United States District Court, N.D. Illinois, Eastern Division
November 12, 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 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 "www.pureimagination.com" and
"www.pureimaginationstudios.com." 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
"www.pureimagination.com" 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
"pureimagination.com" 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 "www.pureimaginatio.com" Domain Name
Pure Imagination attempted to acquire the
"www.pureimagination.com" 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, www.pureim.com. 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 www.pureim.com 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
Upon arriving at Pure Imagination's web site, www.pureim.com,
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
www.pureim.com 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
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 www.pureimagination.com. Studios currently operates a
limited purpose web site at www.pureimagination.com. to direct
customers to its new web site at www.firewheeldesign.com.
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
www.pureimagination.com. Because Studios has established this
good will with the name "pure imagination" it continues to use
the web site www.pureimagination.com as a "redirect."
Specifically, the www.pureimaginatin.com 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
www.firewheeldesign.com 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 www.pureimagination.com. it has
otherwise not used the "pure imagination" mark to market new
clients after learning of Pure Imagination's federal
E. The Parties Interaction Regarding the "pure imagination"
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 www.pureimagination.com. 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 Trimble for
the domain name, Mr. Williams also requested reimbursement for
the time and expenses he devoted to establishing his good will
behind that domain name. Pure Imagination filed this suit on
August 28, 2003 after the parties failed to resolve the issue.
I. Service Mark Infringement and Unfair Competition*fn1
Under the Lanham Act
Congress passed the Lanham Act in 1946 federalizing the
existing common law protection of trade marks used in interstate
commerce. CAE, Inc. v. Clean Air Eng'g, Inc., 267 F.3d 660, 672
(7th Cir. 2001) (citing Peaches Enter. Corp. v. Repertoire
Assocs., Inc., 62 F.3d 690, 692 (5th Cir. 1995)). The Lanham
Act provides a federal cause of action for trademark owners to
protect the good will established in using the mark. Id. To
prevail in a trademark infringement claim against an accused infringer, the plaintiff
must show: (1) it owns a protectable trademark; and (2) there
exists 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. The Parties' Marks in Question are "Service Marks"
Although the parties often use the term "trademark," this term
is used in "a broad and generic sense to denote the entire field
of trademarks, service marks, trade names, and trade dress."
Platinum Home Mortg. Corp. v. Platinum Fin. Group, Inc.,
149 F.3d 722, 726 n. 1 (7th Cir. 1998). The Lanham Act provides
that a "service mark" is "any word, name, symbol, or device, or
any combination thereof ? used by a person ? to identify and
distinguish the services of one person, including a unique
service, from the services of others and to indicate the source
of the services, even if that source is unknown. ?"
15 U.S.C. § 1127. In this case the "pure imagination" mark and Studios'
derivations of that mark are used as "service marks."
B. The "pure imagination" Mark is a Protectable Trademark
As a federally registered mark, Pure Imagination's "pure
imagination" mark is presumed valid and protectable. 15 U.S.C. § 1057(b), 1115(a). Studios did
not offer any argument or evidence at trial to rebut the
presumption that the "pure imagination" mark is valid and
protectable. Even absent federal registration, a mark is
protectable if it is either inherently distinctive or has
acquired secondary meaning. Two Pesos, Inc. v. Taco Cabana,
Inc., 505 U.S. 763, 769, 112 S. Ct. 2753, 2758,
120 L. Ed. 2d 615 (1992); 15 U.S.C. § 1052(e) and (f). Marks are classified
into five categories based on distinctiveness: 1) generic, 2)
descriptive, 3) suggestive, 4) arbitrary, and 5) fanciful.
Mil-Mar Shoes Co., Inc. v. Shonac Corp., 75 F.3d 1153, 1157
(7th Cir. 1996) (citing Two Pesos, Inc. v. Taco Cabana,
Inc., 505 U.S. 763, 767-68, 112 S. Ct. 2753, 2757,
120 L. Ed. 2d 615 (1992)). The level of trademark protection corresponds with
the distinctiveness of the mark. Id. Generic terms are not
distinctive and therefore are not protectable as trademarks.
Id. A descriptive mark requires proof of acquired secondary
meaning in order to be distinctive and therefore protectable.
Two Pesos, 505 U.S. at 772, 112 S. Ct. at 2759. Suggestive,
arbitrary, and fanciful marks, however, are inherently
distinctive and do not require any proof of secondary meaning.
Because the phrase "pure imagination" is not generic or
descriptive of the services provided by Pure Imagination, it is
at least a suggestive mark and therefore inherently distinct.
See Platinum Home Mortg., 149 F.3d at 727 ("terms that are
either suggestive, arbitrary, or fanciful are automatically
entitled to trademark protection because they are inherently
C. Pure Imagination is the Owner and Senior User of the "pure
Federal registration is prima facie evidence of the
registrant's ownership of the mark. 15 U.S.C. § 1057(b). Service
mark ownership is determined by the first to use the mark in commerce. Federal registration of a mark constitutes constructive
nationwide use of the mark from the date of the application for
registration. Allard Enter., Inc. v. Advanced Programming
Resources, Inc., 146 F.3d 350, 358 (6th Cir. 1998);
15 U.S.C. 1057(b), (c), 1115(a). In the absence of, or prior to,
federal registration, ownership is "established as of the first
actual use of a mark in a genuine commercial transaction." Id.
