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Playboy Enterprises, Inc. v Netscape Communications Corp.

Playboy Enterprises, Inc. v Netscape Communications Corp.
354 F.3d 1020 (9th Cir. 2004)

Facts: Defendants use “keying” on their internet search engines, which allows advertisers to target individuals with certain interests by linking advertising to pre-identified terms. The trademarks, “Playboy” and “Playmate,” are in the defendants list of terms to which they key advertisers’ banner ads. P introduced evidence that the adult-oriented banner ads are often graphic in nature and are confusingly labeled or not labeled at all.

Procedure: P sued defendants for trademark infringement and dilution. P sued defendants asserting that they were using P’s marks in a manner that infringed upon and diluted them. District court denied P’s request for a preliminary injunction, and the 9th Circuit affirmed in an unpublished disposition. On remand, the parties filed cross-motions for summary judgment. The district court granted summary judgment in favor of defendants. P appeals from the district court’s grant of summary judgment.

Issue: Whether “keying” lists, which include trademarks that generate banner advertisements, can constitute initial interest confusion where the banner advertisements, which are generated are unassociated with the trademark but are unlabeled or unidentified?
Held: Reversed and remanded. Genuine issues of material fact preclude summary judgment on both the trademark infringement and dilution claims.

Rule: “Keying” constitutes initial interest confusion (trademark infringement) where the search engine uses trademarks in the keying lists to generate banner advertisements and such banner advertisements are not labeled or identified.

Rationale:
1) Defendants are potentially liable under one theory, either direct or contributory liability.
2) A genuine issue of material fact exists regarding the likelihood of consumer confusion resulting from the defendants’ use of P’s marks.
a. No dispute exists regarding the other requirements set forth by the statute: P clearly holds the mark in question and defendants used the mark in commerce without P’s permission. P’s strongest argument for confusion is initial interest confusion.
b. Users will be diverted to other websites because of banner advertisements but consumers may not know that such websites are unaffiliated with the trademark owner.
3) No affirmative defenses apply.

Concurrence: Initial interest confusion should not be found when a consumer is never confused as to source or affiliation, but instead knows, or should know, from the outset that a product or web link is not related to that of the trademark holder because the list produced by the search engines so informs him. (Majority holding is limited to unlabeled or unidentified banner advertisements)


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