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TRANS UNION LLC v. CREDIT RESEARCH
March 26, 2001
TRANS UNION LLC, PLAINTIFF,
CREDIT RESEARCH, INC., AND CREDIT BUREAU OF CARMEL AND PEBBLE BEACH, INC., DEFENDANTS.
The opinion of the court was delivered by: Moran, Senior District Judge.
MEMORANDUM OPINION AND ORDER
In this trademark dispute plaintiff Trans Union LLC ("Trans
Union") accuses defendants Credit Research, Inc. ("CRI") and
Credit Bureau of Carmel and Pebble Beach, Inc. ("Credit Bureau")
(collectively "defendants") of misusing Trans Union's trademarks
on the internet. Trans Union alleges that defendants are
displaying the Trans Union logo on their internet web pages and
using the Trans Union trade name in their website's domain names
and metatags in violations of federal and state trademark
protection laws. Trans Union has now filed a motion for
preliminary injunction targeted at defendants' website. For the
reasons set forth below, Trans Union's motion is granted in part
and denied in part.
Trans Union is in the credit reporting business. It collects
consumer credit information from across the country, maintains
that information on a national database known as CRONUS, and
sells the information in credit reports and other products. Trans
Union controls 35 per cent of the industry, making it one of the
three major credit reporting agencies in the country. Its two
chief competitors are Experian Information Solutions, Inc.
(Experian) and Equifax, Inc. (Equifax). In connection with its
business, Trans Union owns the federally-registered trade name
"Trans Union" (trade name) and stylized "TU" logo (logo)
(collectively "trademarks" or "marks").
In 1986, Trans Union's predecessor entered into a service
agreement with CRI, a local credit bureau serving Santa Cruz, San
Benito, and Monterey counties of northern California. (Cplt.Exh.
1). CRI subsequently assigned its rights and obligations under
the service agreement to Credit Bureau.*fn1 Under the terms of
the contract Credit Bureau supplies Trans Union with credit
information from its three-county region in exchange for the
ability to access the nationwide credit data stored on Trans
Union's CRONUS network. This arrangement has been beneficial to
both parties. Trans Union has been able to rely on Credit Bureau
to gather local credit information from its province of the
country. Indeed, Trans Union has entered into similar contracts
with a number of other local credit bureaus and thereby has been
able to assemble a nationwide body of credit information. As for
Credit Bureau, it has been able to sell credit reports derived
from Trans Union's CRONUS database to its local customers. Credit
Bureau also has used Trans Union to provide billing and other
services related to its credit bureau business.
Although the service agreement creates a contractual
relationship between the parties, it is silent on the issue of
intellectual property rights. Not surprisingly, therefore, issues
regarding defendants' usage of Trans Union's trademarks have
arisen over the years. Soon after entering into the service
agreement Trans Union attempted to clarify some of the confusion.
In a 1987 letter, Trans Union instructed Credit Bureau that it
should "not imply in business stationery any form of ownership by
Trans Union," but, instead, should "use
wording such as `affiliated with Trans Union' or `serviced by
Trans Union'" to describe the business relationship (Cplt.Exh.
2). Trans Union addressed the issue again several years later. In
a 1996 letter to all affiliated local bureaus, Trans Union
admonished that "in order to avoid a legal misrepresentation of
the relationship . . . and . . . dilution of the Trans Union
trademark, CRONUS Bureaus need to be careful about the manner in
which they use the Trans Union name." Trans Union then went on to
provide some guidelines regarding how local bureaus could and
could not use the Trans Union trade name. Specifically, Trans
Union identified certain correct designations (e.g., "Automated
with Trans Union," "Serviced by Trans Union," "A member of the
Trans Union Automated network," and "Serving the Trans Union
system in [city or state]") and also cited a number of incorrect
designations (e.g., "XYZ Credit Bureau/Trans Union," "A
Franchise of Trans Union," "Trans Union's [city] Bureau,"
"[city/state]'s Trans Union bureau," and "A division of Trans
Union") (Cplt.Exh. 3).
Despite these letters, Credit Bureau continued to use a
letterhead that Trans Union found objectionable. In a letter
dated March 11, 1998, Trans Union notified Credit Bureau that it
was in violation of Trans Union's trademark rights and demanded
that Credit Bureau cease and desist its unlawful conduct
(Cplt.Exh. 4). The parties subsequently discussed the matter over
the telephone and on April 7, 1998, Trans Union sent a letter to
Credit Bureau stating that Trans Union does not permit the local
"bureau to make any use of its `TU' logo" and that the only
permitted use of the Trans Union trade name "is that which
accurately describes the relationship between" the parties, such
as "A Credit Bureau Serviced by Trans Union Corporation," or "A
Member Of The Trans Union Corporation Automated Network"
(Cplt.Exh. 5). On April 17, 1998, Credit Bureau wrote back to
inform Trans Union that it was changing its letterhead to conform
with Trans Union's request (Cplt.Exh. 6).
Foreshadowed by the letterhead dispute, the controversy
regarding defendants' use of Trans Union's trademarks has now
emerged in cyberspace. The focus of the conflict is defendants'
use of the marks on their internet website.*fn2 Defendants
market a variety of different credit products on their website.
