Property 6208-22
Fall 2013
Prof. Overton
Supplemental Materials1
Intellectual Property
XII.
INTELLECTUAL PROPERTY
A. Introduction, 187 - 88
B. Trademark
Introduction, 188 – 89
Overview of Trademark Law, IPSUPP 2-6
Trademark statute, IPSUPP 7
Trademark Infringement on the Internet
Playboy v. Netscape, IPSUPP 8-18
PETA v. Doughney, IPSUPP 19-23
Lamparello v. Falwell, IPSUPP 24-31
C. Copyright
Overview of Copyright Law, IPSUPP 32-34
Copyright Statute, IPSUPP 35-36.
Fair Use
SunTrust Bank v. Houghton Mifflin, 218-31
Contributory Infringement, 199-200
UCS v. Sony, IPSUPP 37-46
Metro-Goldwyn-Mayer Studios v. Grokster, Ltd., 201-18
D. Publicity Rights
Martin Luther King Center for Social Change v. American Heritage
Products, 241-254
1
These materials were originally compiled by GW Professor Dawn Nunziato, who teaches Intellectual Property at
GW.
Overview of Trademark Law
***
Cola in the future and instead buy another
brand. Trademark law furthers these goals
by regulating the proper use of trademarks.
1. What is a trademark?
A trademark is a word, symbol, or phrase,
used to identify a particular manufacturer or
seller's products and distinguish them from
the products of another. 15 U.S.C. § 1127.
For example, the trademark "Nike," along
with the Nike "swoosh," identify the shoes
made by Nike and distinguish them from
shoes made by other companies (e.g.
Reebok or Adidas). Similarly, the trademark
"Coca-Cola" distinguishes the browncolored soda water of one particular
manufacturer from the brown-colored soda
of another (e.g. Pepsi). When such marks are
used to identify services (e.g. "Jiffy Lube")
rather than products, they are called service
marks, although they are generally treated
just the same as trademarks.
2. What sources of law govern trademarks?
Trademarks are governed by both state and
federal law. . . . The main federal statute is
the Lanham Act, which was enacted in 1946
and most recently amended in 1996. 15
U.S.C. §§ 1051, et seq.. Today, federal law
provides the main, and by and large the most
extensive, source of trademark protection,
although state common law actions are still
available. . . .
3. What prerequisites must a mark satisfy in
order to serve as a trademark?
In order to serve as a trademark, a mark
must be distinctive -- that is, it must be
capable of identifying the source of a
particular good. In determining whether a
mark is distinctive, the courts group marks
into four categories, based on the
relationship between the mark and the
underlying product: (1) arbitrary or fanciful,
(2) suggestive, (3) descriptive, or (4)
generic. Because the marks in each of these
categories vary with respect to their
distinctiveness, the requirements for, and
degree of, legal protection afforded a
particular trademark will depend upon
which category it falls within.
Under some circumstances, trademark
protection can extend beyond words,
symbols, and phrases to include other
aspects of a product, such as its color or its
packaging. For example, the pink color of
Owens-Corning fiberglass insulation or the
unique shape of a Coca-Cola bottle might
serve as identifying features. Such features
fall generally under the term "trade dress,"
and may be protected if consumers associate
that feature with a particular manufacturer
rather than the product in general. . . .
Trademarks make it easier for consumers to
quickly identify the source of a given good.
Instead of reading the fine print on a can of
cola, consumers can look for the Coca-Cola
trademark. Instead of asking a store clerk
who made a certain athletic shoe, consumers
can look for particular identifying symbols,
such as a swoosh or a unique pattern of
stripes. By making goods easier to identify,
trademarks also give manufacturers an
incentive to invest in the quality of their
goods. After all, if a consumer tries a can of
Coca-Cola and finds the quality lacking, it
will be easy for the consumer to avoid Coca-
An arbitrary or fanciful mark is a mark that
bears no logical relationship to the
underlying product. For example, the words
"Exxon," "Kodak," and "Apple" bear no
inherent relationship to their underlying
products (respectively, gasoline, cameras, or
computers). Similarly, the Nike "swoosh"
bears no inherent relationship to athletic
shoes. Arbitrary or fanciful marks are
inherently distinctive -- i.e. capable of
identifying an underlying product -- and are
given a high degree of protection.
2
A suggestive mark is a mark that evokes or
suggests a characteristic of the underlying
good. For example, the word "Coppertone"
is suggestive of sun-tan lotion, but does not
specifically describe the underlying product.
Some exercise of imagination is needed to
associate the word with the underlying
product. At the same time, however, the
word is not totally unrelated to the
underlying product. Like arbitrary or
fanciful marks, suggestive marks are
inherently distinctive and are given a high
degree of protection.
manner of advertising; (2) the volume of
sales; (3) the length and manner of the
term's use; (4) results of consumer surveys.
Zatarain's, Inc. v. Oak Grove Smokehouse,
Inc., 698 F.2d 786 (5th Cir. 1983).
Finally, a generic mark is a mark that
describes the general category to which the
underlying product belongs. For example,
the term "Computer" is a generic term for
computer equipment. Generic marks are
entitled to no protection under trademark
law. Thus, a manufacturer selling
"Computer" brand computers (or "Apple"
brand apples, etc.) would have no exclusive
right to use that term with respect to that
product. Generic terms are not protected by
trademark law because they are simply too
useful for identifying a particular product.
Giving a single manufacturer control over
use of the term would give that
manufacturer too great a competitive
advantage. Under some circumstances,
terms that are not originally generic can
become generic over time (a process called
"genericity"), and thus become unprotected.
A descriptive mark is a mark that directly
describes, rather than suggests, a
characteristic or quality of the underlying
product (e.g. its color, odor, function,
dimensions, or ingredients). For example,
"Holiday Inn," "All Bran," and "Vision
Center" all describe some aspect of the
underlying product or service (respectively,
hotel rooms, breakfast cereal, optical
services). They tell us something about the
product. Unlike arbitrary or suggestive
marks, descriptive marks are not inherently
distinctive and are protected only if they
have acquired "secondary meaning."
Descriptive marks must clear this additional
hurdle because they are terms that are useful
for describing the underlying product, and
giving a particular manufacturer the
exclusive right to use the term could confer
an unfair advantage.
4. How do you acquire rights in a
trademark?
Assuming that a trademark qualifies for
protection, rights to a trademark can be
acquired in one of two ways: (1) by being
the first to use the mark in commerce; or (2)
by being the first to register the mark with
the U.S. Patent and Trademark Office
("PTO"). 15 U.S.C. § 1127(a). . . . The use
of a mark generally means the actual sale of
a product to the public with the mark
attached. Thus, if I am the first to sell
"Lucky" brand bubble-gum to the public, I
have acquired priority to use that mark in
connection with the sale of bubble-gum
(assuming that the mark otherwise qualifies
for trademark protection). This priority is
limited, however, to the geographic area in
which I sell the bubble gum, along with any
areas I would be expected to expand into or
any areas where the reputation of the mark
has been established. . . .
A descriptive mark acquires secondary
meaning when the consuming public
primarily associates that mark with a
particular producer, rather than the
underlying product. Thus, for example, the
term "Holiday Inn" has acquired secondary
meaning because the consuming public
associates that term with a particular
provider of hotel services, and not with hotel
services in general. The public need not be
able to identify the specific producer; only
that the product or service comes from a
single producer. When trying to determine
whether a given term has acquired
secondary meaning, courts will often look to
the following factors: (1) the amount and
3
5. What does it mean to register a
trademark?
not a specific source or manufacturer. So,
for example, the term "thermos" has become
a generic term and is no longer entitled to
trademark protection. Although it once
denoted a specific manufacturer, the term
now stands for the general type of product.
Similarly, both "aspirin" and "cellophane"
have been held to be generic. Bayer Co. v.
United Drug Co., 272 F.505 (S.D.N.Y.
1921). In deciding whether a term is generic,
courts will often look to dictionary
definitions, the use of the term in
newspapers and magazines, and any
evidence of attempts by the trademark
owner to police its mark.
Although registration with the PTO is not
required for a trademark to be protected,
registration does confer a number of benefits
to the registering party. 15 U.S.C. § 1051.
As described above, registration gives a
party the right to use the mark nationwide,
subject to the limitations noted above. 15
U.S.C. § 1072. . . .
6. Can trademark rights be lost?
The rights to a trademark can be lost through
abandonment, improper licensing or
assignment, or genericity. A trademark is
abandoned when its use is discontinued with
an intent not to resume its use. . . . So, for
example, a recent case held that the Los
Angeles Dodgers had abandoned rights to
the Brooklyn Dodgers trademark Major
League Baseball Properties, Inc. v. Sed Non
Olet Denarius, Ltd., 817 F. Supp. 1103
(S.D.N.Y. 1993).
7. What constitutes trademark infringement?
If a party owns the rights to a particular
trademark, that party can sue subsequent
parties for trademark infringement. 15
U.S.C. §§ 1114, 1125. The standard is
"likelihood of confusion." To be more
specific, the use of a trademark in
connection with the sale of a good
constitutes infringement if it is likely to
cause consumer confusion as to the source
of those goods or as to the sponsorship or
approval of such goods. In deciding whether
consumers are likely to be confused, the
courts will typically look to a number of
factors, including: (1) the strength of the
mark; (2) the proximity of the goods; (3) the
similarity of the marks; (4) evidence of
actual confusion; (5) the similarity of
marketing channels used; (6) the degree of
caution exercised by the typical purchaser;
(7) the defendant's intent. Polaroid Corp. v.
Polarad Elect. Corp., 287 F.2d 492 (2d Cir.),
cert. denied, 368 U.S. 820 (1961).
Trademark rights can also be lost through
improper licensing or assignment. Where the
use of a trademark is licensed (for example,
to a franchisee) without adequate quality
control or supervision by the trademark
owner, that trademark will be canceled.
Similarly, where the rights to a trademark
are assigned to another party in gross,
without the corresponding sale of any assets,
the trademark will be canceled. The
rationale for these rules is that, under these
situations, the trademark no longer serves its
purpose of identifying the goods of a
particular provider. Dawn Donut Co., Inc. v.
Hart's Food Stores, Inc., 267 F.2d 358 (2d
Cir. 1959).
So, for example, the use of an identical mark
on the same product would clearly constitute
infringement. If I manufacture and sell
computers using the mark "Apple," my use
of that mark will likely cause confusion
among consumers, since they may be misled
into thinking that the computers are made by
Apple Computer, Inc. Using a very similar
mark on the same product may also give rise
to a claim of infringement, if the marks are
Trademark rights can also be lost through
genericity. Sometimes, trademarks that are
originally distinctive can become generic
over time, thereby losing its trademark
protection Kellogg Co. v. National Biscuit
Co., 305 U.S. 111 (1938). A word will be
considered generic when, in the minds of a
substantial majority of the public, the word
denotes a broad genus or type of product and
4
close enough in sound, appearance, or
meaning so as to cause confusion. So, for
example, "Applet" computers may be offlimits; perhaps also "Apricot." On the other
end of the spectrum, using the same term on
a completely unrelated product will not
likely give rise to an infringement claim.
Thus, Apple Computer and Apple Records
can peacefully co-exist, since consumers are
not likely to think that the computers are
being made by the record company, or vice
versa. . . .
bicycles or Xerox brand cigarettes. Although
neither example is likely to cause confusion
among consumers, each dilutes the
distinctive quality of the mark. Tarnishment
occurs when the mark is cast in an
unflattering light, typically through its
association with inferior or unseemly
products or services. So, for example, in a
recent case, ToysRUs successfully brought a
tarnishment claim against adultsrus.com, a
pornographic web-site. Toys "R" Us v.
Akkaoui, 40 U.S.P.Q.2d (BNA) 1836 (N.D.
Cal. Oct. 29, 1996).
8. What constitutes trademark dilution?
9. What other potential causes of action are
there?
In addition to bringing an action for
infringement, owners of trademarks can also
bring an action for trademark dilution under
either federal or state law. Under federal
law, a dilution claim can be brought only if
the mark is "famous." In deciding whether a
mark is famous, the courts will look to the
following factors: (1) the degree of inherent
or acquired distinctiveness; (2) the duration
and extent of use; (3) the amount of
advertising and publicity; (4) the geographic
extent of the market; (5) the channels of
trade; (6) the degree of recognition in
trading areas; (7) any use of similar marks
by third parties; (8) whether the mark is
registered. 15 U.S.C. § 1125(c). Kodak,
Exxon, and Xerox are all examples of
famous marks. Under state law, a mark need
not be famous in order to give rise to a
dilution claim. Instead, dilution is available
if: (1) the mark has "selling power" or, in
other words, a distinctive quality; and (2) the
two marks are substantially similar. Mead
Data Central, Inc. v. Toyota Motor Sales,
U.S.A., Inc., 875 F.2d 1026 (2d Cir. 1989).
***
10. What defenses are there to trademark
infringement or dilution?
Defendants in a trademark infringement or
dilution claim can assert basically two types
of affirmative defense: fair use or parody.
Fair use occurs when a descriptive mark is
used in good faith for its primary, rather
than secondary, meaning, and no consumer
confusion is likely to result. So, for example,
a cereal manufacturer may be able to
describe its cereal as consisting of "all bran,"
without infringing upon Kelloggs' rights in
the mark "All Bran." Such a use is purely
descriptive, and does not invoke the
secondary meaning of the mark. Similarly,
in one case, a court held that the defendant's
use of "fish fry" to describe a batter coating
for fish was fair use and did not infringe
upon the plaintiff's mark "Fish-Fri."
Zatarain's, Inc. v. Oak Grove Smokehouse,
Inc., 698 F.2d 786 (5th Cir. 1983). Such
uses are privileged because they use the
terms only in their purely descriptive sense.
Once the prerequisites for a dilution claim
are satisfied, the owner of a mark can bring
an action against any use of that mark that
dilutes the distinctive quality of that mark,
either through "blurring" or "tarnishment" of
that mark; unlike an infringement claim,
likelihood of confusion is not necessary.
Blurring occurs when the power of the mark
is weakened through its identification with
dissimilar goods. For example, Kodak brand
Some courts have recognized a somewhat
different, but closely-related, fair-use
defense, called nominative use. Nominative
use occurs when use of a term is necessary
for purposes of identifying another
producer's product, not the user's own
product. For example, in a recent case, the
newspaper USA Today ran a telephone poll,
5
asking its readers to vote for their favorite
member of the music group New Kids on
the Block. The New Kids on the Block sued
USA Today for trademark infringement. The
court held that the use of the trademark
"New Kids on the Block" was a privileged
nominative use because: (1) the group was
not readily identifiable without using the
mark; (2) USA Today used only so much of
the mark as reasonably necessary to identify
it; and (3) there was no suggestion of
endorsement or sponsorship by the group.
The basic idea is that use of a trademark is
sometimes necessary to identify and talk
about another party's products and services.
When the above conditions are met, such a
use will be privileged. New Kids on the
Block v. News America Publishing, Inc.,
971 F.2d 302 (9th Cir. 1992).
movie was found not to violate Hormel's
rights in the trademark "Spam." Hormel
Foods Corp. v. Jim Henson Prods., 73 F.3d
497 (2d Cir. 1996). On the other hand,
"Gucchie Goo" diaper bags were found not
to be protected under the parody
defenseGucci Shops, Inc. v. R.H. Macy &
Co., 446 F. Supp. 838 (S.D.N.Y. 1977).
Similarly, posters bearing the logo "Enjoy
Cocaine" were found to violate the rights of
Coca-Cola in the slogan "Enjoy CocaColaCoca-Cola Co. v. Gemini Rising, Inc.,
346 F. Supp. 1183 (E.D.N.Y. 1972). Thus,
although the courts recognize a parody
defense, the precise contours of such a
defense are difficult to outline with any
precision.
11. What remedies are there for trademark
infringement and/or dilution?
Finally, certain parodies of trademarks may
be permissible if they are not too directly
tied to commercial use. The basic idea here
is that artistic and editorial parodies of
trademarks serve a valuable critical function,
and that this critical function is entitled to
some degree of First Amendment protection.
The courts have adopted different ways of
incorporating such First Amendment
interests into the analysis. For example,
some courts have applied the general
"likelihood of confusion" analysis, using the
First Amendment as a factor in the analysis.
Other courts have expressly balanced First
Amendment considerations against the
degree of likely confusion. Still other courts
have held that the First Amendment
effectively trumps trademark law, under
certain circumstances. In general, however,
the courts appear to be more sympathetic to
the extent that parodies are less commercial,
and less sympathetic to the extent that
parodies involve commercial use of the
mark.
