Sixth Circuit puts the brakes on TeleScan appeal

In Paccar Inc v TeleScan Techs LLC, the Sixth Circuit Court of Appeals has upheld, in part, an injunction prohibiting TeleScan from using the domain names 'peterbiltnewtrucks.com' and 'kenworthnewtrucks.com'. However, the lower court's decision to extend the injunction to cover the use of Paccar's KENWORTH and PETERBILT marks in the metatags of TeleScan's web pages was vacated and remanded for further consideration.

Peterbilt Motors Company and Kenworth Motor Truck Company, both divisions of Paccar, manufacture trucks under the registered trademarks PETERBILT and KENWORTH. TeleScan registered and used 'peterbiltnewtrucks.com' and 'kenworthnewtrucks.com' to host a number of websites providing truck locator services, including a dealers database for PETERBILT and KENWORTH marked trucks. Paccar brought a claim for trademark infringement and dilution (but not cybersquatting), arguing that TeleScan's websites created the impression that they were affiliated with or sponsored by Paccar.

The District Court for the Eastern District of Michigan agreed with Paccar and ordered the transfer of the domain names. It also issued a preliminary injunction against TeleScan prohibiting it from using domain names incorporating Paccar's marks and using any metatags containing the marks. TeleScan appealed and put forward a number of defences.

The appellate court rejected the defences, holding that TeleScan's use was not:

  • a fair use, since this defence only "allows the use of a [mark] to describe the defendant's goods or services, not the plaintiff's";

  • a nominative fair use, because (i) the Sixth Circuit has declined to accept a nominative fair-use analysis, and (ii) the use of Paccar's marks created a likelihood of confusion; or

  • a first sale use, allowing it to stock, display and resell Paccar's goods under Paccar's trademarks, because Paccar's marks had been used in a way that was likely to cause confusion.

The appellate court, therefore, upheld the lower court's injunction. However, it noted that the district court had not conducted a separate analysis as to whether TeleScan's use of Paccar's trademarks in the metatags of TeleScan's websites was likely to cause confusion. Thus, the preliminary injunction as it stood was too broad. The case was remanded to the district court for further consideration of this issue.

For discussion of how the Seventh and Ninth Circuits deal with nominative fair use, see Former Beach Boy wipes out in Ninth.

Susan Progoff and Jeffrey D Parnass, Fish & Neave, New York

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