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November 12, 2004.


The opinion of the court was delivered by: AMY J. ST. EVE, District Judge


On August 28, 2003, Plaintiff Pure Imagination, Inc. ("Pure Imagination") filed this suit against Defendant Pure Imagination Studios, Inc. ("Studios") for service mark infringement under the Lanham Act § 32(a), 15 U.S.C. § 1114(1), cyberpiracy under the Lanham Act § 43(d), 15 U.S.C. § 11125(d), service mark and trade name infringement and false description of origin under the Lanham Act § 43(a), 15 U.S.C. § 1125(a), and unfair competition under Federal and Illinois common law and the Illinois Uniform Deceptive Trade Practice Act, 815 I.L.C.S. 510, associated with Studios' use of the trade name "Pure Imagination Studios" and the domain names "" and "" A bench trial took place on October 18 and 19, 2004.


  I. Procedural Background

  Pure Imagination filed a Motion for Summary Judgment on July 12, 2004. Briefing was completed and on September 29, 2004 this Court granted partial summary judgment, ruling that Studios does not have priority rights in the mark "" based on any use of that domain name by a third party prior to Studios' own first use of that mark. Pure Imagination, Inc. v. Pure Imagination Studios, Inc., No. 03 C 6070, 2004 WL 2222269 (N.D. Ill. Sep. 30, 2004). The Court also denied summary judgment in part because genuine issues of fact existed regarding likelihood of confusion and Studios' cyberpiracy claim. Id.

  At the conclusion of the two-day bench trial on October 19, 2004, Studios requested directed findings on the issues of damages, unfair competition, cyberpiracy, and its 15 U.S.C. § 1115(b)(5) defense to the service mark infringement claims. The Court addresses Studios' requests for directed findings in connection with its rulings in this Opinion.

  II. Findings of Fact

  A. The Parties

  Pure Imagination is a small advertising and marketing firm that helps businesses improve their marketing efforts by providing advertising, graphic design, illustration, and web site services and goods. Pure Imagination incorporated in Batavia, Illinois on March 21, 2000. Pure Imagination currently has customers in many different states. Len Davis is the principal and owner of Pure Imagination, and one of five full-time employees.

  Defendant Studios also provides advertising, graphic design, illustration, and web site services and goods, although now it focuses on icon design. Studios was initially located in Wheaton, Illinois, incorporating there on January 10, 2001. Studios relocated to Texas before the filing of this suit and incorporated there on April 8, 2003. Studios filed an assumed name certificate in Texas on July 14, 2003 to conduct business as Firewheel Design. Josh Williams is the principal and owner of Studios. B. The Parties' Use of the Marks at Issue

  Pure Imagination contends that it first used its "pure imagination" mark on February 4, 1998. The parties agree that Pure Imagination used its "pure imagination" mark in commerce at least as early as January 1999 on materials created for Moose magazine in Minnesota. This interstate use is evidenced by a January 3, 1999 invoice from Pure Imagination to R.C. Romine Advertising, located in Geneva, Illinois. (Pl. Ex. 3.) The invoice describes the work for R.C. Romine Advertising as "Moose Magazine Pgs. MN '99." Id. Pure Imagination applied for federal registration of the "pure imagination" mark on May 22, 2002 and the United States Patent and Trademark Office granted registration on June 2, 2003.

  Studios was not aware of Pure Imagination or its use of the "pure imagination" mark when it adopted the "pure imagination studios" name. Indeed, Studios derived the name from the theme song from the movie Willy Wonka and the Chocolate Factory. Studios first used the "pure imagination studios" mark on March 6, 2001 and first used that mark in commerce on May 18, 2001. Studios applied for federal registration of the "pure imagination studios" mark on June 13, 2001. After Pure Imagination filed a Notice of Opposition to Studios' application on November 12, 2002, Defendant abandoned its application on July 30, 2003.

  Studios also has various state registrations for the "pure imagination studios" mark. Studios registered the mark "pure imagination studios" in Illinois on December 31, 2001 for graphic art and design services. Studios registered the mark "" in Illinois on April 30, 2002 for graphic design, illustration, corporate identity, and branding. Studios registered the mark "pureimaginationstudios" in Oklahoma on April 22, 2002 for graphic design, illustration, corporate identity, and branding. C. Acquiring the "" Domain Name

  Pure Imagination attempted to acquire the "" domain name from the previous owner, Michelle Trimble. After talks fell through, Pure Imagination decided to wait until Ms. Trimble's registration of the domain name expired. Studios' owner, Mr. Williams, also contacted Ms. Trimble, and completed acquiring the domain name from her in May 2001 for $600 consideration.

