Bare domain name registration does not establish trademark rights

In Pure Imagination Inc v Pure Imagination Studios Inc, the US District Court for the Northern District of Illinois has ruled that a person that acquires a domain name from a third party cannot rely solely on the domain name's date of registration to establish a trademark first use date. The domain name holder must show that the prior owner (i) used the domain name as a mark, and (ii) conveyed to the new owner the goodwill of the business associated with the domain name/trademark.

Pure Imagination Inc (PII), a web design and advertising company, filed a complaint against Pure Imagination Studios Inc (Studios) following its use of the domain name 'pureimagination.com' for services similar to those provided by PII. It claimed that Studios had infringed its PURE IMAGINATION mark, first used in January 1999, and had engaged in cyberpiracy. Studios first used the same mark in May 2001 and had acquired the disputed domain name from a third party. PII moved for summary judgment on its claims.

In opposition to the summary judgment motion, Studios was able to establish that 'pureimagination.com' was originally registered by a third party in early 1998, a date prior to PII's first use of PURE IMAGINATION. Although the domain name registration was not renewed by the original registrant, it was subsequently registered by another third party. Studios purchased the domain name from the second third-party owner. Attempting to tack the prior registrations to its present rights, Studios argued that it had priority in the mark PURE IMAGINATION because it was the owner of a domain name that had an original registration date prior to the date of PII's first use.

The US District Court for the Northern District of Illinois rejected Studios' argument. It concluded that a person can obtain the benefit of a third party's earlier use of a sign (in this case the domain name 'pureimagination.com') only if:

• the earlier use qualifies as trademark use;
  
  
• the sign has been used continuously and has not been abandoned; and
  
  
• the third party assigned the rights in the sign and the goodwill associated with it.

Applying this test, the court found that Studios had failed to show that the earlier registrants of the domain name had used it as a trademark. Citing the US Court of Appeals for the Ninth Circuit's decision in Brookfield Communications Inc v West Coast Entertainment Corp, the court stated that "the law is clear that the mere registration of a domain name does not constitute the use of the domain name as a trademark".

The court further held that even if the prior registrants had used the domain name as a trademark, Studios had not shown, or even alleged, that either of the prior third-party owners had assigned the goodwill associated with the mark to Studios. Without this evidence, Studios could not claim priority based on the earlier third-party domain name registrations, and summary judgment for PII on this issue was thus appropriate.

Timothy J Kelly and Victoria JB Doyle, Fitzpatrick Cella Harper & Scinto, New York