Successful plaintiffs are entitled to a wide
range of remedies under federal law. Such
plaintiffs are routinely awarded injunctions
against further infringing or diluting use of
the trademark. 15 U.S.C. § 1116(a). In
trademark infringement suits, monetary
relief may also be available, including: (1)
defendant's profits, (2) damages sustained
by the plaintiff, and (3) the costs of the
action. 15 U.S.C. § 1117(a). Damages may
be trebled upon showing of bad faith. In
trademark dilution suits, however, damages
are available only if the defendant willfully
traded on the plaintiff's goodwill in using the
mark. Otherwise, plaintiffs in a dilution
action are limited to injunctive relief. 15
U.S.C. § 1125(c).
So, for example, a risqué parody of an L.L.
Bean magazine advertisement was found not
to constitute infringement. L.L. Bean, Inc. v.
Drake Publishers, Inc., 811 F.2d 26, 28 (1st
Cir. 1987). Similarly, the use of a pig-like
character named "Spa'am" in a Muppet
6
action by any person who believes that he or
she is or is likely to be damaged by such act.
Title 15 of the U.S. Code -- The
Lanham Act -- Federal
Trademark Law
(c) Remedies for dilution of famous marks
Selected Provisions
(1) The owner of a famous mark shall be
entitled, subject to the principles of equity
and upon such terms as the court deems
reasonable, to an injunction against another
person's commercial use in commerce of a
mark or trade name, if such use begins after
the mark has become famous and causes
dilution of the distinctive quality of the
mark, and to obtain such other relief as is
provided in this subsection.
***
(4) The following shall not be actionable
under this section:
(A) Fair use of a famous mark by
another person in comparative commercial
advertising or promotion to identify the
competing goods or services of the owner of
the famous mark.
(B) Noncommercial use of a mark.
(C) All forms of news reporting and
news commentary.
Sec. 1125. False designations of origin, false
descriptions, and dilution forbidden
(a) Civil action.
(1) Any person who, on or in connection
with any goods or services, or any container
for goods, uses in commerce any word,
term, name, symbol, or device, or any
combination thereof, or any false
designation of origin, false or misleading
description of fact, or false or misleading
representation of fact, which—
(A) is likely to cause confusion, or to cause
mistake, or to deceive as to the affiliation,
connection, or association of such person
with another person, or as to the origin,
sponsorship, or approval of his or her goods,
services, or commercial activities by
another person, shall be liable in a civil
7
Ninth Circuit.
PLAYBOY ENTERPRISES, INC., Plaintiff-Appellant,
v.
NETSCAPE COMMUNICATIONS CORPORATION, DefendantAppellee.
Playboy Enterprises International, Inc., Plaintiff-Appellant,
v.
Excite, Inc., Defendant-Appellee.
Nos. 00-56648, 00-56662.
Argued and Submitted Sept. 11, 2001.
Filed Jan. 14, 2004.
Before: B. FLETCHER, T.G. NELSON,
and
BERZON,
Circuit
Judges.
"keyed" to gardening-related terms.
Advertisements appearing on search result
pages are called "banner ads" because they
run along the top or side of a page much
like a banner. [FN1]
T.G.
NELSON,
Circuit
Judge.
Playboy Enterprises International, Inc.
(PEI) appeals from the district court's grant
of summary judgment in favor of Netscape
Communications Corporation and Excite,
Inc. PEI sued defendants for trademark
infringement and dilution. We have
jurisdiction pursuant to 28 U.S.C. § 1291.
Because we conclude that genuine issues of
material fact preclude summary judgment
on both the trademark infringement and
dilution claims, we reverse and remand.
I. FACTS
This case involves a practice called
"keying" that defendants use on their
Internet search engines. Keying allows
advertisers to target individuals with certain
interests by linking advertisements to preidentified terms. To take an innocuous
example, a person who searches for a term
related to *1023 gardening may be a likely
customer for a company selling seeds.
Thus, a seed company might pay to have its
advertisement displayed when searchers
enter terms related to gardening. After
paying a fee to defendants, that company
could have its advertisements appear on the
page listing the search results for
gardening-related terms: the ad would be
FN1. Not all banner ads are keyed. Some
advertisers buy space for their banner ads
but only pay to have their ads displayed
randomly. Such ads cost less because they
are un-targeted and are therefore
considered less effective.
Defendants have various lists of terms to
which they key advertisers' banner ads.
Those lists include the one at issue in this
case, a list containing terms related to sex
and adult-oriented entertainment. Among
the over-400 terms in this list are two for
which PEI holds trademarks: "playboy" and
"playmate." [FN2] Defendants require
adult-oriented companies to link their ads
to this set of words. Thus, when a user
types in "playboy," "playmate," or one of
the other listed terms, those companies'
banner ads appear on the search results
page. [FN3]
FN2. The other terms are generally untrademarked words associated with adult
entertainment, ranging from the expected
8
(sex, parts of the human anatomy, etc.) to
the disturbing (gangbangers).
A.
Trademark
Infringement
With
regard
to
PEI's
trademark
infringement claim, the parties disagree on
three points. First, the parties dispute
whether a direct or a contributory theory of
liability applies to defendants' actions. We
conclude that defendants are potentially
liable under one theory and that we need
not decide which one. Second, the parties
disagree regarding whether PEI has
successfully shown that a genuine issue of
material fact exists regarding the likelihood
of consumer confusion resulting from
defendants' use of PEI's marks. We
conclude that a genuine issue of material
fact does exist. Finally, the parties dispute
whether any affirmative defenses apply.
We conclude that no defenses apply. We
will address each dispute in turn.
1. Theory of liability.
Whether the defendants are directly or
merely contributorily liable proves to be a
tricky question. However, we need not
decide that question here. We conclude that
defendants are either directly or
contributorily liable. Under either theory,
PEI's case may proceed. Thus, we need not
decide this issue.
2. PEI's case for trademark infringement.
The "core element of trademark
infringement," the likelihood of confusion,
lies at the center of this case. [FN10] No
dispute exists regarding the other
requirements set forth by the statute: PEI
clearly holds the marks in question and
defendants used the marks in commerce
[FN11] without PEI's permission. [FN12]
FN3. The search results page lists websites
relevant to the search terms pursuant to the
search engine's computer program. A user
can click on any item in the list to link to
the website of the organization listed.
Defendants' search results pages for the
terms "playboy" and "playmate" include
links to PEI's websites.
PEI introduced evidence that the adultoriented banner ads displayed on
defendants' search results pages are often
graphic in nature and are confusingly
labeled or not labeled at all. In addition, the
parties do not dispute that buttons on the
banner ads say "click here." When a
searcher complies, the search results page
disappears, and the searcher finds him or
herself at the advertiser's website. PEI
presented uncontroverted evidence that
defendants monitor "click rates," the ratio
between the number of times searchers
click on banner ads and the number of
times the ads are shown. Defendants use
click rate statistics to convince advertisers
to renew their keyword contracts. The
higher the click rate, the more successful
they
deem
a
banner
ad.
PEI sued defendants, asserting that they
were using PEI's marks in a manner that
infringed upon and diluted them. The
district court denied PEI's request for a
preliminary injunction, and this court
affirmed in an unpublished disposition.
[FN4] On remand, the parties filed crossmotions for summary judgment. The
district court granted summary judgment in
favor of defendants. We reverse.
FN10. Brookfield Communications, Inc. v.
West Coast Entm't Corp., 174 F.3d 1036,
1053 (9th Cir.1999). Because California
trademark law claims are "substantially
congruent," we do not examine them
separately in this opinion, just as the
district court did not. Denbicare U.S.A. Inc.
v. Toys R Us, Inc., 84 F.3d 1143, 1152 (9th
Cir.1996) (internal quotation marks
omitted).
FN4. Playboy Enters., Inc. v. Netscape
Communications Corp., 55 F.Supp.2d 1070
(C.D.Cal.), aff'd, 202 F.3d 278 (9th
Cir.1999).
III. DISCUSSION
9
FN11. Federal jurisdiction over trademark
cases rests on the Commerce Clause,
sweeps as broadly as possible, and clearly
encompasses the circumstances of this
case. 15 U.S.C. § 1127 (defining
"commerce" for jurisdictional purposes as
"all commerce which may lawfully be
regulated by Congress"); see Steele v.
Bulova Watch Co., 344 U.S. 280, 283-84,
73 S.Ct. 252, 97 L.Ed. 319 (1952). In
addition to defining "commerce," 15 U.S.C.
§ 1127 also defines "use in commerce." 15
U.S.C. § 1127. That latter definition applies
to the required use a plaintiff must make in
order to have rights in a mark, as defined
by 15 U.S.C. § 1051. See Planetary
Motion, Inc. v. Techsplosion, Inc., 261 F.3d
1188, 1194-95 (11th Cir.2001). It does not
enter into our jurisdictional analysis.
FN12. 15 U.S.C. § 1114(1)(a).
their confusion, users may follow the
instruction, believing they will be
connected to a PEI cite. Even if they realize
"immediately
upon
accessing"
the
competitor's site that they have reached a
site "wholly unrelated to" PEI's, the
damage has been done: Through initial
consumer confusion, the competitor "will
still have gained a customer by
appropriating the goodwill that [PEI] has
developed in its [ ] mark." [FN17]
FN16. Note that if a banner advertisement
clearly identified its source or, even better,
overtly compared PEI products to the
sponsor's own, no confusion would occur
under PEI's theory.
FN17. Brookfield, 174 F.3d at 1057.
PEI's theory strongly resembles the theory
adopted by this court in Brookfield
Communications, Inc. v. West Coast
Entertainment Corporation. [FN18] In
Brookfield, a video rental company, West
Coast Entertainment Corporation, planned
on using "moviebuff.com" as a domain
name for its website and using a similar
term in the metatags for the site. [FN19]
Brookfield had trademarked the term
"MovieBuff," however, and sued West
Coast for trademark infringement. [FN20]
The court ruled in favor of Brookfield. It
reasoned that Internet users entering
Brookfield's mark (plus ".com") or
searching for Brookfield's mark on search
engines using metatags, would find
themselves at West Coast's website.
Although they might "realize, immediately
upon accessing 'moviebuff.com,' that they
have reached a site operated by West Coast
and wholly unrelated to Brookfield," some
customers who were originally seeking
Brookfield's website "may be perfectly
content with West Coast's database
(especially as it is offered free of charge)."
[FN21] Because those customers would
have found West Coast's site due to West
Coast's "misappropriation of Brookfield's
goodwill" in its mark, the court concluded
that Brookfield withstood summary
judgment. [FN22]
[1]
PEI's strongest argument for a
likelihood of confusion is for a certain kind
of confusion: initial interest confusion.
[FN13] *1025 Initial interest confusion is
customer confusion that creates initial
interest in a competitor's product. [FN14]
Although dispelled before an actual sale
occurs,
initial
interest
confusion
impermissibly capitalizes on the goodwill
associated with a mark and is therefore
actionable trademark infringement. [FN15]
FN13. Indeed, we find insufficient
evidence to defeat summary judgment on
any other theory.
FN14. Brookfield, 174 F.3d at 1062-63.
FN15. Id. at 1057.
PEI asserts that, by keying adult-oriented
advertisements to PEI's trademarks,
defendants actively create initial interest
confusion in the following manner.
Because banner advertisements appear
immediately after users type in PEI's
marks, PEI asserts that users are likely to
be confused regarding the sponsorship of
un-labeled banner advertisements. [FN16]
In addition, many of the advertisements
instruct users to "click here." Because of
10
FN18. 174 F.3d 1036 (9th Cir.1999).
FN19. Id. at 1042.
FN20. Id. at 1043.
FN21. Id. at 1057.
FN22. Id.
FN24. 599
Cir.1979).
F.2d
341,
348-49
(9th
1.
strength
of
the
mark;
2.
proximity
of
the
goods;
3.
similarity
of
the
marks;
4. evidence of actual confusion;
5.
marketing
channels
used;
6. type of goods and the degree of care
likely to be exercised by the purchaser;
7. defendant's intent in selecting the mark;
and
8. likelihood of expansion of the product
lines. [FN25]
[2]
In this case, PEI claims that
defendants, in conjunction with advertisers,
have misappropriated the goodwill of PEI's
marks by leading Internet users to
competitors' websites just as West Coast
video misappropriated the goodwill of
Brookfield's mark. Some consumers,
initially seeking PEI's sites, may initially
believe
that
unlabeled
banner
advertisements are links to PEI's sites or to
sites affiliated with PEI. Once they follow
the instructions to "click here," and they
access the site, they may well realize that
they are not at a PEI-sponsored site.
However, they may be perfectly happy to
remain on the competitor's site, just as the
Brookfield court surmised that some
searchers
initially
*1026
seeking
Brookfield's site would happily remain on
West Coast's site. The Internet user will
have reached the site because of
defendants' use of PEI's mark. Such use is
actionable. [FN23]
FN25. Id.
In the Internet context, courts must be
flexible in applying the factors, as some
may not apply. [FN26] Moreover, some
factors are more important than others. For
example, a showing of actual confusion
among significant numbers of consumers
provides strong support for the likelihood
of confusion. [FN27] For that reason, we
turn first to an examination of factor four:
evidence of actual confusion.
FN26. Brookfield, 174 F.3d at 1054. In this
case, we conclude that only the final factor-the likelihood of expansion of product
lines-- does not apply.
FN23. Id. at 1062-65.
Although analogies to Brookfield suggest
that PEI will be able to show a likelihood
of confusion sufficient to defeat summary
judgment, we must test PEI's theory using
this circuit's well-established eight-factor
test for the likelihood of confusion to be
certain. Accordingly, we turn to that test
now.
FN27. Thane Int'l, Inc. v. Trek Bicycle
Corp., 305 F.3d 894, 902 (9th Cir.2002)
("Evidence of actual confusion constitutes
persuasive proof that future confusion is
likely.... If enough people have been
actually confused, then a likelihood that
people are confused is established.")
(internal quotation marks omitted).
[3]
The Ninth Circuit employs an
eight-factor test, originally set forth in AMF
Inc. v. Sleekcraft Boats, [FN24] to
determine the likelihood of confusion. The
eight factors are:
a. Factor 4: Evidence of Actual Confusion.
The expert study PEI introduced establishes
a strong likelihood of initial interest
confusion among consumers. Thus, factor
four alone probably suffices to reverse the
11
grant
of
summary
judgment.
PEI's expert, Dr. Ford, concluded that a
statistically significant number of Internet
users searching for the terms "playboy" and
"playmate" would think that PEI, or an
affiliate, sponsored banner ads containing
adult content that appear on the search
results page. When study participants were
shown search results for the term
"playboy," 51% believed that PEI
sponsored or was otherwise associated with
the adult-content banner ad displayed.
[FN28] When shown results for the term
"playmate," 31% held the same belief.
Using control groups, Dr. Ford also
concluded that for 29% of those
participants viewing "playboy" searches
and 22% of those viewing "playmate"
searches, the confusion stemmed from the
targeting of the banner advertisements. The
individuals were not confused by random,
un-targeted advertisements.
stage is improper. [FN29] Defendants'
arguments prove the point that a genuine
issue of material fact exists regarding
actual confusion. The presence of Dr.
Ford's criticized (but uncontradicted)
report, with its strong conclusions that a
high likelihood of initial interest confusion
exists among consumers, thus generates a
genuine issue of material fact on the actual
confusion issue.
FN29. Abdul-Jabbar, 85 F.3d at 410.
Because actual confusion is at the heart of
the likelihood of confusion analysis,
[FN30] Dr. Ford's report alone probably
precludes summary judgment. In the
interest of being thorough, however, we
will examine the other seven Sleekcraft
factors. On balance, they also support PEI.
FN30. Thane, 305 F.3d at 902.
FN28. Surveys are commonly introduced
as probative evidence of actual confusion.
See Schering Corp. v. Pfizer Inc., 189 F.3d
218, 225 (2d Cir.1999).
b. Factor One: Strength of the Mark.
PEI has established that strong secondary
meanings for its descriptive marks exist,
and that a genuine issue of material fact
exists as to whether it created the secondary
meanings. [FN31] Thus, the first Sleekcraft
factor favors PEI.
Defendants criticize Dr. Ford's procedures
and conclusions. They offer their own
interpretations
of
his
data,
with
significantly *1027 lower rates of
confusion.
Defendants
cite
cases
identifying probabilities of confusion of
7.6% and less as de minimis and then argue
that Dr. Ford's results showed de minimis
confusion as well. Their critique of Dr.
Ford's methods and interpretations formed
the basis of a motion to exclude his expert
testimony and report before the district
court. The district court denied that motion,
however, and allowed the introduction of
the
evidence.
Defendants may have valid criticism of Dr.
Ford's methods and conclusions, and their
critique may justify reducing the weight
eventually afforded Dr. Ford's expert
report. The district court's evidentiary
ruling is not before us on appeal, however,
and weighing admissible evidence at this
FN31. Sleekcraft, 599 F.2d at 349 n. 12
(noting that, once a party establishes that it
has created secondary meaning, "the
protection
afforded
should
be
commensurate with the degree of consumer
association proven").
At this point, defendants concede that they
use the marks for their secondary
meanings. [FN32] Thus, they concede that
the marks have secondary meanings. They
offer only a weak argument regarding the
strength of the meanings. [FN33] Given
that defendants themselves use the terms
precisely because they believe that Internet
*1028 searchers associate the terms with
their secondary meanings, disputing the
12
strength of the secondary meanings is
somewhat farfetched. The only meaningful
dispute is whether PEI created the strong
secondary meanings associated with the
mark.
unrelated markets. See id. Thus, even if
relevant to our inquiry in the infringement
context, the evidence would not be
dispositive on summary judgment.
FN32. Indeed, to argue that they use the
marks for their primary meaning, as
defendants did below, is absurd.
Defendants obviously do not use the term
"playmate," for example, for its dictionary
definition: "a companion, especially of a
child, in games and play." WEBSTER'S
NEW WORLD
DICTIONARY, 3d coll. ed. (1988).
PEI offered evidence, in the form of expert
reports, tending to show that PEI did create
the secondary meanings of "playboy" and
"playmate."
PEI's
expert
evidence
countered the defendants' expert evidence
to the contrary, and suffices to generate a
genuine issue of material fact on this issue.
c. Factor Two: Proximity of the Goods.
From an Internet searcher's perspective, the
relevant "goods" are the links to the
websites being sought and the goods or
services available at those sites. The
proximity between PEI's and its
competitor's goods provides the reason
Netscape keys PEI's marks to competitor's
banner advertisements in the first place.
Accordingly, this factor favors PEI as well.
d. Factor Three: Similarity of the Marks.
No doubt exists regarding this factor. Aside
from their lack of capitalization, their font,
and the fact that defendants use the plural
form of "playmate," the terms defendants
use are identical to PEI's marks. Thus, they
are certainly similar. [FN33]
FN33. Defendants cite third-party use of
the mark as evidence that the secondary
meanings of PEI's marks are weak.
However, as discussed in the dilution
context in section III.B, the degree of thirdparty use is in dispute in this case, and we
do not find their evidence helpful here.
Although evidence of extensive third-party
use of a mark may be useful in evaluating
the strength of the secondary meaning of a
mark, we note that such evidence can cut
both ways. On the one hand, extensive
third-party use of a mark might tend to
show that consumers are likely to associate
the mark with companies and meanings
other than the markholder's. See, e.g.,
Amstar Corp. v. Domino's Pizza, Inc., 615
F.2d 252, 259-60 (5th Cir.1980). However,
if consumers associate the mark with the
markholder, nd the markholder's secondary
meaning, despite extensive third-party use,
the third-party uses would tend to show the
strength of the association created by the
markholder. Finally, the markets in which
the markholder and the third parties use the
mark must be considered. See Nat'l Lead
Co. v. Wolfe, 223 F.2d 195, 204 (9th
Cir.1955) (considering, and rejecting,
evidence of third-party use because use
within the relevant market, for paint, was
de minimis ). Evidence of third-party use in
markets similar to the markholder's is more
compelling than evidence of third-party use
in
FN33. See Sleekcraft, 599 F.2d at 350-52.
e. Factor Five: Marketing Channels Used.
This factor is equivocal. PEI and the
advertisers use identical marketing
channels: the Internet. More specifically,
each of their sites appears on defendants'
search results pages. Given the broad use of
the Internet today, the same could be said
for countless companies. Thus, this factor
merits little weight.
f. Factor Six: Type of Goods and Degree of
Consumer Care Expected.
This factor favors PEI. Consumer care for
inexpensive products is expected to be
quite low. [FN34] Low consumer care, in
turn, increases the likelihood of confusion.
[FN35]
13
FN34. See Brookfield, 174 F.3d at 1060
("[W]hen dealing with inexpensive
products, customers are likely to exercise
less care, thus making confusion more
likely.").
advertisements and to keep advertisers
coming back to their services. Although
some click-throughs may be the result of
legitimate consumer interest, not confusion,
some may be expected to result from
confusion. Defendants will profit from both
kinds of click-throughs. And they do
nothing to ensure that only click-throughs
based on legitimate interest, as opposed to
confusion,
occur.
PEI introduced evidence suggesting that
labeling the advertisements would reduce
click-through rates. It would also reduce
confusion. However, although defendants
control the content of advertisements in
other contexts, defendants do not require
that advertisers identify themselves on their
banner ads. Moreover, they do not label the
advertisements themselves. Perhaps even
more telling, defendants refuse to remove
the highly-rated terms "playboy" and
"playmate" from their lists of keywords,
even when advertisers request that they do
so. [FN38]
FN35. Id.
In addition to price, the content in question
may affect consumer care as well. We
presume that the average searcher seeking
adult-oriented materials on the Internet is
easily diverted from a specific product he
or she is seeking if other options,
particularly graphic ones, appear more
quickly. Thus, the adult-oriented and
graphic nature of the materials weighs in
PEI's favor as well.
g. Factor Seven: Defendants' Intent in
Selecting the Mark.
This factor favors PEI somewhat. A
defendant's intent to confuse constitutes
probative evidence of likely confusion:
[FN36] Courts assume that the defendant's
intentions were carried out successfully. In
this case, the evidence does not definitively
establish defendants' intent. At a minimum,
however, it does suggest that defendants do
nothing to prevent click-throughs [FN37]
that result from confusion. Moreover, they
profit from such click-throughs.
FN38. PEI introduced evidence that, even
when advertisers objected to using PEI's
marks to key advertisements, defendants
refused to remove the marks from the
keying list. This places advertisers in a
difficult situation, as described infra.
The above evidence suggests, at a
minimum, that defendants do nothing to
alleviate confusion, even when asked to do
so by their advertisers, and that they profit
from confusion. Although not definitive,
this factor provides some evidence of an
intent to confuse on the part of defendants.
This factor thus favors PEI.
h. Factor Eight: Likelihood of Expansion of
Product Lines.
Because the advertisers' goods and PEI's
are already related, as discussed within
factor two, this factor is irrelevant.
Having examined all of the Sleekcraft
factors, we conclude that the majority favor
PEI. Accordingly, we conclude that a
genuine issue of material fact exists as to
the substantial likelihood of confusion. We
FN36. See Sleekcraft, 599 F.2d at 348 n. 9.
FN37. If users click on a banner
advertisement, Netscape has designed its
program to link them immediately to the
advertiser's website. Thus, the user has
"clicked-through" the advertisements to the
advertiser's website.
*1029 Defendants monitor "click-through"
rates on the advertisements they display.
That is, they monitor the number of times
consumers are diverted to their advertisers'
sites. They use the click-through rates as a
way to gauge the success of the
14
now proceed to the defenses advanced by
defendants.
3. Defenses.
FN41. New Kids on the Block, 971 F.2d at
308 (footnote omitted).
[4]
Defendants assert three defenses:
fair use, nominative use, and functional
use. Because we have found that a genuine
issue of fact exists as to likelihood of
confusion under Sleekcraft, we must deny
summary judgment as to the fair use
defense. A fair use may not be a confusing
use. [FN39] Accordingly, we turn to
defendants' other asserted defenses.
Before we apply this test to the facts at
hand, we would like to emphasize what
facts are not at hand. We note that
defendants' use of PEI's marks to trigger
the listing of PEI sites, and other sites that
legitimately use PEI's marks, [FN42] is not
at issue here. In addition, we note that we
are not addressing a situation in which a
banner advertisement clearly identifies its
source with its sponsor's name, [FN43] or
in which a search engine clearly identifies a
banner advertisement's source. We are also
not addressing a situation in which
advertisers or defendants overtly compare
PEI's products to a competitor's--saying, for
example "if you are interested in Playboy,
you may also be interested in the following
message
from[a
different,
named
company]." Rather, we are evaluating a
situation in which defendants display
competitors'
unlabeled
banner
advertisements, with no label or overt
comparison to PEI, after Internet users type
in PEI's trademarks.
FN39. Lindy Pen Co., Inc. v. Bic Pen
Corp., 725 F.2d 1240, 1248 (9th Cir.1984)
(declining to adopt an interpretation of fair
use under
which a use might be fair "even where
likelihood of confusion has been shown,"
but noting that liability may not be imposed
for truthful comparative advertising, an
example of a nominative use).
[5]
[6]
Defendants assert that they
make a nominative use of PEI's marks. We
apply a slightly different test for confusion
in the nominative use, as opposed to the
fair use, context. [FN40] To be considered
a nominative use, the use of a mark must
meet the following three-factor test:
FN42. See, e.g., PEI v. Welles, 279 F.3d at
803-04 (concluding that defendant's use of
PEI's marks in the metatags of her website
was a permissible, nominative use).
FN40. See PEI v. Welles, 279 F.3d 796,
801 (9th Cir.2002) (citing New Kids on the
Block v. News America Publ'g, Inc., 971
F.2d 302, 309 (9th Cir.1992)).
FN43. Doing so might eliminate the
likelihood of initial interest confusion that
exists in this case.
First, the product or service in question
must be one not readily identifiable without
use of the trademark; second, only so much
of the mark or marks may be used as is
reasonably necessary to *1030 identify the
product or service; and third, the user must
do nothing that would, in conjunction with
the mark, suggest sponsorship or
endorsement by the trademark holder.
[FN41]
The situation with which we are dealing
runs afoul of the first requirement for
nominative use. Accordingly, we do not
consider
the
other
prongs.
Defendants could use other words, besides
PEI's marks, to trigger adult-oriented
banner advertisements. Indeed, they
already do so. The list they sell to
advertisers includes over 400 terms besides
PEI's
marks.
There
is
nothing
indispensable, in this context, about PEI's
15
marks. [FN44] Defendants do not wish to
identify PEI or its products when they key
banner advertisements to PEI's marks.
[FN45] Rather, they wish to identify
consumers who are interested in adultoriented entertainment so they can draw
them
to
competitors'
websites.
Accordingly, their use is not nominative.
Thus, we reverse the district court's grant of
summary judgment based on nominative
use.
rare instances, be functional and that use of
the word "Compaq" as an identifier was
functional in case at hand).
Nothing about the marks used to identify
PEI's products is a functional part of *1031
the design of those products. PEI could
easily have called its magazine and its
models entirely different things without
losing any of their intended function. Thus,
the marks are not functional and may be
granted trademark protection. [FN47]
FN44. Compare Welles, 279 F.3d at 802
(explaining that, because Welles would
have to use absurd and lengthy turns of
phrase to describe her title as a Playboy
Playmate of the Year without using the
marks, her use of the marks satisfied the
first requirement of nominative use).
FN47. Qualitex, 514 U.S. at 169-70, 115
S.Ct. 1300.
The fact that the marks make defendants'
computer program more functional is
irrelevant. Defendants designed their
program to identify consumers interested in
adult-oriented entertainment so that some
percentage of those consumers might be
attracted to competitors' websites, thereby
helping defendants generate advertising
revenue.
Thus,
defendants
might
conceivably be unable to trademark some
of the terms used in their program because
those terms are functional within that
program. Because we are not dealing with
defendants' wish to trademark their
computer program, but with PEI's ability to
protect the trademarks it already uses to
identify its products, the doctrine of
functional use does not help defendants
here.
We hold that genuine issues of material fact
exist with respect to defendants' keying
practices. Thus, we conclude that summary
judgment was inappropriate on the
trademark
infringement
claim.
FN45. Id. at 801 (noting that, unlike a
traditional fair use, a nominative use is a
defendant's use of a mark to identify "not
its own
product, but the plaintiff's").
[7]
[8]
Defendants' final asserted
defense, functional use, also fails.
Defendants appear not to have raised this
defense before the district court. Even if
they have not waived the defense, however,
it fails. Under the functional use doctrine,
parts of a design that have a functional use
may not receive trademark protection.
[FN46] We do not have such a case here.
FN46. Qualitex Co. v. Jacobson Prods.
Co., 514 U.S. 159, 164-66, 115 S.Ct. 1300,
131 L.Ed.2d 248 (1995) (finding color of
sponge to be non-functional and therefore
granting it trademark protection); Fisher
Stoves, Inc. v. All Nighter Stove Works,
Inc., 626 F.2d 193, 195-96 (1st Cir.1980)
(finding stove roof design functional and
therefore denying it trademark protection);
Compaq Computer Corp. v. Procom Tech.,
Inc.,
908
F.Supp.
1409,
1423
(S.D.Tex.1995) (finding that words may, in
***
IV. CONCLUSION
Genuine issues of material fact exist as to
PEI's trademark infringement [and dilution]
claims. Accordingly, we reverse the district
court's grant of summary judgment in favor
of defendants and remand for further
proceedings.
16
REVERSED
AND
REMANDED.
confused to situations in which a party is
never confused. I do not think it is
reasonable to find initial interest confusion
when a consumer is never confused as to
source or affiliation, but instead knows, or
should know, from the outset that a product
or web link is not related to that of the
trademark holder because the list produced
*1035 by the search engine so informs him.
There is a big difference between hijacking
a customer to another website by making
the customer think he or she is visiting the
trademark holder's website (even if only
briefly), which is what may be happening
in this case when the banner advertisements
are not labeled, and just distracting a
potential customer with another choice,
when it is clear that it is a choice. True,
when the search engine list generated by
the search for the trademark ensconced in a
metatag comes up, an internet user might
choose to visit westcoastvideo.com, the
defendant's website in Brookfield, instead
of the plaintiff's moviebuff.com website,
but such choices do not constitute
trademark infringement off the internet,
and I cannot understand why they should
on
the
internet.
For example, consider the following
scenario: I walk into Macy's and ask for the
Calvin Klein section and am directed
upstairs to the second floor. Once I get to
the second floor, on my way to the Calvin
Klein section, I notice a more prominently
displayed line of Charter Club clothes,
Macy's own brand, designed to appeal to
the same people attracted by the style of
Calvin Klein's latest line of clothes. Let's
say I get diverted from my goal of reaching
the Calvin Klein section, the Charter Club
stuff looks good enough to me, and I
purchase some Charter Club shirts instead.
Has Charter Club or Macy's infringed
Calvin Klein's trademark, simply by having
another
product
more
prominently
displayed before one reaches the Klein
line? Certainly not. See Gregory Shea,
Note, Trademarks and Keyword Banner
Advertising, 75 S. CAL. L. REV. 529, 554
(2002)
(comparing
keyed
banner
advertisements to a customer entering a
BERZON, Circuit Judge, concurring.
I concur in Judge Nelson's careful opinion
in this case, as it is fully consistent with the
applicable precedents. I write separately,
however, to express concern that one of
those precedents was wrongly decided and
may one day, if not now, need to be
reconsidered
en
banc.
I am struck by how analytically similar
keyed advertisements are to the metatags
found
infringing
in
Brookfield
Communications
v.
West
Coast
Entertainment Corp., 174 F.3d 1036 (9th
Cir.1999). In Brookfield, the court held that
the defendant could not use the
trademarked term "moviebuff" as one of its
metatags. Metatags are part of the HTML
code of a web page, and therefore are
invisible to internet users. Search engines
use these metatags to pull out websites
applicable to search terms. See also
Promatek Indus., Ltd. v. Equitrac Corp.,
300 F.3d 808, 812-13 (7th Cir.2002)
(adopting
the
Brookfield
holding).
Specifically, Brookfield held that the use of
the trademarked terms in metatags violated
the Lanham Act because it caused "initial
interest confusion." Brookfield, 174 F.3d at
1062-66. The court explained that even
though "there is no source confusion in the
sense that consumers know[who] they are
patronizing, ... there is nevertheless initial
interest confusion in the sense that, by
using 'moviebuff.com' or 'MovieBuff' to
divert people looking for 'MovieBuff' to its
website, [the defendant] improperly
benefits from the goodwill that [the
plaintiff] developed in its mark." Id. at
1062.
As applied to this case, Brookfield might
suggest that there could be a Lanham Act
violation even if the banner advertisements
were clearly labeled, either by the
advertiser or by the search engine. I do not
believe that to be so. So read, the metatag
holding in Brookfield would expand the
reach of initial interest confusion from
situations in which a party is initially
17
supermarket, requesting Tylenol, and then
being directed to the pain reliever section
which includes generic Acetaminophen,
along with other generic and name-brand
pain relievers); Julie A. Rajzer, Comment,
Misunderstanding the Internet: How
Courts are Overprotecting Trademarks
Used in Metatags, 2001 L. REV. MICH.
ST.
U.C.L.
427,
462-63
(2001)
(highlighting the brick-and-mortar world in
which Kellogg's Raisin Bran and Post
Raisin Bran both appear next to one
another
on
the
same
aisle).
