considering, and re coll. ed. third-party jecting, of use because evidence third-party mark cite use of the 33. market, paint, for the relevant use within secondary meanings of that the as evidence minimis). third-party of use in de Evidence However, as dis- marks are weak. PEI's is more to the markholder's markets similar III.B, context in section cussed in the dilution third-party compelling of use than evidence Thus, dispute in degree third-party use is in the of even if markets. See id. unrelated case, infringement inquiry we do not find evidence to our in the this and their relevant context, dispositive Although extensive evidence would not be helpful evidence of here. summary judgment. third-party be useful in use a mark of the terms with their specifically, searchers associate neis: the Internet. More each secondary meanings, disputing appears of their sites on defendants’ secondary meanings strength of is search results pages. Given the broad use only meaning- somewhat farfetched. today, of the Internet the same could be dispute ful is whether created the Thus, companies. said countless this secondary meanings associated strong weight. factor merits little the mark. Type f.Factor Six: Goods evidence, in

PEI offered the form of of Degree and Consumer tending expert reports, to show that PEI of Expected. Care secondary meanings create the of did “playboy” “playmate.” expert PEI’s This factor favors PEI. Consumer care expert countered the defendants’ evidence inexpensive products expected is to be contrary, to the evidence suffices to care, turn, quite low.34 Low consumer genuine issue of generate a material fact increases the likelihood of confusion.35 issue. on this price, In addition to in ques- the content tion affect consumer care as well. Proximity c.Factor Two: the Goods. presume average We searcher perspec- an Internet searcher’s From seeking adult-oriented materials on the In- tive, “goods” relevant are the links to easily ternet is diverted specific from a being sought and goods the websites product he or she is seeking op- if other services available those sites. The tions, ones, particularly graphic PEI’s proximity competi- between and its quickly. more the adult-oriented provides the reason goods Netscape tor’s graphic weighs nature the materials keys competitor’s PEI’s marks banner in PEI’s favor as well. in the first place. advertisements Accord- ingly, this factor favors PEI as well. g.Factor Seven: Intent Defendants’ Selecting the Mark. Similarity Factor Three:

d. the Marks. This factor favors PEI somewhat. A defendant’s intent to confuse constitutes regarding exists factor. No doubt this probative likely evidence of confusion:36 capitalization, from their lack of Aside Courts assume that the font, defendant’s inten- and the fact that their defendants use tions were successfully. carried out “playmate,” form plural the terms case, the evidence does not definitively are use identical to PEI’s Thus, they establish defendants’ intent. At a mini- certainly marks. similar.33 mum, however, it suggest does that defen- Marketing e. Factor Five: nothing prevent dants do click- Channels Used. throughs result from confusion. equivocal. Moreover, This factor PEI and they profit from such click- use marketing advertisers identical chan- throughs. Sleekcraft,

33. See Sleekcraft, 599 F.2d at 350-52. 36. See 599 F.2d at 348 n. 9. Brookfield, (“[W]hen 34. See 174 F.3d at 1060 advertisement, If users click on banner dealing inexpensive products, customers Netscape designed program has to link care, likely to making exercise less thus immediately them to the advertiser’s website. likely."). confusion more "clicked-through" the user has the ad- 35. Id. vertisements to the advertiser’s website. “click-through” Defendants monitor h. Eight: Factor Likelihood they display. rates on the advertisements Expansion Product is, they That monitor the number of times Lines. consumers are diverted to their advertis- Because the advertisers’ goods and They click-through ers’ sites. use the related, already PEI’s are as discussed way gauge rates as a to the success of the two, within factor this factor is irrelevant. keep advertisements and to advertisers Having all examined coming back to their Although services. Sleekcraft factors, we majority conclude that the fa- click-throughs may some be result of vor PEI. Accordingly, we conclude that a interest, legitimate consumer not confu- of material fact sion, issue exists as to may expected some be to result from the substantial likelihood of confusion. profit confusion. Defendants will from We proceed now to click-throughs. they by both kinds of the defenses advanced And do nothing only click-throughs to ensure that defendants. interest, legitimate opposed

