Judge Stays Injunction, Permitting Continuing Use of www.perfumebay.com
HUNTINGTON BEACH, Calif. - Dec. 8, 2005 -- Judges Alfred T. Goodwin and William A. Fletcher of the U.S. Court of Appeal for the Ninth Circuit Tuesday night granted Perfume Bay Inc.'s motion to stay the lower court's injunction against the company. The stay permits Perfume Bay -- which has been involved in a two-year lawsuit with eBay -- to continue using its URL,
www.perfumebay.com, pending final decision by the Appellate Court.
"This is very welcome news for this company," said Thomas Chan, Chairman of Chan Law Group, counsel to Perfume Bay. "We are very pleased that the Appellate Court, and earlier the District Court, gave Perfume Bay a much-needed reprieve in granting the stay, apparently believing that the injunction against using the URL stands a very reasonable chance of being reversed by the Appellate Court. Changing to a new URL would have disrupted Perfume Bay's business, especially during this holiday season, and deprived everyone who loves shopping at Perfume Bay a great source for buying holiday gifts."
Chan continued, "While many companies would have backed down and settled, when faced with a much larger adversary, Perfume Bay chose to defend its name to retain brand equity. Perfume Bay President Jacquelyn Tran has worked diligently since founding the company in 1999. It is a quality, family-run business and the family has used hard work to achieve 'the American dream.' This lawsuit has been difficult for the family, to say the least, but they are gratified that the Appellate judges understand their battle against eBay."
The Nov. 14, 2005 injunction from Judge William D. Keller of the Central District Court of California had required Perfume Bay to change its Website URL by Dec. 2 to avoid any likelihood of confusion between Perfume Bay and eBay.
Judge Keller's original ruling was a victory for Perfume Bay in every aspect of the lawsuit, other than the URL. The judge had found no actual confusion between the trademarks Perfume Bay and eBay or any dilution of the eBay mark by Perfume Bay under federal or state law, and no breach of settlement agreement by Perfume Bay. Further, the judge found that Perfume Bay had no intent to infringe on eBay's trademark and that the company is entitled to continue using its name, logo and slogan "Where perfume lovers go." As a result, the U.S. Patent and Trademark Office has been ordered to register the Perfume Bay trademark for the company.
However, he did rule that there is a likelihood of confusion between Perfumebay (as it is written in the URL) and eBay, and therefore required Perfume Bay to insert a separator, either a space or an underscore, in its Web URL. Because companies cannot register a URL with a space or underscore, due to Internet regulations, Perfume Bay sought an emergency stay of Judge Keller's injunction, which was granted by Judge Goodwin of the Appellate Court on Dec. 1. This was followed by Judge Keller's grant of a 30-day stay, and culminated in Tuesday's Appellate Court stay of the injunction until the appeal is finally heard and decided by the Appellate Court. Appeals typically take between one and two years for resolution.
In the same Sept. 21, 2005 decision, Judge Keller decided Perfume Bay won the unclean hand defense, finding "eBay used deceptive advertising, which suggested a link between the two companies." He issued a counter-injunction ordering eBay to cease ads using Perfume Bay or any similarly confusion variant thereof in the heading or text of any advertisement, including "sponsored links and banner ads." "As a matter of fact, they (eBay) do it to this day, which is remarkable," said the Judge.
