Interstellar Starship Services v. Epix

Citation: Interstellar Starship Servs., Ltd. v. EPIX, Inc., 983 F. Supp. 1331 (D. Or. 1997), rev'd, 184 F.3d 1107 (9th Cir. 1999); 125 F. Supp. 2d 1269 (D. Or. 2001) (motion to compel production), aff'd, 304 F.3d 936 (9th Cir. 2002).

Trial Court Proceedings
Threatened with having its domain name placed on hold, Interstellar Starship ("ISS") brought an action for a declaratory judgment against EPIX, Inc., a computer company. ISS claimed that its use of the domain name "epix.com" for a website promoting a theater group and its Rocky Horror Picture Show did not infringe Epix's registered trademark EPIX for "printed circuit boards and computer programs for image acquisition, processing, display, and transmission." Epix argued that ISS was engaged in image acquisition, processing, display, and transmission because ISS's "epix.com" website displayed scanned photographs of cast members that were capable of being downloaded by Internet users.

The court disagreed and granted ISS's motion for summary judgment, finding that consumer confusion was unlikely in view of the substantial differences between using a domain name to publicize a theater group and the goods and services recited in Epix's trademark registration. That ISS also provided consulting services in the field of "design for test" circuit boards did not factor into the court's decision because there was no evidence that ISS promoted these services on the "epix.com" website. In a later opinion, the court refused to award attorney's fees to ISS where no bad faith or willful conduct was shown, but did allow ISS to recover costs. See 46 U.S.P.Q.2d 1156 (D. Or. 1998).

The grant of summary judgment was reversed by the Ninth Circuit. Although two of the Sleekcraft likelihood-of-confusion factors weighed in favor of Epix (similarity of marks and marketing channels), only one factor weighed in favor of ISS (sophistication of Epix's customers), and the remaining five factors required the court to weigh conflicting evidence. Because the evidence of record "would permit a rational factfinder to find a likelihood of confusion," the district court erred in granting summary judgment and remanded the case for trial. In addition, the Ninth Circuit affirmed the district court's denial of ISS's claim for attorney's fees.

After remand, Epix amended its complaint to add a claim that ISS's registration of the country-code domain name "epix.cc" violated the ACPA. In addition, after plaintiff's former counsel failed to keep a firm trial date for the second time, the court ordered ISS to transfer the "epix.com" domain name to Epix pending a final resolution of the case. After a bench trial, the district court made two separate findings on Epix's claim for false designation of origin.

First, it held that ISS's use of the "epix.com" domain name in connection with the Rocky Horror Picture Show did not, alone, cause a likelihood of confusion with the mark EPIX due to the different goods and services, the minimal evidence of actual confusion, the separate markets and marketing channels, and the high sophistication of consumers. Interpreting Brookfield and other cases as requiring bad faith "as a component of actionable initial-interest confusion involving Internet domain names," Epix failed to prove actionable initial interest confusion because ISS registered the "epix.com" domain name without knowledge of the EPIX trademark. The court thus ordered Epix to transfer the "epix.com" domain name back to ISS. But the court did find, however, that there was a likelihood of confusion regarding ISS's use of the website in connection with technical and digital-image processing services.

Finding that ISS's website at one time had a link from its home page to a page showing the owner's expertise in computers and electronic imaging, the court found that these services were highly related to Epix's computer programs for image acquisition, processing, display, and transmission.

The court thus enjoined ISS and its owner from using its "epix.com" website in connection with the promotion of ISS's technical services and image processing. The court also enjoined ISS from using its EPIX.COM logo on its website, unless it provided a disclaimer explaining that "epix.com" is not affiliated with Epix on each web page displaying the logo. Characterizing this infringement as "incidental and unintentional," the court held that Epix was not entitled to any monetary relief as there was no evidence of profits to ISS or losses to Epix related to the infringement. As to Epix's remaining claims, the court rejected Epix's dilution claim under Oregon law because it failed to establish that the EPIX mark was famous or even recognized in Oregon.

And the court also rejected Epix's ACPA claim based on ISS's alleged registration of the "epix.cc" domain name on May 22, 1999, prior to the enactment of ACPA on November 29, 1999. Although it was unclear whether ISS ever registered "epix.cc," this fact was of no consequence. The court could not award damages based solely on the act of owning the "epix.cc" name after November 29, 1999. ISS never offered to sell the "epix.cc" name. Moreover, Epix eventually registered the "epix.cc" domain name, thus mooting the need for injunctive relief.

Appellate Court Proceedings
Epix appealed, but the Ninth Circuit affirmed the district court's decision in all respects. Although the three most important likelihood-of-confusion factors in an Internet context are the similarity of the marks, the relatedness of the goods or services, and the parties' simultaneous use of the Internet as a marketing channel, the district court properly coNSIdered the remaining likelihood-of-confusion factors because the so-called Internet trinity factors did not clearly indicate that consumer confusion was likely.

Here, the parties' goods and services were so different that "any consumer looking for EXPIX, who mistakenly guessed that it could be found at www.epix.com. would realize in one hot second that she was in the wrong place and either guess again or resort to a search engine to locate the Epix site at www.epixinc.com."

In addition, the EPIX mark was weak and diluted, and ISS adopted the "epix.com" name in good faith because it connoted electronic pictures. Although the district court specifically addressed only the name "epix.cc" in the context of Epix's ACPA claim, ISS's good-faith adoption of the "epix.com" name was also sufficient to defeat an ACPA claim against "epix.com." ISS's offer to sell the name to Epix for $25,000 did not establish bad faith because it was made by ISS's attorney in the context of settlement negotiations after the litigation started.

Regarding Epix's Oregon dilution claim, it failed to produce any evidence that its EPIX mark was distinctive in Oregon. Finally, the district court did not abuse its discretion by allowing ISS to retain ownership of the "epix.com" domain name despite its finding of infringement as to ISS's digital-image processing services. Because these infringing past uses were "minimal and incidental to the primary purpose of ISS's website," the lower court's limited injunction was sufficient to alleviate any confusion and therefore appropriate under the circumstances.

This page uses content from Finnegan’s Internet Trademark Case Summaries. This entry is available under the GNU Free Documentation License.