The Lanham Act defines "use in commerce" as bona fide use of a
mark in the ordinary course of trade," and further explains that
a service mark is in use "when it is used or displayed in the
sale or advertising of services and the services are rendered in
commerce." 15 U.S.C. § 1127. "`[C]ommerce' means all commerce
which may lawfully be regulated by Congress." Id.
Here, the parties agree that Pure Imagination used the "pure
imagination" mark in commerce in early January 1999.*fn2 The
earliest use in commerce alleged by Studios of either the "pure imagination studios" or "pureimagination.com" marks is May
18, 2001. Therefore, as between, Pure Imagination and Studios,
based on its priority of service mark use, Pure Imagination is
the senior user and Studios is the junior user. As of its
application for federal registration of the "pure imagination"
mark on May 22, 2002, Pure Imagination had constructive
nation-wide use of the "pure imagination" mark. The burden is
therefore on Studios to prove any rights in the "pure
imagination" mark to which Pure Imagination's federal
registration was subject.
D. Likelihood of Confusion
Likelihood of confusion is a question of fact. Scandia Down
Corp. v. Euroquilt, Inc., 772 F.2d 1423, 1428 (7th Cir.
1985). The Seventh Circuit weighs seven factors in determining
whether a likelihood of confusion exists: (1) similarity of the
marks; (2) similarity of the products or services; (3) area and
manner of concurrent use; (4) degree of care likely to be
exercised by consumers; (5) 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., 267 F.3d at 677-78. The likelihood of confusion test is an
equitable balancing test and no single factor is dispositive.
Barbecue Marx, Inc. v. 551 Ogden, Inc., 235 F.3d 1041, 1044
(7th Cir. 2000). At the summary judgment stage, Studios argued only three
of these factors: area and manner of concurrent use, actual
confusion, and intent. Studios made no additional arguments at
trial. Nonetheless, the Court addresses each of the seven factors
and finds that a likelihood of confusion exists.
1. Similarity of the Marks
The first factor in the Seventh Circuit's likelihood of
confusion analysis is the similarity of the plaintiff's and
defendant's marks. The Court finds that Pure Imagination's "pure
imagination" mark and Studios' "pure imagination studios" and
"pureimagination.com" marks are virtually identical. Regarding
"pureimagination.com," as Pure Imagination correctly points out,
the presence of the second-level domain ".com" does not itself
distinguish an otherwise similar mark. Brookfield Comm., Inc. v.
West Coast Ent., Corp., 174 F.3d 1036, 1055 (9th Cir. 1999)
(finding that the similarity factor weighed heavily in favor of
plaintiff in analyzing "MovieBuff" and "moviebuff.com" marks).
Regarding "pure imagination studios," courts typically ignore a
generic portion of a mark, focusing instead on the modifying
portion. See Bishops Bay Founders Group, Inc. v. Bishop Bay
Apartments, LLC, 301 F. Supp. 2d 901, 912 (W.D. Wis. 2003). In
the context of web design, advertising, and graphic design and
illustration services, the term "studios" is either generic or
descriptive. Therefore, the term "studios" in the "pure
imagination studios" mark bears little importance in
distinguishing the mark from "pure imagination" and those marks
are essentially identical. Because the relevant portions of "pure
imagination studios" and "pureimagination.com" marks are
essentially identical to plaintiff's "pure imagination" mark, the
similarity of marks factor weighs heavily in Pure Imagination's
favor. 2. Similarity of Services
The second factor is the similarity of the services associated
with the marks. Both Pure Imagination and Studios provide
advertising, graphic design, illustration, and web site services
and goods. Josh Williams testified that Studios is world reknown
for its icon design services and in fact won the Pixelpalooza
award for its icon design in 2002. Studios does not deny,
however, that it also offers web site services, advertising, and
graphic design services, just like Pure Imagination. Indeed,
Studios' Illinois state registration for "pure imagination
studios" states that the mark is for "graphic art and design
services." (Def. Ex. 2.) Studios' Illinois registration for
"pureimagination.com" states that the mark is for graphic design,
illustration, corporate identity, and branding." (Def. Ex. 3.)
Studios' Oklahoma registration for "pureimaginationstudios"
states that it is for "graphic design, illustration, corporate
identity & branding." (Def. Ex. 4.) Moreover, Studios' current
web site, accessed via www.pureimagination.com. lists Studios'
services as identity design, icon design, illustration, and web
design. The record, therefore, plainly shows that there is at
least significant overlap, if not essential identity, between the
services offered by Pure Imagination and Studios under the
service mark "pure imagination," including Studios' "pure
imagination studios" and "pureimagination.com" marks.
Studios argued at trial that the parties are not in direct
competition and, therefore, there is no likelihood of confusion.
This factor, however, does not examine whether direct competition
actually exists, but whether the parties provide services so
related that the public could reasonably think that the same
party offers the services. See CAE, Inc., 267 F.3d at 679
(finding that similarity of products factor weighed in
plaintiff's favor even though many of the parties' products were
dissimilar); Forum Corp. of N. Am. V. Forum, Ltd.,
903 F.2d 434, 442 (7th Cir. 1990) (noting that lack of "direct competition" was not
dispositive of issue of likelihood of confusion); Int'l Kennel
Club of Chicago, Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1089
(7th Cir. 1988) (finding likelihood of confusion even when
the products were not identical but were sufficiently related to
create an inference in consumers' minds that the products came
from the same source). Therefore, because there is at least a
significant overlap in the parties' services offered under the
mark "pure imagination," the public could think that the same
party offers the services. This factor thus weighs heavily in
favor of Pure Imagination. See CAE, Inc., 267 F.3d at 679.
