Internet Trademark Case Summaries
Savannah Coll. of Art and Design, Inc. v. Houeix
369 F. Supp. 2d 929 (S.D. Ohio 2004) (bench trial), 2005 U.S. Dist. LEXIS 9022 (S.D. Ohio Apr. 22, 2005) (denying defendant’s motion for attorney’s fees)
Plaintiff, the Savannah College of Art and Design (“the College”), used the mark and name SCAD for many years as an acronym for the College’s full name. Defendant Houeix and his wife were professors at the College. Houeix became upset when the College fired his wife, and he resigned shortly thereafter and moved to Ohio where his wife obtained a new teaching job. Houeix registered the domain name “scad.info” and began using it for a website critical of the College. Houeix also registered the domain name “scad-and-us.info” when his ISP temporarily shut down his “scad.info” site. That site contained emails he received about the College from prospective students, parents, faculty members, staff, and third parties. The majority of these emails were critical of the College. The College sued Houeix for cybersquatting, infringement, unfair competition, and dilution. At the College’s request, the court dismissed the claim for cybersquatting on the first day of trial. Following a two-day bench trial, the court ruled in favor of Houeix on the remaining claims. Regarding infringement, it was undisputed that the College owned the mark SCAD. And it was clear that Houeix used the domain names in commerce as courts have routinely held that providing information over the Internet constitutes use in commerce. The key issue was whether Houeix used the SCAD mark in his domain names “in connection with the sale, offering for sale, distribution, or advertising of any goods or services.” The College argued that Houeix satisfied this requirement because: (1) he advertised the goods and services of third parties on his website through banner ads and links to commercial websites, (2) his website was designed to harm the College commercially, and (3) his website prevented others from reaching the College’s website. Regarding the banner ads, Houeix’s website was “under construction” for one month in early 2002 and contained a banner ad for Register.com, a domain-name registrar, in exchange for free web-hosting services. The court agreed that the presence of Register.com’s ad was a use of the SCAD mark “in connection with the advertising” of the goods sold by the advertiser. At the time of trial, however, Houeix’s website contained no advertising, sold no goods and services, and did not solicit any donations or payments. Because Houeix’s site no longer contained such ads, any request for injunctive relief—the only relief sought by the College—was moot. Houeix’s website also contained links to three third-party sites, which in turn contained ads for third-party products or services or charged users to access certain information. Houeix received no compensation from any of these sites. Relying on Bosley, the court held that this “two-step process” to reach the commercial content on the third-party sites was “too tenuous to make Houeix’s sites ‘commercial’ within the meaning of the Lanham Act.” Nor were Houeix’s websites commercial simply because they might commercially harm the College (e.g., dissuading potential students from attending or potential faculty from accepting teaching positions). The court distinguished the cases relied on by the College because Houeix’s sites neither sold any products or services on the site, endorsed any particular product or service, or solicited donations for any cause (Planned Parenthood), nor linked to a site owned by Houeix that raised funds by selling merchandise (Jews for Jesus). Even if those two cases stood for the proposition that an unauthorized use of a mark that hindered the commercial success of the trademark owner or disparaged the owner was a “commercial” use, the Sixth Circuit rejected that argument in Taubman when it stated that “although economic damage might be an intended effect of [the defendant’s] expression, the First Amendment protects critical commentary when there is no confusion as to source, even when it involves the criticism of a business.” The College’s argument that Houeix’s use of his domain names was commercial because they prevented Internet users from reaching the College’s website was similarly without merit. Although the court acknowledged that registering a trademark-related domain name with an intent to profit from the mark (e.g., registering such names and offering to sell them to the trademark owners) could be a commercial use, it was not aware of any authority holding that “the mere registration of a domain name which prevents the mark’s owner from registering the same domain name constitutes a commercial use of the mark.” Having failed to establish that Houeix used the SCAD mark with the sale or advertising of any goods or services, the court ruled in Houeix’s favor on the College’s infringement and unfair-competition claims. Even assuming Houeix could have established the necessary “commercial use,” the court held that the College failed to demonstrate a likelihood of confusion required for those claims. Although the SCAD mark was strong and Houeix admittedly used “scad” domain names with the understanding that Internet users could be confused, the other factors either favored Houeix or were neutral. In particular, although Houeix’s websites did not display any “explicit” disclaimers, his home page had many features that “immediately alert[ed]” users that the College was not the source of the site. These included the prominent statement “Savannah College of Art and Design Master Fraudulent Process” and a box in the middle of the page containing announcements about this lawsuit in red bold-face print. According to the court, “A reasonable internet user would know by perusing the content of scad.info that Savannah College is not the source of the [website].” Confusion was further unlikely because prospective students or faculty members searching the Internet for information about the College would easily locate the College’s website. Specifically, a search for “scad” on the Yahoo! search engine returned 141,000 hits with the College’s website as the first result while Houeix’s websites were not in the top ten. The College noted that these Yahoo! search results prompted or suggested a search for “scad college” which in turn still revealed the College’s website as the first hit but revealed Houeix’s sites as the third and sixth hits. The College argued that Internet users would be confused because these results for Houeix’s sites failed to clearly state that the sites were not affiliated with the College. The court rejected this argument because it was based on the “illogical assumption” that users would ignore the “scad.edu” website as the top search result. Citing Taubman, the court stated that “a visitor who is searching for Savannah College’s official website and inadvertently lands on scad.info can simply hit the ‘back’ button to immediately return the visitor to his or her point of origin.” And although it was possible that an Internet user searching for information on the College could type “scad.info” into a browser, it was unlikely because of the universal use of the .edu domain by schools of higher education and the .info domain was fairly new. The College also argued that initial-interest confusion supported a finding of likelihood of confusion. But the court noted that courts relying on initial-interest confusion have involved “situations where the defendant had a commercial or financial incentive or motive for using the plaintiff’s mark to attract initial interest.” The College relied on the Sixth Circuit’s decision in Paccar in support of its position, but that case was distinguishable because the defendant in Paccar was a competitor trying to gain an unfair financial or commercial advantage. The situation here was more like the Sixth Circuit’s decision in Taubman, decided two days after Paccar, in which it rejected any initial-interest confusion that consumers experience “by viewing the domain names only” in the context of a noncommercial site. Nor was the court impressed by the College’s evidence of alleged actual confusion¾one confused alum, two dozen phone calls to the College, and three emails to Houeix. Even if the source of this confusion was Houeix’s use of SCAD in his domain names, this “scant” evidence of confusion compared to over 260,000,000 hits for the official “scad.edu” website provided “weak support” for the College’s claims. Finally, regarding dilution, the College had to prove that Houeix’s use of the SCAD mark was a commercial use in commerce, among other elements. The Lanham Act, however, expressly exempts from dilution coverage uses of trademarks that are noncommercial. Because Houeix’s critical commentary of the College was a noncommercial use, the court held that College failed to establish its claim for dilution.