It's nice when the courts come down on your side on an issue. The Sixth Circuit just ruled I'm right that domain names are speech. And First Amendment trumps trademark. Gots ta' be that way!
Opinion edited at "***" for brevity.
Taubman Co. v. Webfeats, No. 01-2648 (6th Cir. 02/07/2003)
[1] UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
[2] Nos. 01-2648/2725
[3] 2003.C06.0000044<
http://www.versuslaw.com>
[4] February 7, 2003
[5] THE TAUBMAN COMPANY, PLAINTIFF-APPELLEE,
v.
WEBFEATS, A TEXAS COMPANY AND HENRY MISHKOFF, AN INDIVIDUAL, DEFENDANTS-APPELLANTS.
[6] Appeal from the United States District Court for the Eastern District of Michigan at Detroit. No. 01-72987--Lawrence P. Zatkoff, Chief District Judge.
***
OPINION
[20] Defendant-Appellant Henry Mishkoff, d/b/a Webfeats, appeals from two preliminary injunctions, respectively entered on October 11, 2001, and December 7, 2001, in the United States District Court for the Eastern District of Michigan, together granting Plaintiff-Appellee the Taubman Company's (Taubman) request to prevent Mishkoff from using six internet domain names because they likely violate Taubman's trademarks in the terms "Taubman," and "The Shops at Willow Bend."
***
II. Analysis
[36] Mishkoff claims the injunctions preventing his use of the domain name "shopsatwillowbend.com" and the five "complaint names" are inappropriate because Taubman has not demonstrated a likelihood of success on the merits and because the orders represent a prior restraint on his First Amendment right to speak.
***
[49]
Mishkoff proposes that, regardless of whether his use of Taubman's marks violates the Lanham Act, any injunction prohibiting his use violates the Constitution as a prior restraint on his First Amendment right of Free Speech. Since Mishkoff has raised Free Speech concerns, we will first explain the interrelation between the First Amendment and the Lanham Act. First, this Court has held that the Lanham Act is constitutional. Semco, Inc. v. Amcast, Inc., 52 F.3d 108, 111-12 (6th Cir.1995) (stating that reach of Lanham Act is limited so as to be constitutional); see also Seven-Up v. Coca-Cola Co., 86 F.3d 1379, 1383 n.6 (5th Cir. 1996).
The Lanham Act is constitutional because it only regulates commercial speech, which is entitled to reduced protections under the First Amendment. Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of New York, 447 U.S. 557, 563 (1980) (stating that regulation of commercial speech is subject only to intermediate scrutiny).
Thus, we must first determine if Mishkoff's use is commercial and therefore within the jurisdiction of the Lanham Act, worthy of lesser First Amendment protections.
[50] If Mishkoff's use is commercial, then, and only then, do we analyze his use for a likelihood of confusion. If Mishkoff's use is also confusing, then it is misleading commercial speech, and outside the First Amendment. See 134 Cong. Rec. 31, 851 (Oct. 19, 1988) (statement of Rep. Kastenmeier) (stating that ç 43 of the Lanham Act only affects misleading commercial speech); cf. Va. Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 771 & n. 24 (1976) (stating that misleading commercial speech is not protected by the First Amendment); Bonito Boats Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 157 (1989) (stating that a trademark owner has at best a quasi-property right in his mark, and can only prevent its use so as to maintain a confusion-free purchasing public) (quoting Crescent Tool Co. v. Kilborn & Bishop Co., 247 F. 299, 301(2d Cir. 1917) (L. Hand, J.)).
[51] Hence, as per the language of the Lanham Act,
any expression embodying the use of a mark not "in connection with the sale . . . or advertising of any goods or services," and not likely to cause confusion, is outside the jurisdiction of the Lanham Act and necessarily protected by the First Amendment. Accordingly, we need not analyze Mishkoff's constitutional defenses independent of our Lanham Act analysis. With this backdrop in mind, we proceed to analyze the nature of the two websites.
[52] a. November 9 Injunction -- The "shopsatwillowbend" Website
[53] In regard to the first website, "shopsatwillowbend.com," Mishkoff argues that his use is completely non-commercial and not confusing, and therefore speech entitled to the full protections of the First Amendment. Taubman offers three arguments that Mishkoff is using its name commercially to sell or advertise goods or services. First, Mishkoff had a link to a site owned by Hartley's blouse company, "shirtbiz.com." Second, he had a link to his own site for his web design company, Webfeats. Third, Mishkoff had accepted a $1000 offer to relinquish the name to Taubman.