3. Area and Manner of Concurrent Use
The third factor is the area and manner of concurrent use of
the "pure imagination" mark. Under this factor, the Court must
assess whether "there is a relationship in use, promotion,
distribution, or sales between the good or services of the
parties." Ty, Inc. v. Jones Group, Inc., 237 F.3d 891, 900
(7th Cir. 2001). Many courts have ruled in analyzing a factor
similar to the Seventh Circuit's "area and manner of concurrent
use" factor, that the parties' use of the marks in question in
the domain name of a web site is dispositive of this factor
favoring the trademark owner. See Public Service Co. of New
Mexico v. Nexus Energy Software, Inc., 36 F. Supp. 2d 436, 439
(D. Mass. 1999) (finding that "channels of trade" factor favored
trademark owner because both parties compete on the Internet,
even though there were differences in geographic regions served);
Washington Speakers Bureau, Inc. v. Leading Auth., Inc.,
33 F. Supp. 2d 488, 499 (E.D. Va. 1999) (finding that "similarity of
facilities used in business" factor favors trademark owner
because both parties used the Internet as a facility through
which services were advertised and provided); Jews for Jesus v.
Brodsky, 993 F. Supp. 282, 304-5 (D.N.J. 1998) (finding that "manner in which marketed" factor favored trademark
owner because both parties used the mark in their domain names
that could be accessed from any Internet browser); Interstellar
Starship Services, Ltd. v. Epix, Inc., 983 F. Supp. 1331, 1336
(D. Or. 1997) (finding that "marketing channels" factor favored
trademark owner because both parties marketed themselves through
the Internet) (reversed on other grounds); Planned Parenthood
Fed. of Am., Inc. v. Bucci, No. 97 Civ. 0629, 1997 WL 13313, *8
(S.D.N.Y. March 24, 1997) (finding that "the competitive
proximity of the products or services" factor favored trademark
owner because the web sites are located on the World Wide Web and
"compete for the same audience namely, Internet users who are
searching for a web site that uses plaintiff's mark as its
address"). While the Court declines to hold that the mere use of
the Internet by both parties means that this factor weighs in
favor of the trademark owner, under the facts of this case where
both parties actively use the Internet to perform their services,
this factor weighs heavily in favor of Pure Imagination.
Further, in analyzing this factor, courts have noted the
importance of several "sub-factors:" (1) the relative
geographical distribution areas; (2) the existence of direct
competition between the products; (3) whether the products are
sold to consumers in the same type of store, and (4) whether the
product is sold in the same marketing channels. Id. (internal
citations omitted). Regarding the first sub-factor, the parties
have the same relative geographic distribution areas. Because the
parties both rely on the Internet to conduct their business as
well as their marketing, they both have a worldwide distribution
area. Len Davis testified that Pure Imagination's customers can
be located anywhere in the world because business is conducted
over the Internet. In particular, Pure Imagination can post draft
designs on its web site, Pure Imagination's customers can view
and comment on them, and then Pure Imagination can revise and re-post them. Similarly, Josh Williams testified that Studios
conducts business in a similar manner and that because of the
Internet, its customers can come from anywhere in the world.
Indeed, this use of the Internet has resulted in an actual
overlap in the geographical location of customers. Defendants'
Exhibit 9 shows that Studios has at least one customer located in
Chicago, Illinois, which is the primary base of Pure
Imagination's business. (Def. Ex. 9.) Regarding the second
sub-factor, the parties have not presented any evidence of mutual
customers or Studios' soliciting Pure Imagination's customers. On
the other hand, as discussed above with respect to the
"similarity of services" factor, an overlap exists between the
offered services of the parties. Regarding the third sub-factor,
because both Pure Imagination and Studios do not simply market
their services over the Internet, but actually render those
services on the Internet, the services are offered in the same
type of "store" and this sub-factor favors Pure Imagination.
Regarding the fourth sub-factor, because the parties' services
are marketed over the Internet on web sites that use, or try to
use, the "pure imagination" mark in the domain name, they share
the same marketing channels. See Washington Speakers,
33 F.Supp. 2d at 499 ("To facilitate access to their web sites,
individuals and companies typically prefer to have a domain name
that is memorable and that may even be surmised by users who do
not know their exact web site address"); Jews for Jesus,
993 F.Supp. at 304-5 (finding that "manner in which marketed" factor
favored trademark owner because both parties used mark in
question as a domain name). Even absent evidence of direct
competition, because three of the four sub-factors favor Pure
Imagination, the Court finds that the "area and manner of
concurrent use" factor favors Pure Imagination. 4. Degree of Care Likely to be Exercised by Customers
The fourth factor is the degree of care likely to be exercised
by consumers of the services sold by the parties under the "pure
imagination" mark. Courts have recognized that when a product or
service is sold over the Internet the consuming public consists
of a broad range of purchasers. Trans Union LLC v. Credit
Research, Inc., 142 F. Supp. 2d 1029, 1043 (N.D. Ill. 2001);
Intermatic Inc. v. Toeppen, 947 F. Supp. 1227, 1235-36 (N.D.
Ill. 1996). Here, both parties offer web design services over the
Internet. Because of the wide-spread use of web sites and
therefore the need for web design services by companies of all
sizes and levels of sophistication, each party has at least some
potential customers of relatively low-levels of sophistication.
As here, where the parties have a broad range of customers, the
"standard of care to be exercised by the reasonably prudent
purchaser will be equal to that of the least sophisticated
consumer in the class." Trans Union LLC,
142 F. Supp. 2d at 1043 (citing Ford Motor Co. v. Summit Motor Prods., Inc.,
930 F.2d 277, 293 (3d Cir. 1991)). Because the standard of care
to be exercised by the parties' consumers is that of a relatively
low level of sophistication, confusion is more likely and this
factor favors Pure Imagination.
5. Strength of Plaintiff's Mark
The fifth factor is the strength of Pure Imagination's mark,
which refers to "the mark's distinctiveness, meaning its
propensity to identify the products or services sold as emanating
from a particular source." See CAE, Inc., 267 F.3d at 685. A
mark's strength is of little importance when the marks are
essentially identical. Sand, Taylor & Wood Co., 978 F.2d at 959
(quoting 1 J. Thomas McCarthy, Trademarks and Unfair
Competition § 11:24, at 505-6 (1991 Supp.)). Even if given
little weight, this factor also weighs slightly in favor of Pure
Imagination. Pure Imagination has a federally registered mark that is presumed
valid. 15 U.S.C. § 1115(a). Even without federal registration,
the "pure imagination" mark is at least suggestive and therefore
inherently distinctive. Mil-Mar Shoe Co., 75 F.3d at 1156.
Therefore, although Pure Imagination has not provided significant
other evidence of its mark's strength, its federal registration,
and the inherent distinctiveness of the mark, mean that the
"strength of the mark" factor slightly favors Pure Imagination.
6. Actual Confusion
The sixth factor is whether there is any evidence of actual
confusion. Because the ultimate question is whether there is
"likelihood" of confusion, evidence of actual confusion is not
required for a finding of likelihood of confusion. Int'l Kennel
Club of Chicago, Inc., 846 F.2d at 1090. When such evidence does
exist, however, it "is entitled to substantial weight." Id.
Pure Imagination has presented testimony from a funeral home
director in Batavia, Illinois. This witness knew of Pure
Imagination's services and attempted to locate its web site on
the Internet. The witness entered "www.pureimagination.com,"
assuming that the company's name would be the domain
name.*fn3 The witness entered and spent several minutes at
the www.pureimagination.com web site. Later that day, the
witness telephoned Mr. Davis, and when he mentioned that he had
been on www.pureimagination.com, Mr. Davis informed him that
this was not Pure Imagination's web site. At the summary judgment
stage, Pure Imagination also provided an affidavit of another
witness who had a similar experience entering
www.pureimagination.com as a domain name assuming to find Pure
Imagination's web site. Further, Mr. Davis testified at trial that he has experienced
numerous other instances of customers being confused about the
location of Pure Imagination's web site because of Studios' using
the domain name www.pureimagination.com.
Studios attacks this evidence by arguing that all of these
customers eventually figured out that www.pureimagination.com
was not the web site of Pure Imagination. Studios also argues
that any of these customers could have performed a search on a
search engine that would have likely yielded Pure Imagination's
priority listings linking directly to Pure Imagination's web site
at www.pureim.com. Pure Imagination is correct, however, that
its evidence demonstrates 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. The Ninth Circuit
offered a hypothetical explanation similar to the following.
Imagine if McDonalds puts up a sign at Exit 7 saying "Burger King
Exit 7," but in reality Burger King is located at Exit 8. If
there is, however, a McDonalds at Exit 7, McDonalds can benefit
from the good will of Burger King because cars that exit the
freeway at Exit 7 and do not see the Burger King may simply pull
into the McDonalds rather than get back on the freeway. Even
though the consumer is fully aware the McDonalds is not a Burger
King, the initial confusion of where to exit the freeway allowed
McDonalds to improperly reap the good will of its competitor.
See Brookfield, 174 F.3d at 1064. Such is the case here, where
even though the consumers eventually 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 benefitted from the
goodwill of Pure Imagination.
Further, the testimony of Pure Imagination's witness also
evidences actual confusion with respect to the "pure imagination
studios" mark. The witness made clear that even after several
minutes on the www.pureimagination.com web site, he still
believed the web site was affiliated with Pure Imagination. It
was not until later speaking with Len Davis that he realized he
had been mistaken. Plaintiff's Exhibit 14, a printout of the
www.pureimagination.com web site shows that the web site twice
identifies Pure Imagination Studios as the sponsor of the web
site. (Pl. Ex. 14.) Therefore, even after seeing the mark "pure
imagination studios," the witness still assumed he was on Pure
Imagination's web site. This evidence of actual confusion with
respect to both the "pureimagination.com" and "pure imagination
studios" is entitled to great weight and heavily favors Pure
7. Defendant's Intent
The seventh factor is whether Studios intentionally passed off
its services as those of Pure Imagination. This factor is only
relevant if the defendant intended to "palm off" his products as
those of another. See Sands, Taylor & Wood Co.,
978 F.2d at 961; also see Wesley-Jessen Div. Of Schering Corp. v. Bausch &
Lomb Inc., 698 F.2d 862, 867 (7th Cir. 1983) (intent is not
necessary for a finding of likelihood of confusion). This factor
concerns intent to confuse consumers, "not merely the intent to
use a mark that is already in use somewhere else." Am. Society
of Plumbing Eng'rs v. TMB Pub., Inc., Nos. 02-3632, 02-3765,
2004 WL 1799362, *9 (7th Cir. Aug. 3, 2004). Pure Imagination
presents no direct evidence that Studios was aware of Pure
Imagination's mark when Studios adopted its own marks. Rather,
Pure Imagination points to various conduct of Studios after it
became aware of Pure Imagination in June 2001. In particular, Pure Imagination points to numerous occasions, where
shortly after Pure Imagination took steps to enforce its
trademark rights against Studios, Studios then immediately took
steps to expand its use of the "pure imagination" mark. After Len
Davis e-mailed Josh Williams in early June 2001, Studios
responded by applying for its own federal trademark registration.
