Gregerson v. Vilana Financial

Citation: Gregerson v. Vilana Financial, Inc., 446 F.Supp.2d 1053 (D. Minn. Nov. 7, 2006)(full-text) (defendant’s motion for preliminary injunction); 2007 U.S. Dist. LEXIS 64960 (D. Minn. Aug. 31, 2007)(http://scholar.google.com/scholar_case?case=11155481803009626383&q=Gregerson+v.+Vilana+Financial&hl=en&as_sdt=2002 full-text]) (cross-motions for summary judgment).

Factual Background
Plaintiff, an independent photographer, licensed his photographs through his websites at “cgstock.com” and “phototour.minneapolis.mn.us.” Defendants ran a finance company under the marks VILANA, VILANA FINANCIAL, VILANA REALTY, and VILANAFINANCIAL.COM.

Trial Court Proceedings
Plaintiff sued defendants for copyright infringement for taking a photograph from plaintiff’s website and using it in advertising without plaintiff’s permission.

After plaintiff criticized defendants on his websites and used defendants’ marks in the links, subject lines, and metatags of his websites, defendants counterclaimed for trademark infringement and moved for a preliminary injunction to stop plaintiff’s use of defendants’ marks.

At oral argument, the court requested plaintiff to voluntarily alter his site to “obviate the need for granting injunctive relief.” In response, plaintiff removed all comments from the site referring to defendant Vilenchik’s “secretary or girlfriend”; added a large red disclaimer to his website; and edited the metatags and descriptions to “more explicitly state the nature of the web site as a criticism of Vilana Financial and Andrew Vilenchik.” The court then denied defendants’ motion for preliminary injunction because they failed to establish a likelihood of success on the merits.

Quoting from its decision in Faegre & Benson v. Purdy, the court stated that “[a] defendant’s use of a trademark in metatags in a descriptive manner can constitute a non-infringing fair use.” Moreover, although the court recognized that the balance of harms could tip in favor of defendants due to the comments critical of defendants, it acknowledged plaintiff’s First Amendment right to free expression and found that plaintiff’s voluntary modifications to his website “cure[d] much of the harm described in [defendants’] Motion” and “comport[ed] with the “guidelines found to be appropriate in Purdy.” The public interest factor was neutral because the public had interests in the enforcement of both the trademark laws and the First Amendment. The court stated that it would “closely monitor” plaintiff’s websites and that defendants could renew their motion should the circumstances change.

Copyright infringement
Both parties later moved for summary judgment. Regarding Gregerson’s copyright infringement claim, the court found that he sufficiently proved that he had properly registered the photos in question with the Copyright Office and that the photos used by Vilana in its advertisements were the same. Because intent is irrelevant in copyright infringement cases, and Vilana admittedly reproduced the photos, the court granted Gregerson’s motion for summary judgment on his copyright claim.

Trademark infringement
Turning to Vilana’s trademark infringement counterclaims, the court first noted that use of a party’s marks in metatags to divert Internet customers can constitute trademark infringement by creating initial-interest confusion, but when used in a descriptive manner, it could constitute fair use. Without analyzing each likelihood-of-confusion factor, the court found that a likelihood of confusion, whether there was initial-interest confusion or not, was unlikely where the parties were not competitors and do not sell “similar products.”

The court discredited Vilana’s evidence of actual confusion, because those people, while exhibiting general confusion about the relation of Gregerson’s website to Vilana, were not confused as to the services that each party sold. According to the court, “[i]t is highly unlikely that someone looking for any of Vilana’s [real estate] services became confused and actually bought photographs instead.” Further, Gregerson’s commentary on his website was for critical commentary purposes, and not to divert Internet users from Vilana’s website. Thus, the court granted Gregerson’s motion for summary judgment on Vilana’s trademark infringement claims.

Cybersquatting claim
The court also granted summary judgment to Gregerson on Vilana’s cybersquatting claim, finding that Gregerson had no bad-faith intent to profit from the use of Vilana’s mark in a domain name. Gregerson’s use of VILANA in the post-domain path of his URL was not use of a domain name.

Other claims
The court did not, however, grant summary judgment in favor of Gregerson on Vilana’s claims for deceptive trade practices, interference with contractual and interference with business relationships, or appropriation. It found that Gregerson posted potentially disparaging and false remarks concerning Vilana’s alleged fraudulent and predatory business conduct and that several of Vilana’s employees may be in the Russia mafia, and that such remarks could support claims of deceptive trade practices and interference with Vilana’s business relationships.

Further, Gregerson’s use of the names and photos of some of Vilana’s employees on his webpage linked to his commercial website could constitute a use of these names or likenesses for Gregerson’s own purposes and benefit, to the detriment of Vilana and thus could support a common law claim for appropriation.

As to unjust enrichment, the court found Vilana’s claims that Gregerson received increased profits or something else of value were too speculative, and granted summary judgment in Gregerson’s favor. Finally, the court refused to revisit its previous denial of an injunction against Gregerson. This page uses content from Finnegan’s Internet Trademark Case Summaries. This entry is available under the Creative Commons Attribution-Share Alike License 3.0 (Unported) (CC-BY-SA).