United States District Court, N.D. Illinois, Eastern Division
September 29, 2004.
PURE IMAGINATION, INC., Plaintiff,
PURE IMAGINATION STUDIOS, INC., Defendant.
The opinion of the court was delivered by: AMY J. ST. EVE, District Judge
MEMORANDUM OPINION AND ORDER
On August 28, 2003, Plaintiff Pure Imagination, Inc. ("Pure
Imagination") filed this suit against Defendant Pure Imagination
Studios, Inc. ("Studios") for trade mark infringement and
cyberpiracy associated with Studios' use of the trade name "Pure
Imagination Studios" and the domain names
"www.pureimagination.com" and "www.pureimaginationstudios.com."
After conducting discovery, Pure Imagination filed a Motion for
Summary Judgment. (R. 18-1.) For the reasons set forth below,
Pure Imagination's Motion is granted in part and denied in part.
I. Factual Background
A. The Parties
Pure Imagination provides advertising and web site development
services and goods. (R. 1-1, Compl. ¶ 7.) Pure Imagination was
incorporated in Illinois on March 21, 2000 and has its principal
place of business in Batavia, Illinois. (R. 25-1, Plaintiff's
Rule 56.1 Statement of Material Facts in Supp. of its Mot. For
Summ. J. ("Pl.'s 56.1 Stmt.") ¶ 6; R. 1-1, Compl. ¶ 7.) Studios provides advertising, graphic design, illustration, and
web site services and goods. (R. 61, Answer ¶ 19.) Studios was
incorporated in Illinois on January 10, 2001 and has an office in
Texas. (Id. ¶ 3.)
B. The Parties' Use of the Mark "pure imagination"
Pure Imagination used the "pure imagination" mark in a
publication for a Minnesota magazine on January 3, 1999. (Pl.'s
56.1 Stmt. ¶ 3.) The parties dispute the scope of Pure
Imagination's business. Studios alleges that Pure Imagination's
market is primarily local to Batavia, Illinois. (R. 22-2,
Defendant's Rule 56.1 Statement of Material Facts in Opp. to
Plaintiff's Mot. For Summ. J. ("Def.'s 56.1 Stmt.") ¶ 7.) On the
other hand, Pure Imagination contends that it has a worldwide
business because it advertises on the Internet. (R. 18-1, Pl.'s
Mem. at 9.)
Studios first used the mark "pure imagination" in interstate
commerce on May 18, 2001. (Pl.'s 56.1 Stmt. ¶ 4.) Studios alleges
that in early 2001, it performed a trademark search and found no
reference to Pure Imagination. (Def.'s 56.1 Stmt. ¶ 2.) Studios
further alleges that in early 2001 it had no knowledge that Pure
Imagination was in business. Id. Studios offers services
worldwide, including fifteen states and seven countries. (Id. ¶
On May 22, 2002, Pure Imagination filed an application for
registration of the "pure imagination" mark with the United
States Patent & Trademark Office. (Pl.'s 56.1 Stmt. ¶ 9.) Pure
Imagination received its registration certificate No. 2721,452 on
June 2, 2003. (Id. ¶ 9.) Prior to Pure Imagination's federal
registration application, Studios obtained state trademark
registrations for the marks "Pure Imagination Studios" and
"pureimagination.com" in Illinois on December 31, 2001. (Def.'s
56.1 Stmt. ¶ 6.) On April 22, 2002, Studios obtained registration
for the mark "Pure Imagination Studios" in Oklahoma. Id.
C. Previous Registration of the "www.pureimagination.com"
In early 1998, Scott Hamlin operated a company known as Pure
Imagination and in June 1998 registered the domain name
"pureimagination.com." (Def's 56.1 Stmt. ¶ 3.) The principal of
Studios, Josh Williams, worked with Mr. Hamlin at this time.
Id. Mr. Hamlin did not renew the domain name
"pureimagination.com," and Michele Trimble subsequently
registered the name. (Id. ¶ 4.) Mr. Williams completed a formal
transfer of ownership in the domain name in May, 2001, paying
$600 to Ms. Trimble for the domain name. (Id. ¶ 4.)