Similarly, suppose a customer walks into a
bookstore and asks for Playboy magazine
and is then directed to the adult magazine
section, where he or she sees Penthouse or
Hustler up front on the rack while Playboy
is buried in back. One would not say that
Penthouse or Hustler had violated
Playboy's trademark. This conclusion holds
true even if Hustler paid the store owner to
put its magazines in front of Playboy's.
One can test these analogies with an on-line
example: If I went to Macy's website and
did a search for a Calvin Klein shirt, would
Macy's violate Calvin Klein's trademark if
it responded (as does Amazon.com, for
example) with the requested shirt and
pictures of other shirts I might like to
consider as well? I very much doubt it.
Accordingly, I simply cannot understand
the broad principle set forth in Brookfield.
Even the main analogy given in Brookfield
belies its conclusion. The Court gives an
example of Blockbuster misdirecting
customers from a competing video store,
West Coast Video, by putting up a highway
billboard sign giving directions to
Blockbuster but telling customers that a
West Coast Video store is located there.
Brookfield, 174 F.3d at 1064. Even though
customers who arrive at the Blockbuster
realize that it is not West Coast Video, they
were initially misled and confused. Id.
But there was no similar misdirection in
Brookfield, nor would there be similar
misdirection in this case were the banner
ads *1036 labeled or otherwise identified.
The Brookfield defendant's website was
described by the court as being accurately
listed as westcoastvideo.com in the
applicable search results. Consumers were
free to choose the official moviebuff.com
website and were not hijacked or
misdirected elsewhere. I note that the
billboard analogy has been widely
criticized as inapplicable to the internet
situation, given both the fact that customers
were not misdirected and the minimal
inconvenience in directing one's web
browser back to the original list of search
results. See J. THOMAS McCARTHY,
McCARTHY ON TRADEMARKS &
UNFAIR COMPETITION § 25:69 (4th
ed.2003);
Shea,
supra
at
552.
The degree to which this questionable
aspect of Brookfield affects this case is not
clear to me. Our opinion limits the present
holding to situations in which the banner
advertisements are not labeled or identified.
See ante at 1029-1030. Whether, on
remand, the case will remain so limited is
questionable. PEI may seek to reach
labeled
advertisements
as
well.
There will be time enough to address the
continuing vitality of Brookfield should the
labeled advertisement issue arise later. I
wanted to flag the issue, however, as
another case based on the metatag aspect of
Brookfield was decided recently, Horphag
Research Ltd. v. Pellegrini, 337 F.3d 1036
(9th Cir.2003), so the issue is a recurring
one. Should the question arise again, in this
case or some other, this court needs to
consider whether we want to continue to
apply an insupportable rule.
18
United States Court of Appeals,
Fourth Circuit.
PEOPLE FOR THE ETHICAL TREATMENT OF ANIMALS,
Plaintiff-Appellee,
v.
Michael T. DOUGHNEY, an individual, Defendant-Appellant.
Diane Cabell; Milton Mueller, Amici Curiae.
People for the Ethical Treatment of Animals, Plaintiff-Appellant,
v.
Michael T. Doughney, an individual, Defendant-Appellee.
Nos. 00-1918, 00-2289.
Argued May 7, 2001.
Decided Aug. 23, 2001.
OPINION
since 1995. For example, Doughney
registered domain names such as
dubyadot.com,
dubyadot.net,
deathbush.com, RandallTerry.org (Not
Randall Terry for Congress), bwtel.com
(Baltimore-Washington
Telephone
Company), pmrc.org ("People's Manic
Repressive Church"), and ex-cult.org (ExCult Archive). At the time the district court
issued its summary judgment ruling,
Doughney owned 50-60 domain names.
Doughney registered the domain name
peta.org in 1995 with Network Solutions,
Inc. ("NSI"). When registering the domain
name, Doughney represented to NSI that
the registration did "not interfere with or
infringe upon the rights of any third party,"
and that a "non-profit educational
organization" called "People Eating *363
Tasty Animals" was registering the domain
name.
Doughney
made
these
representations to NSI despite knowing that
no corporation, partnership, organization or
entity of any kind existed or traded under
that name. Moreover, Doughney was
familiar with PETA and its beliefs and had
been for at least 15 years before registering
the
domain
name.
After registering the peta.org domain
name, Doughney used it to create a website
purportedly on behalf of "People Eating
Tasty Animals." Doughney claims he
GREGORY,
Circuit
Judge:
People for the Ethical Treatment of
Animals
("PETA")
sued
Michael
Doughney ("Doughney") after he registered
the domain name peta.org and created a
website called "People Eating Tasty
Animals." PETA alleged claims of service
mark infringement under 15 U.S.C. § 1114
and Virginia common law, unfair
competition under 15 U.S.C. § 1125(a) and
Virginia common law, and service mark
dilution and cybersquatting under 15
U.S.C. § 1123(c). Doughney appeals the
district court's decision granting PETA's
motion for summary judgment and PETA
cross-appeals the district court's denial of
its motion for attorney's fees and costs.
Finding no error, we affirm.
I.
PETA is an animal rights organization with
more than 600,000 members worldwide.
PETA "is dedicated to promoting and
heightening public awareness of animal
protection issues and it opposes the
exploitation of animals for food, clothing,
entertainment
and
vivisection."
Appellee/Cross-Appellant PETA's Brief at
7.
Doughney is a former internet executive
who has registered many domain names
19
created the website as a parody of PETA. A
viewer accessing the website would see the
title "People Eating Tasty Animals" in
large, bold type. Under the title, the viewer
would see a statement that the website was
a "resource for those who enjoy eating
meat, wearing fur and leather, hunting, and
the fruits of scientific research." The
website contained links to various meat,
fur, leather, hunting, animal research, and
other organizations, all of which held views
generally antithetical to PETA's views.
Another statement on the website asked the
viewer whether he/she was "Feeling lost?
Offended? Perhaps you should, like, exit
immediately." The phrase "exit immediately
" contained a hyperlink to PETA's official
website.
Doughney's
website
appeared
at
"www.peta.org" for only six months in
1995-96. In 1996, PETA asked Doughney
to voluntarily transfer the peta.org domain
name to PETA because PETA owned the
"PETA" mark ("the Mark"), which it
registered in 1992. See U.S. Trademark
Registration
No.
1705,510.
When
Doughney refused to transfer the domain
name to PETA, PETA complained to NSI,
whose rules then required it to place the
domain name on "hold" pending resolution
of Doughney's dispute with PETA. [FN1]
Consequently, Doughney moved the
website to www.mtd.com/tasty and added a
disclaimer stating that "People Eating Tasty
Animals is in no way connected with, or
endorsed by, People for the Ethical
Treatment of Animals."
Non-Profit Groups Upset by Unauthorized
Use of Their Names on the Internet, THE
CHRONICLE OF PHILANTHROPY,
Nov. 14, 1996. Doughney does not dispute
making this statement. Additionally,
Doughney posted the following message on
his website on May 12, 1996:
"PeTa" has no legal grounds whatsoever to
make even the slightest demands of me
regarding this domain name registration. If
they disagree, they can sue me. And if they
don't, well, perhaps they can behave like
the polite ladies and gentlemen that they
evidently aren't and negotiate a settlement
with me.... Otherwise, "PeTa" can wait
until the significance and value of a domain
name drops to nearly nothing, which is
inevitable as each new web search engine
comes on-line, because that's how long it's
going to take for this dispute to play out.
PETA sued Doughney in 1999, asserting
claims for service mark infringement,
unfair
competition,
dilution
and
cybersquatting. PETA did not seek
damages, but sought only to enjoin
Doughney's use of the "PETA" Mark and
an order requiring Doughney to transfer the
peta.org domain name to PETA.
Doughney responded to the suit by arguing
that the website was a constitutionallyprotected parody of PETA. Nonetheless,
*364 the district court granted PETA's
motion for summary judgment on June 12,
2000. People for the Ethical Treatment of
Animals, Inc. v. Doughney, 113 F.Supp.2d
915 (E.D.Va.2000). The district court
rejected Doughney's parody defense,
explaining
that
[o]nly after arriving at the "PETA.ORG"
web site could the web site browser
determine that this was not a web site
owned, controlled or sponsored by PETA.
Therefore, the two images: (1) the famous
PETA name and (2) the "People Eating
Tasty Animals" website was not a parody
because [they were not] simultaneous.
Id.
at
921.
PETA subsequently moved for attorney
fees and costs. The district court denied the
motion, finding that the case was not
"exceptional" under 15 U.S.C. § 1117.
FN1. When Doughney registered peta.org,
he agreed to abide by NSI's Dispute
Resolution Policy, which specified that a
domain name using a third party's
registered trademark was subject to
placement on "hold" status.
In response to Doughney's domain name
dispute with PETA, The Chronicle of
Philanthropy quoted Doughney as stating
that, "[i]f they [PETA] want one of my
domains, they should make me an offer."
20
PETA moved to reconsider in part, arguing
that it was entitled to "costs of the action"
and attaching a statement for filing fees,
photocopying, facsimiles, courier services,
postage, travel, mileage, tolls, parking, long
distance telephone calls, "services,"
transcripts,
computer
research,
"miscellaneous" expenses, and witness fees
and mileage. The district court ruled on
September 15, 2000, stating that
Plaintiff has submitted to the Court what it
asserts is an itemization of its expenses
without
providing
any
supporting
documentation or legal analysis of why
these expenses are "costs of the action"
within the meaning of 15 U.S.C. § 1117(a)
and 28 U.S.C. § 1920. Defendant
challenges
Plaintiff's
expenses
as
excessive. It appears to the Court that many
of Plaintiff's expenses are for mere "trial
preparation," and not recoverable as costs.
For those reasons it is hereby,
ORDERED that Plaintiff's Motion for
Reconsideration and/or Clarification is
DENIED except that Plaintiff shall be
awarded those costs routinely taxed by the
Clerk. Plaintiff shall not receive as costs
mere trial preparation expenses. Plaintiff
shall submit a Bill of Costs to the Clerk of
the
Court.
People for the Ethical Treatment of
Animals, Inc. v. Doughney, Civil Action
No. 99-1336-A, Order (E.D.Va. Sept. 15,
2000).
II.
We review a district court's summary
judgment ruling de novo, viewing the
evidence in the light most favorable to the
non-moving party. Goldstein v. The
Chestnut Ridge Volunteer Fire Co., 218
F.3d 337, 340 (4th Cir.2000); Binakonsky
v. Ford Motor Co., 133 F.3d 281, 284-85
(4th Cir.1998). Summary judgment is
appropriate if "the pleadings, depositions,
answers to interrogatories, and admissions
on file, together with the affidavits, if any,
show that there is no genuine issue as to
any material fact and that the moving party
is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56.
A.
Trademark
Competition
Infringement/Unfair
[1]
A plaintiff alleging causes of action
for trademark infringement and unfair
competition must prove (1) that it possesses
a mark; (2) that the defendant used the
mark; (3) that the defendant's use of the
mark occurred "in commerce"; (4) that the
defendant used the mark "in connection
with the sale, offering for sale, distribution,
or advertising" of goods or services; and
(5) that the defendant used the mark in a
manner likely to confuse consumers. 15
U.S.C. §§ 1114, 1125(a); Lone Star
Steakhouse & Saloon v. Alpha of Virginia,
43 F.3d 922, 930 (4th Cir.1995). [FN2]
FN2. See also Lone Star Steakhouse &
Saloon, 43 F.3d at 930 n. 10
("[t]he test for trademark infringement and
unfair competition under the Lanham Act is
essentially the same as that for common
law unfair competition under Virginia
law....").
*365 There is no dispute here that PETA
owns the "PETA" Mark, that Doughney
used it, and that Doughney used the Mark
"in commerce." Doughney disputes the
district court's findings that he used the
Mark in connection with goods or services
and that he used it in a manner engendering
a likelihood of confusion.
1.
To use PETA's Mark "in connection with"
goods or services, Doughney need not have
actually sold or advertised goods or
services on the www.peta.org website.
Rather, Doughney need only have
prevented users from obtaining or using
PETA's goods or services, or need only
have connected the website to other's goods
or
services.
While sparse, existing caselaw on
infringement and unfair competition in the
Internet context clearly weighs in favor of
this conclusion. For example, in OBH, Inc.
v. Spotlight Magazine, Inc., the plaintiffs
owned the "The Buffalo News" registered
21
trademark used by the newspaper of the
same
name.
86
F.Supp.2d
176
(W.D.N.Y.2000).
The
defendants
registered
the
domain
name
thebuffalonews.com and created a website
parodying The Buffalo News and providing
a public forum for criticism of the
newspaper. Id. at 182. The site contained
hyperlinks to other local news sources and
a site owned by the defendants that
advertised Buffalo-area apartments for rent.
Id.
at
183.
The court held that the defendants used the
mark "in connection with" goods or
services because the defendants' website
was "likely to prevent or hinder Internet
users from accessing plaintiffs' services on
plaintiffs'
own
web
site."
Id.
Prospective users of plaintiffs' services who
mistakenly access defendants' web site may
fail to continue to search for plaintiffs' web
site due to confusion or frustration. Such
users, who are presumably looking for the
news services provided by the plaintiffs on
their web site, may instead opt to select one
of the several other news-related hyperlinks
contained in defendants' web site. These
news-related hyperlinks will directly link
the user to other news-related web sites that
are in direct competition with plaintiffs in
providing news-related services over the
Internet. Thus, defendants' action in
appropriating plaintiff's mark has a
connection to plaintiffs' distribution of its
services.
Id. Moreover, the court explained that
defendants' use of the plaintiffs' mark was
in connection with goods or services
because it contained a link to the
defendants' apartment-guide website. Id.
Similarly,
in
Planned
Parenthood
Federation of America, Inc. v. Bucci, the
plaintiff owned the "Planned Parenthood"
mark, but the defendant registered the
domain name plannedparenthood.com. 42
U.S.P.Q.2d 1430, 1997 WL 133313
(S.D.N.Y.1997). Using the domain name,
the defendant created a website containing
information antithetical to the plaintiff's
views. Id. at 1435. The court ruled that the
defendant used the plaintiff's mark "in
connection with" the distribution of
services
because it is likely to prevent some Internet
users from reaching plaintiff's own Internet
web site. Prospective users of plaintiff's
services who mistakenly access defendant's
web site may fail to continue to search for
plaintiff's own home page, due to anger,
frustration, or the belief that plaintiff's
home
page
does
not
exist.
Id.
The same reasoning applies here. As the
district court explained, Doughney's *366
use of PETA's Mark in the domain name of
his
website
is likely to prevent Internet users from
reaching[PETA's] own Internet web site.
The prospective users of[PETA's] services
who mistakenly access Defendant's web
site may fail to continue to search for
[PETA's] own home page, due to anger,
frustration, or the belief that [PETA's]
home
page
does
not
exist.
Doughney, 113 F.Supp.2d at 919 (quoting
Bucci, 42 U.S.P.Q.2d at 1435). Moreover,
Doughney's web site provides links to more
than 30 commercial operations offering
goods and services. By providing links to
these commercial operations, Doughney's
use of PETA's Mark is "in connection with"
the sale of goods or services.
2.
[2]
[3]
The unauthorized use of a
trademark infringes the trademark holder's
rights if it is likely to confuse an "ordinary
consumer" as to the source or sponsorship
of the goods. Anheuser-Busch, Inc. v. L &
L Wings, Inc., 962 F.2d 316, 318 (4th
Cir.1992) (citing 2 J. McCarthy,
Trademarks and Unfair Competition §
23:28 (2d ed.1984)). To determine whether
a likelihood of confusion exists, a court
should not consider "how closely a
fragment of a given use duplicates the
trademark," but must instead consider
"whether the use in its entirety creates a
likelihood of confusion." Id. at 319.
Doughney does not dispute that the
peta.org domain name engenders a
22
likelihood of confusion between his web
site and PETA. Doughney claims, though,
that the inquiry should not end with his
domain name. Rather, he urges the Court to
consider his website in conjunction with
the domain name because, together, they
purportedly parody PETA and, thus, do not
cause a likelihood of confusion.
this second message is not conveyed
simultaneously with the first message, as
required to be considered a parody. The
domain name conveys the first message;
the second message is conveyed only when
the viewer reads the content of the website.
As the district court explained, "an internet
user would not realize *367 that they were
not on an official PETA web site until after
they had used PETA's Mark to access the
web page 'www.peta.org.' " Doughney, 113
F.Supp.2d at 921. Thus, the messages are
not conveyed simultaneously and do not
constitute a parody. See also Morrison &
Foerster LLP v. Wick, 94 F.Supp.2d 1125
(D.Co.2000) (defendant's use of plaintiffs'
mark in domain name "does not convey
two simultaneous and contradictory
messages" because "[o]nly by reading
through the content of the sites could the
user discover that the domain names are an
attempt at parody"); Bucci, 42 U.S.P.Q.2d
at 1435 (rejecting parody defense because
"[s]eeing or typing the 'planned parenthood'
mark and accessing the web site are two
separate and nonsimultaneous activities").
