Zipee v. U.S. Postal Service

‘‘‘Citation:’’’ Zipee v. U.S. Postal Serv., 140 F. Supp. 2d 1084 (D. Or. 2000) (order granting summary judgment), No. CV 99-1290-MA (D. Or. Jan. 29, 2001) (order granting permanent injunction), No. CV 99-1290-MA (D. Or. Apr.13, 2001) (order denying attorney's fees).

Factual Background
Plaintiff sought a declaration that its registration and use of the domain name "postal-service.com" did not violate the United States Postal Service's unregistered mark POSTAL SERVICE. On the parties' cross-motions for summary judgment, the court held that (1) defendant's POSTAL SERVICE mark was not generic; (2) the POSTAL SERVICE mark was protectable, as it was only descriptive but had acquired secondary meaning; (3) plaintiff's use of "postal-service.com" infringed the POSTAL SERVICE mark; and (4) plaintiff's registration of "postal-service.com" violated the ACPA. Plaintiff argued that "postal service" was a generic term. On the contrary, based in part on survey evidence, the court held that the term POSTAL SERVICE designated source rather than a product or a genus of products and the consuming public specifically associated the term with defendant. Defendant's consumer survey also established that plaintiff's "postal-service.com" website created actual confusion as consumers mistakenly believed that plaintiff's website was sponsored by, or associated with, defendant. Plaintiff's prior registration of many other names containing well-known marks, including "s-o-n-y.com," "walt-disey.com," and "yahoo-links.com," weighed in the favor of finding a bad-faith intent to profit. Moreover, even though plaintiff did not directly profit from its use of the "postal-service.com" domain name, it received the benefit of increased traffic to its websites.

On January 29, 2001, at defendant's request, the court dismissed defendant's state and federal dilution claims without prejudice. It then issued a permanent injunction, enjoining plaintiff from: (1) using the POSTAL SERVICE, U.S. POSTAL SERVICE, or UNITED STATES POSTAL SERVICE marks and trade names; (2) using any mark or domain name containing the POSTAL SERVICE mark or any other mark owned by the U.S. Postal Service; and (3) using metatags, hidden code, or other means to divert Internet users to defendant's sites or other sites. Defendant was also ordered to transfer to plaintiff the domain names "postal-service.com," "Internet-postal-service.com," "Internet-postal-service.org," "Internet-postal-service.net," and "p-o-s-t-o-f-f-i-c-e.com."

On April 13, 2001, the court denied defendant's motion for attorney's fees and nontaxable costs totaling $1,183,403.22. The court noted that a court may award reasonable attorney's fees only in "exceptional cases" and that a case was exceptional if the infringement was malicious, fraudulent, deliberate, or willful. The court further noted that "fees may be denied where the legality of the activity is 'unsettled' or where the claims were 'not unfounded' or brought for the purposes of harassment." Defendant argued that it was entitled to fees because plaintiff's infringement was willful and plaintiff previously registered other domain names that were confusingly similar to other trademarks. The court, however, held that there was "a genuine good faith dispute" as to whether the unregistered mark POSTAL SERVICE was entitled to trademark protection at all. "Whether 'postal service' was generic and unprotectable or descriptive and protectable because it had acquired secondary meaning was not a groundless or unreasonable issue." Accordingly, because the case presented a question of "unsettled legality," the case was not an exceptional one.

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