AOL v. AT&T

Citation: America Online, Inc. v. AT&T Corp., 1998 U.S. Dist. LEXIS 22556 (E.D. Va. Dec. 24, 1998) (preliminary injunction), and 64 F.Supp.2d 549 (E.D. Va. 1999) (summary judgment), aff’d in part and vacated in part, 243 F.3d 812 (4th Cir. 2001), cert. denied, 534 U.S. 946 (2001).

Factual Background
Plaintiff America Online (“AOL”) alleged that defendant AT&T’s use of the phrases “You Have Mail,” “I’m Here,” and “Buddy List” for e-mail and Internet messaging-related services infringed and diluted AOL’s rights in the marks YOU HAVE MAIL, BUDDY LIST, and IM for identical services.

Trial Court Proceedings
In its application for a temporary restraining order, AOL argued that AT&T had planned the release date of its new “You Have Mail” e‑mail notification service to coincide with the release of the movie featuring AOL’s service entitled “You’ve Got Mail,” in order to trade off the tremendous goodwill associated with AOL’s service and to cause confusion among potential new online customers.

In response, AT&T asserted that each of the terms “YOU HAVE MAIL,” “BUDDY LIST,” and “IM” was generic and widely used throughout the industry, such that AOL should not be able to appropriate these common phrases to describe features that customers have come to expect an e‑mail service to provide.

Construing AOL’s request as a motion for preliminary injunction because the case had been briefed by both parties, the court agreed with AT&T, finding it questionable that AOL was likely to succeed on the merits of its claims. Specifically, the court found that AT&T had made a fairly compelling case that the marks at issue were generic. In addition, the court determined that AOL was unlikely to suffer irreparable harm if an injunction did not issue and that whatever harm AOL may have suffered could be compensated through monetary damages. But the court declined to determine whether AOL might possess protectable rights in the combination of a mailbox symbol, the words “You Have Mail,” and the voice prompt “You’ve Got Mail” to notify subscribers of new messages.

In a later decision, the court granted AT&T’s motion for summary judgment on its declaratory-judgment counterclaims that AOL’s marks YOU HAVE MAIL, IM, and BUDDY LIST were generic and not protectable as trademarks. The court thus found that AT&T’s use of these terms did not infringe AOL’s rights in the terms. In reaching this conclusion, the court pointed to widespread generic use of these phrases by the public, the media, AOL’s competitors, and AOL itself. The court also held that AT&T’s declaratory-judgment claim that the term “You’ve Got Mail” was generic was mooted by AOL’s stipulation that should the court’s ruling that the phrase “You Have Mail” is generic be affirmed on appeal, AOL would not assert that AT&T’s use of “You Have Mail” infringed AOL’s YOU’VE GOT MAIL mark.

Appellate Court Proceedings
On appeal, the Fourth Circuit upheld the district court’s grant of summary judgment that the terms YOU HAVE MAIL and IM were generic, but vacated and remanded for further consideration the ruling that BUDDY LIST was generic. On the latter issue, AOL argued that the lower court failed to give “substantial deference” to the PTO’s decision to register the mark BUDDY LIST without requiring evidence of secondary meaning, as required by the Supreme Court’s decision in Chevron.

The appeals court, however, held that the district court had no obligation to afford “Chevron-type deference” to the PTO’s decision. Instead, the court was required only to receive the registration into evidence and treat it as prima facie evidence of the validity of the mark and that BUDDY LIST was suggestive. Although the district court properly received the registration into evidence, “it thereafter erred in ignoring that evidence.”

According to the appeals court, “[t]he prima facie evidence provided by the. . . registration was in this case sufficient to establish a question of material fact that could not be resolved on summary judgment.” In addition, the district court had noted other evidence in the record that BUDDY LIST had been treated in a suggestive manner, and the district court itself recognized that this other evidence “tended to create a factual dispute.”

In affirming the district court’s finding that YOU HAVE MAIL was generic, the Fourth Circuit introduced the interesting concept of use of a term within the “heartland” of its ordinary meaning. It first looked at the understanding of the common meaning of YOU HAVE MAIL and its common usage, and then determined that use of the words YOU HAVE MAIL by AOL and others to alert online users that they had e-mail was “within the heartland of their ordinary meaning. . . .” Although AOL’s survey evidence showed that a portion of the public associated the term YOU HAVE MAIL with AOL, such de facto secondary meaning did not entitle AOL to prevent others from using those words in their functional and descriptive sense.

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