The district court properly rejected
Doughney's parody defense and found that
Doughney's use of the peta.org domain
name engenders a likelihood of confusion.
Accordingly, Doughney failed to raise a
genuine issue of material fact regarding
PETA's
infringement
and
unfair
competition claims.
IV.
For the foregoing reasons, the judgment of
the district court is affirmed.
[4]
[5]
[6]
A "parody" is
defined as a "simple form of entertainment
conveyed by juxtaposing the irreverent
representation of the trademark with the
idealized image created by the mark's
owner." L.L. Bean, Inc. v. Drake
Publishers, Inc., 811 F.2d 26, 34 (1st
Cir.1987). A parody must "convey two
simultaneous--and
contradictory-messages: that it is the original, but also
that it is not the original and is instead a
parody." Cliffs Notes, Inc. v. Bantam
Doubleday Dell Publ. Group, Inc., 886
F.2d 490, 494 (2d Cir.1989) (emphasis in
original). To the extent that an alleged
parody conveys only the first message, "it
is not only a poor parody but also
vulnerable under trademark law, since the
customer will be confused." Id. While a
parody necessarily must engender some
initial confusion, an effective parody will
diminish the risk of consumer confusion
"by conveying [only] just enough of the
original design to allow the consumer to
appreciate the point of parody." Jordache
Enterprises, Inc. v. Hogg Wyld, Ltd., 828
F.2d 1482, 1486 (10th Cir.1987).
Looking at Doughney's domain name
alone, there is no suggestion of a parody.
The domain name peta.org simply copies
PETA's Mark, conveying the message that
it is related to PETA. The domain name
does not convey the second, contradictory
message needed to establish a parody--a
message that the domain name is not
related to PETA, but that it is a parody of
PETA.
Doughney claims that this second message
can be found in the content of his website.
Indeed, the website's content makes it clear
that it is not related to PETA. However,
AFFIRMED.
23
United States Court of Appeals,
Fourth Circuit.
website included headlines such as "Bible
verses that Dr. Falwell chooses to ignore"
and "Jerry Falwell has been bearing false
witness (Exodus 20:16) against his gay and
lesbian neighbors for a long time." The site
also contained in-depth criticism of
Reverend Falwell's views. For example, the
website stated:
Dr. Falwell says that he is on the side of
truth. He says that he will preach that
homosexuality is a sin until the day he
dies. But we believe that if the reverend
were to take another thoughtful look at the
scriptures, he would discover that they
have been twisted around to support an
anti-gay political agenda ... at the expense
of the gospel.
Christopher LAMPARELLO,
Plaintiff-Appellant, v. Jerry
FALWELL
Before MICHAEL, MOTZ, and KING,
Circuit Judges.
Reversed and remanded by published
opinion. Judge MOTZ wrote the opinion, in
which Judge MICHAEL and Judge KING
joined.
OPINION
Although the interior pages of Lamparello's
website did not contain a disclaimer, the
homepage prominently stated, "This website
is NOT affiliated with Jerry Falwell or his
ministry"; advised, "If you would like to
visit Rev. Falwell's website, you may click
here";
and provided a hyperlink to
Reverend Falwell's website.
DIANA GRIBBON MOTZ, Circuit Judge.
Christopher Lamparello appeals the district
court's order enjoining him from
maintaining a gripe website critical of
Reverend Jerry Falwell. For the reasons
stated below, we reverse.
I.
Reverend Falwell is "a nationally known
minister who has been active as a
commentator on politics and public affairs."
Hustler Magazine v. Falwell, 485 U.S. 46,
47, 108 S.Ct. 876, 99 L.Ed.2d 41 (1988).
He holds the common law trademarks "Jerry
Falwell" and "Falwell," and the registered
trademark "Listen America with Jerry
Falwell." Jerry Falwell Ministries can be
found online at "www.falwell.com," a
website which receives 9,000 hits (or visits)
per day.
At one point, Lamparello's website included
a link to the Amazon.com webpage for a
book that offered interpretations of the Bible
that Lamparello favored, but the parties
agree that Lamparello has never sold goods
or services on his website. The parties also
agree that "Lamparello's domain name and
web site at www.fallwell.com," which
received only 200 hits per day, "had no
measurable impact on the quantity of visits
to [Reverend Falwell's] web site at
www.falwell.com."
Lamparello registered the domain name
"www.fallwell.com" on February 11, 1999,
after hearing Reverend Falwell give an
interview "in which he expressed opinions
about gay people and homosexuality that
[Lamparello] considered ... offensive."
Lamparello created a website at that domain
name to respond to what he believed were
"untruths about gay people." Lamparello's
*312 [1] Nonetheless, Reverend Falwell
sent Lamparello letters in October 2001 and
June 2003 demanding that he cease and
desist from using www.fallwell.com or any
variation of Reverend Falwell's name as a
domain name. Ultimately, Lamparello filed
this action against Reverend Falwell and his
ministries
(collectively
referred
to
hereinafter as "Reverend Falwell"), seeking
a declaratory judgment of noninfringement.
24
Reverend Falwell counter-claimed, alleging
trademark infringement under 15 U.S.C. §
1114 (2000), false designation of origin
under 15 U.S.C. §
1125(a), unfair
competition under 15 U.S.C. § 1126 and the
common law of Virginia, [FN1] and
cybersquatting under 15 U.S.C. § 1125(d).
F.Supp.2d at 773, 775. However, the court
denied Reverend Falwell's request for
statutory damages or attorney fees,
reasoning that the "primary motive" of
Lamparello's website was "to put forth
opinions on issues that were contrary to
those of [Reverend Falwell]" and "not to
take away monies or to profit." Id. at 775.
FN1. As the district court noted,
although Reverend Falwell "assert
[s] a claim under 15 U.S.C. [§ ]
1126 for a violation of federal unfair
competition law, no such cause of
action exists. False Designation of
Origin is commonly referred to as
unfair
competition
law...."
Lamparello
v.
Falwell,
360
F.Supp.2d
768,
773
n.
2
(E.D.Va.2004). Accordingly, the
district court "construed any claim
by [Falwell] for violation of federal
unfair competition law as a claim
for violation of 15 U.S.C. [§ ]
1125." Id. We will do the same.
Furthermore, because "[t]he test for
trademark infringement and unfair
competition under the Lanham Act
is essentially the same as that for
common law unfair competition
under Virginia law because both
address the likelihood of confusion
as to the source of the goods or
services involved," Lone Star
Steakhouse & Saloon, Inc. v. Alpha
of Va., Inc., 43 F.3d 922, 930 n. 10
(4th Cir.1995), Reverend Falwell's
state-law unfair competition claim
rises or falls with his federal claims
of
infringement
and
false
designation of origin. Therefore, we
will not analyze his state-law claim
separately.
Lamparello appeals the district court's
order; Reverend Falwell cross-appeals the
denial of statutory damages and attorney
fees. We review de novo a district court's
ruling on cross-motions for summary
judgment.
See People for the Ethical
Treatment of Animals v. Doughney, 263
F.3d 359, 364 (4th Cir.2001) [hereinafter
"PETA "].
II.
We first consider Reverend Falwell's claims
of trademark infringement and false
designation of origin.
A.
Section 32 of the Lanham Act creates a
cause of action against:
[a]ny person who shall, without the
consent of the registrant--(a) use in
commerce any reproduction, counterfeit,
copy, or colorable imitation of a registered
mark in connection with the sale, offering
for sale, distribution, or advertising of any
goods or services on or in connection with
which such use is likely to cause
confusion, or to cause mistake, or to
deceive.
15 U.S.C. § 1114(1). Similarly, Section
43(a) creates a cause of action against:
[a]ny person who, on or in connection
with any goods or services, ... uses in
commerce any word ... [or] name ..., or
any false designation of origin, false *313
or misleading description of fact, or false
or misleading representation of fact,
which--(A) is likely to cause confusion, or
to cause mistake, or to deceive as to the
affiliation, connection, or association of
such person with another person, or as to
the origin, sponsorship, or approval of his
or her goods, services, or commercial
The parties stipulated to all relevant facts
and filed cross-motions for summary
judgment.
The district court granted
summary judgment to Reverend Falwell,
enjoined Lamparello from using Reverend
Falwell's mark at www.fallwell.com, and
required Lamparello to transfer the domain
name to Reverend Falwell. Lamparello, 360
25
activities by another person.
15 U.S.C. § 1125(a)(1)(A).
that application of the Lanham Act must be
restricted to "commercial speech" to assure
that trademark law does not become a tool
for unconstitutional censorship. The Sixth
Circuit has endorsed this view, see Taubman
Co. v. Webfeats, 319 F.3d 770, 774 (6th
Cir.2003), and the Ninth Circuit recently has
done so as well, see Bosley Med. Inst., Inc.
v. Kremer, 403 F.3d 672, 674 (9th
Cir.2005).
[2] Both infringement and false designation
of origin have five elements. To prevail
under either cause of action, the trademark
holder must prove:
(1) that it possesses a mark; (2) that the
[opposing party] used the mark; (3) that
the [opposing party's] use of the mark
occurred "in commerce"; (4) that the
[opposing party] used the mark "in
connection with the sale, offering for sale,
distribution, or advertising" of goods or
services; and (5) that the [opposing party]
used the mark in a manner likely to
confuse consumers.
PETA, 263 F.3d at 364 (citing 15 U.S.C. §
§ 1114, 1125, and Lone Star Steakhouse &
Saloon, 43 F.3d at 930).
In its two most significant recent
amendments to the Lanham Act, the Federal
Trademark Dilution Act of 1995 ("FTDA")
and the Anticybersquatting Consumer
Protection Act of 1999 ("ACPA"), Congress
left little doubt that it did not intend for
trademark laws to impinge the First
Amendment
rights
of
critics
and
commentators. The dilution statute applies
to only a "commercial use in commerce of a
mark," 15 U.S.C. §
1125(c)(1), and
explicitly states that the "[n]oncommercial
use of a mark" is not actionable. Id. §
1125(c)(4). Congress explained that this
language was added to "adequately address [
] legitimate First Amendment concerns,"
H.R.Rep. No. 104-374, at 4 (1995),
reprinted in 1995 U.S.C.C.A.N. 1029, 1031,
and "incorporate[d] the concept of
'commercial' speech from the 'commercial
speech' doctrine." Id. at 8, reprinted in 1995
U.S.C.C.A.N. at 1035;
cf.
Lorillard
Tobacco Co. v. Reilly, 533 U.S. 525, 554,
121 S.Ct. 2404, 150 L.Ed.2d 532 (2001)
(defining commercial *314 speech as
"speech
proposing
a
commercial
transaction") (internal quotation marks and
citation omitted).
Similarly, Congress
directed that in determining whether an
individual has engaged in cybersquatting,
the courts may consider whether the person's
use of the mark is a "bona fide
noncommercial or fair use." 15 U.S.C. §
1125(d)(1)(B)(i)(IV).
The legislature
believed this provision necessary to
"protect[ ] the rights of Internet users and
the interests of all Americans in free speech
and protected uses of trademarked names for
such things as parody, comment, criticism,
comparative advertising, news reporting,
Trademark law serves the important
functions
of
protecting
product
identification,
providing
consumer
information, and encouraging the production
of quality goods and services. See Qualitex
Co. v. Jacobson Prods. Co., 514 U.S. 159,
164, 115 S.Ct. 1300, 131 L.Ed.2d 248
(1995). But protections " 'against unfair
competition' " cannot be transformed into "
'rights to control language.' " CPC Int'l, Inc.
v. Skippy Inc., 214 F.3d 456, 462 (4th
Cir.2000) (quoting Mark A. Lemley, The
Modern Lanham Act and the Death of
Common Sense, 108 Yale L.J. 1687, 171011 (1999)). "Such a transformation" would
raise serious First Amendment concerns
because it would limit the
ability to discuss the products or criticize
the conduct of companies that may be of
widespread
public
concern
and
importance.
Much useful social and
commercial discourse would be all but
impossible if speakers were under threat
of an infringement lawsuit every time they
made reference to a person, company or
product by using its trademark.
Id. (internal quotation marks and citations
omitted).
Lamparello and his amici argue at length
26
etc." S.Rep. No. 106-140 (1999), 1999 WL
594571, at *8.
designation fail for a more obvious reason.
The hallmark of such claims is a likelihood
of confusion--and there is no likelihood of
confusion here.
In contrast, the trademark infringement and
false designation of origin provisions of the
Lanham Act (Sections 32 and 43(a),
respectively) do not employ the term
"noncommercial." They do state, however,
that they pertain only to the use of a mark
"in connection with the sale, offering for
sale, distribution, or advertising of any
goods or services," 15 U.S.C. § 1114(1)(a),
or "in connection with any goods or
services," id. § 1125(a)(1). But courts have
been reluctant to define those terms
narrowly. [FN2] Rather, as the Second
Circuit has explained, "[t]he term 'services'
has been interpreted broadly" and so "[t]he
Lanham Act has ... been applied to
defendants furnishing a wide variety of noncommercial public and civic benefits."
United We Stand Am., Inc. v. United We
Stand, Am. N.Y., Inc., 128 F.3d 86, 89-90
(2d Cir.1997). Similarly, in PETA we noted
that a website need not actually sell goods or
services for the use of a mark in that site's
domain name to constitute a use " 'in
connection with' goods or services." PETA,
263 F.3d at 365; see also Taubman Co., 319
F.3d at 775 (concluding that website with
two links to websites of for-profit entities
violated the Lanham Act).
B.
1.
[3][4] "[T]he use of a competitor's mark
that does not cause confusion as to source is
permissible." Dorr-Oliver, Inc. v. FluidQuip, Inc., 94 F.3d 376, 380 (7th Cir.1996).
Accordingly, Lamparello can only be liable
for infringement and false designation if his
use of Reverend Falwell's mark would be
likely to cause confusion as to the source of
the website found at www.fallwell.com.
This likelihood-of-confusion test "generally
strikes a comfortable balance" between the
First Amendment and the rights of
markholders. Mattel, Inc. v. MCA Records,
Inc., 296 F.3d 894, 900 (9th Cir.2002).
FN2. Indeed, Lamparello agreed at
oral argument that the Lanham Act's
prohibitions on infringement and
false designation apply to more than
just commercial speech as defined
by the Supreme Court.
[5] We have identified seven factors helpful
in determining whether a likelihood of
confusion exists as to the source of a work,
but "not all these factors are always relevant
or equally emphasized in each *315 case."
Pizzeria Uno Corp. v. Temple, 747 F.2d
1522, 1527 (4th Cir.1984) (internal
quotation marks, citations, and brackets
omitted). The factors are: "(a) the strength
or distinctiveness of the mark; (b) the
similarity of the two marks;
(c) the
similarity of the goods/services the marks
identify; (d) the similarity of the facilities
the two parties use in their businesses; (e)
the similarity of the advertising used by the
two parties; (f) the defendant's intent; (g)
actual confusion." Id. (citation omitted).
Thus, even if we accepted Lamparello's
contention that Sections 32 and 43(a) of the
Lanham Act apply only to commercial
speech, we would still face the difficult
question of what constitutes such speech
under those provisions. In the case at hand,
we need not resolve that question or
determine whether Sections 32 and 43(a)
apply exclusively to commercial speech
because Reverend Falwell's claims of
trademark
infringement
and
false
Reverend Falwell's mark is distinctive, and
the domain name of Lamparello's website,
www.fallwell.com, closely resembles it.
But, although Lamparello and Reverend
Falwell employ similar marks online,
Lamparello's website looks nothing like
Reverend Falwell's; indeed, Lamparello has
made no attempt to imitate Reverend
Falwell's website.
Moreover, Reverend
Falwell does not even argue that
Lamparello's website constitutes advertising
27
or a facility for business, let alone a facility
or advertising similar to that of Reverend
Falwell. Furthermore, Lamparello clearly
created his website intending only to provide
a forum to criticize ideas, not to steal
customers.
they found the content at www.fallwell.com
antithetical to Reverend Falwell's views
does not illustrate, as Reverend Falwell
claims, that the website engendered actual
confusion. To the contrary, the anecdotal
evidence Reverend Falwell submitted shows
that those searching for Reverend Falwell's
site and arriving instead at Lamparello's site
quickly realized that Reverend Falwell was
not the source of the content therein.
Most importantly, Reverend Falwell and
Lamparello do not offer similar goods or
services. Rather they offer opposing ideas
and commentary. Reverend Falwell's mark
identifies his spiritual and political views;
the website at www.fallwell.com criticizes
those very views. After even a quick glance
at the content of the website at
www.fallwell.com,
no
one
seeking
Reverend Falwell's guidance would be
misled
by
the
domain
name-www.fallwell.com--into believing Reverend
Falwell authorized the content of that
website.