After Pure Imagination sent another written demand in August
2001, Studios responded by obtaining state registrations and
renewing its domain name. Later, after Pure Imagination obtained
its federal registration, Studios nonetheless continued using
Josh Williams, however, explains that after being contacted by
Mr. Davis and Mr. Davis claiming that Pure Imagination had a
pending federal registration, Mr. Williams searched the United
States Patent & Trademark Office's web site and found no such
pending registration. He was, therefore, doubtful of Pure
Imagination's rights in the "pure imagination" mark. Further, he
knew that he had used the mark himself and had purchased the
domain name from a third party. After consulting with his own
legal counsel, he genuinely felt that Studios had rights in the
"pure imagination" mark and corresponding domain name. Mr.
Williams also explained that publications exist that reference
Studios' accomplishments in the field of icon design and list its
web site as www.pureimagination.com. Studios has continued
using that domain name so that customers can find Studios' new
web site at www.firewheeldesign.com. The Court finds Mr.
Williams testimony entirely credible on the issue of good faith
and finds no evidence that Studios has intentionally acted to
pass off its services as those of plaintiff Pure Imagination.
Therefore, this factor weighs in favor of Studios. 8. Weighing the Factors
Since every factor, other than intent to "palm off," weighs in
favor of Pure Imagination, the Court finds that on balance of the
equities there does exist a likelihood of confusion for both the
"pure imagination studios" and "pureimagination.com" marks. The
"similarity of the marks" and "evidence of actual confusion"
factors, in particular, weigh heavily in favor of Pure
Imagination. CAE, Inc., 267 F.3d at 686-87 (the similarity of
marks, evidence of actual confusion, and defendant's intent are
three most important factors, although all three of these factors
must not weigh in plaintiff's favor to find a likelihood of
E. Studios' Defense Under 15 U.S.C. § 1115(b)(5)
The Lanham Act provides rights to a 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.*fn4
15 U.S.C. § 1115(b)(5);*fn5 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.
At trial, Studios argued that Pure Imagination bears the burden
of proving that it was first to use the "pure imagination" mark
in each geographic market. This is incorrect. As the Supreme
Court discussed in Park `N Fly, Inc. v. Dollar Park and Fly,
Inc., the Lanham Act provided for constructive notice of
registration and thereby modified "the common-law rule that
allowed acquisition of concurrent rights by users in distinct
geographic areas if the subsequent user adopted the mark without
knowledge of prior use." 469 U.S. 189, 200, 105 S.Ct. 658, 664,
83 L.Ed. 2d 582 (1985). In other words, when a party has a
federally registered trademark, it is entitled to constructive
nationwide use as of registration and a presumptively valid and
protectable mark. The determination of rights as between two
users of the same mark, when one has a federally registered mark,
is not the simple question of which party comes forward with
evidence to demonstrate that it was the first user in each market
in question. Rather, the party without the federal registration
must prove its prior and continuous rights in a market that
preempts the registrant's constructive nationwide rights.
15 U.S.C. § 1115(b)(5); Allard, 146 F.3d at 361. Therefore,
because Pure Imagination has established that it has a federally
registered trademark, Studios bears the burden of proving each of
the elements of its § 1115(b)(5) affirmative defense. See
Emergency One, Inc. v. American Fire Eagle Engine Co., Inc., 332
F.3d 264, 272 (4th Cir. 2003) (noting that the good faith junior
user defense is an affirmative defense under the Lanham Act);
Quill Corp. v. LeBlanc, 654 F.Supp. 380 (D.N.H. 1987) (noting
that defendant bears the burden of proving its prior adoption
without knowledge of the senior user's prior use, the continuous
use in that market from date prior to senior user's registration,
and the boundaries of that market); West Disinfecting Co. v.
Onorato, 242 F.2d 197 (C.C.P.A. 1957) (holding that in context
of a trademark interference proceeding, the junior user had the
burden to prove its use in a market prior to the senior user's
use in that market). Specifically, Studios must prove that: (1)
it adopted the mark without actual knowledge of Pure
Imagination's prior use; (2) it has continuously used the mark;
(3) it adopted the mark prior to Pure Imagination's application
for federal registration in May 2002; and (4) it uses the mark in
the area for which prior continuous use has been proved.
15 U.S.C. § 1115(b)(5); Concord Labs., Inc., v. Concord Med.
Center, 552 F.Supp. 549 (N.D. Ill. 1982); Quill Corp.,
645 F. Supp. at 385 ("At the point in time of registration, the junior
user's current market it's area [of] continuous prior use," ?
is frozen, and "[a]s at common law, the junior user's reputation,
advertising, and sales delimit its frozen area.") (citing
Thrifty Rent-A-Car Sys. v. Thrift Cars, Inc., 639 F. Supp. 750,
755-56 (D. Mass. 1986)).
