Digital Equipment Corp. v.
Altavista Technology, Inc.,
United States District Court for
the District of Massachusetts
March 12, 1997
This case involves a dispute
between two corporations over rights and commercial interests on the Internet. (1)
Both parties operate electronic services and distribute software over the
Internet. The plaintiff, Digital Equipment Corporation ("Digital"),
has brought suit against defendant AltaVista Technology, Incorporated ("ATI"),
for breach of a trademark licensing agreement, trademark and servicemark
infringement, unfair competition, and trademark dilution.
Digital owns an Internet and
World Wide Web "search-engine" service known as AltaVista. (2)
Digital purchased ATI's rights in its trademark "AltaVista"; Digital
then licensed back to ATI the right to use "AltaVista," in certain
defined ways, as part of both ATI's corporate name and its Uniform Resource
Locator ("url"), "http://www.altavista.com." (3)
The license precludes ATI from using AltaVista as "the name of a product or
Digital seeks a preliminary
injunction, claiming that ATI's Web-site breaches its licensing agreement and
infringes its trademark rights in "AltaVista." ATI opposes Digital's
motion on the merits and moves to dismiss for lack of personal jurisdiction.
First, I find that this Court
has jurisdiction over ATI, whose Web-site, in the context of the specific facts
of this case, meets both the statutory and constitutional standards. Second, I
find that Digital has met the requisite standards for a preliminary injunction.
ATI is hereby ENJOINED from
using the trademark AltaVista in any way that does not comport with the specific
terms of the licensing agreement, as set forth in the opinion below and the
In December, 1995, Digital, a
Massachusetts corporation, launched an Internet search service using the
servicemark "AltaVista." Since that time, Digital's AltaVista Internet
search service has become one of the leading search services on the Internet
and, indeed, one of the most frequently visited sites on the World Wide Web
("Web"). Currently, Digital's AltaVista Web-site receives millions of
"hits" (or visits) per day. Digital also markets and sells computer
software products and services related to the Internet under names such as
AltaVista Directory, AltaVista Firewall, AltaVista Forum, AltaVista Mail, etc.
Its marketing strategy, however, did not then include soliciting advertising
revenues from advertisers on its Website.
At the same time, Digital claims
two sources for its right to use the service and trademark "AltaVista":
its own use of the mark under common law, and its acquisition by assignment of
ATI's trademark rights in AltaVista.
ATI is a California corporation,
formerly known as Tree Full of Owls, Inc.; it changed its name to AltaVista
Technology, Inc., by amendment to its Articles of Incorporation, in May of 1994.
In March of 1996, Digital paid for an assignment of ATI's rights to the
trademark AltaVista; it immediately licensed-back to ATI the right to use
AltaVista both as part of ATI's corporate name, AltaVista Technology, Inc., and
as part of ATI's Web-site address "www.altavista.com." The license
agreement, however, precludes ATI from using "AltaVista" as "the
name of a product or service offering."
The scope and meaning of this
license are hotly contested by the parties. ATI contends that its agreement with
Digital was formed with the specific intention of allowing it to benefit from
the popularity of Digital's AltaVista, and the strong brand identity the "AltaVista"
search service had created. In contrast, Digital maintains that ATI's licensing
agreement strictly limited ATI's ability to use "Altavista" -- as part
of its corporate name and its url -- and not as "the name of a product or
Consistent with its broad
interpretation of the agreement, ATI dramatically changed the appearance of its
Website, (4) moving it markedly closer to the appearance of
Digital's AltaVista Web-site. (5) By the time this lawsuit was
brought by Digital, ATI's Website looked like, and could effectively function as,
Digital's AltaVista search service.
As of May 22, 1996, less than
two months after the Digital-ATI agreement, a visitor to "www.altavista.com,"
ATI's Web-site, would see the word "AltaVista" by itself at the top of
the page, apparently not attached to ATI's corporate name. One would see an
offer of free ATI software. Using a link, (6) one could "click"
(7) to receive "demo versions of AltaVista
software." (8) One would also have been offered a link to
an unnamed "Search Engine" where one could "Search the Internet.
