''Playboy Enterprises, Inc. v. Netscape Communications Corp.'', 354 F.3d 1020 (9th Cir. 2004) was a case regarding
trademark infringement
Trademark infringement is a violation of the exclusive rights attached to a trademark without the authorization of the trademark owner or any licensees (provided that such authorization was within the scope of the licence). Infringement may o ...
and
trademark dilution
Trademark dilution is a trademark law concept giving the owner of a famous trademark standing to forbid others from using that mark in a way that would lessen its uniqueness. In most cases, trademark dilution involves an unauthorized use of anoth ...
decided by the
United States Court of Appeals for the Ninth Circuit
The United States Court of Appeals for the Ninth Circuit (in case citations, 9th Cir.) is the U.S. federal court of appeals that has appellate jurisdiction over the U.S. district courts in the following federal judicial districts:
* District ...
. The ruling addressed unauthorized use of trademarked terms when using web search data to determine the recipients of
banner ads
A web banner or banner ad is a form of advertising on the World Wide Web delivered by an ad server. This form of online advertising entails embedding an advertisement into a web page. It is intended to attract traffic to a website by linking ...
.
[''Playboy Enterprises v. Netscape Communications'']
354 F. 3d 1020
(9th Cir., 2004).
Facts
As an Internet
search engine
A search engine is a software system designed to carry out web searches. They search the World Wide Web in a systematic way for particular information specified in a textual web search query. The search results are generally presented in a ...
,
Netscape
Netscape Communications Corporation (originally Mosaic Communications Corporation) was an American independent computer services company with headquarters in Mountain View, California and then Dulles, Virginia. Its Netscape web browser was onc ...
allowed advertisers to
target
Target may refer to:
Physical items
* Shooting target, used in marksmanship training and various shooting sports
** Bullseye (target), the goal one for which one aims in many of these sports
** Aiming point, in field artillery, fi ...
specific users of its service by displaying certain ads to certain people, depending on what each user searches for. This practice is called "keying" in the Internet industry, and is considered more effective than displaying ads to web users at random.
Playboy Enterprises
PLBY Group, Inc. is an American global media and lifestyle company founded by Hugh Hefner as Playboy Enterprises, Inc. to oversee the ''Playboy'' magazine and related assets. Its headquarters are in Los Angeles, California.
The company is focus ...
learned that Netscape was using this technique to send certain
banner ads
A web banner or banner ad is a form of advertising on the World Wide Web delivered by an ad server. This form of online advertising entails embedding an advertisement into a web page. It is intended to attract traffic to a website by linking ...
to users who had searched for the terms "playboy" and "playmate" which were
trademarked
A trademark (also written trade mark or trade-mark) is a type of intellectual property consisting of a recognizable sign, design, or expression that identifies products or services from a particular source and distinguishes them from others. ...
by Playboy. The ads were for adult entertainment-oriented services in general, and often featured Playboy's competitors. Playboy claimed that Netscape's use of those terms in its keying technique constituted
trademark infringement
Trademark infringement is a violation of the exclusive rights attached to a trademark without the authorization of the trademark owner or any licensees (provided that such authorization was within the scope of the licence). Infringement may o ...
.
In addition, by displaying ads that were for Playboy's competitors but not easily discerned as such because company names were often obscured, Playboy claimed that Netscape had committed
trademark dilution
Trademark dilution is a trademark law concept giving the owner of a famous trademark standing to forbid others from using that mark in a way that would lessen its uniqueness. In most cases, trademark dilution involves an unauthorized use of anoth ...
. This in turn could confuse web users into thinking that Playboy was behind all such ads, per the
initial interest confusion doctrine. Finally, Playboy claimed that this practice allowed other companies to profit by connecting their own names to that of Playboy and gaining prestige by association.
District court proceedings
The case was first heard at the
District Court for the Central District of California in 1999.
[''Playboy Enterprises v. Netscape Communications'']
55 F. Supp. 2d 1070
(C.D. Cal., 1999). Playboy sought a preliminary injunction to prevent Netscape from continuing its "keying" processes with the company's trademarked terms. The district court held that Playboy could not prove that Netscape was using the terms in a fashion that created harm under existing
trademark
A trademark (also written trade mark or trade-mark) is a type of intellectual property consisting of a recognizable sign, design, or expression that identifies products or services from a particular source and distinguishes them from others ...
law. Hence, the court rejected Playboy's claim of
trademark infringement
Trademark infringement is a violation of the exclusive rights attached to a trademark without the authorization of the trademark owner or any licensees (provided that such authorization was within the scope of the licence). Infringement may o ...