Because Pure Imagination applied for its federal registration
on May 22, 2002, Studios' market for using the marks in question
froze as of this date (assuming it proves the requisite
elements). See 15 U.S.C. § 1057(c) ("Contingent on the
registration of a mark on the principal register ?, the filing
of the application to register such mark shall constitute
constructive use of the mark, conferring a right of priority,
nationwide in effect.") Only if Studios proves each element of
its section 1115(b)(5) defense, it is entitled to protection
throughout the area of its prior continuous use, but it cannot expand beyond that area.
Concord Labs., 552 F.Supp. at 552.
Here, Studios has failed to meet its burden of proving each of
the elements of its § 1115(b)(5) defense. In particular, Studios
has not proven the specific markets in which it contends it has
priority rights, the first dates of its use in those markets that
are prior to Pure Imagination's first use in those markets, and
whether it has continuously used its marks in those markets from
a date prior to Pure Imagination's constructive nationwide use on
May 22, 2002. While Studios has offered general testimony that
its first customers were located around Oklahoma City, Oklahoma
and in Texas, it has not even attempted to provide any boundaries
to the markets in which it alleges priority. See Quill Corp.,
654 F. Supp. 380, 385 (party asserting good faith prior user
defense must set forth the geographic extent of its prior
customer base). Courts, including in the Seventh Circuit, do not
automatically define a market by state borders. Burger King of
Fla., Inc. v. Hoots, 403 F.2d 904, 906 (7th Cir. 1968)
(finding that innocent use in Mattoon, Illinois along with an
Illinois registration did not give the party priority rights in
all of Illinois, but only in market where mark was actually
used). Because Pure Imagination has constructive nationwide use,
Studios had the burden of establishing with some specificity that
market within which it had priority rights.
Studios also failed to set forth the specific timing of its
alleged penetration in markets remote from Pure Imagination's
trademark use. Studios merely offered the testimony of Josh
Williams that some of its first customers were around Oklahoma
City, Oklahoma and in Texas when it first began business. Without
any specific evidence of when Studios used the marks in question in these markets, it cannot establish priority in these
markets.*fn6 Also, while the Court recognizes that the
operation of an active web site on the Internet could constitute
nationwide trademark use, the record is not clear either as to
which party first used the "pure imagination" mark on the
Internet. While the evidence shows that Studios had acquired the
rights in the "pureimagination.com" domain name by May 2001, the
mere registration of a domain name does not count as trademark
use. Brookfield Comm., 174 F.3d at 1051. Moreover, while Josh
Williams testified that Studios began operating its web site
shortly after it acquired the domain name, he also testified that
in mid-2001 he visited Pure Imagination's web site at
www.pureim.com. Therefore, even from Studios' own testimony it
is unclear which party first used the "pure imagination" mark on
Studios has failed to offer any specificity as to its activity
in any markets in which it alleges priority rights. Courts have
declined to find market penetration when a party cannot establish that it has engaged in more than de minimis activity
within that market. Natual Footwear Ltd. v. Hart, Schaffner &
Marx, 760 F.2d 1383, 1400 (3d Cir. 1985) ("When sales activity
does not exceed even a minimum threshold level, a court may
properly conclude that market penetration ? has not been
established"). Under the facts of the Natural Footwear case,
the Third Circuit found that de minimis activity meant either
gross sales of over $5,000 or a total of over 50 customers in at
least two or three years for which sales data was available.
Id. While the Court recognizes that the amount of activity
necessary to constitute market penetration will vary with the
facts of the case, here, Studios has offered no evidence related
to the type and amount of activity in any alleged markets.
Without more, the Court cannot find that Studios had established
priority rights in any markets.
Lastly, Studios has also failed to prove that it has
continuously offered its services into those markets since the
time of the first sales. While Studios still uses its "pure
imagination studios" and "pureimagination.com" marks in
redirecting customers to its new www.firewheeldesign.com web
site, it has not presented any evidence that it still uses those
marks in any specific markets in which Studios is contending
priority rights. Indeed, Studios admits that it no longer uses
those marks in conjunction with marketing its services in any way
other than on the limited purpose web site. Because Studios prior
rights would be subject to its geographic area of prior
continuous use, its failure to prove any continuous use in any
specific area is fatal to its section 1115(b)(5) defense.
Studios has therefore failed to meet its burden of establishing
its defense under 15 U.S.C. § 1115(b)(5). The Court notes that it
finds that Studios did adopt the "pure imagination studios" and
"pureimagination.com" marks in good faith. While Studios
otherwise failed to establish its good faith prior user defense, the Court will take Studios' good
faith adoption, into consideration in analyzing the question of
II. Cyberpiracy Claims
To prove its cyberpiracy claim, Pure Imagination must prove
that (1) "pure imagination" is a distinctive or famous mark
entitled to protection; (2) Studios' "pureimagination.com" domain
name is "identical or confusingly similar to" Pure Imagination's
mark; and (3) Studios registered the domain names with the bad
faith intent to profit from them. 15 U.S.C. § 1125(d)(1)(A);
Shields v. Zuccarini, 254 F.3d 476, 483 (3rd Cir. 2001). As
discussed above, the first two elements are met because "pure
imagination" is a distinctive mark and the "pureimagination.com"
domain name is confusingly similar to Pure Imagination's mark.