. ." This link was to Digital's AltaVista search service.
By August 8, 1996, ATI's page
changed again. Again, the visitor would see the word "AltaVista" at
the top of the page, again not as part of ATI's corporate name. Below that there
was a banner ad (9) selling an unrelated party's products.
This time, however, directly beneath the "Search Engine" line were the
words "Digital's Alta Vista," rather than merely "Search the
Internet. . ."
On the same date as these
changes were implemented, Digital's trademark counsel, Lawrence Robins
("Robins") sent ATI's president, Jack Marshall, a letter claiming that
the appearance of ATI's Web-site constituted a breach of Clause 1.1 of their
license agreement. The letter states: Use of the 'AltaVista' logo, without the
additional language 'Technologies, Inc.' is a violation of Paragraph 1.1 of the
Agreement. The sole license granted therein is to use "AltaVista" as
part of the corporate name 'AltaVista Technologies, Inc.' and as part of the url
'http://www.altavista.com.' Robins claimed that any use by ATI of
"Altavista," including using it as the name of a product or service on
ATI's Web-site, and apart from its use as part of ATI's corporate name and as
the url of ATI's Web-site, constituted a breach of Clause 1.1.
Clause 1.1 of the license
agreement says: Digital hereby grants to ATI a nonexclusive, nontransferable
license to use the trademark 'ALTAVISTA' (the "Mark") as part of the
corporate name 'Altavista Technologies, Inc.' and as part of the url 'http://www.altavista.com,
and in accordance with and subject to the terms and conditions of this
Agreement, provided that nothing in this agreement shall prohibit Digital or any
of its direct or indirect majority-owned subsidiaries from using the Mark or
from offering products or services under such Mark to third parties. This
License does not grant ATI the right to use the Mark as the name of a product or
At the same time, Robins put ATI
on notice of the possible termination of their license agreement pursuant to
Clause 3.1. Clause 3.1 of the licensing agreement deals with quality control:
"all products sold and services rendered while using the Mark shall be. .
.of such style, appearance and quality as to protect and enhance the Mark and
the goodwill associated therewith." (10)
A month later, on September 5,
1996, a visitor to ATI's Website would have been greeted by "AltaVista"
in large, bold letters at the top of the page, with "Technology"
immediately under it in smaller, plain type; beneath this was a banner ad and
link through which one could "Search the Net with AltaVista" (again,
presumably, but not explicitly, Digital's search service) by "Clicking
here." (11) In addition, the site retained a second,
clearly designated link to Digital's AltaVista search site, as well as ATI's
AltaVista logo by itself in bold near the bottom of the page.
By October 28, 1996, three days
before Digital brought its present motion for preliminary injunction, ATI's
Web-site had been altered again: beneath the AltaVista logo in big, bold letters
(with a small, plain "Technology" placed immediately below it) sat a
"banner ad" for an unrelated product; beneath the banner ad is a
solicitation encouraging one to "Click here for advertising
information-reach millions every month!" Immediately below that sits an
almost identical graphical representation of Digital's AltaVista search engine
interface (i.e. the appearance of Digital's AltaVista Web-site, including the
logo, etc.). Below that is a statement informing users that they can "Search
with Digital's AltaVista" (using Digital's AltaVista search engine while
still, to all appearances, being at the ATI Web-site). In short, a visitor to
ATI's site could easily have the impression that they were actually at Digital's
AltaVista site. (12)
By October 28, 1996, ATI's
Web-site was designed to look, feel, and function very much like Digital's
AltaVista Web-site. At the same time, ATI derived revenues from the site and its
ties to Digital's Altavista. It displayed banner ads and solicited other
advertisers, who could get information about how they, too, could reach millions
of users everyday by advertising on ATI's Web-site. Digital expressly eschewed
providing advertising space to others for its Web-site at that time.
Digital claims that ATI's
Web-site is now a service that provides both a search engine, and advertising
space. ATI thus breaches the license agreement by attaching the word "AltaVista"
to both of these services. Digital further contends that ATI's Web-site
infringes Digital's trademark rights in AltaVista, and that the ATI site
constitutes unfair competition both under the Lanham Act § 43(a) and at common
law. ATI argues its usage of AltaVista is permitted by its license with Digital.
