The opinion of the court was delivered by: Nolan, United States Magistrate Judge.
Plaintiff, Classified Ventures, L.L.C. ("Classified
Ventures"), filed this action on November 24, 1998, alleging
that defendants Softcell Marketing, Inc. ("Softcell"), and Gary
Gould ("Gould"), used the mark CARS.COM in connection with spam
e-mail advertisements. The parties stipulate to the following
findings of fact and conclusions of law, and consent to entry of
a permanent injunction as set forth below. Accordingly, the
Court enters the following:
A. Classified Ventures and the Cars.com Name and Mark
Classified Ventures provides classified advertising over the
Internet for a wide variety of products and services. Classified
Ventures hosts a web site located at www.cars.com (the
"Cars.com Site"). The Cars.com Site includes classified
advertising for new and used automobiles for sale, as well as
editorial reviews, interest rates, price reports, and other
information relating to automobiles.
Classified Ventures acquired the domain name cars.com in
September, 1997, and began to use it as a service mark in the
fall of 1997. The domain name functions as both a location of
the Cars.com Site and as a service mark identifying Classified
Ventures' Internet automobile search and information services.
On December 19, 1997, Classified Ventures applied to register
its CARS.COM service mark as well as its CARS.COM and Design
mark ("CARS.COM Service Marks") on the Principal Register of the
Patent and Trademark Office.
Classified Ventures has expended large amounts of money, time
and effort to promoting its CARS.COM Service Marks and
developing the goodwill associated with those marks. Classified
Ventures markets its services through various national and
worldwide media, including the Internet and national newspapers.
Classified Ventures has spent millions of dollars to advertise
the Cars.com Site and attendant CARS.COM Service Marks. The
Cars.com Site is one of the most heavily trafficked auto-related
web sites on the Internet. As a result of this extensive
promotion, advertising, and Internet exposure, the CARS.COM
Service Marks have become famous and have acquired a strong
secondary meaning and a selling power signifying Classified
Ventures and its Cars.com Site. Consequently, Classified
Ventures has built up and now owns a substantial and valuable
goodwill which is symbolized by the CARS.COM Service Marks.
Classified Ventures acquired this goodwill and fame long prior
to the acts complained of herein.
B. Defendant Softcell and Its Services
Defendant Softcell provides Internet promotion services, and
specializes in "spam" e-mail. In Internet parlance, this means
mass, unsolicited electronic mail. Softcell advertises the
benefits of spam email on two web sites it maintains, located at
www.soflinc.net and www.softcell.net.
Softcell has also been engaged in the for-profit Internet
pornography business. Among the domain names it owns are
comenow.com, quickcheapsex.com, mailsexey.com,
planetlovejoy.com, and planetlovetoy.com. Softcell has
operated for-profit pornographic web sites using at least three
of these domain names.
C. The November 18, 1998 Incident
On November 18, 1998, Softcell perpetrated a massive and
intricately designed spam e-mail scheme whereby it sent at least
a hundred thousand e-mail messages addressed to subscribers of
the Internet service provider America Online ("AOL"), located
throughout the United States. Each e-mail bore the same return
address: email@example.com. These messages were "spam" e-mail.
All messages bore the return address firstname.lastname@example.org and
contained an advertisement for Internet pornography services
available at www.freeyellow.com/members5/hotweb. The
messages varied only by their subject lines, which included such
messages as "Hi," "Do it for free," "don'y fay [sic] for Video,"
"not kidding!. . . . Really Free," "free this time," and "Got
your note." Classified Ventures did not create or maintain the
e-mail address email@example.com. Classified Ventures did not
authorize the use of its domain name cars.com in connection
with the address designation stione. However, consumers who
received Softcell's spam e-mails believed they were sent by
Ventures because the return address designated "cars.com" as
the sender. Consumers were harmed by receiving unsolicited spam
e-mail messages advertising Internet pornography. They received
the unsolicited spam e-mail but had no way of knowing that the
return e-mail address, firstname.lastname@example.org. was a false address.
The spam e-mails sent a false message that Classified Ventures
participates in spam e-mail campaigns and sells pornography
services under its CARS.COM Service Marks.
Classified Ventures' extensive and exclusive use of the
CARS.COM Service Marks in connection with the Cars.com Site
establishes Classified Ventures' exclusive right to use the
CARS.COM Service Marks for the services provided through the
Cars.com Site. Zip Dee, Inc. v. Dometic Corp., 931 F. Supp. 602,
606 (N.D.Ill. 1996). This exclusive right empowers
Classified Ventures to prevent any third party from using any
name or mark that is likely to cause confusion with or dilute
the CARS.COM Service Marks.
Softcell's use of "cars.com" in its spam e-mail messages was
identical to Classified Ventures' CARS.COM Service Marks and
domain name. Consumers receiving Softcell's spam e-mail were
likely to believe that Classified Ventures is the source of
Softcell's Internet pornography services. Further, Classified
Ventures and Softcell both offer Internet services. These
services are "related" for purposes of a likelihood of confusion
analysis. Homeowners Group, Inc. v. Home Marketing Specialists,
Inc., 931 F.2d 1100, 1109 (6th Cir. 1991) (services "are
`related' if the ...