[54] Although Mishkoff claims his intention in creating his website was non-commercial, the proper inquiry is not one of intent. Daddy's Junky Music Stores, Inc. v. Big Daddy's Family Music Center, 109 F.3d 275, 287 (6th Cir. 1997). In that sense, the Lanham Act is a strict liability statute. See Hard Rock Café Licensing Corp. v. Concession Servs, Inc., 955 F.2d 1143, 1152 n. 6 (7th Cir. 1992). If consumers are confused by an infringing mark, the offender's motives are largely irrelevant. Wynn Oil Co. v. Thomas, 839 F.2d 1183, 1188 (6th Cir. 1988) (citing Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 799 F.2d 867, 875 (2d Cir. 1986)). We believe the advertisements on Mishkoff's site, though extremely minimal, constituted his use of Taubman's mark "in connection with the advertising" of the goods sold by the advertisers. This is precisely what the Lanham Act prohibits.
[55] However, Mishkoff had at least removed the shirtbiz.com link prior to the injunction. A preliminary injunction is proper only to prevent an on-going violation. See, e.g. Hecht Co. v. Bowles, 321 U.S. 321, 329-30 (1944) (recounting the historical role of courts of equity and stating that purpose of injunctive relief is "to deter, not to punish"). As long as Mishkoff has no commercial links on either of his websites, including links to shirtbiz.com, Webfeats, or any other business, we find no use "in connection with the advertising" of goods and services to enjoin, and the Lanham Act cannot be properly invoked.*fn3
[56]
Taubman's assertion that its offer to buy the domain name "shopsatwillowbend.com" from Mishkoff qualifies Mishkoff's use of the mark as "in connection with the sale of goods" is meritless. Although other courts have held that a so-called cybersquatter, who registers domain names with the intent to sell the name to the trademark holder, uses the mark "in connection with the sale of goods," they have also limited their holdings to such instances where the defendant had made a habit and a business of such practices. See, e.g., E & J Gallo Winery v. Spider Webs Ltd., 286 F.3d 270, 270 (5th Cir. 2002) (noting that defendant had made a business practice of selling domain names on eBay for no less than $10,000); Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998).
[57] In
Panavision, the defendant, Toeppen, purchased and offered to sell the name "panavision.com" to Panavision for $13,000. Id. at 1318. Evidence showed that Toeppen had attempted similar deals with a myriad of other companies, ranging from Delta Airlines to Eddie Bauer. Id. at 1319. The Ninth Circuit found Toeppen's intent to sell the domain name relevant in determining that his creation of the site was a commercial use of Panavision's mark. Id. at 1325. In contrast, not only has
Mishkoff not made a practice of registering and selling domain names, but he
did not even initiate the bargaining process here. Although Taubman's counsel intimated at oral argument that Mishkoff had in fact initiated the negotiation process, correspondence in the record supports the opposite conclusion, and shows that Taubman first offered Mishkoff $1000 to relinquish the site on August 16, 2001, and Mishkoff initially accepted it under threat of litigation. Hence, this case is distinguishable from Panavision. There is no evidence that Mishkoff's initial motive in selecting Taubman's mark was to re-sell the name. Therefore, we hold his use of the name "shopsatwillowbend.com" is not "in connection with the sale of goods."
[58]
Even if Mishkoff's use is commercial speech, i.e., "in connection with the sale . . . or advertising of any goods or services," and within the jurisdiction of the Lanham Act, there is a violation only if his use also creates a likelihood of confusion among customers. 15 U.S.C. ç 1114(1). Moreover, the only important question is whether there is a likelihood of confusion between the parties' goods or services. Bird v. Parsons, 289 F.3d 865, 877 (6th Cir. 2002). Under Lanham Act jurisprudence, it is irrelevant whether customers would be confused as to the origin of the websites, unless there is confusion as to the origin of the respective products. See also Daddy's Junky Music Stores, 109 F.3d at 280.
[59] Since its inception, Mishkoff had always maintained a disclaimer on the website, indicating that his was not the official website. In Holiday Inns, Inc. v. 800 Reservation, Inc., 86 F.3d 619 (6th Cir. 1996), we found the existence of a disclaimer very informative, and held that there was no likelihood of confusion, partly on that basis.