. Furthermore, Playboy could not prove that the "keying" process caused enough confusion among web users to constitute
trademark dilution
Trademark dilution is a trademark law concept giving the owner of a famous trademark standing to forbid others from using that mark in a way that would lessen its uniqueness. In most cases, trademark dilution involves an unauthorized use of anoth ...
. Thus, the court denied Playboy's request for an injunction against Netscape.
Playboy Enterprises appealed this ruling to the
Ninth Circuit Court of Appeals
The United States Court of Appeals for the Ninth Circuit (in case citations, 9th Cir.) is the U.S. federal court of appeals that has appellate jurisdiction over the U.S. district courts in the following federal judicial districts:
* District ...
, which heard the case in 2001.
Circuit court ruling
The Ninth Circuit analyzed the dispute with a greater focus on the
initial interest confusion doctrine, which it had addressed in another case involving confusion over the use of trademarked terms during the web search process. Under that precedent, Playboy could claim under the initial interest confusion doctrine that users were likely to be confused about the nature of banner ads at first glance, and would only be able to determine that such ads were or were not affiliated with Playboy after further investigation. This could damage the value of the company's trademarks while adding prestige to unrelated companies.
The circuit court applied a nine-part test, which had been established in another trademark law precedent, to determine the level of confusion that may be experienced by viewers of the banner ads in question. The factors most relevant for Playboy's claim included evidence of actual confusion among consumers, due to evidence to this effect presented by Playboy; the defendant's use of a trademark for its own marketing purposes; the care to be exercised by the average consumer; and the defendant's intent to confuse consumers advertently or inadvertently. The other factors in the initial interest confusion doctrine were found to be irrelevant to this dispute, but those listed worked in favor of Playboy.
Netscape claimed that its use of Playboy's trademarked terms for the keying practice constituted
nominative use, but this defense was rejected by the circuit court due to the advertising-related intent of confusing consumers during the keying process. Netscape also attempted a functional use defense; under that doctrine, parts of a design that have a functional use may not receive trademark protection. This claim was also rejected by the circuit court because ''Playboy'' magazine could have received any other name but it would retain the same function. A broader attempt at a
fair use
Fair use is a doctrine in United States law that permits limited use of copyrighted material without having to first acquire permission from the copyright holder. Fair use is one of the limitations to copyright intended to balance the interests ...
defense was also rejected due to the obvious likelihood of consumer confusion over ownership of the resulting banner ads received after searching for the trademarked terms.
Thus, the circuit court reversed the lower court's ruling on
trademark infringement
Trademark infringement is a violation of the exclusive rights attached to a trademark without the authorization of the trademark owner or any licensees (provided that such authorization was within the scope of the licence). Infringement may o ...
, and granted an injunction to Playboy Enterprises. This restricted Netscape from using Playboy's trademarked terms to generate banner ads via the keying process, unless those ads were clearly labelled with information on their origins, to prevent consumers from assuming they were affiliated with Playboy. Meanwhile, the circuit court determined that some issues of fact remained over whether the keying practice resulted in
dilution
Dilution may refer to:
* Reducing the concentration of a chemical
* Serial dilution, a common way of going about this reduction of concentration
* Homeopathic dilution
* Dilution (equation), an equation to calculate the rate a gas dilutes
*Tradema ...
of Playboy's trademarked terms. This matter was
remanded to the district court for further
discovery
Discovery may refer to:
* Discovery (observation), observing or finding something unknown
* Discovery (fiction), a character's learning something unknown
* Discovery (law), a process in courts of law relating to evidence
Discovery, The Discovery ...
.
Impact
''Playboy Enterprises, Inc. v. Netscape Communications Corp.'' has been noted as an important precedent on the matter of using trademarked terms to generate
targeted ads on the Internet, and on the need for full identification on the origin of the resulting ads. The ruling has also been cited as an important development in assessing the consumer confusion that can be engendered by Internet advertising.
References
{{Reflist
External links
9th Circuit decision
United States trademark case law
United States Court of Appeals for the Ninth Circuit cases
2004 in United States case law
Playboy litigation
Netscape litigation