Pure Imagination's cyberpiracy claim, therefore, hinges on
whether Studios registered the domain names with the bad faith
intent to profit from them. As discussed above, the Court does
not find that Studios has operated in bad faith in using the
"pure imagination" marks, including registering the
"pureimagination.com" domain name. The Lanham Act provides a safe
harbor provision: bad faith "shall not be found in any case in
which the court determines that the person believed and had
reasonable grounds to believe that the use of the domain name was
a fair use or otherwise lawful." 15 U.S.C. § 1125 (d)(1)(B)(i)
and (ii). The Court finds the testimony of Josh Williams entirely
credible and, therefore, finds that Studios believed and had
reasonable grounds to believe that the use of the
"www.pureimagination.com" domain name was lawful. The evidence
supports that Studios at all times felt that it had prior rights
to use the domain name. It was not aware of Pure Imagination at
the time it adopted the domain name. Even after being made aware
of Pure Imagination's use of the "pure imagination" mark, Josh
Williams searched the USPTO's web site and could not find Pure Imagination's
alleged pending registration. Because Studios is covered by the
safe harbor provision of § 1125(d)(1)(B)(ii), it is not liable
for Cyberpiracy under the Lanham Act. Hartog & Co. v. swix.com,
136 F. Supp. 2d 531, 541-42 (E.D. Va. 2001).
Even if Studios did not believe under reasonable grounds that
its use of the "pure imagination" mark was lawful, the factors
provided by the Lanham Act do not support a finding of bad faith.
Most notably, Studios had registered the mark in various states
and felt that it had common law rights in the "pure imagination"
mark, at least in certain markets.
15 U.S.C. § 1125(d)(1)(B)(i)(I). The domain name "www.pureimagination.com"
consists of most of Studios legal name, Pure Imagination Studios,
Inc., under which Studios is incorporated.*fn8
15 U.S.C. § 1125(d)(1)(B)(i)(II). Studios used the domain name in connection
with the bona fide offering of its web and icon design services.
15 U.S.C. § 1125(d)(1)(B)(i)(III). There is no evidence that the
web site accessible under the domain name
"www.pureimagination.com" could harm the goodwill represented by
the mark, let alone any evidence of intent on the part of Studios
to divert customers from Pure Imagination's web site.
15 U.S.C. § 1125(d)(1)(B)(i)(IV). Although Studios made various offers to
essentially sell the domain name to Pure Imagination, at the time
of these offers, Studios had used the domain name in the bona
fide offering of its services. 15 U.S.C. § 1125(d)(1)(B)(i)(VI).
There is no evidence that Studios has either provided misleading contact information or failed to maintain accurate contact
information in connection with the registration of the domain
name. 15 U.S.C. § 1125(d)(1)(B)(i)(VII). Also, there is no
evidence that Studios has registered any marks that relate in any
way to the trademark rights of others.
15 U.S.C. § 1125(d)(1)(B)(i)(VIII). In sum, the factors provided by the
Lanham Act do not support a finding of bad faith on the part of
The Lanham Act also provides that courts can look at other
factors to assess whether a person acted with bad faith in
connection with its registration of a domain name. Pure
Imagination points to various conduct on the part of Studios that
it alleges demonstrates that every time Pure Imagination made
efforts to protect its trademark rights, Studios took steps to
expand its use of the mark and acquire its own rights in the
domain name. As discussed above, however, this Court finds that
none of this conduct on the part of Studios exhibits bad faith.
Studios reasonably believed that it had prior rights in the mark,
it was not aware of Pure Imagination when it adopted the mark,
and after it perceived Pure Imagination to be claiming that it
had a pending registration, Studios searched for that pending
registration but did not find it.
For these reasons, the Court does not find that Studios had a
bad faith intent to profit from the "www.pureimagination.com"
domain name as required by the Lanham Act.
15 U.S.C. § 1125(d)(1)(A)(i).
III. Pure Imagination's Other Claims
Also, "[c]laims for unfair competition and deceptive business
practices brought under Illinois statutes are to be resolved
according to the principles set forth under the Lanham Act," and
thus claims under the Deceptive Trade Practices Act or
815 ILCS § 510 are coterminous with Pure Imagination's Lanham Act claims.
Spex, Inc. v. Joy of Spex, Inc., 847 F. Supp 567, 579 (N.D. Ill. 1994) (citing Gimix, Inc. v. JS & A Group, Inc.,
669 F.2d 901, 908 (7th Cir. 1983) (Illinois state law claims for
unfair competition or deceptive trade practices are resolved
according to the principles set forth under the Lanham Act). To
the extent Pure Imagination's state law claims entitle Pure
Imagination to any additional rights other than its rights under
the Lanham Act, Pure Imagination waived those rights by not
submitting any law on the state law claims in its pretrial order
or making any argument on those claims at trial.
A. Monetary Relief
As Pure Imagination conceded during its closing argument, there
is no evidence of any financial damages in this case. Therefore,
Pure Imagination is not entitled to monetary relief. Under
15 U.S.C. § 1117(a), the "court in exceptional cases may award
reasonable attorneys fees to the prevailing party." The Court
does not find this to be an exceptional case and no award of
attorneys' fees is appropriate. In particular, the Court finds no
evidence of bad faith or intentional misconduct on the part of
B. Injunctive Relief
As the Supreme Court has recognized, the Lanham Act provides
that courts "shall have power to grant injunctions, according to
the principles of equity and upon such terms as the court may
deem reasonable. 15 U.S.C. § 1116; Park `N Fly, 105 S.Ct. 658,
673. The Lanham Act also requires that any remedy is subject to
the principles of equity. Id. Courts have recognized that the
decision whether to grant a permanent injunction can be
influenced by a general balancing of the interests of the parties
involved such as "the nature of the senior user's priority, the
senior user's delay in asserting its claim, and the harm to the
junior user as compared to the benefit of the senior user that would result from the requested injunction."