I. Legal Standards
Under Federal Rule of Civil Procedure 56, summary judgment is
proper where "the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law." FED. R. CIV. P. 56(c); Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552,
91 L.Ed.2d 265 (1986). The Court's function is "not to weigh the evidence
but merely to determine if `there is a genuine issue for trial.'"
Jackson v. Illinois Medi-Car, Inc., 300 F.3d 760, 764 (7th
Cir. 2002) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986)). A genuine
issue of material fact exists only if a "fair-minded jury could
return a verdict for the [nonmoving party] on the evidence
presented." Anderson, 477 U.S. at 252.
In assessing whether a genuine issue of material fact exists in
a case, the Court must construe all facts in the light most
favorable to the non-moving party and draw all reasonable and justifiable inferences in favor of that party. See id. at 255.
Neither "the mere existence of some alleged factual dispute
between the parties," id. at 247, nor the existence of "some
metaphysical doubt as to the material facts," Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586,
106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986), is sufficient to defeat a
motion for summary judgment. See Skorup v. Modern Door Corp.
153 F.3d 512, 514 (7th Cir. 1998).
II. Trademark Infringement
To prevail in a trademark infringement claim against an accused
infringer, the plaintiff must show a protectable trademark and a
likelihood of confusion on the part of the public. Nike, Inc. v.
"Just Did It" Enter., 6 F.3d 1225, 1227 (7th Cir. 1993). A
party shows a protectable trademark by establishing priority of
use of the mark as a trademark. Johnny Blastoff, Inc. v. Los
Angeles Rams Football Co., 188 F.3d 427, 433 (7th Cir.
1999). The registration of a trademark in the United States
Patent & Trademark Office establishes constructive use of the
trademark nationwide. 15 U.S.C. § 1057(b). Even when a plaintiff
has a federally registered trademark, a defendant who in good
faith used the trademark continuously from a time prior to a
plaintiff's application for registration may have rights to use
that mark in the areas in which it had trademark rights prior to
the plaintiff's registration application. 15 U.S.C. § 1115(b);
Safeway Stores, Inc. v. Safeway Quality Foods, Inc.,
433 F.2d 99, 104 (7th Cir. 1970). A party can obtain the benefit of a
third party's earlier use of a mark but only if the earlier use
qualifies as "trademark use," the mark has been used continuously
and not abandoned, and the third party assigned the rights in the
mark and the goodwill associated with that mark. Money Store v.
Harriscorp Fin., Inc., 689 F.2d 666 (7th Cir. 1982).
The issues in Pure Imagination's Motion related to trademark
infringement are: (1) whether Studios obtained trademark rights in the domain name
"www.pureimagination.com" through third parties' registration of
that domain name and Studios' subsequent purchase of the domain
name; (2) if Studios' does not benefit from the third parties'
earlier registration of the "www.pureimagination.com" domain
name, does Studios have any trademark rights related to its use
of the "pure imagination" mark prior to Pure Imagination's
federal registration application; and (3) whether a likelihood of
confusion exists between Pure Imagination's use of the "pure
imagination" mark and Studios' use of the "Pure Imagination
Studios," "www.pureimagination.com," and
A. Studios May Not Rely on the Earlier Third Party
Studios appears to contend that Mr. Hamlin's registration of
the domain name "www.pureimagination.com" in early 1998 prior to
Pure Imagination's first use of the "pure imagination" mark in
January 1999 gives Studios priority in that mark over Pure
Imagination. Pure Imagination responds that Studios cannot
benefit from the third parties' earlier domain name
registrations, and even if Studios could benefit, Pure
Imagination can prove an earlier first use of the "pure
imagination" mark in February 1998.*fn1 In order to "tack"
trademark rights to an earlier use of a third party, the party
seeking to obtain the benefit of the earlier use must show that