No one would believe that
Reverend Falwell sponsored a site
criticizing himself, his positions, and his
interpretations of the Bible. See New Kids
on the Block v. News Am. Publ'g, Inc., 971
F.2d 302, 308-09 (9th Cir.1992) (stating that
use of a mark to solicit criticism of the
markholder implies the markholder is not
the sponsor of the use). [FN3]
For all of these reasons, it is clear that the
undisputed record evidences no likelihood
of confusion. In fact, Reverend Falwell
even conceded at oral argument that those
viewing the content of Lamparello's website
probably were unlikely to confuse Reverend
Falwell with the source of that material.
2.
[6] Nevertheless, Reverend Falwell argues
that he is entitled to prevail under the "initial
interest confusion" doctrine. This relatively
new and sporadically applied doctrine holds
that "the Lanham Act *316 forbids a
competitor from luring potential customers
away from a producer by initially passing
off its goods as those of the producer's, even
if confusion as to the source of the goods is
dispelled by the time any sales are
consummated." Dorr-Oliver, 94 F.3d at 382.
According to Reverend Falwell, this
doctrine requires us to compare his mark
with Lamparello's website domain name,
www.fallwell.com, without considering the
content of Lamparello's website. Reverend
Falwell argues that some people who
misspell
his
name
may
go
to
www.fallwell.com assuming it is his site,
thus giving Lamparello an unearned
audience--albeit one that quickly disappears
when it realizes it has not reached Reverend
Falwell's site. This argument fails for two
reasons.
FN3. If Lamparello had neither
criticized Reverend Falwell by name
nor expressly rejected Reverend
Falwell's teachings, but instead
simply had quoted Bible passages
and offered interpretations of them
subtly different from those of
Reverend Falwell, this would be a
different case. For, while a gripe
site, or a website dedicated to
criticism of the markholder, will
seldom create a likelihood of
confusion, a website purporting to
be the official site of the markholder
and, for example, articulating
positions that could plausibly have
come from the markholder may well
create a likelihood of confusion.
First, we have never adopted the initial
interest confusion theory; rather, we have
followed a very different mode of analysis,
requiring courts to determine whether a
likelihood of confusion exists by
"examin[ing] the allegedly infringing use in
Finally, the fact that people contacted
Reverend Falwell's ministry to report that
28
the context in which it is seen by the
ordinary consumer." Anheuser-Busch, Inc.
v. L & L Wings, Inc., 962 F.2d 316, 319 (4th
Cir.1992) (emphasis added) (citing cases);
see also What-A-Burger of Va., Inc. v.
Whataburger, Inc., 357 F.3d 441, 450 (4th
Cir.2004).
entirety creates a likelihood of confusion."
Id. at 366 (internal quotation marks and
citation omitted) (emphasis added). When
dealing with domain names, this means a
court must evaluate an allegedly infringing
domain name in conjunction with the
content of the website identified by the
domain name. [FN4]
Contrary to Reverend Falwell's arguments,
we did not abandon this approach in PETA.
Our inquiry in PETA was limited to whether
Doughney's use of the domain name
"www.peta.org" constituted a successful
enough parody of People for the Ethical
Treatment of Animals that no one was likely
to believe www.peta.org was sponsored or
endorsed by that organization. For a parody
to be successful, it "must convey two
simultaneous--and contradictory--messages:
that it is the original, but also that it is not
the original and is instead a parody." PETA,
263 F.3d at 366 (internal quotation marks
and citation omitted). Doughney argued that
his domain name conveyed the first message
(that it was PETA's website) and that the
content of his website conveyed the requisite
second message (that it was not PETA's
site). Id. Although "[t]he website's content
ma[de] it clear that it [wa]s not related to
PETA," id., we concluded that the website's
content could not convey the requisite
second message because the site's content
"[wa]s not conveyed simultaneously with the
first message, [i.e., the domain name itself,]
as required to be considered a parody." Id.
at 366. Accordingly, we found the "district
court properly rejected Doughney's parody
defense." Id. at 367.
FN4.
Contrary to Reverend
Falwell's suggestions, this rule does
not change depending on how
similar the domain name or title is
to the mark. Hence, Reverend
Falwell's assertion that he objects
only to Lamparello using the
domain name www.fallwell.com
and has no objection to Lamparello
posting
his
criticisms
at
"www.falwelliswrong.com," or a
similar domain name, does not
entitle him to a different evaluation
rule.
Rather it has long been
established that even when alleged
infringers use the very marks at
issue in titles, courts look to the
underlying content to determine
whether the titles create a likelihood
of confusion as to source. See, e.g.,
Parks v. LaFace Records, 329 F.3d
437, 452-54 (6th Cir.2003); Mattel,
296 F.3d at 901-02; Westchester
Media v. PRL USA Holdings, Inc.,
214 F.3d 658, 667-68 (5th
Cir.2000); Rogers v. Grimaldi, 875
F.2d 994, 1000-01 (2d Cir.1989).
*317 Moreover, even if we did endorse the
initial interest confusion theory, that theory
would not assist Reverend Falwell here
because it provides no basis for liability in
circumstances such as these. The few
appellate courts that have followed the Ninth
Circuit and imposed liability under this
theory for using marks on the Internet have
done so only in cases involving a factor
utterly absent here--one business's use of
another's mark for its own financial gain.
See, e.g., PACCAR Inc. v. TeleScan Techs.,
L.L.C., 319 F.3d 243, 253 (6th Cir.2003);
Promatek Indus., Ltd. v. Equitrac Corp., 300
[7] PETA simply outlines the parameters of
the parody defense; it does not adopt the
initial interest confusion theory or otherwise
diminish the necessity of examining context
when determining whether a likelihood of
confusion exists. Indeed, in PETA itself,
rather than embracing a new approach, we
reiterated that "[t]o determine whether a
likelihood of confusion exists, a court
should not consider how closely a fragment
of a given use duplicates the trademark, but
must instead consider whether the use in its
29
F.3d 808, 812 (7th Cir.2002); Brookfield
Communications, Inc. v. West Coast Entm't
Corp., 174 F.3d 1036, 1055-56 (9th
Cir.1999).
& Infrastructure, Inc. v. Teunissen,
131 F.3d 1210, 1217 (7th Cir.1997);
Dorr-Oliver, 94 F.3d at 383.
This critical element--use of another firm's
mark to capture the markholder's customers
and profits--simply does not exist when the
alleged infringer establishes a gripe site that
criticizes the markholder. See Hannibal
Travis, The Battle For Mindshare: The
Emerging Consensus that the First
Amendment Protects Corporate Criticism
and Parody on the Internet, 10 Va. J.L. &
Tech. 3, 85 (Winter 2005) ("The premise of
the 'initial interest' confusion cases is that by
using the plaintiff's trademark to divert its
customers, the defendant is engaging in the
old 'bait and switch.' But because ... Internet
users who find [gripe sites] are not sold
anything, the mark may be the 'bait,' but
there is simply no 'switch.' ") (citations
omitted). [FN6] Applying the initial interest
*318 confusion theory to gripe sites like
Lamparello's would enable the markholder
to insulate himself from criticism--or at least
to minimize access to it. We have already
condemned such uses of the Lanham Act,
stating that a markholder cannot " 'shield
itself from criticism by forbidding the use of
its name in commentaries critical of its
conduct.' " CPC Int'l, 214 F.3d at 462
(quoting L.L. Bean, Inc. v. Drake
Publishers, Inc., 811 F.2d 26, 33 (1st
Cir.1987)). "[J]ust because speech is critical
of a corporation and its business practices is
not a sufficient reason to enjoin the speech."
Id.
Profiting financially from initial interest
confusion is thus a key element for
imposition of liability under this theory.
[FN5] When an alleged infringer does not
compete with the markholder for sales,
"some initial confusion will not likely
facilitate free riding on the goodwill of
another mark, or otherwise harm the user
claiming infringement. Where confusion
has little or no meaningful effect in the
marketplace, it is of little or no consequence
in our analysis." Checkpoint Sys., 269 F.3d
at 296-97. For this reason, even the Ninth
Circuit has stated that a firm is not liable for
using another's mark in its domain name if it
"could not financially capitalize on [a]
misdirected consumer [looking for the
markholder's site] even if it so desired."
Interstellar Starship Servs., Ltd. v. Epix,
Inc., 304 F.3d 936, 946 (9th Cir.2002).
FN5. Offline uses of marks found to
cause actionable initial interest
confusion also have involved
financial gain. See Elvis Presley
Enters., Inc. v. Capece, 141 F.3d
188, 204 (5th Cir.1998); Mobil Oil
Corp. v. Pegasus Petroleum Corp.,
818 F.2d 254, 260 (2d Cir.1987).
And even those courts recognizing
the initial interest confusion theory
of liability but finding no actionable
initial confusion involved one
business's use of another's mark for
profit. See, e.g., Savin Corp. v. The
Savin Group, 391 F.3d 439, 462 n.
13 (2d Cir.2004); AM Gen. Corp. v.
DaimlerChrysler Corp., 311 F.3d
796, 827-28 (7th Cir.2002);
Checkpoint Sys., Inc. v. Check Point
Software Techs., Inc., 269 F.3d 270,
298 (3d Cir.2001); Hasbro, Inc. v.
Clue Computing, Inc., 232 F.3d 1, 2
(1st Cir.2000); Syndicate Sales, Inc.
v. Hampshire Paper Corp., 192 F.3d
633, 638 (7th Cir.1999); Rust Env't
FN6. Although the appellate courts
that have adopted the initial interest
confusion theory have only applied
it to profit-seeking uses of another's
mark, the district courts have not so
limited the application of the theory.
Without expressly referring to this
theory, two frequently-discussed
district court cases have held that
using another's domain name to post
content
antithetical
to
the
markholder
constitutes
infringement.
See
Planned
30
Parenthood Fed'n of Am., Inc. v.
Bucci, No. 97 Civ. 0629, 1997 WL
133313 (S.D.N.Y. March 24, 1997),
aff'd, 152 F.3d 920 (2d Cir.1998)
(table) (finding use of domain name
"www.plannedparenthood.com" to
provide links to passages of antiabortion
book
constituted
infringement); Jews for Jesus v.
Brodsky,
993
F.Supp.
282
(D.N.J.1998), aff'd, 159 F.3d 1351
(3d Cir.1998) (table) (finding use of
"www.jewsforjesus.org" to criticize
religious
group
constituted
infringement). We think both cases
were wrongly decided to the extent
that in determining whether the
domain names were confusing, the
courts did not consider whether the
websites' content would dispel any
confusion. In expanding the initial
interest confusion theory of liability,
these cases cut it off from its
moorings to the detriment of the
First Amendment.
summary judgment on all counts. [FN8]
Accordingly, the judgment of the district
court is reversed and the case is remanded
for entry of judgment for Lamparello.
FN8. Given our resolution of
Lamparello's appeal, Reverend
Falwell's cross-appeal with respect
to statutory damages and attorney
fees is moot.
REVERSED AND REMANDED.
420 F.3d 309, 76 U.S.P.Q.2d 1024
In sum, even if we were to accept the initial
interest confusion theory, that theory would
not apply in the case at hand. Rather, to
determine whether a likelihood of confusion
exists as to the source of a gripe site like that
at issue in this case, a court must look not
only to the allegedly infringing domain
name, but also to the underlying content of
the website. When we do so here, it is clear,
as explained above, that no likelihood of
confusion exists. Therefore, the district court
erred in granting Reverend Falwell summary
judgment on his infringement, false
designation, and unfair competition claims.
III.
[8] We evaluate Reverend Falwell's
cybersquatting claim separately because the
elements of a cybersquatting violation differ
from those of traditional Lanham Act
violations. * * *
IV.
For the foregoing reasons, Lamparello,
rather than Reverend Falwell, is entitled to
31
which is given a statutory basis in section
107 of the 1976 Copyright Act. In other
instances, the limitation takes the form of a
"compulsory license" under which certain
limited uses of copyrighted works are
permitted upon payment of specified
royalties and compliance with statutory
conditions. For further information about the
limitations of any of these rights, consult the
copyright law or write to the Copyright
Office.
Overview of Copyright Law
WHAT IS COPYRIGHT?
Copyright is a form of protection provided
by the laws of the United States (title 17,
U.S. Code) to the authors of “original works
of authorship,” including literary, dramatic,
musical, artistic, and certain other
intellectual works. This protection is
available to both published and unpublished
works. Section 106 of the 1976 Copyright
Act generally gives the owner of copyright
the exclusive right to do and to authorize
others to do the following:
• To reproduce the work in copies or
phonorecords;
• To prepare derivative works based upon
the work;
•To distribute copies or phonorecords of the
work to the public by sale or other transfer
of ownership, or by rental, lease, or lending;
• To perform the work publicly, in the case
of literary, musical, dramatic, and
choreographic works, pantomimes, and
motion pictures and other audiovisual
works;
• To display the copyrighted work publicly,
in the case of literary, musical, dramatic, and
choreographic works, pantomimes, and
pictorial, graphic, or sculptural works,
including the individual images of a motion
picture or other audiovisual work; and
• In the case of sound recordings, to perform
the work publicly by means of a digital
audio transmission.
WHO CAN CLAIM COPYRIGHT?
Copyright protection subsists from the time
the work is created in fixed form. The
copyright in the work of authorship
immediately becomes the property of the
author who created the work. Only the
author or those deriving their rights through
the author can rightfully claim copyright.
In the case of works made for hire, the
employer and not the employee is
considered to be the author.
Mere ownership of a book, manuscript,
painting, or any other copy or phonorecord
does not give the possessor the copyright.
The law provides that transfer of ownership
of any material object that embodies a
protected work does not of itself convey any
rights in the copyright.
WHAT WORKS ARE PROTECTED?
Copyright protects "original works of
authorship" that are fixed in a tangible form
of expression. The fixation need not be
directly perceptible so long as it may be
communicated with the aid of a machine or
device. Copyrightable works include the
following categories:
1. literary works;
2.
musical
works,
including
any
accompanying words
It is illegal for anyone to violate any of the
rights provided by the copyright law to the
owner of copyright. These rights, however,
are not unlimited in scope. Sections 107
through 121 of the 1976 Copyright Act
establish limitations on these rights. In some
cases, these limitations are specified
exemptions from copyright liability. One
major limitation is the doctrine of "fair use,"
32
3. dramatic works, including any
accompanying music
4. pantomimes and choreographic works
5. pictorial, graphic, and sculptural works
6. motion pictures and other audiovisual
works
7. sound recordings
8. architectural works
These categories should be viewed broadly.
For example, computer programs and most
"compilations" may be registered as "literary
works"; maps and architectural plans may be
registered as "pictorial, graphic, and
sculptural works."
WHAT IS NOT
COPYRIGHT?
PROTECTED
Copyright Secured Automatically upon
Creation
The way in which copyright protection is
secured is frequently misunderstood. No
publication or registration or other action in
the Copyright Office is required to secure
copyright. (See following Note.) There are,
however, certain definite advantages to
registration. See "Copyright Registration."
Copyright is secured automatically when the
work is created, and a work is "created"
when it is fixed in a copy or phonorecord for
the first time. "Copies" are material objects
from which a work can be read or visually
perceived either directly or with the aid of a
machine or device, such as books,
manuscripts, sheet music, film, videotape, or
microfilm. "Phonorecords" are material
objects embodying fixations of sounds
(excluding, by statutory definition, motion
picture soundtracks), such as cassette tapes,
CDs, or LPs. Thus, for example, a song (the
"work") can be fixed in sheet music ("
copies") or in phonograph disks ("
phonorecords"), or both.
If a work is prepared over a period of time,
the part of the work that is fixed on a
particular date constitutes the created work
as of that date.
BY
Several categories of material are generally
not eligible for federal copyright protection.
These include among others:
• Works that have not been fixed in a
tangible form of expression (for example,
choreographic works that have not been
notated or recorded, or improvisational
speeches or performances that have not been
written or recorded)
• Titles, names, short phrases, and slogans;
familiar symbols or designs; mere variations
of typographic ornamentation, lettering, or
coloring; mere listings of ingredients or
contents
• Ideas, procedures, methods, systems,
processes, concepts, principles, discoveries,
or devices, as distinguished from a
description, explanation, or illustration
• Works consisting entirely of information
that is common property and containing no
original authorship (for example: standard
calendars, height and weight charts, tape
measures and rulers, and lists or tables taken
from public documents or other common
sources)
PUBLICATION
Publication is no longer the key to obtaining
federal copyright as it was under the
Copyright Act of 1909. However,
publication remains important to copyright
owners.
NOTICE OF COPYRIGHT
The use of a copyright notice is no longer
required under U. S. law, although it is often
beneficial.
