Creative Gifts v. UFO

Citation: Creative Gifts, Inc. v. UFO, 235 F.3d 540 (10th Cir. 2000).

Factual Background
In 1995, plaintiff obtained a federal registration for the mark LEVITRON & Design for antigravity tops. Shortly thereafter, plaintiff and defendant entered into a business relationship under which defendant purchased and sold LEVITRON antigravity tops. In October 1996, the parties reached an oral agreement for defendant to domain name registration|register the domain name]] "levitron.com" to operate a website to sell LEVITRON tops. After negotiations broke down over formalizing a trademark license for defendant to use the LEVITRON mark in the “levitron.com” domain name, plaintiff withdrew defendant’s permission to use the mark in the domain name and then filed this lawsuit.

Trial Court Proceedings
The trial court, in an unpublished opinion, held that the term LEVITRON was not generic, and that defendant’s use of the “levitron.com” domain name infringed the LEVITRON mark. The district court ordered the transfer of "levitron.com" to plaintiff and enjoined defendant’s future use of the LEVITRON mark.

Appellate Court Proceedings
On appeal, the Tenth Circuit affirmed the lower court's decision. A small number of handwritten customer orders that mentioned only “LEVITRON” and “a selective compilation of Internet websites” did not establish that the term LEVITRON was generic. The customer orders on their face did not reveal whether the customers believed LEVITRON was a generic term or a trademark and, in any event, constituted less than .2% of the total sales of LEVITRON tops.

The website evidence was equally unimpressive because: (1) some of the sites actually used LEVITRON in a trademark sense, (2) others were in foreign languages, (3) the evidence had “no assurance of representativeness” as it was compiled by defendant, and (4) none of the websites “came from traditionally competent sources such as newspapers or trade journals.”

The appellate court also rejected defendant’s argument that the district court erroneously assigned it the burden of proving that LEVITRON was generic. According to defendant, plaintiff’s amendment of its registration for LEVITRON & Design to LEVITRON in block letters was motivated solely to obtain the “levitron.com” domain name under the NSI dispute-resolution policy in effect at the time. Because plaintiff failed to inform the PTO that this was its motive, defendant claimed that plaintiff’s amended registration was invalidly procured, thus shifting the burden to plaintiff to prove that LEVITRON was not generic. The appellate court not only questioned defendant’s “highly dubious” premise on establishing this motive, but barred defendant from arguing this issue on appeal because it was not raised below.

Lastly, the court rejected defendant’s “naked licensing” defense. As a licensee under the LEVITRON mark, defendant was estopped from making that claim.

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