the earlier user did not abandon the mark and that the earlier
user assigned the mark along with the goodwill of the business
(associated with the trademark). 15 U.S.C. § 1060; Money Store,
689 F.2d at 676. Any attempt by Studios to rely on the earlier third party
domain registrations fails as a matter of law for at least two
reasons. First, Studios' has not set forth any evidence to show
that Mr. Hamlin or Ms. Trimble actually used the
"www.pureimagination.com" domain name as a trademark. The law is
clear that the mere registration of a domain name does not
constitute the use of the domain name as a trademark. Juno
Online Servs., L.P. v. Juno Lighting, Inc., 979 F. Supp. 684,
691 (N.D. Ill. 1997) ("The mere `warehousing' of the domain name
is not enough to find that defendant placed the mark on goods or
`used or displayed [the mark] in the sale or advertising of
services' as required."); also see Brookfield Communications,
Inc. v. West Coast Entm't Corp., 174 F.3d 1036, 1051 (9th
Cir. 1999) (holding that "registration of a domain name does not
itself constitute `use' for purpose of acquiring trademark
priority"). Because there is no evidence of the third parties'
use of the domain name as a trademark, there is no genuine
dispute that Studios cannot benefit from any earlier trademark
priority before its own first use.
Second, even if either Mr. Hamlin or Ms. Trimble did use the
domain name as a trademark, Studios offers no evidence, or does
it even allege, that either of those third parties assigned the
goodwill associated with that trademark to Studios. While this
Court recognizes that tangible assets need not be transferred
along with a trademark in order for the "good will" to be
transferred, Money Store, 689 F.2d at 676, none of the evidence
set forth by Studios creates any genuine issue about any goodwill
associated with the domain name being transferred. See Pepsico,
Inc. v. Grapette Co., 416 F.2d 285, 287 (8th Cir. 1969)
(holding that assignment of trademark was void because no
goodwill associated with the mark was transferred along with the
mark). Studios provides several pieces of correspondence between
Ms. Trimble and the principal of Studios, Mr. Williams. (R. 22-1,
Def.'s Mem. Exs. 1-9). This correspondence, however, at most indicates that the domain name was sold for $600 and the
assignment process took several months. Id. Because Studios has
not even alleged that it obtained any goodwill along with the
domain name rights from Ms. Trimble, as a matter of law, Studios
cannot claim as its first trademark use the earlier domain name
registrations of either Mr. Hamlin or Ms. Trimble.
B. There is an Issue of Fact Regarding Whether Studios Has
Trademark Rights as a Junior Good Faith User
The Lanham Act provides rights to a junior user of a mark who
adopted the mark without knowledge of a registrant's prior use
and who used the mark continuously since prior to the
registrant's application for federal registration.
15 U.S.C. § 1115(b)(5);*fn2 Safeway Stores, 433 F.2d 99 (holding that
defendant's innocent continuous use of the mark prior to
plaintiff's registration was a defense to trademark infringement
claim for geographic areas where defendant, but not plaintiff,
was using the mark prior to plaintiff's federal registration);
Burger King of Florida, Inc. v. Hoots, 403 F.2d 904 (7th
Cir. 1968) (stating that defendants who adopted a mark without
knowledge of the plaintiff's prior use and that had continuously
used the mark from a date prior to plaintiffs' federal
registration of the mark are entitled to protection in the area
of such earlier remote use). Prior to federal registration,
trademark priority is determined by the first use in a market
area. Zazu Designs v. L'Oreal, S.A., 979 F.2d 499, 503 (7th
Cir. 1992) ("Under the common law, one must win the race to the
marketplace to establish the exclusive right to a market"). A
second user who uses the mark in good faith may still use its
trademark in areas geographically remote from the market
appropriated by the first user. V & V Food Prods., Inc. v. Cacique Cheese Co., Inc., 683 F. Supp. 662, 666 (N.D. Ill.
