Trademarkdilution.com

• Citation: Vol. 2 No. 1
• Publication year: 2005

Shidler Journal of Law, Commerce & Technology

Volume 2, Issue 1, Summer 2005

Intellectual Property

Cite as: Lawrence F. Rozsnyai, TrademarkDilution.com: Nissan Motor Co. v. Nissan Computer Corp., and the Evolving Law of Trademark Dilution on the Internet, 2 Shidler J. L. Com. & Tech. 2 (Aug. 12, 2005), at [http://www.lctjournal.washington.edu/Vol2/a002Rozsnyai.html]

TrademarkDilution.com: Nissan Motor Co. v. Nissan Computer Corp., and the Evolving Law of Trademark Dilution on the Internet

By Lawrence F. Rozsnyai(fn1)

(c) 2005 Lawrence F. Rozsnyai

Abstract

The Ninth Circuit recently held that an individual, Mr. Uzi Nissan, infringed the trademark of Nissan Motors when he registered and posted commercial content on www.nissan.com. An injunction was granted, barring Mr. Uzi from using the site commercially. Although the trademark dilution claim was remanded, the Ninth Circuit's opinion favors a finding of dilution on remand. Additional arguments involving the property-right-in-gross theory of dilution, reverse domain name hijacking, and actual consumer behavior on the Internet should be used by the parties to bolster their cases and encourage a decision from the district court that will advance trademark law on the Internet in a reasoned and predictable fashion.

Table of Contents

IntroductionBackground: Partial Resolution of the Initial DisputeFinding Dilution: Not a "Dilute" Theory at AllThe Ninth Circuit's Decision Favors Nissan Motor on RemandResolving the Question: Additional Arguments to Consider on RemandConclusionPractice Pointers

Introduction

[1] Point your browser to www.nissan.com(fn2) or www.nissan.net(fn3) and you'll find the site of Nissan Motor Co., the well known car company, right? Not so. Five years ago, you would have found the site of Nissan Computer Corporation, a small business in North Carolina owned by Mr. Uzi Nissan which sold computers and related services. Today both Internet sites have been barred from containing any commercial content whatsoever, whether related to cars or not. The Ninth Circuit held that Mr. Nissan's use of the sites infringed on the Nissan Motors name, but remanded the matter of trademark dilution to the district court.(fn4) This decision demands scrutiny by both individuals and companies using trademarks on the Internet since it applies traditional rules of trademark law to the Internet, continues a line of cases that expands the reach of dilution, and yet leaves courts with little guidance on how to apply the law. Offering additional arguments of trademark law on remand, as discussed below, might help to resolve these issues and provide future litigants with greater guidance.

Background: Partial Resolution of the Initial Dispute

[2] Mr. Uzi Nissan registered "nissan.com" in 1994 and "nissan.net" in 1996 to support his two businesses, Nissan Computer Corporation ("NCC") and The Internet Center, Inc. Although the primary purpose of these sites was to promote sales of computers and computer services, in August 1999 Mr. Nissan began selling space on nissan.com for third party advertising. Some of this content contained automobile-related ads. Two months later, Nissan Motor Co. Ltd. and Nissan North America (collectively "Nissan Motor") offered to purchase nissan.com, but no agreement was reached.(fn5)

[3] Nissan Motor filed suit in district court in December 1999.(fn6) The original complaint asserted claims of trademark dilution in violation of federal and state law; trademark infringement; domain name piracy; false designation of origin; and state law unfair competition. In response, NCC began posting commentary concerning the dispute in March 2000, including a link to www.ncchelp.org,(fn7) links to media reports, and e-mail messages from people supporting Mr. Nissan and decrying the lawsuit. In 2002, the district court granted the plaintiff's motion for summary judgment on dilution, infringement and cybersquatting, and issued its published opinion on the injunction. The district court allowed NCC to retain ownership of nissan.com and nissan.net, but permanently enjoined the posting of any commercial or advertising content, the posting of any commentary regarding Nissan Motor, and the posting of any links to other sites containing either types of content.

[4] Both sides appealed the district court's decision. In June 2004, the Ninth Circuit affirmed the infringement judgment. The court applied the well-known "Sleekcraft factors" of likelihood of confusion, and found that auto-related advertising was infringing but non-auto-related content was not.(fn8) It reversed the injunction however, and struck down Nissan Motor's attempt to silence negative commentary about the lawsuit since such an injunction would constitute a content-based restriction on speech in violation of the First Amendment. The dilution claim was remanded because the record lacked sufficient facts regarding the strength of the Nissan mark.(fn9)

Finding Dilution: Not a "Dilute" Theory at All

[5] Although the court was unable to issue a ruling on the dilution claim, it took a clear position on the applicable law. It relied heavily on two cases to construct its rule. First, from its earlier decision in Avery...