based on as to confusion, occur. 3. Defenses. suggesting introduced evidence Defendants assert three defenses: that labeling the advertisements would re- use, use, fair nominative and functional click-through duce rates. It would also use. Because we have genu found that a However, reduce although confusion. de- ine issue of fact exists as to likelihood of fendants control the content of advertise- Sleekcraft, confusion under deny we must contexts, ments other defendants do not summary judgment as to the fair use de require identify that advertisers them- fense. A fair use not be a confusing Moreover, selves on their banner ads. use.39 Accordingly, we turn to defendants’ they do not label the advertisements them- other asserted defenses. Perhaps selves. even more telling, defen- they assert highly-rated dants refuse to remove the make a nominative use of PEI’s marks. “playboy” “playmate” terms from apply slightly We different test for con keywords, their lists of even when adver- use, fusion in the opposed nominative as to request tisers do so.38 use, the fair context.40 To be considered a The above evidence mini- suggests, at a use, nominative the use of a mark must mum, nothing defendants do to allevi- following meet the three-factor test: confusion, ate even when asked to do so First, product in question service advertisers, their and that profit from readily must be one not identifiable definitive, Although confusion. trademark; second, without use of the provides factor some evidence of an intent to part only confuse on the so much of the mark or marks defendants. This factor thus favors PEI. reasonably necessary used as is that, might PEI introduced evidence even when which a use be fair "even where likeli- shown,” objected using advertisers PEI’s marks to hood of confusion has been but not- advertisements, key liability may imposed defendants refused to re- not be keying move the comparative advertising, marks from the list. example This truthful an situation, places use). advertisers in difficult as of a nominative described infra. Welles, (9th 40. See PEI v. 279 F.3d Co., Cir.2002) Lindy Corp., Pen Inc. v. (citing Bic Pen New Kids on the Block v. (9th Cir.1984) Inc., (declining F.2d Publ'g, News America adopt interpretation 1992)). an of fair use under Cir.

1030 service; not Accordingly, nominative use. we do or product

identify prongs. other consider the third, nothing do user must mark, would, conjunction with the in words, could use other be- Defendants or endorsement suggest sponsorship marks, trigger to adult-orient- sides PEI’s holder.41 the trademark Indeed, they ed banner advertisements. to already so. The list sell adver- do to the facts at this test apply we Before over 400 terms besides tisers includes hand, to what emphasize like we would nothing indispens- PEI’s marks. There is are not at hand. We that defen- note facts context, able, PEI’s in this about marks.44 trigger to PEI’s marks use of dants’ identify PEI or do not wish to sites, sites listing of PEI other they key when banner products its adver- marks,42 not at PEI’s is legitimately use Rather, they PEI’s marks.45 tisements to addition, we note that we here. issue identify consumers who are inter- wish a in which a addressing situation are not in adult-oriented entertainment so ested clearly identifies its banner advertisement competitors’ them to web- they can draw name,43 in sponsor’s source Accordingly, use is not nomi- sites. them a engine clearly identifies which a search Thus, we the district native. reverse We are advertisement’s source. banner summary judgment of grant court’s based in which addressing a also situation on nominative use. overtly compare defendants advertisers or competitor’s saying, to a products PEI’s — final de Defendants’ asserted Play- in example you “if are interested use, fense, also fails. Defen functional you may boy, also interested not to have raised this de dants different, named following message from[a if fense before the district court. Even Rather, evaluating a we are company].” defense, waived the howev have not com- display situation which er, it fails. Under the functional doc use advertisements, unlabeled banner petitors’ trine, a func parts design of a that have PEI, comparison to with no or overt . label tional use not receive trademark trade- type after Internet users PEI’s do not have such a case protection.46 We marks. here. dealing Nothing situation with which we are about the marks used identi- part a functional fy products PEI’s requirement