  D. The Parties' Use of the Internet

  Both Pure Imagination and Studios rely heavily on the Internet to both market and conduct their business. While Pure Imagination uses a variety of different marketing methods, it focuses on search engine results that will direct potential customers to its web site, Pure Imagination registers key words and creates hundreds of "doorway pages" that serve to funnel prospective customers to Pure Imagination's web site. As Pure Imagination's owner explained, its web site has hundreds of "doorway pages" containing text designed to achieve a priority spot on search engine result lists. For instance, the top of these "doorway pages" may focus on keywords, such as "Chicago" or "web design." Also, Pure Imagination pays fees to various search engines so that displays as a sponsored listing on those search engines. While some of Pure Imagination's "doorway pages" or paid keywords target Chicago customers, others have no geographic reference, thus targeting a worldwide audience.

  Upon arriving at Pure Imagination's web site,, a customer can learn about Pure Imagination's services and view work samples. Once a customer hires Pure Imagination, it can provide services via the Internet. As Mr. Davis explained, instead of shipping products, Pure Imagination provides services resulting in electronic media that it can be provide to the customer via Pure Imagination's web site on the Internet. Pure Imagination typically has very little face-to-face contact even with Chicago customers. Rather, most communications occur through e-mail, telephone, or by posting work on the web site. Pure Imagination's business, therefore, does not have specific geographic boundaries. Pure Imagination's costs of providing services to a customer are essentially the same, regardless of where the customer is located. The only limitation is that the potential customer must first locate Pure Imagination's web site.

  The testimony on Pure Imagination's first use of the "pure imagination" mark on the Internet was vague. While Pure Imagination's expert could only conjecture on Pure Imagination's first use of the Internet in mid-2002, Studios' principle Josh Williams testified that he visited Pure Imagination's web site in connection with receiving an e-mail from Mr. Davis in June 2001. There is no evidence, however, of when Pure Imagination began using its web site to transact business as described above.

  Studios also relies heavily on the Internet to both market and conduct its business. Indeed, Studios has never conducted mass mailings, but rather relies solely on the Internet and word of mouth for marketing. As with Pure Imagination, because Studios uses its web site to conduct business, its customers are not geographically restricted. As Studios' owner, Josh Williams, explained, even when Studios was based in Wheaton, Illinois, it had few, if any, customers in that area. Instead, its first customers were in Oklahoma City, Oklahoma, and in Texas because of Mr. Williams' previous connections to those areas. Studios also currently conducts significant business for California clients due to the number of software companies in that state.

  Although it purchased the domain name in May 2001, the record is unclear as to when Studios first began operating its web site at Studios currently operates a limited purpose web site at to direct customers to its new web site at Studios began doing business under the name "Firewheel Design" in July 2003. Studios business, though, remains listed and referred to in various books that reference its web site as Because Studios has established this good will with the name "pure imagination" it continues to use the web site as a "redirect." Specifically, the web site is a single page that states "Pure Imagination Studios is evolving. . . . Firewheel Design." It contains a link reading "Click Here to Visit Firewheel Design" directing potential customers to the web site. At the bottom of the page there is a disclaimer that reads "Notice: Firewheel Design and this web site are not affiliated with Pure Imagination, Inc. of Batavia, IL." The disclaimer is presented in relatively small, light-gray font. While Studios has continued operating this limited purpose web site at it has otherwise not used the "pure imagination" mark to market new clients after learning of Pure Imagination's federal registration.

  E. The Parties Interaction Regarding the "pure imagination" Mark

  Len Davis e-mailed Josh Williams in early June 2001 notifying Mr. Williams that he believed a legal dispute existed as to the parties' rights in the "pure imagination" mark. Although the e-mail indicated that Pure Imagination had a pending federal registration for the mark, it appears this statement merely referenced Mr. Davis' engagement of legal counsel to obtain federal registration. In fact, Pure Imagination had not yet filed a federal registration. Davis' representation confused Mr. Williams who was unable to find the pending federal registration to which he believed Mr. Davis was referring. After further correspondence, Mr. Davis and Mr. Williams met face-to-face in November 2001 in Naperville, Illinois. At that meeting, the parties discussed Mr. Davis buying Studios' rights to the domain name A series of conversations followed but the parties were unable to reach a resolution. In particular, while Mr. Davis was willing to reimburse Mr. Williams for the $600 he paid Michelle ...

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