HOW LONG COPYRIGHT PROTECTION
ENDURES
Works Originally Created on or after
January 1, 1978
HOW TO SECURE A COPYRIGHT
33
A work that is created (fixed in tangible
form for the first time) on or after January 1,
1978, is automatically protected from the
moment of its creation and is ordinarily
given a term enduring for the author's life
plus an additional 70 years after the author's
death. In the case of "a joint work prepared
by two or more authors who did not work
for hire," the term lasts for 70 years after the
last surviving author's death. For works
made for hire, and for anonymous and
pseudonymous works (unless the author's
identity is revealed in Copyright Office
records), the duration of copyright will be 95
years from publication or 120 years from
creation, whichever is shorter.
protection, the copyright law provides
several inducements or advantages to
encourage copyright owners to make
registration.
TRANSFER OF COPYRIGHT
Any or all of the copyright owner's
exclusive rights or any subdivision of those
rights may be transferred, but the transfer of
exclusive rights is not valid unless that
transfer is in writing and signed by the
owner of the rights conveyed or such
owner's duly authorized agent. Transfer of a
right on a nonexclusive basis does not
require a written agreement.
A copyright may also be conveyed by
operation of law and may be bequeathed by
will or pass as personal property by the
applicable laws of intestate succession.
Copyright is a personal property right, and it
is subject to the various state laws and
regulations that govern the ownership,
inheritance, or transfer of personal property
as well as terms of contracts or conduct of
business. For information about relevant
state laws, consult an attorney.
COPYRIGHT REGISTRATION
In general, copyright registration is a legal
formality intended to make a public record
of the basic facts of a particular copyright.
However, registration is not a condition of
copyright
protection.
Even
though
registration is not a requirement for
34
Title 17 of the United States
Code – Copyright Law –
Selected Provisions
§ 106. Exclusive rights in copyrighted works
Subject to sections 107 through 122, the
owner of copyright under this title has the
exclusive rights to do and to authorize any
of the following:
§ 102. Subject matter of copyright: In
general
(a) Copyright protection subsists, in
accordance with this title, in original works
of authorship fixed in any tangible medium
of expression, now known or later
developed, from which they can be
perceived, reproduced, or otherwise
communicated, either directly or with the
aid of a machine or device. Works of
authorship include the following categories:
(1) to reproduce the copyrighted work in
copies or phonorecords;
(1) literary works;(2) musical works,
including any accompanying words;(3)
dramatic
works,
including
any
accompanying music;(4) pantomimes and
choreographic works;(5) pictorial, graphic,
and sculptural works;(6) motion pictures and
other
audiovisual
works;(7)
sound
recordings; and(8) architectural works.
(4) in the case of literary, musical, dramatic,
and choreographic works, pantomimes, and
motion pictures and other audiovisual
works, to perform the copyrighted work
publicly;
(2) to prepare derivative works based upon
the copyrighted work;
(3) to distribute copies or phonorecords of
the copyrighted work to the public by sale or
other transfer of ownership, or by rental,
lease, or lending;
(5) in the case of literary, musical, dramatic,
and choreographic works, pantomimes, and
pictorial, graphic, or sculptural works,
including the individual images of a motion
picture or other audiovisual work, to display
the copyrighted work publicly; and
(b) In no case does copyright protection for
an original work of authorship extend to any
idea, procedure, process, system, method of
operation, concept, principle, or discovery,
regardless of the form in which it is
described,
explained,
illustrated,
or
embodied in such work.
(6) in the case of sound recordings, to
perform the copyrighted work publicly by
means of a digital audio transmission.
35
§ 107. Limitations on exclusive rights: Fair
use
(1) the purpose and character of the use,
including whether such use is of a
commercial nature or is for nonprofit
educational purposes;
Notwithstanding the provisions of sections
106 and 106A, the fair use of a copyrighted
work, including such use by reproduction in
copies or phonorecords or by any other
means specified by that section, for purposes
such as criticism, comment, news reporting,
teaching (including multiple copies for
classroom use), scholarship, or research, is
not an infringement of copyright. In
determining whether the use made of a work
in any particular case is a fair use the factors
to be considered shall include —
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the
portion used in relation to the copyrighted
work as a whole; and
(4) the effect of the use upon the potential
market for or value of the copyrighted work.
The fact that a work is unpublished shall
not itself bar a finding of fair use if such
finding is made upon consideration of all
the
above
factors.
36
as well as an injunction against the manufacture
and marketing of Betamax VTR's.
Supreme Court of the United States
SONY CORPORATION OF
AMERICA, et al., Petitioners
v.
UNIVERSAL CITY STUDIOS,
INC., etc., et al.
After a lengthy trial, the District Court denied
respondents all the relief they sought and
entered judgment for petitioners. 480 F.Supp.
429 (1979). The United States Court of Appeals
for the Ninth Circuit reversed the District
Court's judgment on respondent's copyright
claim, holding **778 petitioners liable for
contributory infringement and ordering the
District Court to fashion appropriate relief.
*421 659 F.2d 963 (1981). We granted
certiorari, 457 U.S. 1116, 102 S.Ct. 2926, 73
L.Ed.2d 1328 (1982); since we had not
completed our study of the case last Term, we
ordered reargument, 463 U.S. 1226, 103 S.Ct.
3568, 77 L.Ed.2d 1409 (1983). We now
reverse.
No. 81-1687.
Argued Jan. 18, 1983.
Reargued Oct. 3, 1983.
Decided Jan. 17, 1984.
*419 Justice STEVENS delivered the opinion
of the Court.
Petitioners manufacture and sell home video
tape recorders. Respondents own the copyrights
on some of the television *420 programs that
are broadcast on the public airwaves. Some
members of the general public use video tape
recorders sold by petitioners to record some of
these broadcasts, as well as a large number of
other broadcasts. The question presented is
whether the sale of petitioners' copying
equipment to the general public violates any of
the rights conferred upon respondents by the
Copyright
Act.
Respondents commenced this copyright
infringement action against petitioners in the
United States District Court for the Central
District of California in 1976. Respondents
alleged that some individuals had used
Betamax video tape recorders (VTR's) to
record some of respondents' copyrighted works
which had been exhibited on commercially
sponsored television and contended that these
individuals had thereby infringed respondents'
copyrights. Respondents further maintained
that petitioners were liable for the copyright
infringement allegedly committed by Betamax
consumers because of petitioners' marketing of
the Betamax VTR's. [FN1] Respondents sought
no relief against any Betamax consumer.
Instead, they sought money damages and an
equitable accounting of profits from petitioners,
An explanation of our rejection of respondents'
unprecedented attempt to impose copyright
liability upon the distributors of copying
equipment requires a quite detailed recitation of
the findings of the District Court. In summary,
those findings reveal that the average member
of the public uses a VTR principally to record a
program he cannot view as it is being televised
and then to watch it once at a later time. This
practice, known as "time-shifting," enlarges the
television viewing audience. For that reason, a
significant amount of television programming
may be used in this manner without objection
from the owners of the copyrights on the
programs. For the same reason, even the two
respondents in this case, who do assert
objections to time-shifting in this litigation,
were unable to prove that the practice has
impaired the commercial value of their
copyrights or has created any likelihood of
future harm. Given these findings, there is no
basis in the Copyright Act upon which
respondents can hold petitioners liable for
distributing VTR's to the general public. The
Court of Appeals' holding that respondents are
37
entitled to enjoin the distribution of VTR's, to
collect royalties on the sale of such equipment,
or to obtain other relief, if affirmed, would
enlarge the scope of respondents' statutory
monopolies to encompass control over an
article of commerce that is not the subject of
copyright protection. Such an expansion of the
copyright privilege is beyond the limits of the
grants authorized by Congress.
I
The two respondents in this action, Universal
Studios, Inc. and Walt Disney Productions,
produce and hold the copyrights on a
substantial number of motion pictures and other
audiovisual works. In the current marketplace,
they can exploit their rights in these works in a
number of ways: *422 by authorizing theatrical
exhibitions, by licensing limited showings on
cable and network television, by selling
syndication rights for repeated airings on local
television stations, and by marketing programs
on prerecorded videotapes or videodiscs. Some
works are suitable for exploitation through all
of these avenues, while the market for other
works
is
more
limited.
Petitioner Sony manufactures millions of
Betamax video tape recorders and markets
these devices through numerous retail
establishments, some of which are also
petitioners in this action. [FN2] Sony's
Betamax VTR is a mechanism consisting of
three basic components: (1) a tuner, which
receives electromagnetic signals transmitted
over the television band of the public airwaves
and separates them into audio and visual
signals; (2) a recorder, which records such
signals on a magnetic tape; and (3) an adapter,
which converts the audio and visual signals on
the tape into a composite signal that can be
received by a television set.
showed that the primary use of the machine for
most owners was "time-shifting,"--the practice
of recording a program to view it once at a later
time, and thereafter erasing it. Time-shifting
enables viewers to see programs they otherwise
would miss because they are not at home, are
occupied with other tasks, or are viewing a
program on another station at the time of a
broadcast that they desire to watch. Both
surveys also showed, however, that a
substantial number of interviewees had
accumulated libraries of tapes. [FN3] Sony's
survey indicated *424 that over 80% of the
interviewees watched at least as much regular
television as they had before owning a
Betamax. [FN4] Respondents offered no
evidence of decreased television viewing by
Betamax owners. [FN5]
Sony introduced considerable evidence
describing television programs that could be
copied without objection from any copyright
holder, with special emphasis on sports,
religious, and educational programming. For
example, their survey indicated that 7.3% of all
Betamax use is to record sports events, and
representatives of professional baseball,
football, basketball, and hockey testified that
they had no objection **780 to the recording of
their televised events for home use. [FN6]
*425 Respondents offered opinion evidence
concerning the future impact of the unrestricted
sale of VTR's on the commercial value of their
copyrights. The District Court found, however,
that they had failed to prove any likelihood of
future harm from the use of VTR's for timeshifting. Id., at 469.
The respondents and Sony both conducted
surveys of the way the Betamax machine was
used by several hundred owners during a
sample period in 1978. Although there were
some differences in the surveys, they both
II
Article I, Sec. 8 of the Constitution provides
that:
38
"The Congress shall have Power ... to Promote
the Progress of Science and useful Arts, by
securing for limited Times to Authors and
Inventors the exclusive Right to their respective
Writings
and
Discoveries."
[2]
*430 From its beginning, the law of
copyright has developed in response to
significant changes in technology. [FN11]
Indeed, it **783 was the invention of a new
form of copying equipment--the printing press-that gave rise to the original need for copyright
protection. [FN12] Repeatedly, as new
developments have *431 occurred in this
country, it has been the Congress that has
fashioned the new rules that new technology
made necessary. Thus, long before the
enactment of the Copyright Act of 1909, 35
Stat. 1075, it was settled that the protection
given to copyrights is wholly statutory.
Wheaton v. Peters, 33 U.S. (8 Peters) 591, 661662, 8 L.Ed. 1055 (1834). The remedies for
infringement "are only those prescribed by
Congress." Thompson v. Hubbard, 131 U.S.
123, 151, 9 S.Ct. 710, 720, 33 L.Ed. 76 (1889).
[1]
*429 The monopoly privileges that
Congress may authorize are neither unlimited
nor primarily designed to provide a special
private benefit. Rather, the limited grant is a
means by which an important public purpose
may be achieved. It is intended to motivate the
creative activity of authors and inventors by the
provision of a special reward, and to allow the
public access to the products of their genius
after the limited period of exclusive control has
expired.
"The copyright law, like the patent statute,
makes reward to the owner a secondary
consideration. In Fox Film Corp. v. Doyal, 286
U.S. 123, 127 [52 S.Ct. 546, 547, 76 L.Ed.
1010], Chief Justice Hughes spoke as follows
respecting the copyright monopoly granted by
Congress, 'The sole interest of the United States
and the primary object in conferring the
monopoly lie in the general benefits derived by
the public from the labors of authors.' It is said
that reward to the author or artist serves to
induce release to the public of the products of
his creative genius." United States v.
Paramount Pictures, 334 U.S. 131, 158, 68
S.Ct.
915,
929,
92
L.Ed.
1260.
As the text of the Constitution makes plain, it is
Congress that has been assigned the task of
defining the scope of the limited monopoly that
should be granted to authors or to inventors in
order to give the public appropriate access to
their work product. Because this task involves a
difficult balance between the interests of
authors and inventors in the control and
exploitation of their writings and discoveries on
the one hand, and society's competing interest
in the free flow of ideas, information, and
commerce on the other hand, our patent and
copyright statutes have been amended
repeatedly. [FN10]
The judiciary's reluctance to expand the
protections afforded by the copyright without
explicit legislative guidance is a recurring
theme.. Sound policy, as well as history,
supports our consistent deference to Congress
when major technological innovations alter the
market for copyrighted materials. Congress has
the constitutional authority and the institutional
ability to accommodate fully the varied
permutations of competing interests that are
inevitably implicated by such new technology.
In a case like this, in which Congress has not
plainly marked our course, we must be
circumspect in construing the scope of rights
created by a legislative enactment which never
contemplated such a calculus of interests. In
doing so, we are guided by Justice Stewart's
exposition of the correct approach to
ambiguities in the law of copyright:
"The limited scope of the copyright holder's
statutory monopoly, like the limited copyright
duration required by the Constitution, reflects a
balance of competing claims upon the public
interest: Creative work is to be *432
encouraged and rewarded, but private
39
motivation must ultimately serve the cause of
promoting broad public availability of
literature, music, and the other arts. The
immediate effect of our copyright law is to
secure a fair return for an 'author's' creative
labor. But the ultimate aim is, by this incentive,
to stimulate artistic creativity for the general
public good. 'The sole interest of the United
States and the primary object in conferring the
monopoly,' this Court has said, 'lie in the
general benefits derived by the public from the
labors of authors.' Fox Film Corp. v. Doyal,
286 U.S. 123, 127 [52 S.Ct. 546, 547, 76 L.Ed.
1010]. See Kendall v. Winsor, 21 How. 322,
327-328 [16 L.Ed. 165]; Grant v. Raymond, 6
Pet. 218, 241-242 [8 L.Ed. 376]. When
technological change has rendered its literal
terms ambiguous, the Copyright Act must be
construed in light of this basic purpose."
Twentieth Century Music Corp. v. Aiken, 422
U.S. 151, 156, 95 S.Ct. 2040, 2043, 45 L.Ed.2d
84
(footnotes
omitted).
is, anyone who trespasses into his exclusive
domain by using or authorizing the use of the
copyrighted work in one of the five ways set
forth in the statute, "is an infringer of the
copyright." Id., § 501(a). Conversely, anyone
who is authorized by the copyright owner to
use the copyrighted work in a way specified in
the statute or who makes a fair use of the work
is not an infringer of the copyright with respect
to
such
use.
**784 [3]
[4]
[5]
Copyright
protection "subsists ... in original works of
authorship fixed in any tangible medium of
expression." 17 U.S.C. § 102(a). This
protection has never accorded the copyright
owner complete control over all possible uses
of his work. [FN13] Rather, the Copyright Act
grants the *433 copyright holder "exclusive"
rights to use and to authorize the use of his
work in five qualified ways, including
reproduction of the copyrighted work in copies.
Id., § 106. [FN14] All reproductions of the
work, however, are not within the exclusive
domain of the copyright owner; some are in the
public domain. Any individual may reproduce a
copyrighted work for a "fair use;" the copyright
owner does not possess the exclusive right to
such a use. Compare id., § 106 with id., § 107.
FN15. Moreover, anyone who willfully
infringes the copyright to reproduce a motion
picture for purposes of commercial advantage
or private financial gain is subject to criminal
penalties of one year imprisonment and a
$25,000 fine for the first offense and two years
imprisonment and a $50,000 fine for each
subsequent offense, 17 U.S.C. § 506(a), and the
fruits and instrumentalities of the crime are
forfeited upon conviction, id., § 506(b).
[7]
[8]
The Copyright Act provides the
owner of a copyright with a potent arsenal of
remedies against an infringer of his work,
including an injunction to restrain the infringer
from violating *434 his rights, the
impoundment and destruction of all
reproductions of his work made in violation of
his rights, a recovery of his actual damages and
any additional profits realized by the infringer
or a recovery of statutory damages, and
attorneys fees. Id., §§ 502-505. [FN15]
The two respondents in this case do not seek
relief against the Betamax users who have
allegedly infringed their copyrights. Moreover,
this is not a class action on behalf of all
copyright owners who license their works for
television broadcast, and respondents have no
right to invoke whatever rights other copyright
holders may **785 have to bring infringement
actions based on Betamax copying of their
works. [FN16] As was made clear by their own
evidence, the copying of the respondents'
programs represents a small portion of the total
[6]
"Anyone who violates any of the
exclusive rights of the copyright owner," that
40
use of VTR's. It is, however, the taping of
respondents own copyrighted programs that
provides them with standing to charge Sony
with contributory infringement. To prevail,
they have the burden of proving that users of
the Betamax have infringed their copyrights
and that Sony should be held responsible for
that infringement.