runs afoul of the first that, Block, (noting a F.2d at 308 45. Id. at 801 unlike traditional 41. New Kids on the use, (footnote omitted). use a nominative use is defendant’s fair identify product, "not its own of mark Welles, See, e.g., 42. PEI v. 279 F.3d at 803-04 plaintiff's”). but the (concluding PEI's that defendant's use Co., Qualitex Prods. 46. Co. v. Jacobson metatags was a in the of her website marks 159, 164-66, 1300, 131 U.S. 115 S.Ct. use). permissible, nominative (1995) (finding sponge L.Ed.2d 248 color granting and therefore it to be non-functional Doing might likelihood of so eliminate the Stoves, protection); Fisher Inc. trademark that exists in this initial interest confusion Works, Inc., Nighter All Stove 626 F.2d case. Cir.1980) (1st (finding stove roof de 195-96 Welles, denying sign trade Compare (explain- at and therefore it functional that, Compaq Computer Corp. v. protection); Welles have to use mark because would Tech., Inc., F.Supp. lengthy phrase to de- Procom turns of absurd (S.D.Tex.1995) (finding may, in Playboy Playmate that words as a her title scribe instances, marks, and that using rare be functional use without use of Year her "Compaq” as an identifier func requirement the word satisfied the first of nomi- marks hand). use). tional in case native action, dilution,48 products. PEI could of design the of those trademark and remand easily magazine proceedings. have called its and its for further We conclude that entirely things without PEI genuine models different has established that issues of losing any of their intended function. material fact exist regarding two of the Thus, the marks are not functional and parties three elements that dispute: granted protection.47 trademark the famousness of the marks and defen- dants’ commercial use of the mark.49 We The fact the marks make defen- will address each of the disputed three computer program dants’ more functional elements in turn. designed is irrelevant. Defendants their program identify consumers interested 1. Famousness of the mark. so that adult-oriented entertainment might percentage some of those consumers The pro federal dilution statute websites, competitors’ be attracted to use, eight vides along factors courts thereby helping generate defendants ad- factors, with other relevant determin “[i]n Thus, vertising revenue. defendants whether mark is distinctive and fa might conceivably be unable to trademark eight mous.” Those factors are: program of some the terms used their (A) degree acquired of inherent or functional because those terms are within mark; distinctiveness of the program. dealing Because we are not (B) the duration and extent of use of with defendants’ wish to trademark their the mark in goods connection with the ability computer program, but with PEI’s used; or services with which the mark is protect already it the trademarks uses (C) the duration identify products, and extent of adver- the doctrine mark; tising publicity of the help functional use does not here. (D) geographical extent of the used; trading area which the mark is

We hold that issues of material respect key- fact exist with to defendants’ (E) the channels of trade for the ing practices. we conclude that goods or services with which the mark is summary judgment inappropriate used; infringement trademark claim. (F) degree recognition mark in trading areas and channels

B. Trademark Dilution of trade used the marks’ owner and grant We reverse the person against injunction district court’s whom the summary judgment sought; on PEI’s second cause Qualitex, 169-70, by providing injunction against 514 U.S. at 115 S.Ct. "an another person's commercial use in commerce of name, begins mark or trade if such use after 48. PEI the mark has become famous and causes dilu- asserted claims under federal Analysis quality tion of the state law. of the state law is sub the mark....” distinctive only portion stantially analysis dispute similar to of the federal of PEI’s claim not in use, Avery is the Corp. Sumpton, law. See time of defendants’ which was Dennison Cir.1999). clearly registered ordingl F.3d after PEI the mark. That Acc mark, y, separately leaves defen- we do not state law the famousness of address mark, dants' commercial use of the and dilu- claims. dispute. tion of the mark in statute, 1125(c), § 49. The dilution 15 U.S.C. 1125(c). provides § relief to the owners of famous marks 50.15 U.S.C.

(G) counted, considering extent of use of be at least not when the nature and by par- or similar marks third same are famous within whether PEI’s marks ties; and their market.53 (H) registered mark was whether the Thus, defendants introduced evidence of 3, 1881, March or the under the Act of third-party disputed and PEI the evi- use 1905, 20, February or on the Act of showing dence with evidence of its own principal register.51 substantially that defendants’ list was (B), to contest factors grounds No exist dispute over-inclusive. A of material fact (D), (E), (H), (C), and all of which favor only factor thus exists as relevant directly only contest fac- PEI. Defendants the famousness of the marks that defen- (G): nature and extent of use of tor “the Accordingly, dants contest. the first con- by par- similar marks third the same or requirement tested of dilution favors PEI PEI ties.” conclude that has estab- We summary judgment. issue of material fact re- lished (G). Accordingly, first garding factor 2. Defendants’ commercial of use requirement trademark dilu- contested mark. purposes summary tion PEI for favors Congress only intended to limit judgment. speech, opposed political commercial as Defendants introduced evidence that closely protected speech, other more forty third-party more than trademark statute; thus, passed when it the dilution registrations “playboy” exist for the terms requirement it included the be the use “playmate,” and as well as evidence that a commercial A argu one.54 successful companies hundreds of use the terms with- ment that make no commercial defendants company in their names. coun- Plaintiffs marks, then, argu use of the would be an (a) tered, however, by many that: showing speech ment associated with their companies by of the cited defendants are political, actions not commercial. De PEI infringers diligently active whom argument, fendants do not make such an (b) pursuing; merely companies others are light and it would difficult to in be do so applied who have for similar marks but the clear (c) evidence commercial na them; yet who have not received and enterprise. PEI Accordingly, ture then* still others are listed several times. The remainder, asserts, disputed require has satisfied the second are different fields or localized areas and should not ment of dilution. (c)(1). argument