They sell credit reports derived from information maintained on
Trans Union's CRONUS database, and also market credit reports
from Experian and Equifax, as well as merged reports containing
information from more than one source. Defendants no doubt view
their website as a successful expansion of their marketing
efforts. Trans Union, however, believes that defendants have
again crossed the line to tread on its intellectual property
rights. Specifically, Trans Union claims that defendants' website
abuses its trademarks in three ways. First, Trans Union claims
that defendants unlawfully display the Trans Union logo on their
web pages. Second, Trans Union criticizes defendants for
registering their website under domain names*fn3 which contain
the Trans Union
trade name, including transunioncredit.com, transunioncredit.org,
creditbureautransunion.org, and creditbureautransunion.net.
Third, Trans Union alleges that defendants illegally use the
Trans Union trade name in their website's metatags.*fn4
On April 6, 2000, Trans Union sent defendants a
cease-and-desist letter regarding their use of the trademarks on
the internet (Cplt.Exh. 8). The parties were unable to reach an
amicable resolution of their differences and, on June 27, 2000,
Trans Union initiated this lawsuit. The eight-count complaint
raises federal claims of trademark infringement (count I) and
unfair competition (count II) under the Lanham Act, 15 U.S.C. § 1114,
1125(a), trademark dilution under the Federal Trademark
Dilution Act, 15 U.S.C. § 1125(c)(1) (count VII), and cyberpiracy
under the Anticybersquatting Consumer Protection Act,
15 U.S.C. § 1125(d)(1) (count VIII). Trans Union also alleges violations of
the Illinois Uniform Deceptive Trade Practice Act, 815 ILCS 510/1
et seq. (count IV), Illinois Consumer Fraud and Deceptive
Business Practices Act, 815 ILCS 505/1 et seq. (count V), and
common law claims of trademark infringement and unfair
competition (count III) and unjust enrichment (count VI). On
November 21, 2000, Trans Union filed a motion for preliminary
injunctive relief. Trans Union's motion essentially urges us to
enjoin defendants from the following: 1) displaying the Trans
Union logo on their web pages; 2) using the Trans Union trade
name as part of their registered domain names; and 3) embedding
the Trans Union trade name in their website's metatags.
I. Preliminary Injunction Standard
In order to obtain a preliminary injunction the moving party
must establish that 1) there is a reasonable likelihood of
success on the merits; 2) there exists no adequate remedy at law;
3) it will suffer irreparable harm without the injunction; 4) the
threatened harm to the movant outweighs the injury an injunction
may cause to the nonmovant; and 5) the injunction will not
disserve the public interest. See Kiel v. City of Kenosha,
236 F.3d 814, 815-16 (7th Cir. 2000). We are to assess these factors
on a sliding scale. The greater the movant's likelihood of
succeeding on the merits, the less the balance of harms need be
in his favor. See Eli Lilly & Co. v. Natural Answers, Inc.,
233 F.3d 456, 461 (7th Cir. 2000).
We turn our attention first to Trans Union's likelihood of
succeeding on the merits of its various claims. The Seventh
Circuit has defined this initial element of the preliminary
injunction analysis as requiring the movant to demonstrate a
"better than negligible" chance of success on the merits.
International Kennel Club of Chicago, Inc. v. Mighty Star,
Inc., 846 F.2d 1079, 1084 (7th Cir. 1988). After assessing the
merits of Trans Union's claims, we will go on to consider the
other relevant elements of the test in order to determine
whether the circumstances support a preliminary injunction in
II. Trademark Infringement and Related Claims
Count I of the complaint alleges trademark infringement under
the Lanham Act, 15 U.S.C. § 1114. In order to succeed on such a
federal trademark infringement claim, Trans Union must establish
that it has a protectable trademark and that defendants' misuse
of the trademark creates a likelihood of confusion among
consumers. Barbecue Marx, Inc. v. 551 Ogden, Inc.,
235 F.3d 1041, 1043 (7th Cir. 2000). This same analysis applies to Trans
Union's unfair competition claim under the Lanham Act, see
Meridian Mut. Ins. Co. v. Meridian Ins. Group, Inc.,
128 F.3d 1111, 1115 (7th Cir. 1997), its unfair trade practice claims
under the Illinois Uniform Deceptive Trade Practice Act and
Illinois Consumer Fraud and Deceptive Business Practices Act,
see D 56, Inc. v. Berry's Inc., 955 F. Supp. 908, 920 (N.D.Ill.
1997), and its trademark infringement and unfair competition
claims under Illinois common law, see AHP Subsidiary Holding Co.
v. Stuart Hale Co., 1 F.3d 611, 619 (7th Cir. 1993). Therefore,
with respect to the likelihood of success on the merits, counts
II-V share the same fate as count I.*fn5
Trans Union argues that the display of Trans Union's logo on
defendants' web pages and use of Trans Union's trade name in
defendants' domain names and metatags are likely to create the
false impression that Trans Union endorses or otherwise is
affiliated with defendants' website. See PACCAR, Inc. v.
Telescan Technologies, L.L.C., 115 F. Supp.2d 772, 780 (E.D.Mich.
2000) (discussing similar website-related infringement claim).
Defendants disagree. Their defense rests in part on the
affiliation between the parties, and also raises ...