Intellectual Property Law

No Laches Found Where Defendant Had Not Invested in Brand Awareness For Infringing Domain Name During Period of Delay in Bringing Suit

The One Sentence Summary: In affirming an injunction prohibiting use of an ISPWEST domain name for internet services, the panel affirmed jury instructions on likelihood of confusion, and affirmed a finding of no laches where the defendant had not invested in brand awareness during a period of delay.

What They Were Fighting About: A jury ruled for plaintiff finding trademark infringement of the domain name IS-WEST for internet services was infringed by defendant's use of its ISPWEST domain.

Ninth Circuit Holdings:

• The trial court's jury instruction in a trademark infringement case on likelihood of confusion properly stated the law that in Internet cases, the "Internet troika" of

  (i) similarity of plaintiff?s and defendant?s mark; (ii) relatedness of services; and (iii) simultaneous use of the Internet as a marketing channel

  are the most important factors in determining likelihood of confusion.
• On laches, the panel found that a presumption of laches applied because plaintiff knew of a potential trademark infringement claim starting in 1998 (when defendant first started offering internet services under a similar name), a period longer than the four year statute of limitations.
• The panel reviewed the district court's consideration of the factors for laches. The six factors are:

  1) the strength and value of trademark rights asserted; 2) plaintiff?s diligence in enforcing mark; 3) harm to senior user if relief denied; 4) good faith ignorance by junior users; 5) competition between senior and junior users; and 6) extent of harm suffered by junior user because of senior user?s delay. E-Systems, Inc. v. Monitek, Inc., 720 F.2d 604, 607 (9th Cir. 1983).



• The district court erred in determining that plaintiff was diligent when it waited until defendant offered DSL before suing. Natural expansion of defendant's internet services into DSL is not progressive encroachment that allows delay in pursuing a legal claim.
• The panel affirmed the district court's exercise of discretion in finding no prejudice to defendant due to delay in bringing the action. Prejudice must arise from investment in building brand awareness, not simple infringing use of the mark, and the trial court did not abuse its discretion in reaching the factual conclusion there was little investment in brand awareness.
• The district court's injunction against using the ISWEST trademark or confusingly similar variations was appropriate in scope.
  

Full post as published by IP Law Observer on March 17, 2009 (boomark / email).