51. Id. for niche fame which defendants do adequately not counter and which the district appears reject We court not to have considered. This defendants' contention that provides grounds Syn alone remaining waived reversal. See PEI has factors. PEI Sales, Hampshire Paper Corp., argued dicate Inc. v. that its mark was famous before the (7th Cir.1999) (holding 192 F.3d 640-41 parties district court and both evi- introduced issue, failing that the lower court erred in to consid dence that was relevant to that includ- er fame within a niche market where defen relevant to the evidence factors listed directing activity dant was towards the same the statute. no waiver has occurred. market); Avery Corp. Sumpton, Dennison (9th Cir.1999). argues 53. PEI thus that the market for seeds “Playboy” potatoes yams to which sweet McCARTHY, targeted are J. the market for children’s 54. See TRADEMARKS AND toys games “Playmate” toys § to which UNFAIR COMPETITION 24:97:2 ed.2001); (Nov. targeted Rep. do affect PEI’s fame within its House No. 104-374 1995). entirely strong different niche. PEI makes a that dilution cannot argue quality of of distinctive Dilution they do not label their found because marks. However, goods with PEI’s marks. own the district We conclude con- things considers from the when one held, applying it erred when court argument defendants’ perspective, sumers’ force,55 PEI had then standard evidence, to PEI’s in the According fails. However, dilution. no likelihood of shown consumers, implicitly minds of recently clari Supreme Court goods competitors because label the of PEI’s marks. withstanding sum the standard for fied claims, va we judgment on dilution

mary fault the methods used to Finding with decision on the district court’s cate PEI’s re- collect and evaluate evidence to re instructions and remand with point be- garding Internet searchers’ association PEI, in to discovery parties keyed to allow the tween the advertisements open regard- defendants criticize PEI’s evidence un may satisfy, or evidence that troduce ing blurring. the likelihood of As dermine, standard.56 the new confu- regarding the likelihood of evidence standard, PEI established the old Under claim, however, infringement sion regarding fact issue of material genuine a critique of PEI’s evidence defendants’ to respect With of dilution. likelihood a issue of fact on this pointed to sug- PEI introduced evidence blurring,57 issue, summary judgment. not to number of Inter- significant that a gesting evi- did not counter PEI’s are that advertisements users assume net of tarnish- dentiary showing support PEI affiliated with or somehow sponsored a likeli- Accordingly, ment. showed PEI’s trademarked using a search after as well. hood of tarnishment not counter that did terms. Defendants the district Because we conclude tarnishment,58 respect to evidence. With theories under the traditional court erred tending to evidence introduced plaintiffs dilution, parties’ need not reach the we the materi- consumers consider show that whether Panavision arguments regarding inferior to the banner ads to be als International, v. Toeppen59 L.P. applies, by PEI and that consum- offered materials species a of dilu- it created new whether regarding sponsorship ers are confused tion, valid after or whether it remains Anticybersquatting also did Congress the banner ads. Defendants enacted Ac- Act of 1999.60 Protection Consumer that evidence. counter 1316, Inc., Int'l, n. Toeppen, F.3d 1326 Catalogue, L.P. v. 141 537 Moseleyv. V Secret 55. See 1998). 1124, 418, 1115, 7 Cir. 155 L.Ed.2d 1 123 S.Ct. U.S. standard, (2003) (setting the current forth mark occurs "when a famous 58. Tarnishment showing requires of actual dilution to which a improperly with an inferior associated summary judgment). withstand product or service.” Id. offensive Pellegrini, Horphag Ltd. v. Research 56. See (9th Cir.1998) (ap- F.3d 59. 141 (9th Cir.2003) (remand- 337 F.3d finding dilution proving court's a district court to re-consider mo- to allow district registering where the defendant’s conduct— standard, where tion to dismiss under new in domain plaintiff trademarks Panavision's standard). old mark holder had satisfied capacity of Pana- "the names—diminished distinguish identify Pana- to vision marks a Blurring when another's use of occurs Internet”) goods on the and services vision’s possibility that the mark mark creates "the omitted). (internal quotation marks unique ability as a identi- will lose its to serve 1125(d). § 60. 15U.S.C. plaintiff’s product." Panavision fier of (9th Cir.1999). cordingly, applied, Corp., if the old standard we F.3d 1036 post-sum- Brookfield, and remand for would reverse the court held that the defen- mary judgment proceedings. dant could not use the trademarked term metatags. “moviebuff’ as one of its Meta- standard, requiring the old a Because tags part of the HTML code of a web dilution, no showing of mere likelihood page, and therefore are invisible to inter- longer applies, we vacate the district engines net users. Search use these meta- court’s decision as to the third element of tags pull applicable out websites the dilution claim and remand in order Indus., search terms. See also Promatek apply proper allow the district court to Equitrac Corp., Ltd. v. 812- standard, to with- standard.61 Under (7th Cir.2002) (adopting summary judgment, party stand must Brookfield holding). that actual dilution show has occurred.62 PEI’s current evidence does not establish Specifically, held the use Brookfield actual dilution. we remand with in metatags trademarked terms vio- re-open discovery instructions to the Lanham Act lated because it caused motions directed at allow the new stan- “initial Brookfield, interest confusion.” dard. explained F.3d at 1062-66. The court though even “there is no source confu- preclude

