Internet Trademark Case Summaries

Standard Process, Inc. v. Banks

554 F.Supp.2d 866 (E.D. Wis. 2008)

Plaintiff Standard Process manufactured and sold dietary supplements to health-care providers who were contractually restricted to resell the products only from their medical clinics or pharmacies. Defendant Banks was a chiropractor, nutritional counselor, and reseller of dietary supplements through his clinic and website “www.spinelife.com.” Banks was a Standard Process authorized distributor from 1999 until 2004, when his account was terminated due to his Internet sales. Banks continued his Internet sales, purchasing unaltered Standard Process products from other authorized retailers and using Standard Process trademarks and photographs on his website and in his site’s metatags to sell the products. Standard Process objected, asserting that the Internet sales created a false impression that Banks was affiliated with Standard Process. In response, Banks removed all Standard Process logos and pictures from his website and placed a non-affiliation disclaimer on the site. In 2006 and 2007, however, Banks emailed solicitations for Standard Process products to his customers containing Standard Process product photographs and no disclaimer. Standard Process sued for trademark infringement and false designation of origin and filed a motion for summary judgment. The court found that Banks’ website sales were permissible, as the removal of Standard Process’ logos and pictures and posting of a non-affiliation disclaimer was as an effective means of preventing consumer confusion. The court also rejected Standard Process’ evidence of actual confusion in the form of testimony from their marketing coordinator, because her claims of “hundreds of calls” inquiring about Banks’ status as an authorized Internet reseller were not accompanied with dates, so the court could not determine if the calls were received before or after the posting of the disclaimer. Banks’ email solicitations, however, were found improper because some included photographs of Standard Process products and all lacked any non-affiliation disclaimer. The court issued a permanent injunction prohibiting Banks from further use of Standard Process trademarks on any websites, solicitations, or advertisements unless Banks prominently displayed a disclaimer stating that he was not affiliated with Standard Process and that he was not an authorized seller of their products. Standard Process argued that this injunction was not sufficient. First, because Banks’ online sales did not require a one-on-one consultation as did in-office sales, Standard Process argued that this diminished the quality of its marks through consumer confusion regarding the product’s genuineness. The court disagreed, finding no risk of customer confusion because customers purchasing products on the Internet did not expect to receive individualized attention. Second, Standard Process alleged initial-interest confusion through Banks’ use of the Standard Process trademarks in his metatags. The court distinguished Banks’ use from other initial-interest confusion cases because he actually sold the trademark holder’s goods, as compared to retailers in other cases who used competitor’s marks in metatags to enhance sales of their own products. Moreover, the court commented that search engine technology had progressed to the point that metatags are of “little if any” use due to the prevalence of page-rank search algorithms that ignored metatags.