1988). While neither party has directly addressed this issue, the
facts as viewed in the light most favorable to non-movant
Defendant Studios show that a genuine question of fact exists
whether Pure Imagination's federal trademark registration is
subject to Studios' existing rights in certain geographic areas
at the time of such application.
Viewed in the light most favorable to the non-movant, Studios'
first use in commerce of the "Pure Imagination Studios" mark was
May 1, 2001 and its first use in commerce of the
"www.pureimagination.com" mark was April 1, 2001. (R. 22-1, Def.
Mem. Ex. 3). Although these first uses occurred after Pure
Imagination's first use, they nonetheless took place prior to
Pure Imagination's application for federal trademark registration
on May 22, 2002. (Pl.'s 56.1 Stmt. ¶ 9). Studios submits the
affidavit of its principal Josh Williams stating that
"Defendant's services are offered world-wide, including 15 states
and 7 countries." (R. 22-3, Williams' Aff. ¶ 9). Mr. Williams
continues that "Pure Imagination Inc.'s business is primarily
local in the Chicagoland area." Id. Mr. Williams further states
that at the time Studios was incorporated, Studios was not aware
of Plaintiff or Plaintiff's use of the "pure imagination" mark.
Id. ¶ 4. While Pure Imagination disputes some of the facts set
forth in Studios' Affidavit of Mr. Williams, this Court cannot
weigh credibility issues at the summary judgment stage. AHP
Subsidiary Holding Co. v. Stuart Hale Co., 1 F.3d 611, 619
(quoting Liberty Lobby, 477 U.S. at 255, 106 S.Ct. At 2513-14).
A reasonable jury could therefore find that Studios had used in
good faith the "pure imagination" mark in areas where Pure
Imagination did not yet have trademark rights.
C. Likelihood of Confusion
In determining whether a likelihood of confusion exists, the
Seventh Circuit has established seven factors to consider: "(1) similarity between
the marks in appearance and suggestion; (2) similarity of the
products; (3) the area and manner of concurrent use; (4) the
degree of care likely to be exercised by consumers; (5) the
strength of the plaintiff's mark; (6) whether actual confusion
exists; and (7) whether the defendant intended to `palm off' his
product as that of the plaintiff." CAE, Inc. v. Clean Air Eng'g,
Inc., 267 F.3d 660, 677-78 (7th Cir. 2001). The likelihood
of confusion analysis involves a fact intensive balancing test
and no single factor is dispositive. Id. at 678.
As this Court has explained, under Local Rule 56.1, a party
moving for summary judgment must file a statement of material
facts on which it relies in support of its motion. LOCAL RULE
56.1; see Dugan v. American Brick Paving, Inc., No. 02 C 5261,
2004 WL 1459265 (N.D. Ill. June 24, 2004) (noting that failure to
comply with Local Rule 56.1 was "a potentially dispositive
matter"). Here, although Pure Imagination has provided a Local
Rule 56.1 statement, it has failed to set forth in that statement
most, if not all, of the facts it is presumably relying on to
support its likelihood of confusion analysis. See Smith
Fiberglass Prods, Inc. v. Ameron, Inc., 7 F.3d 1327, 1329
(7th Cir. 1993) (likelihood of confusion is a question of
Analyzing the facts as set forth in Pure Imagination's
Memorandum, genuine questions of fact still exist as to
likelihood of confusion. Specifically, there are questions of
fact related to three of the Seventh Circuit's factors: intent of
Defendant to palm off his product as that of another; actual
confusion; and area and manner of concurrent use.
First, genuine questions of fact exist whether Studios intended
to cause confusion through its use of the "pure imaginations"
mark. As discussed, Studios has set forth an affidavit that it
was not aware of Pure Imagination or Pure Imagination's use of
the "pure imagination" mark at the time it began to use that mark. (R. 22-3, Williams' Aff. ¶
4). There is therefore an issue of fact regarding the intent of
Studios to confuse.
