Sales of Company's Products as Fair Use

[chatcher]

I'm starting this thread after seeing a mention of sales of a company's products as a possible fair use of the company's name in a domain name. I'd like to explore this area and get some opinions.

Sales come in many varieties, and I'm sure some would not constitute legitimate, good-faith, fair use of a trademark. Take these examples:

1. A Chevrolet dealership registers a domain name including the mark "chevrolet".

2. A used car dealer specializing in used Chevrolet automobiles registers a domain name including the mark "chevrolet".

It would seem to me that the first example would have the best chance of retaining their domain name, since they have a contractual relationship with the automaker.

But the second example might also be considered fair use, since referring to a Chevrolet as a Chevrolet is fair use by definition, and being in the business of selling Chevrolet's, even used ones not purchased directly from the manufacturer, should allow use of the term in a descriptive sense in the course of conducting business.

3. Let's assume the company in example 2 starts a pay-per-click affiliate program paying 5 cents per click for leads. An individual registers the domain name "usedchevroletsonline.com" (I haven't checked to see if it's available) and redirects all traffic to the used Chevrolet dealer in example 2 as an affiliate.

Now, I think the individual would almost certainly lose to Chevrolet in a UDRP proceeding, but from a strictly technical point of view, they are involved at least tangentially in selling Chevrolets. The cars are not fakes, there was no intent to use the famous Chevrolet mark to sell Fords, and the individual is not exactly a competitor.

How far removed from a trademark owner can one be and still use their mark in business (to refer to the actual products of the trademark owner)?

4. Another individual whose hobby is restoring old Chevrolets registers a domain name "oldchevystuff.com". He develops a website devoted to providing information and resources for fellow hobbyists. To help pay the hosting bill, he includes a banner ad for a buy-a-new-car-online service. Although his website is non-commercial in nature, he is collecting money from the banner ad, and that ad may result in someone buying a new Ford.

Ignoring the bad PR and karma for Chevrolet if they actively go after guys like example 4, what are his chances of successfully defending his name?

And how has the Internet changed threshhold of trademark infringement? (Many publishers unaffiliated with Chevrolet have published magazines with names like "Old Chevy", and have carried advertisements for all kinds of automotive products.)

 

[jberryhill]

It turns out that the used car dealer in your example may be better of than the one who has a contract with Chevy. The reason is that now many distributorship agreements specificall cover what kinds of domain names may or may not be used, as well as other regulations on the use of the trademark. Hence, the authorized distributor may have contractual constraints that the reseller or aftermarket merchant may not.

A federal appeals court which covers several midwest US states recently ruled that the use of the domain name "bargainbeanies.com" by someone who was engaged in selling Beanie Babies was an acceptable nominative use of a domain name. UDRP panelists are all over the map on this particular issue.

It is odd that some of the rationales used to establish "bad faith" registration and use of such domain names simply defy what we accept as normal in the non-internet world. When you are driving down the road at night and you see a neon sign in the window of a bar saying "Budweiser", then you might stop and go in for a beer. When you get inside, you'll find the bar has all sorts of beer, including Budweiser. You might not have even noted the name of the bar when you walked in, but nobody seems to have a problem with the idea of hanging a Budweiser sign on the side of a bar that sells Budweiser among other brands of beer.

Ditto the gas station that has a sign outside advertising the price of Marlboro cigarettes sold there.

I think what happens is that people who are not very thoughtful have this "the internet is mysterious and different, and all of these issues are new" mentality that prevents them from recognizing perfectly clear analogies to situations that have always been considered perfectly acceptable nominative uses of trademarks in connection with commerce relating to the genuine products known by those marks.

Your mention of fan magazines is a perfect example. When I owned a VW bus, I would regularly pick up publications like "Hot VW's" etc., which cater to those who are perpetually looking for good deals on air-cooled engine parts, aftermarket body panels, etc. etc...

(including the occasional Porshe owner who discovers that you can drop the VW bus engine right into a 911, which is why you find vintage Porsche stuff combined with VW bus stuff, as at http://www.vintagebus.com/howto/ )

But, let's say you run one of those magazines directed to the VW aftermarket. Nobody in a million years would go after you for printing the magazine, but when you register a domain name, there are those who think it is some kind of crime against humanity. I really can't figure it out, other than to conclude that some people do not know how to apply good old fashioned trademark law to a medium they don't quite understand.