Franklin Resources, Inc. v. Franklin Credit Management Corp.,
988 F. Supp. 322, 327 (citing Thompson Medical Co., Inc. v.
Pfizer Inc., 753 F.2d 208, 214 (2d Cir. 1985)). Although, "a
showing of a likelihood of confusion alone will suffice to
support a grant of injunctive relief." Schutt Mfg. Co. v.
Riddell, Inc., 673 F.2d 202, 207 (7th Cir. 1982).
In this case, the equities favor enjoining Studios from using
the marks "www.pureimagination.com" or "pure imagination
studios." Len Davis testified that Pure Imagination has held back
from its marketing because it did not have the domain name
"www.pureimagination.com." It has also provided evidence of
actual confusion where customers seeking its web site have
automatically entered "www.pureimagination.com" and end up at
Studios' web site. On the other hand, Studios has already begun
conducting business under its new name "Firewheel Design." While
Studios will certainly be burdened by discontinuing use of the
"pure imagination studios" and "pureimagination.com" marks, the
fact that it has commenced transferring its good will to a new
mark will mitigate this burden.
Courts have recognized that disclaimers, by themelves, do not
sufficiently limit the harm to a trademark owner. Int'l Kennel
Club, 846 F.2d at 1093 ("we are convinced that plaintiff's
reputation and goodwill should not be rendered forever dependent
on the effectiveness of fineprint disclaimers often ignored by
customers"). Especially in the context of the Internet,
disclaimers are often ineffective in preventing confusion.
Caterpillar Inc. v. Telescan Tech., L.L.C., No. Civ.A. 00-1111,
2002 WL 1301304, *4 (C.D. Ill. Feb. 13, 2002) (citing Paccar v.
Telescan, 115 F. Supp. 2d 772, 778 (E.D. Mich. 2000) ("A
disclaimer that purports to disavow association with the
trademark owner after the customer has reached the site comes too
late")); Ford Motor Co. v. Ford Financial Solutions, Inc.,
103 F. Supp. 2d at 1128 ("Due to the nature of Internet use, [a] defendant's
appropriation of [a] plaintiff's mark as a domain name and home
page address cannot adequately be remedied by a disclaimer")
(internal quotation omitted).
Although the Court finds that injunctive relief is appropriate,
it declines to order Studios to transfer the
"pureimagination.com" domain name to Pure Imagination. The Ninth
Circuit has recognized that "only upon proving the rigorous
elements of cyber-squatting under the ACPA have plaintiffs
successfully forced the transfer of an infringing domain name."
Interstellar Starship Services, Ltd. v. Epix, Inc., 304 S.3d
936, 948 (9th Cir. 2002). As discussed, here, the Court does
not find Studios liable for cyberpiracy under
15 U.S.C. § 1125(d).
A district court has broad discretion to fashion any remedy
that alleviates the confusion. Id. In this case, the Court has
not found any evidence of bad faith on the part of Studios. The
record supports that each party is a relatively small company
that is rapidly growing and independently adopted essentially the
same name, "pure imagination" and "pure imagination studios."
Moreover, because these companies rely primarily on the Internet,
the domain names of these companies are significant to their
ability to capitalize on their respective good will and to
continue to grow.*fn9 While each party has demonstrated good
faith, it is Pure Imagination that was the first to use the "pure
imagination" mark and to federally register that mark. Therefore,
it is Pure Imagination that should eventually be the sole company
to use that mark in this field, as least as between Pure
Imagination and Studios. Accordingly, the Court will permanently
enjoin Studios from using either the "pure imagination studios"
or the "pureimagination.com" domain name. Specifically, six months from the date of this Order,
Studios will cease and desist from using the "pure imagination
studios" or "pureimagination.com" marks, or any marks confusingly
similar to the "pure imagination" mark. As of the date of this
Order, Studios may not commence any new uses of the "pure
imagination studios" or "pureimagination.com" marks, although
Studios may use those marks to inform customers of its new name
"Firewheel Design," and the associated web site
www.firewheeldesign.com. Studios, may also continue to use those
marks in directing potential customers to its "Firewheel Design"
web site, as it does now. If Studios continues such use of the
"pure imagination studios" or "pure imagination.com" marks,
Studios must not only provide a disclaimer in reasonably sized
font, but also provide a link to Pure Imagination's web site
along with such disclaimer. Studios must reasonably identify this
disclaimer and the link to Pure Imagination's web site so that
customers seeking Pure Imagination can readily access Pure
Imagination's web site. CONCLUSION
Studios' "pure imagination studios" and "pureimagination.com"
marks infringe Pure Imagination's trademark rights under
15 U.S.C. § 1114(1) and § 1125(a). Studios failed to prove its prior
user defense under 15 U.S.C. § 1115(b)(5). Studios did not act
with bad faith and is not liable for cyberpiracy under
15 U.S.C. § 1125(d). No monetary relief is appropriate. This Court
permanently enjoins Studios from using the "pure imagination
studios" and "pureimagintion.com" marks effective May 13, 2005.
Studios has six months from the date of this Order to continue
using those marks to direct customers to its new business name.
Studios must provide a link to Pure Imagination's web site on any
web page that uses the "pure imagination studios" or