Paccar v. Telescan Technologies

Citation: Paccar, Inc. v. Telescan Techs., L.L.C., 115 F.Supp.2d 772 (E.D. Mich. 2000), aff'd in part and vacated in part, 319 F.3d 243 (6th Cir. 2003).

Factual Background
Plaintiff owns the PETERBILT and KENWORTH trademarks for trucks and truck parts. Defendant, owner of several online truck-locator services, used plaintiff's trademarks in a number of [domain name]]s (e.g., “peterbilttrucks.com“; “peterbiltdealers.com“; “kenworthdealers.com“) and in its metatags.

Trial Court Proceedings
Plaintiff sought a preliminary injunction against defendant’s use of these domain names. In finding trademark infringement, the court noted that the addition of generic terms such as "trucks" or "dealers" did not avoid a likelihood of confusion between defendant's [domain name]]s and plaintiff's marks. The court rejected defendant’s argument that its use of plaintiff’s trademarks in its [domain name]]s was a fair use, distinguishing use of another’s trademark in [domain name]]s from use in advertising. According to the court, use of a brand of truck in an advertisement conveys the source of the truck, not the seller of the truck. In contrast, use of the brand name in [domain name]]s communicates information about the source of the website, not the source of the products being sold on the site.


 * “Using the name Peterbilt or Kenworth in a domain name sends a message to Internet users that the website is associated with, or sponsored by the company owning the trademarks Peterbilt or Kenworth.”

In finding dilution, the court rejected defendant's assertion that no dilution or tarnishment occurred because the trucks shown on its websites were manufactured by plaintiff. The court emphasized that “the issue is the website itself, not the trucks.” Because plaintiff had no control over what messages, goods, or services were associated with defendant’s websites, “it is effectively 'at the mercy’ of [defendant].”

The preliminary injunction enjoined defendant from using plaintiff's trademarks in any domain name, in metatags, as the title of a web page, or as a wallpaper background of a web page. The injunction did not, however, prohibit defendant from using plaintiff's trademarks on its website in a noninfringing manner. The court also suggested that defendant could use plaintiff’s trademarks in the postdomain path of an URL (e.g., “www.telescan.com/peterbilt“). Finally, defendant was required to: (1) immediately transfer the disputed domain names to plaintiff, (2) post the court’s order on its websites, and (3) give notice of the order to all its customers, correspondents, members, and subscribers.

Appellate Court Proceedings
On appeal, the Sixth Circuit affirmed the district court's grant of a preliminary injunction, finding that plaintiff demonstrated a "strong" likelihood of success on the merits of its trademark-infringement claim based on defendant's use of plaintiff's trademarks in its [domain name]]s. Central to the appellate court's decision was its recognition that a domain name can be more than a mere address because "words in many domain names can and do communicate information as to the source or sponsor of the web site."

The district court properly found that defendant's disclaimer did not remedy the initial interest confusion caused by defendant's domain names.

The Sixth Circuit rejected defendant's three primary defenses. First, defendant's use of plaintiff's trademarks in its domain names did not constitute a "descriptive" fair use because defendant used PETERBILT and KENWORTH in its domain names as trademarks, not as descriptive terms.

Second, regarding defendant's nominative fair-use defense, the Sixth Circuit noted that it had never followed the nominative fair-use test advanced by the Ninth Circuit in New Kids and was not "inclined" to do so here. Even if the court did apply the nominative use test here, however, defendant's use of plaintiff's trademarks did not satisfy that test because defendant used plaintiff's trademarks in its domain names to describe its own products its websites rather than plaintiff's trucks, parts, and dealers. Moreover, defendant's use of plaintiff's marks in its domain names, coupled with its other uses of plaintiff's marks on its websites, went “beyond using the marks 'as is reasonably necessary to identify' PACCAR's trucks, parts, and dealers."

The Sixth Circuit distinguished this case from Volkswagenwerk v. Church, in which the Ninth Circuit upheld a lower court decision that a repair shop unaffiliated with Volkswagen could refer to itself as "Independent Volkswagen Porsche Service." In that case, the defendant's "prominent use of the word 'Independent' whenever the terms 'Volkswagen' or 'VW' appeared in his advertising was sufficient to distinguish his business to the eye of the customer" so they would not believe that defendant was "part of Volkswagen's organization of franchised dealers and repairmen." Here, however, defendant's domain names did not contain words like "independent" or "unaffiliated" to distinguish the producer’s websites. Third, the first-sale doctrine offered no relief for defendant as it applies only when a purchaser "does no more than stock, display, and resell" a product under its trademark. It did not apply where, as here, a reseller uses the trademark "in a manner likely to cause the public to believe the reseller was part of the producer's authorized sales force or one of its franchisees."

Given plaintiff's strong showing on the likelihood of success of its infringement claim, the appeals court did not consider the district court's "cursory analysis" that led to its finding of dilution.

Finally, because the lower court failed to consider whether defendant's use of plaintiff's marks in metatags created a likelihood of confusion separate from use of those marks in defendant's domain names, the Sixth Circuit vacated the injunction’s prohibition on the use of plaintiff’s trademarks in defendant’s metatags.

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