It also contends this Court lacks personal jurisdiction over it.
A. Burden Of
ATI has moved under Fed.R.Civ.P.
12(b)(2) to dismiss for lack of personal jurisdiction over it. Digital, as the
plaintiff, bears the burden of demonstrating both that ATI's conduct satisfies
Massachusetts's (the forum state's) Long-Arm statute, and that the exercise of
jurisdiction pursuant to this statute "comports with the strictures of the
Constitution." Foster-Miller, Inc. v. Babcock and Wilcox Canada, 46 F.3d
138, 144-45 (1st Cir. 1995) (quoting Pritzker v. Yari, 42 F.3d 53, 60 (1st Cir.
1994); other citations omitted). (13) Though ATI acknowledges
that it has a contract with Digital, a Massachusetts corporation, which contract
gives rise to this litigation, it contends that in toto it has insufficient
"minimum contacts" with Massachusetts to allow this Court to assert
jurisdiction over it. I disagree. Digital has met its burden.
B. Personal Jurisdiction And The Internet
Regardless of whether this is a
diversity case based on breach of contract, or a case involving a federal
question such as trademark infringement, (14) I find the
assertion of jurisdiction over ATI by this Court to be entirely appropriate. I
so conclude under the traditional approaches dictated by the Supreme Court and
First Circuit precedents, approaches which have been characterized as "territorially
based." (15) I have evaluated the totality of ATI's
minimum contacts with Massachusetts -- a contract with a Massachusetts
corporation, reflecting an agreement to apply Massachusetts law, soliciting
business through its Web-site, including Massachusetts business, and three sales
to Massachusetts residents, etc.
At the same time, I cannot
ignore the fact that the medium through which many of the significant
Massachusetts contacts occurred is anything but traditional; it is a site in
cyberspace, a Web-site. It has been said that the Courts have had to re-evaluate
traditional concepts of personal jurisdiction in the light of the increasing
globalization of the economy. See CompuServe v. Patterson, 89 F.3d 1257, 1262
(6th Cir. 1996). The commercial use of the Internet tests the limits of these
traditional, territorial-based concepts even further.
The Internet has no territorial
boundaries. To paraphrase Gertrude Stein, as far as the Internet is concerned,
not only is there perhaps "no there there," the "there" is
everywhere where there is Internet access. When business is transacted over a
computer network via a Web-site accessed by a computer in Massachusetts, it
takes place as much in Massachusetts, literally or figuratively, as it does
anywhere. As one commentator noted: The Internet breaks down barriers between
physical jurisdictions. When a buyer and seller consummate a commercial
transaction through a World Wide Web site, there is no need for the traditional
physical acts that often determine which jurisdiction's law will apply and
whether the buyer or seller will be subject to personal jurisdiction in the
courts where the other is located.
Bradley A. Slutsky, Jurisdiction
Over Commerce on the Internet, available at http://www.kslaw.com/menu/jurisdic/html,
(page 2). (16) On the Internet, "messages can be
transmitted from any physical location to any other location. . .without any
physical cues or barriers that might otherwise keep certain geographically
remote places and people separate from one another." Law and Borders, 48
Stan. L. Rev. at 1370-71.
The change is significant.
Physical boundaries typically have framed legal boundaries, in effect creating
signposts that warn that we will be required after crossing to abide by
different rules. Id. To impose traditional territorial concepts on the
commercial uses of the Internet has dramatic implications, opening the Web user
up to inconsistent regulations throughout fifty states, indeed, throughout the
globe. It also raises the possibility of dramatically chilling what may well be
"the most participatory marketplace of mass speech that this country -- and
indeed the world -- has yet seen." ACLU v. Reno, 929 F. Supp. 824, 881 (E.D.