[60] In Holiday Inns, the plaintiff hotel chain used the phone number 1-800-HOLIDAY for its guest room reservation hotline. Holiday Inns claimed a Lanham Act violation when the defendant company, a business that profited by taking reservations for several hotel chains, used the phone number 1-800-H0LIDAY (with a zero instead of an "O") in order to take advantage of any calls misdialed by customers seeking Holiday Inns' hotline. We found no Lanham Act violation, partly because the defendant played an unmistakable disclaimer upon answering each call, explaining that it was unaffiliated with Holiday Inns, and providing customers with Holiday Inns' correct phone number. Id. at 621. We found that the defendant was, in fact, directing business to Holiday Inns that otherwise would have been lost, and although some callers chose to do business with the defendant, others hung up and called Holiday Inns. Had it not been for defendants' service, Holiday Inns would likely never have recovered many customers who had misdialed. Id. at 625.
[61] We find the analysis here indistinguishable from the disclaimer analysis in Holiday Inns.*fn4 Mishkoff has placed a conspicuous disclaimer informing customers that they had not reached Taubman's official mall site. Furthermore, Mishkoff placed a hyperlink to Taubman's site within the dislcaimer. We find this measure goes beyond even what was done by the defendant in Holiday Inns. There, a customer who reached the defendant's hotline in error had to hang up and redial the correct Holiday Inns number. Id. Here, a misplaced customer simply has to click his mouse to be redirected to Taubman's site. Moreover, like Holiday Inns, the customers who stumble upon Mishkoff's site would otherwise have reached a dead address. They would have received an error message upon typing "shopsatwillowbend.com," simply stating that the name was not a proper domain name, with no message relating how to arrive at the official site. Hence, Mishkoff's website and its disclaimer actually serve to re-direct lost customers to Taubman's site that might otherwise be lost. Accordingly, we find
no likelihood that a customer would be confused as to the source of Taubman's and Mishkoff's respective goods.
[62] b. December 7 Injunction -- The "sucks" Site
[63] In regard to Mishkoff's "complaint site," Taubman claims that Mishkoff's use is necessarily "in connection with the sale of goods" because his intent behind the use of the names "taubmansucks.com," et al., is to harm Taubman economically.
[64] In Planned Parenthood Fed'n of Amer., Inc. v. Bucci, No. 97 Civ. 0629, 1997 WL 133313 (S.D.N.Y. March 24, 1997), aff'd, No. 97-7492, 1998 WL 336163 (2d Cir. Feb. 9, 1998), the defendant usurped the domain name "plannedparenthood.com" and created a website displaying anti-abortion pictures and pro-life messages in clear contradiction of the plaintiff's stated mission. Id. at *1. The court there found that, although not selling or advertising any goods, the defendant's use of Planned Parenthood's mark was commercial because he had used plaintiff's mark and attempted to cause economic harm. Id. at *4. (noting that Lanham Act is applicable because "defendant's action in appropriating plaintiff's mark has a connection to plaintiff's distribution of its services).
[65] Following Planned Parenthood, Taubman argues that all cybergriping sites are per se commercial and "in connection with the sale of goods." However, Planned Parenthood, as an unpublished district court opinion, is not binding on this Court, and is nonetheless distinguishable. Even if Mishkoff's use is commercial, it must still lead to a likelihood of confusion to be violative of the Lanham Act. 15 U.S.C. ç 1114(1). In Planned Parenthood, the defendant used the plaintiff's trade name as a domain name, without the qualifying moniker "sucks," or any other such addendum to indicate that the plaintiff was not the proprietor of the website. In contrast, "taubmansucks.com" removes any confusion as to source. We find no possibility of confusion and no Lanham Act violation.
[66]
We find that Mishkoff's use of Taubman's mark in the domain name "taubmansucks.com" is purely an exhibition of Free Speech, and the Lanham Act is not invoked. And although economic damage might be an intended effect of Mishkoff'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. Such use is not subject to scrutiny under the Lanham Act. In fact,
Taubman concedes that Mishkoff is "free to shout 'Taubman Sucks!' from the rooftops. . . ." Brief for Respondent, at 58. Essentially, this is what he has done in his domain name. The rooftops of our past have evolved into the internet domain names of our present.
We find that the domain name is a type of public expression, no different in scope than a billboard or a pulpit, and Mishkoff has a First Amendment right to express his opinion about Taubman,
and as long as his speech is not commercially misleading, the Lanham Act cannot be summoned to prevent it.
***
[78] For the foregoing reasons, we REVERSE the decision of the district court and dissolve both preliminary injunctions preventing Mishkoff from using the domain name, "shopsatwillowbend.com," and the five "complaint names" listed above.
(And extend a hearty round of appreciation to Charles Carreon, who articulated this argument on dnforum.com, where our law clerks picked up the analysis.)
I sleep well tonight:razz:
