EntrepreneurPR.com triumphs over EMI in domain name battle

Background
Court of appeals decision


The Ninth Circuit Court of Appeals has reversed a lower court's ruling in Entrepreneur Media Inc v Smith that a California public relations firm owned by Scott Smith could not use the domain 'entrepreneurpr.com' because it infringed on trademarks belonging to the publisher of Entrepreneur Magazine. In striking down an injunction, the court outlined some strict rules for spotting trademark infringement in domain names.

Background

EMI is the publisher of Entrepreneur Magazine and registered owner of the trademark ENTREPRENEUR. The company also uses the domain names 'entrepreneur.com' and 'entrepreneurmag.com' for its websites. EMI claimed that Scott Smith infringed its trademark rights by using 'EntrepreneurPR' as the name of his public relations business, Entrepreneur Illustrated as the name of his yearly magazine, and 'entrepreneurpr.com' as the domain name for his website.

EMI was successful in a summary judgment application before the district court. The district court awarded EMI substantial damages and enjoined Smith from using the challenged business name, magazine title and domain name. Smith appealed.

Court of appeals decision

The central issue before the court of appeals was whether Smith's use of the related terms was likely to cause confusion as to the origin, sponsorship or approval of the goods and services with which they were associated. The court of appeals affirmed the district court's finding of confusion only with respect to Smith's use of Entrepreneur Illustrated, and only to the extent that the word 'illustrated' is obscured. The court reversed the lower court's findings regarding the 'EntrepreneurPR' business name and the 'entrepreneurpr.com' domain name.

The court noted that Smith's second-level domain name 'entrepreneurpr' is not identical to EMI's ENTREPRENEUR trademark. Consequently, internet users attempting to access EMI's website by using the trademark with the '.com' suffix would not reach Smith's website. Similarly, a simple spelling error by a user attempting to access EMI's website would not lead to Smith's site. The court also felt that internet users are aware that domain names for different websites are often similar.

An important consideration in assessing 'likelihood of confusion' is whether the parties use overlapping marketing channels for their respective goods and services. The court of appeals held that the district court placed undue emphasis on the fact that both EMI and Smith used the Internet for marketing, and that "some use" of the Internet for marketing does not alone constitute an overlap. The court held that the proper inquiry is whether:

  • both parties use the Internet as a "substantial marketing and advertising channel";

  • the parties' marks are used in conjunction with internet-based products; and

  • the parties' marketing channels overlap in any other way.

The court of appeals concluded that although EMI has the exclusive right to use the ENTREPRENEUR trademark to identify its goods and services, trademark law does not allow EMI to appropriate the word 'entrepreneur' for its exclusive use. The court noted that the descriptive nature and common, necessary use of the word required courts to exercise caution in extending the scope of protection to which EMI's mark was entitled.

The court of appeals remanded the matter for trial before the district court, and directed the district court to fashion an injunction to allow Smith to use Entrepreneur Illustrated as his magazine title as long as the word 'illustrated' was not obscured or otherwise eclipsed.

For a discussion of a different outcome in a similar case, see Amazon.com wins domain names in controversial decision.

Bradley J Freedman, Borden Ladner Gervais LLP, Vancouver

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