Intellectual Property Law

Ninth Circuit Clarifies Test for Dilution, Finds that ?PerfumeBay? Dilutes ?eBay.?

Summary: For trademark dilution, the similarity requirement may be less stringent in circumstances in which the senior mark is highly distinctive and the junior mark is used for a closely related product, as is the case here. Therefore, though PerfumeBay is not ?nearly identical? to eBay, it does dilute eBay.

What They Were Fighting About: PerfumeBay?s founder began her business selling perfume on eBay. She later stopped selling on eBay and started her own web-based company, Perfumebay.com, Inc. She purchased keyword advertisements on Google and Yahoo! so that a search for the word ?perfume? would pull up a sponsored link to perfumebay.com, whether or not the search also contained other terms, like ?ebay.? In February 2004, eBay sued Perfumebay.com for trademark infringement and dilution. The district court found that Perfumebay.com?s use of the conjoined forms of ?PerfumeBay,? was likely to cause confusion, but that nonconjoined uses were not. The district court found that neither form of Perfumebay.com caused dilution.

Ninth Circuit Holdings:

• For dilution, the similarity requirement may be less stringent in circumstances in which the senior mark is highly distinctive and the junior mark is used for a closely related product.
• ?PerfumeBay? dilutes ?eBay? for the following reasons: eBay is highly distinctive and famous, eBay is closely associated with its services, PerfumeBay contains the word ?eBay,? and the parties sell the same product, perfume, in the same forum, the internet.
  
• Nonconjoined versions of ?PerfumeBay,? for instance if ?Perfume? and ?Bay? were separated by a space or the image of a starfish, would also dilute ?eBay.?
• ?PerfumeBay? is likely to be confused with eBay, in part because it contains the entire "eBay" mark.
  
• Nonconjoined versions of PerfumeBay are not likely to cause confusion, in part they do not incorporate the entire ?eBay? mark.
• The lower court properly issued an injunction barring the use of the domain names perfumebay.com and perfume-bay.com.
  

Full post as published by IP Law Observer on November 28, 2007 (boomark / email).