Pa. 1996). As a result courts have been, and should be, cautious in applying
Given the very new and unique
nature of the technology, this Court will take heed of a Supreme Court
plurality's recent recognition "of the changes taking place in the law, the
technology, and the industrial structure, related to telecommunications, [that]
we believe [make] it unwise and unnecessary definitively to pick one analogy or
one specific set of words now." Denver Area Education Telecommunications
Consortium, Inc. v. FCC, 135 L. Ed. 2d 888, 116 S. Ct. 2374, 2385 (1996) (Breyer,
J., plurality opinion) (citation omitted); see also Cass R. Sunstein, Forward:
Leaving Things Undecided, 110 Harv. L. Rev. 6, 30-33 (1996) (approving of
Justice Breyer's refusal to lay down a broad rule in Denver Area Consortium as
an example of a reasonable, "minimalist" judicial approach to
contentious questions regarding rapidly changing technologies).
While this case raises some of
these concerns, they are not, in the final analysis, dispositive. There is no
issue of inconsistent regulations suddenly imposed on Web users without notice.
There is no issue of parties being haled into the courts of a given jurisdiction
solely by virtue of a Web-site, without meaningful notice that such an outcome
was likely. Nor is there a great risk of chilling the Internet's "participatory
marketplace" by affirming jurisdiction here.
The parties at bar are
corporations who have attempted to tame the "Wild West" of the
Internet through their private ordering. They have entered into a contract
governing their commercial activities on the Internet. Digital sought (and
indeed bought) all rights to a trademark identifying its search engine, with
certain express exceptions; ATI agreed to enter into a licensing agreement. They
both agreed that Massachusetts law would apply to its provisions. While ATI may
have tried to structure its relationship with Digital so that it would not be
susceptible to jurisdiction in Massachusetts, its subsequent Web activities
bring ATI "over the line," and render jurisdiction appropriate.
This case does not reach the
issue of whether any Web activity, by anyone, absent commercial use, absent
advertising and solicitation of both advertising and sales, absent a contract
and sales and other contacts with the forum state, and absent the potentially
foreseeable harm of trademark infringement, would be sufficient to permit the
assertion of jurisdiction over a foreign defendant. While it raises some
troubling issues, and while the traditional analyses must be informed by this
new technology, ultimately, this is not the day nor the forum to resolve them.
C. Methods Of Determining Personal Jurisdiction
The First Circuit has outlined
three approaches to a motion to dismiss for want of personal jurisdiction.
Foster-Miller, 46 F.3d at 145. The prima facie facie standard, obliges the
plaintiff "to adduce evidence of specific facts," beyond the pleadings
which the court accepts "as true for the purpose of determining the
adequacy of the prima facie jurisdictional showing." Id. The approach is
particularly appropriate when the facts which would support personal
jurisdiction are not disputed. See id.; Boit v. Gar-Tec Products Inc., 967 F.2d
671, 676 (1st Cir. 1992).
At the other extreme lies the
"preponderance-of-the-evidence standard," which "necessitates a
full-blown evidentiary hearing at which the court will adjudicate the
jurisdictional issue definitively before the case reaches trial."
Foster-Miller, 46 F.3d at 145-46. The problem with this approach is that it
"contemplates a binding adjudication. . .[with] preclusive effect. . .[which]
can all too easily verge on a deprivation of the right to trial by jury."
Id. at 146.
The First Circuit has offered
this Court a "middle course" which I will follow: To engage "in
some differential factfinding, limited to probable outcomes as opposed to
definitive findings of fact. . ." in order to determine whether "the
plaintiff has shown a likelihood of the existence of each fact necessary to
support personal jurisdiction." Id. at 146 (quoting Boit, 967 F.2d at 677).
Since the preliminary injunction motion presently before me also requires
findings of fact based on a comparable standard, and since some facts supporting
jurisdiction may be "bound up with the claim on the merits," id., the
intermediate test seems a particularly appropriate course. See Boit, 967 F.2d at
677-78; Foster-Miller, 46 F.3d at 146.