Genuine issues of material fact in summary judgment on sion sense consumers PEI’s dilution patronizing, claim. The fame of the marks and the are ... know[who] there dispute, likelihood of dilution are in there- is nevertheless initial interest in confusion by precluding summary judgment. that, by using the sense ‘moviebuff.com’or people looking ‘MovieBuff to divert

IV. CONCLUSION website, ‘MovieBuff to its [the defendant] Genuine issues of material fact exist as improperly goodwill benefits from the infringement to PEI’s trademark and dilu- plaintiff] developed in mark.” [the its tion claims. Accordingly, we reverse the at 1062. grant summary district court’s judg- applied case, As might to this Brookfield in ment favor of defendants and remand suggest that there could a Lanham be Act proceedings.

for further violation even the banner advertisements REVERSED AND REMANDED. labeled, clearly by were either the adver- by tiser or engine. search I do not BERZON, Judge, concurring. Circuit read, believe to be so. So the meta- I in Judge opin- concur Nelson’s careful tag holding in expand would Brookfield case, ion in it fully as is consistent reach of initial interest confusion from sit- applicable precedents. I write in party initially uations which a con- is however, separately, express concern fused to situations in party which a is precedents that one of wrongly those never I think confused. do not it is rea- now, day, decided and one if not need sonable to find initial interest confusion to be reconsidered en banc. when consumer is never confused as to affiliation, knows,

I source or but by analytically am struck how instead or similar know, keyed should from metatags prod- advertisements are to the the outset that a infringing found in link Communi- uct or web is not related to that of the Brookfield cations v. West Coast Entertainment trademark holder pro- because the list Horphag, Moseley, 61. See 328 F.3d at 1113. 123 S.Ct. at 1124. and name-brand along generic with other informs engine so by the search

