Promatek v. Equitrac

Citation: Promatek Indus. v. Equitrac Corp., 300 F.3d 808 (7th Cir. 2002)(full-text).

Factual Background
The parties were competitors in selling cost-recovery equipment. Defendant used the term “Copitrack,” an inadvertent misspelling of plaintiff’s mark COPITRAK, in the metatags of its website because it provided maintenance and service on plaintiff’s COPITRAK equipment. When it learned of the suit, defendant removed the metatag and contacted numerous search engines to remove any link between the term “Copitrack” and defendant’s website. Plaintiff nevertheless sought a preliminary injunction to prevent defendant from using the term “Copitrak” on its website. The district court granted plaintiff’s motion without a hearing and ordered defendant to place the following disclaimer on its website: “If you were directed to this site through the term ‘Copitrack,’ that is in error as there is no affiliation between Equitrac and that term. The mark ‘Copitrak’ is a registered trademark of Promatek Industries, Ltd., which can be found at www.promatek.com or www.copitrak.com.”

On appeal, the Seventh Circuit affirmed the injunction. Plaintiff was likely to succeed on the merits of its Lanham Act claim based on the initial-interest confusion caused by defendant’s use of “Copitrack” in its metatags, which diverted consumers to its website. Even if consumers “are only briefly confused” before realizing their mistake, they “are likely to learn more about [defendant] and its products before beginning a new search for [plaintiff] and Copitrak.” Although defendant argued that the disclaimer caused it economic harm by sending customers to plaintiff’s website, it submitted no evidence of customers it lost due to the disclaimer. The informative nature of the disclaimer and its effect directing consumers to the correct website outweighed defendant’s speculative claims of harm. Finally, the court rejected defendant’s argument that the injunction should not have been issued without an evidentiary hearing, finding that defendant failed to demonstrate that its evidence would weaken plaintiff’s case enough to affect the district court’s decision. Several months later, the Seventh Circuit amended its earlier decision to clarify its position on use of others’ trademarks as a metatag. Specifically, the amended decision removed the sentence, “It is Equitrac’s use of the term Copitrak in its metatag that is a prohibited practice because of the potential for consumer confusion” and replaced it with “The problem here is not that Equitrac, which repairs Promatek products, used Promatek’s trademark in its metatag, but that it used that trademark in a way calculated to deceive consumers into thinking that Equitrac was Promatek.” The Seventh Circuit also added the following footnote to this new sentence: “It is not the case that trademarks can never appear in metatags, but that they may only do so where a legitimate use of the trademark is being made.”

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