Litigation

Ninth Circuit rules in favor of pro se defendants' use of Lexus mark in domain names

By Dan Larsen

On-line auto brokers triumphed over Toyota last week when the Ninth Circuit Court of Appeals approved of the use of the Lexus trademark in their domain names.

Toyota Motor Sales USA is the exclusive distributor of Lexus vehicles in the United States and guardian of the Lexus mark.  Independent auto brokers used the Lexus mark in domain names "buy-a-lexus.com" and "buyorleaselexus.com."  This and other conduct by the brokers prompted Toyota to sue for trademark infringement and to seek an injunction to prevent use of the Lexus mark.  The brokers defended the action pro se.  The district court, applying the eight-factor test for likelihood of confusion from AMF v. Sleekcraft Boats,  concluded that the brokers had infringed Toyota's mark.  The court then enjoined use of the Lexus mark in any domain name or metatag. 

On appeal, the Ninth Circuit in Toyota Motor Sales, U.S.A. v. Tabari reversed, holding that the brokers' use of the Lexus mark in their domain names was a lawful nominative fair use.  According to the court, consumers who use the Internet for shopping will not be confused as to the sites' sponsorhip or affiliation because they are sophisticated and accustomed to domain names that incorporate marks but are not affiliated with the trademark owner.  Moreover, even if the use of the Lexus mark leads Internet consumers searching for the official Lexus website to the brokers' sites, these consumers expect trial and error in exploring websites and know at a glance that certain websites are not what they want.  Without an affirmative suggestion of sponsorship or affiliation, the Ninth Circuit reasoned, mere use of the mark in the domain name does not cause Internet users to believe there is sponsorship by, or affiliation with, the trademark owner.   

Full post as published by Northwest Business Litigation Blog on July 14, 2010 (boomark / email).