I find the following
jurisdictional facts necessary and sufficient to support personal jurisdiction
over ATI are likely to exist: (17) ATI entered into a
contract with Digital that includes a clause requiring this contract to be
interpreted "under and in accordance" with the laws of Massachusetts;
this contract (the "AltaVista" license) and ATI's alleged breach of it
gives rise to the present litigation; ATI operates a Web-site accessible to
Massachusetts computer-users; it solicits advertising and its own products
through the site; it made at least three sales to Massachusetts residents of
software products in the course of and related to its operation of a Web-site;
finally, Digital alleges ATI's Web-site has infringed its trademark and caused
considerable confusion in Massachusetts.
Massachusetts Long-Arm Statute
The Massachusetts Long-Arm
statute, M.G.L. ch. 223A § 3 ("Section 3"), provides several bases
for asserting jurisdiction. Section 3 reads in pertinent part: A
court may exercise personal jurisdiction over a person, who acts directly or by
an agent, as to a cause of action in law or equity arising from the person's (a)
transacting any business in this commonwealth;. . . (c) causing
tortious injury by an act or omission in this commonwealth; (d) causing tortious
injury in this commonwealth by an act or omission outside this commonwealth if
he regularly does or solicits business, or engages in any other persistent
course of conduct, or derives substantial revenue from goods used or consumed or
services rendered, in this commonwealth. . . .
M.G.L. ch. 223A § 3(a, c-d).
Any one of these grounds would be sufficient. The facts which I have found could
be construed to confer personal jurisdiction over ATI based on all three: (1)
ATI's transacting business in the Commonwealth of Massachusetts; (2) ATI's
Web-site allegedly causing tortious injury by acts or omissions in this
Commonwealth; or (3) ATI allegedly causing tortious injury in this Commonwealth
based on the act of maintaining a Web-site outside Massachusetts, while engaging
in what I consider to be a persistent course of conduct here.
1. ATI's Transaction Of Business In Massachusetts
Section 3(a) requires that the
defendant must have transacted business in Massachusetts and that the
plaintiff's claim must have arisen from the transaction of such business. Tatro
v. Manor Care, Inc., 416 Mass. 763, 767, 625 N.E.2d 549 (1994). At the outset,
the Massachusetts Supreme Judicial Court, however, reminds us that Section 3(a)
"has been construed broadly." Id. (citation and internal quotation
marks omitted). That court held that "although an isolated (and minor)
transaction with a Massachusetts resident may be insufficient [to satisfy
Section 3(a)], generally the purposeful and successful solicitation of business
from residents of the Commonwealth, by a defendant or its agent, will suffice to
satisfy this requirement." Id. (citations omitted). The "purposeful
and successful solicitation of business" from Massachusetts residents may
be manifested by a contract with such a resident. Where, as here, such a
contract is "associated with other forum-related activities," the
transacting business requirement of section 3(a) is met. Id. at 768 (citations
The license-agreement to use the
trademark "AltaVista" is a contract entered into by ATI with Digital,
a Massachusetts corporation. Without more, it may not be sufficient to comprise
transacting business under section 3(a). The "more" is the following:
First, the contract at issue is
an integral part of ATI's transaction of business in Massachusetts. ATI
initially sold Digital all of its rights in "AltaVista"; it then
contracted to "license-back" the use of "AltaVista" in its
url. Any use of this Web-site in Massachusetts "arises from" the
contract ATI executed with Digital. Second, ATI's contract with Digital, which
governed the use of the Web-site with the address "www.altavista.com,"
was the vehicle through which it solicited business from Massachusetts residents.
Its Web-site solicited both sales of software and advertising. Finally, ATI
admits that its solicitations were in fact successful; it has made at least
three sales to Massachusetts residents. (18)
ATI claims that its contacts
with Digital in Massachusetts are relatively minor. Digital apparently solicited
the contract from ATI; the negotiations were conducted by phone or in California;
the contract itself was not signed by ATI in Massachusetts; neither the
defendant nor its physical agents have traveled to Massachusetts, nor does ATI
maintain any presence here apart from its Web-site.