Second, a genuine dispute also exists regarding the actual
confusion evidence set forth by Pure Imagination. Pure
Imagination has provided the affidavits of two Batavia, Illinois
residents that attempted to locate Pure Imagination's website by
visiting www.pureimagination.com. (R. 18-1, Pl.'s Mem. Ex. O).
The customers entered the website, looked around, then became
confused and eventually telephoned Pure Imaginations. Id.
Studios disputes that these affidavits demonstrate actual
confusion because "the consumers realized they had the wrong
website." (R. 22-1, Def.'s Mem. at 5). Pure Imagination is
correct that the affidavits demonstrate initial interest
confusion with respect to the "www.pureimagination.com" mark.
Dorr-Oliver, Inc. v. Fluid Quip, Inc., 94 F.3d 376, 382
(7th Cir. 1996). As the Seventh Circuit has explained, "the
Lanham Act forbids a competitor from luring potential customers
away from a producer by initially passing off its goods as those
of the producer's even if confusion as to the source of the goods
is dispelled by the time any sales are consumated." Id. In
other words, even though the consumers realized they were not at
the web site of Pure Imagination, the fact that the consumers
visited www.pureimagination.com, in the first instance, shows
that Studios was benefitting from the goodwill of Pure
Imagination. Pure Imagination's initial interest confusion
argument as set forth in its Motion, though, only applies to the
"www.pureimagination.com" mark and not to the "Pure Imagination
Studios" mark. A question of fact exists as to whether the
consumers were actually confused when they first saw the "Pure
Imagination Studios" mark after the consumers had arrived at
the website. Additionally, because the consumers could possibly
view Studios' disclaimer in conjunction with their first exposure
to the "Pure Imagination Studios" mark, there is a genuine dispute whether Studios' disclaimer would mitigate
Third, for the area and manner of concurrent use factor, Pure
Imagination relies solely on each parties' use of the Internet to
advertise their services and goods. While Studios fails to come
forward with any facts related to this factor, Pure Imagination's
initial analysis is insufficient to show that this factor weighs
heavily in favor of Pure Imagination. If the mere fact that two
companies both advertised on the Internet meant that they had the
same area and manner of using their marks, then this factor would
almost always favor confusion. Rather, Pure Imagination needs
further factual analysis before this factor can unquestionably
weigh in its favor.
The Court notes that while Pure Imagination failed to properly
set forth its facts for likelihood of confusion in accordance
with Local Rule 56.1, the discussion of those facts in its
Memorandum presents a compelling case for likelihood of
confusion. The Court recognizes that no one factor is required
for a finding of a likelihood of confusion analysis. See CAE,
Inc., 267 F.3d at 678 (7th Cir. 2001). Nonetheless,
balancing the totality of the circumstances and viewing the facts
in the light most favorable to Defendants, issues of fact remain.
III. Cyberpiracy Claims
The Lanham Act requires that a party have a bad faith intent to
profit from the mark in order to be liable for cyberpiracy.
15 U.S.C. § 1125(d)(1)(A). As discussed above, a genuine question of
fact exists whether Studios was aware of Pure Imagination and the
"pure imagination" mark when Studios acquired the domain names in
question. Accordingly, summary judgment is denied as to Pure
Imagination's claim for cyberpiracy. CONCLUSION
Pure Imagination is entitled to judgment as a matter of law
that Studios does not have trademark rights in the mark
"www.pureimagination.com" based on any registration or use of
that domain name prior to Studios' own first use of that mark.
There is no genuine issue of material fact that would allow a
jury to find that Studios benefits from any prior third party
registration of the domain name "www.pureimagination.com." Pure
Imagination's Motion for Summary Judgment is hereby granted
regarding this claim.
Because genuine questions of material fact exist as to Studios'
trademark rights prior to Pure Imagination's federal trademark
registration and to the likelihood of confusion analysis, Pure
Imagination's Motion for Summary Judgment is denied in part. Pure
Imagination's Motion for Summary Judgment is also denied as to
the claims for cyberpiracy because genuine issues remain
regarding whether Studios' acted with bad faith as required by
the Lanham Act.