Internet Trademark Case Summaries

Designer Skin, LLC v. S & L Vitamins, Inc.

560 F. Supp. 2d 811 (D. Ariz. 2008)

Plaintiff Designer Skin manufactured indoor tanning products and sold its products through independent distributors whose sales were contractually restricted to a list of pre-approved designer tanning salons. Defendant S&L Vitamins was an Internet reseller of various products, including Designer Skin’s products that it purchased directly from tanning salons. S&L Vitamins used Designer Skin’s trademarks on its website in thumbnail images and metatags, and purchased the marks as search engine keywords. Designer Skin sued for trademark infringement, trademark dilution, copyright infringement, intentional interference with contractual relations, and unfair competition, and both parties moved for summary judgment. The court granted S&L Vitamins’ motion for summary judgment on both the trademark infringement and dilution claims. Designer Skin alleged that S&L’s use of its marks resulted in initial-interest confusion in three ways: (1) as search engine keywords, (2) as metatags because it gave S&L Vitamins’ site higher priority on search engine result pages than its own website, causing users to believe S&L Vitamins was associated with Designer Skin, and (3) the appearance of its marks in close association with S&L Vitamins’ own logo. The court rejected all three theories. Initially, it stated that initial-interest confusion is meant to address deceptive “bait and switch” schemes, where a competitor’s mark is used to lure customers away to a competitor’s website that only sells competing products. The court differentiated this situation, as Designer Skin’s products are offered for sale on the S&L Vitamins website and there is no evidence of any attempt to deceive consumers. Second, even if deception is evident, liability attaches only if the conduct is likely to confuse “an appreciable number of people.” While Internet searches for Designer Skin may produce links to S&L Vitamins’ site, the court stated that users confused by this will “be the naive few.” Finally, the court stated that the theory based on Designer Skin’s close association of S&L’s marks with its logo also failed, as Designer Skin admitted that visible uses of its mark on websites for the sale of its goods were not actionable. The court found unpersuasive the Tenth Circuit’s holding in Australian Gold, Inc. v. Hatfield, where initial-interest confusion was found on very similar facts. This court focused on the fact the Internet reseller here, S&L Vitamins, did in fact sell the products whose marks it used, while implying the reseller in Australian Gold followed the bait and switch scheme. The court also rejected Designer Skin’s dilution claim based on a nominative fair use analysis. It found that (1) Designer Skin’s products were not readily identifiable without the use of its marks, (2) S&L Vitamins used only the words contained in the mark (i.e., no logos), and (3) S&L Vitamins did nothing to imply sponsorship or endorsement of their products by Designer Skin, as there was no evidence presented that use of the marks actually produced consistently higher rankings for S&L Vitamins’ website over Designer Skin’s website on search result pages. The court qualified its analysis on the third factor by acknowledging that evidence of superior search engine rank through the use of a party’s mark in metatags, if presented, could preclude a nominative fair use defense under Ninth Circuit case law. On the remaining claims, the court allowed the copyright infringement to proceed to trial, while granting summary judgment for S&L Vitamins on the intentional interference with contractual relations claim. Finally, the unfair competition claim was allowed to proceed, as it was based on the copyright infringement claim.