*440 In the Patent Code both the concept of
infringement and the concept of contributory
infringement are expressly defined by statute.
[FN20] The prohibition against contributory
**788 infringement is confined to the knowing
sale of a component especially made for use in
connection with a particular patent. There is no
suggestion in the statute that one patentee may
object to the sale of a product that might be
used in connection with other patents.
Moreover, the Act expressly provides that the
sale of a "staple article or commodity of
commerce suitable for substantial noninfringing
use" is not contributory infringement.
III
The Copyright Act does not expressly render
anyone liable for infringement committed by
another. In contrast, the *435 Patent Act
expressly brands anyone who "actively induces
infringement of a patent" as an infringer, 35
U.S.C. § 271(b), and further imposes liability
on certain individuals labeled "contributory"
infringers, id., § 271(c). The absence of such
express language in the copyright statute does
not preclude the imposition of liability for
copyright infringements on certain parties who
have not themselves engaged in the infringing
activity. [FN17] For vicarious liability is
imposed in virtually all areas of the law, and
the concept of contributory infringement is
merely a species of the broader problem of
identifying the circumstances in which it is just
to hold one individual accountable for the
actions of another.
When a charge of contributory infringement is
predicated entirely on the sale of an article of
commerce that is used by the purchaser to
infringe a patent, the public interest in access to
that article of commerce is necessarily
implicated. A *441 finding of contributory
infringement does not, of course, remove the
article from the market altogether; it does,
however, give the patentee effective control
over the sale of that item. Indeed, a finding of
contributory infringement is normally the
functional equivalent of holding that the
disputed article is within the monopoly granted
to the patentee. [FN21]
For that reason, in contributory infringement
cases arising under the patent laws the Court
has always recognized the critical importance
of not allowing the patentee to extend his
monopoly beyond the limits of his specific
grant. These cases deny the patentee any right
to control the distribution of unpatented articles
unless they are "unsuited for any commercial
noninfringing use." Dawson Chemical Co. v.
Rohm & Hass Co., 448 U.S. 176, 198, 100
S.Ct. 2601, 2614, 65 L.Ed.2d 696 (1980).
Unless a commodity "has no use except
through practice of the patented method," ibid,
the patentee has no right to claim that its
distribution
constitutes
contributory
[10]
*439 If vicarious liability is to be
imposed on petitioners in this case, it must rest
on the fact that they have sold equipment with
constructive knowledge of the fact that their
customers may use that equipment to make
unauthorized copies of copyrighted material.
There is no precedent in the law of copyright
for the imposition of vicarious liability on such
a theory. The closest analogy is provided by the
patent law cases to which it is appropriate to
refer because of the historic kinship between
patent law and copyright law. [FN19]
41
infringement. "To form the basis for
contributory infringement the item must almost
be uniquely suited as a component of the
patented invention." P. Rosenberg, Patent Law
Fundamentals § 17.02[2] (1982). "[A] sale of
an article which though adapted to an
infringing use is also adapted to other and
lawful uses, is not enough to make the seller a
contributory infringer. Such a rule would block
the
wheels
of
commerce."
commercially significant. For one potential use
of the Betamax plainly satisfies this standard,
however
it
is
understood:
private,
noncommercial time-shifting in the home. It
does so both (A) because respondents have no
right to prevent other copyright holders from
authorizing it for their programs, and (B)
because the District Court's factual findings
reveal that even the unauthorized home timeshifting of respondents' programs is legitimate
fair
use.
*443
A.
Authorized
Time
Shifting
Each of the respondents owns a large inventory
of valuable copyrights, but in the total spectrum
of television programming their combined
market share is small. The exact percentage is
not specified, but it is well below 10%. [FN22]
If they were to prevail, the outcome of this
litigation would have a significant impact on
both the producers and the viewers of the
remaining 90% of the programming in the
Nation. No doubt, many other producers share
respondents' concern about the possible
consequences
of
unrestricted
copying.
Nevertheless the findings of the District Court
make it clear that time-shifting may enlarge the
total viewing audience and that many producers
are willing to allow private time-shifting to
continue, at least for an experimental time
period. [FN23]
[11]
We recognize there are substantial
differences between the patent and copyright
laws. But in both areas the contributory
infringement doctrine is grounded on the
recognition that adequate protection of a
monopoly may require the courts to look
beyond actual duplication of a device or
publication to the products or activities that
make such duplication possible. The staple
article of commerce doctrine must strike a
balance between a copyright holder's legitimate
demand for effective--not merely symbolic-protection of the statutory monopoly, and the
rights of others freely to **789 engage in
substantially unrelated areas of commerce.
Accordingly, the sale of copying equipment,
like the sale of other articles of commerce, does
not constitute contributory infringement if the
product is widely used for legitimate,
unobjectionable purposes. Indeed, it need
merely be capable of substantial noninfringing
uses.
IV
The
District
Court
found:
"Even if it were deemed that home-use
recording of copyrighted material constituted
infringement, the Betamax could still legally be
used to record noncopyrighted material or
material whose owners consented to the
copying. An injunction would deprive the
public of the ability to use the Betamax for this
noninfringing
off-the-air
recording.
*444 "Defendants introduced considerable
testimony at trial about the potential for such
copying of sports, religious, educational and
other programming. This included testimony
from representatives of the Offices of the
[12]
The question is thus whether the
Betamax is capable of commercially significant
noninfringing uses. In order to resolve that
question, we need not explore all the different
potential uses of the machine and determine
whether or not they would constitute
infringement. Rather, we need only consider
whether on the basis of the facts as found by
the district court a significant number of them
would be non-infringing. Moreover, in order to
resolve this case we need not give precise
content to the question of how much use is
42
Commissioners of the National Football,
Basketball, Baseball and Hockey Leagues and
Associations, the Executive Director of
National Religious Broadcasters and various
educational
communications
agencies.
Plaintiffs attack the weight of the testimony
offered and also contend that an injunction is
warranted because infringing **790 uses
outweigh noninfringing uses."
Second is the testimony of Fred Rogers,
president of the corporation that produces and
owns the copyright on Mr. Rogers'
Neighborhood. The program is carried by more
public television stations than any other
program. Its audience numbers over 3,000,000
families a day. He testified that he had
absolutely no objection to home taping for
noncommercial use and expressed the opinion
that it is a real service to families to be able to
record children's programs and to show them at
appropriate times. [FN27]
"Whatever the future percentage of legal versus
illegal home-use recording might be, an
injunction which seeks to deprive the public of
the very tool or article of commerce capable of
some noninfringing use would be an extremely
harsh remedy, as well as one unprecedented in
copyright law." 480 F.Supp., at 468.
Although the District Court made these
statements in the context of considering the
propriety of injunctive relief, the statements
constitute a finding that the evidence
concerning "sports, religious, educational, and
other programming" was sufficient to establish
a significant quantity of broadcasting whose
copying is now authorized, and a significant
potential for future authorized copying. That
finding is amply supported by the record. In
addition to the religious and sports officials
identified explicitly by the District Court,
[FN24] two items in the record deserve specific
mention.
*446 If there are millions of owners of VTR's
who make copies of televised sports events,
religious broadcasts, and educational programs
such as Mister Rogers' Neighborhood, and if
the proprietors of those programs welcome the
practice, the business of supplying the
equipment that makes such copying feasible
should not be stifled simply because the
equipment is used by some individuals to make
unauthorized
**791
reproductions
of
respondents' works. The respondents do not
represent a class composed of all copyright
holders. Yet a finding of contributory
infringement would inevitably frustrate the
interests of broadcasters in reaching the portion
of their audience that is available only through
time-shifting.
*445 First is the testimony of John Kenaston,
the station manager of Channel 58, an
educational station in Los Angeles affiliated
with the Public Broadcasting Service. He
explained and authenticated the station's
published guide to its programs. [FN25] For
each program, the guide tells whether unlimited
home taping is authorized, home taping is
authorized subject to certain restrictions (such
as erasure within seven days), or home taping is
not authorized at all. The Spring 1978 edition
of the guide described 107 programs. Sixty-two
of those programs or 58% authorize some home
taping. Twenty-one of them or almost 20%
authorize unrestricted home taping. [FN26]
[13]
Of course, the fact that other copyright
holders may welcome the practice of timeshifting does not mean that respondents should
be deemed to have granted a license to copy
their programs. Third party conduct would be
wholly irrelevant in an action for direct
infringement of respondents' copyrights. But in
an action for contributory infringement against
the seller of copying equipment, the copyright
holder may not prevail unless the relief that he
seeks affects only his programs, or unless he
speaks for virtually all copyright holders with
an interest in the outcome. In this case, the
43
record makes it perfectly clear that there are
many important producers of national and local
television programs who find nothing
objectionable about the enlargement in the size
of the television audience that results from the
practice of time-shifting for private home use.
[FN28] The seller of the equipment that
expands those producers' audiences cannot be a
contributory *447 infringer if, as is true in this
case, it has had no direct involvement with any
infringing activity.
[14]
Even unauthorized uses of a
copyrighted work are not necessarily
infringing. An unlicensed use of the copyright
is not an infringement unless it conflicts with
one of the specific exclusive rights conferred
by the copyright statute. Twentieth Century
Music Corp. v. Aiken, 422 U.S. 151, 154-155,
95 S.Ct. 2040, 2043, 45 L.Ed.2d 84. Moreover,
the definition of exclusive rights in § 106 of the
present Act is prefaced by the words "subject to
sections 107 through 118." Those sections
describe a variety of uses of copyrighted
material that "are not infringements of
copyright notwithstanding the provisions of §
106." The most pertinent in this case is § 107,
the legislative endorsement of the doctrine of
"fair use." [FN29]
In the context of television programming, some
producers evidently believe that permitting
home viewers to make copies of their works off
the air actually enhances the value of their
copyrights. Irrespective of their reasons for
authorizing the practice, they do so, and in
significant enough numbers to create a
substantial market for a non-infringing use of
the Sony VTR's. No one could dispute the
legitimacy of that market if the producers had
authorized home taping of their programs in
exchange for a license fee paid directly by the
home user. The legitimacy of that market
is not compromised simply because these
producers have authorized home taping of their
programs without demanding a fee from the
home user. The copyright law does not require
a copyright owner to charge a fee for the use of
his works, and as this record clearly
demonstrates, the owner of a copyright may
well have economic or noneconomic reasons
for permitting certain kinds of copying to occur
without receiving direct compensation from the
copier. It is not the role of the courts to tell
copyright holders the best way for them to
exploit their copyrights: even if respondents'
competitors were ill-advised in authorizing
home videotaping, that would not change the
fact that they have created a substantial market
for a paradigmatic non-infringing use of
petitioners' product.
B.
Unauthorized
*448 **792 That section identifies various
factors [FN30] that enable a Court to apply an
"equitable rule of reason" analysis to particular
claims of infringement. [FN31] Although not
conclusive, the first *449 factor requires that
"the commercial or nonprofit character of an
activity" be weighed in any fair use decision.
[FN32] If the Betamax were used to make
copies for a commercial or profit-making
purpose, such use would presumptively be
unfair. The contrary presumption is appropriate
here, however, because the District Court's
findings plainly establish that time-shifting for
private home use must be characterized as a
noncommercial, nonprofit activity. Moreover,
when one considers the nature of a televised
copyrighted audiovisual work, see 17 U.S.C. §
107(2), and that timeshifting merely enables a
viewer to see such a work which he had been
invited to witness in its entirety free of charge,
the fact *450 that the entire work is reproduced,
see id., at § 107(3), does not have its ordinary
effect of militating against a finding of fair use.
[FN33]
Time-Shifting
The Senate Committee similarly eschewed a
rigid, bright line approach to fair use. The
44
Senate Report endorsed the view "that off-theair recording for convenience" could be
considered
"fair
use"
under
some
circumstances, although it then made it clear
that it did not intend to suggest that off-the-air
recording for convenience should be deemed
fair use under any circumstances imaginable.
Senate Report 94-473, pp. 65-66. The latter
qualifying statement is quoted by the dissent,
post, at 809, and if read in isolation, would
indicate that the Committee intended to
condemn all off-the-air recording for
convenience. Read in context, however, it is
quite clear that that was the farthest thing from
the Committee's intention.
Actual present harm need not be shown; such a
requirement would leave the copyright holder
with no defense against predictable damage.
Nor is it necessary to show with certainty that
future harm will result. What is necessary is a
showing by a preponderance of the evidence
that some meaningful likelihood of future harm
exists. If the intended use is for commercial
gain, that likelihood may be presumed. But if it
is for a noncommercial purpose, the likelihood
must
be
demonstrated.
In this case, respondents failed to carry their
burden with regard to home time-shifting.
Congress has plainly instructed us that fair use
analysis calls for a sensitive balancing of
interests
**793 This is not, however, the end of the
inquiry because Congress has also directed us
to consider "the effect of the use upon the
potential market for or value of the copyrighted
work." Id., at § 107(4). The purpose of
copyright is to create incentives for creative
effort. Even copying for noncommercial
purposes may impair the copyright holder's
ability to obtain the rewards that Congress
intended him to have. But a use that has no
demonstrable effect upon the potential market
for, or the value of, the copyrighted work need
not be prohibited in order to protect the author's
incentive to create. The prohibition of such
noncommercial uses would *451 merely inhibit
access to ideas without any countervailing
benefit. [FN34]
*456 In summary, the record and findings of
the District Court lead us to two conclusions.
First, Sony demonstrated a significant
likelihood that substantial numbers of **796
copyright holders who license their works for
broadcast on free television would not object to
having their broadcasts time-shifted by private
viewers. And second, respondents failed to
demonstrate that time-shifting would cause any
likelihood of nonminimal harm to the potential
market for, or the value of, their copyrighted
works. The Betamax is, therefore, capable of
substantial noninfringing uses. Sony's sale of
such equipment to the general public does not
constitute contributory infringement of
respondent's copyrights.
V
"The direction of Art. I is that Congress shall
have the power to promote the progress of
science and the useful arts. When, as here, the
Constitution is permissive, the sign of how far
Congress has chosen to go can come only from
Congress." One may search the Copyright Act
in vain for any sign that the elected
representatives of the millions of people who
watch television every day have made it
unlawful to copy a program for later viewing at
home, or have enacted a flat prohibition against
the sale of machines that make such copying
[15]
Thus, although every commercial use
of copyrighted material is presumptively an
unfair exploitation of the monopoly privilege
that belongs to the owner of the copyright,
noncommercial uses are a different matter. A
challenge to a noncommercial use of a
copyrighted work requires proof either that the
particular use is harmful, or that if it should
become widespread, it would adversely affect
the potential market for the copyrighted work.
45
possible.
It may well be that Congress will take a fresh
look at this new technology, just as it so often
has examined other innovations in the past. But
it is not our job to apply laws that have not yet
been written. Applying the copyright statute, as
it now reads, to the facts as they have been
developed in this case, the judgment of the
Court of Appeals must be reversed.
It is so ordered.
The Court of Appeals concluded that Sony
should be held liable for contributory
infringement, reasoning that "[v]ideotape
recorders are manufactured, advertised, and
sold for the primary purpose of reproducing
television programming," and "[v]irtually all
television programming is copyrighted
material." 659 F.2d, at 975. While I agree with
the first of these propositions, [FN42] the
second, for me, is problematic. The key
question is not the amount of television
programming that is copyrighted, but rather the
amount of VTR usage that is infringing. [FN43]
*457 Justice BLACKMUN, with whom Justice
MARSHALL, Justice POWELL, and Justice
REHNQUIST
join,
dissenting.
*
*
*
I recognize . . . that many of the concerns
underlying the "staple article of commerce"
doctrine are present in copyright law as well.
As the District Court noted, if liability for
contributory infringement were imposed on the
manufacturer or seller of every product used to
infringe--a
typewriter,
a
camera,
a
photocopying machine--the "wheels of
commerce" would be blocked. 480 F.Supp., at
461; see also Kalem Co. v. Harper Brothers,
222 U.S., at 62, 32 S.Ct., at 21.
I therefore conclude that if a significant portion
of the product's use is noninfringing, the
manufacturers and sellers cannot be held
contributorily liable for the product's infringing
uses. See ante, at 788. If virtually all of the
product's use, however, is to infringe,
contributory liability may be imposed; if no one
would buy the product for noninfringing
purposes alone, it is clear that the manufacturer
is purposely profiting from the infringement,
and that liability is appropriately imposed. In
such a case, the copyright owner's monopoly
would not be extended beyond its proper
bounds; the manufacturer of such a product
contributes to the infringing activities of others
and profits directly thereby, while *492
providing no benefit to the public sufficient to
justify
the
infringement.
46