duced Comment, relievers); Rajzer, Julie A. pain him. Misunderstanding the Internet: How hijack- biga difference between is There Overprotecting Trademarks Courts by mak- another website ing a customer L. REV. Metatags, MICH. Used visiting is think he or she customer ing the (2001) (highlighting 462-63 ST. U.C.L. (even if holder’s website the trademark in which Kel- world the brick-and-mortar hap- is what only briefly), which Post Raisin Bran logg’s Raisin Bran and the banner adver- case when in this pening next to one another on the both labeled, just dis- are not tisements aisle). same another customer with tracting potential choice, that it a choice. it is clear when a customer walks into Similarly, suppose generat- True, engine list when the search Playboy maga- a bookstore and asks en- for the trademark ed search mag- directed to the adult zine and is then up, internet metatag in a comes an sconced section, Pent- where he or she sees azine to visit westcoastvi- choose might user front on rack up house Hustler deo.com, website Brook- the defendant’s in back. One Playboy while is buried movie- plaintiffs field, instead say that Penthouse or Hustler would not website, do but such choices buff.com This Playboy’s trademark. had violated infringement off trademark constitute paid true even if Hustler conclusion holds why internet, I cannot understand magazines put owner to the store internet. on the should front of Playboy’s. following sce- example, consider For an analogies with on- One can- these test for the Macy’s into and ask nario: I walk Macy’s I to example: If website line went up- am and directed Klein section Calvin shirt, for a Klein and did a search Calvin get I to floor. Once stairs the second to Klein’s trade- Macy’s violate Calvin would floor, my way to the Calvin on the second (as Amazon.com, responded it does mark if section, prominently a more I notice Klein shirt and requested with the example) clothes, Club line of Charter displayed to might I like of other shirts pictures brand, to designed appeal own Macy’s very much doubt it. I consider as well? by style of attracted people the same I cannot understand simply Accordingly, line of clothes. Let’s latest Calvin Klein’s in forth principle set the broad Brookfield. my of reach- goal I from say get diverted analogy given Even the main Brookfield section, Charter Klein ing the Calvin gives an The Court belies conclusion. me, I enough to and good looks Club stuff cus- misdirecting example of Blockbuster in- shirts some Charter Club purchase store, competing video West tomers from in- Macy’s Club stead. Has Charter Video, highway bill- by putting up Coast trademark, simply Klein’s fringed Calvin to Blockbuster sign directions giving board promi- having product another more by that a West Coast telling customers but one nently displayed before reaches Brookfield, there. is located Video store Gregory Certainly not. See Klein line? though 1064. Even customers 174 F.3d at Note, Keytuord Shea, Trademarks realize arrive at the Blockbuster who L. Advertising, 75 CAL. REV. Banner S. Video, they were it is not Coast West (2002) keyed banner (comparing and confused. initially misled entering a a customer advertisements misdirection no similar But then there Tylenol, and requesting supermarket, mis- there be similar nor would Brookfield, section pain to the reliever being directed ads were the banner in this case Acetaminophen, direction generic includes which labeled or otherwise identified. The J. Richard WAGNER and Kristin

Brookfield, defendant’s website was de- Schwall, on behalf of themselves and being accurately scribed the court as similarly situated, all others Plain applica- listed as westcoastvideo.com the s-Appellees/Cross-Appellants, tiff ble search results. Consumers were free to choose the official moviebuff.com web- hijacked site and were not or misdirected PROFESSIONAL ENGINEERS IN I elsewhere. note that the billboard analo- GOVERNMENT, CALIFORNIA De gy widely inapplica- has been criticized as fendant-Appellant/Cross-Appellee, situation, ble to the internet given both the fact that customers were misdirected the minimal in directing inconvenience Connell, Controller, Kathleen State one’s web original browser back list only, capacity in her official of search results. See J. THOMAS Defendant. McCarthy McCarthy, trade- on 02-16397, Nos. 02-16461.

marks & UNFAIR COMPETITION (4th ed.2003); Shea, § supra 25:69 at 552. Appeals, United States Court of Ninth Circuit. degree questionable to which this Argued and Submitted June aspect of affects this case is not Brookfield opinion clear to me. Our limits the pres- Filed Jan. ent holding to situations in the ban- which ner advertisements are not labeled or

identified. See ante 1029-1030.

Whether, remand, the case will remain questionable.

so limited seek

to reach labeled advertisements as well.

There will time enough to address continuing vitality should Brookfield

the labeled advertisement issue arise later. issue, however,

I wanted to flag the as

another case metatag aspect based recently, was decided Hor Brookfield

phag Research Pellegrini, Ltd. v. (9th Cir.2003), so the issue is a recur

ring question one. Should again, arise other,

in this case or some this court needs

to consider whether we want to continue to

apply insupportable an rule.

Case Details

Case Name: Playboy Enterprises, Inc. v. Netscape Communications Corporation, Playboy Enterprises International, Inc. v. Excite, Inc.

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Jan 14, 2004

Citation: 354 F.3d 1020

Docket Number: 00-56648, 00-56662

Court Abbreviation: 9th Cir.