 

[dtobias]

Originally posted by jberryhill
I think what happens is that people who are not very thoughtful have this "the internet is mysterious and different, and all of these issues are new" mentality that prevents them from recognizing perfectly clear analogies to situations that have always been considered perfectly acceptable nominative uses of trademarks in connection with commerce relating to the genuine products known by those marks.

This attitude is not confined to trademark cases, and it unfortunately hasn't fully gone away even with the collapse of the "dot-com bubble".

You see it also in the U.S. Patent Office, where they willingly grant patents for business methods that have been done for centuries with in-person or mail-order sales using "technologies" like paper, pencils, and file cabinets, but suddenly become patentable if they're done over the Internet using a computer. (For instance, Amazon's "one-click" patent basically patents the idea of keeping track of a customer's contact, shipment, and payment information so that when they come in and want to buy something they can do it quickly without supplying any new info; kinda like old-fashioned general stores did when they kept a card file on their regular customers and let them run up a tab on their account.)

And you see it with marketing departments, some of whom still to this day think it's "kewl" to put ".com" at the end of a company's name, even though that's really just as silly as embedding any other addressing system to a company's name (like an area code, a street address, or a P.O. box number; yes, I know, there *are* companies that do just that, like "Saks Fifth Avenue" and "1-800-Flowers", but they're the rare exception, while "dot-coms" are annoyingly common even after the "collapse").

The very existence of a domain-speculation community, as evidenced by this forum, is a symptom of this craziness; do you see a big community speculating on the "good" phone numbers, street addresses, or post office box numbers?

 

[dtobias]

Well, a developer *does* get to name the streets within the development, if they're newly built, and needs to pick names that aren't already taken within that particular city, so in a way they're something like domain names within a given TLD. However, the cities don't let a developer grab a street name unless they actually *build* something, so if they want to make that market similar to that for domain names, they'd have to create a registry where anybody can reserve a name of a street, if it's not already taken, without any requirement that anything be physically built, just by paying an annual registration fee. If that happened, maybe you'd have developers reserving names for possible future projects, or just to keep competitors from getting them, and speculators trying to grab the good names first so they could sell them to developers. And if a developer builds a particularly famous project in one city, with a distinctive street name, he might feel compelled to "protect his investment" by reserving the same street name in every other city to stop "lookalike" projects.

 

[dtobias]

...and maybe you'd also have "streetsquatting" cases where judges would have to decide whether Peachtree Lane is confusingly similar to Peachtree Street (Atlanta has a whole bunch of different Peachtrees, so it would be a fertile ground for such cases), and whether Apple Orchard Drive infringes on the trademark of Apple Computer.

 

[jberryhill]

"The very existence of a domain-speculation community, as evidenced by this forum, is a symptom of this craziness; do you see a big community speculating on the "good" phone numbers, street addresses, or post office box numbers?"

Ummm... yes.

Some of the mail-drop companies trade on people who want to have addresses like "Suit xyz, nnn Rodeo Drive, Beverly Hills" and so forth.

And there is something of the same thing that goes on with 800 numbers that "spell" anything.

When large numbers of immigrants from Hong Kong began moving into Vancouver, real estate agents found that they could command premiums for street addresses which had "auspicious" numbers in them.

 

[edisaacson]

"Obviously street addresses are different but I would say when Trump built his big tower that he was speculating on an address."

All you have to do is look at the addresses in Manhattan that Trump has built on to see the answer to that. I'm sitting in one right now - 757 Fifth Avenue. 59th Street & 5th Avenue is a top 5 location in this city. He also has buildings in the other 4 prime locations.

Location, location, location is the rule for property (real or "e")

 

[chatcher]

The problem with the Internet and domain names is that all analogies to other areas fail at some point.

You could make the case that domain names are nothing but addresses to virtual property on the Internet. So locating your business at apple.com would be the same as opening a store on Apple Lane. In the "real" world, Apple Computers would not be able to prevent people from buying property on Apple Lane. Even a PC store could have an address of 100 Apple Lane. Of course, it's a very weak analogy that does not adequately consider the peculiarities of domain names.

In my opinion, the technology is mature enough that there is no longer a need for any special laws or policies to protect intellectual property in the domain name business, beyond the same trademark laws that have served us so well for many years. In other words, use of a domain name to infringe a trademark would be addressed the same way as other types of infringement. But I'm sure mine is a minority opinion, and not one that will influence current or future policy!