Nevertheless, those contacts,
especially when viewed in the context of ATI's conduct after the contract with
Digital was executed -- the increasing similarities between the appearance of
Altavista's Web site and Digital's, ATI's apparent belief that the licensing
agreement gave it free rein to capitalize on Digital's Altavista's popularity in
Massachusetts and elsewhere, the sales to Massachusetts residents -- make it
clear that its "contract with the plaintiff was one part of a broader range
of activities that, literally, amounted to the transaction of business in
Massachusetts." Tatro, 416 Mass. at 769.
ATI also minimizes its contacts
by claiming that all it was doing was selling general advertising space on its
Web-site, which only incidentally reached Massachusetts residents. (19)
While general advertising may not suffice to confer jurisdiction, in this case,
ATI's selling of advertising space (and advertising its own products) on a
Web-site is related to the very contract it signed with a Massachusetts company,
and integral to the cause of action. (20) Here ATI's
advertising (of its own products and services) on its Web-site in part creates
the cause of action. Moreover, when juxtaposed next to its other contacts with
this state, it suffices under 3(a).
In short, Digital's suit "arises
from" an alleged breach of a contract with a Massachusetts corporation, and
ATI's resulting Internet activities, including sales and advertising to
Massachusetts residents taken together constitute transacting business here. The
requirements of Section 3(a) have thus been satisfied.
Alleged Tort Caused By Acts In Massachusetts
"in" Massachusetts can be an alternative basis for jurisdiction under
Section 3(c). See, e.g., Ealing Corp. v. Harrods LTD., 790 F.2d 978, 982 (1st
Cir. 1986) (holding that a misrepresentation in a telex sent to Massachusetts
would provide the basis for Section 3(c) jurisdiction, citing First Circuit and
Massachusetts cases). More recently, the Massachusetts Appeals Court held that
intentional misrepresentations made by an attorney by phone and mail were
sufficient to provide jurisdiction under Section 3(c). See Rye v. Atlas Hotels,
Inc., 30 Mass. App. Ct. 904, 906, 566 N.E.2d 617 (1991) (quoting Murphy v.
Erwin-Wasey, Inc., 460 F.2d 661, 663-64 (1st Cir. 1972)). See also Burtner v.
Burnham, 13 Mass. App. Ct. 158, 163, 430 N.E.2d 1233 (1982) ("where a
defendant knowingly sends into a state a false statement, intending that it
should be relied upon to the injury of a resident of that state, he has, for
jurisdictional purposes, acted within that state.") (21)
Using the Internet under the
circumstances of this case is as much knowingly "sending" into
Massachusetts the allegedly infringing and therefore tortious uses of Digital's
trademark as is a telex, mail, or telephonic transmission; (22)
the only difference is that the transmission is not "singularly"
directed at Massachusetts, in the way that a letter addressed to this state, or
a telephone or fax number with a Massachusetts area code would be. But ATI
"knows" that its Web-site reaches residents of Massachusetts who
choose to access it, just as surely as it "knows" any letter or
telephone call is likely to reach its destination. And it presumably "knows"
the contents of its Web-site. ATI is a corporation whose primary business is
providing Internet software; it is charged with the knowledge that its Web-site
is accessible through the Internet in Massachusetts. It not only took no steps
to prevent the alleged infringements from reaching this state's residents --
assuming there were steps to take - it plainly intended to market its wares
Again, this lawsuit "arises
from" ATI's allegedly tortious acts or omissions, and Section 3(c)'s
requirements are thus satisfied.
Tort Caused By Acts Outside Massachusetts
Section 3(d) requires a tort
committed in Massachusetts based on acts committed elsewhere, coupled with
either regular solicitation of business, or continuing contacts, or the
derivation of substantial revenue from Massachusetts. (23)
As noted above, Digital alleges
that a tort -- trademark infringement -- was committed in Massachusetts. The
question under Section 3(d) is whether ATI's activities also amount to regularly
"soliciting business" in this Commonwealth or constitutes "engaging
in any other persistent course of conduct" within the meaning of the
ATI's Web-site, generally
accessible twenty-four hours a day and seven days a week to all Massachusetts
residents who can access the Web, plainly solicits business in Massachusetts. It
also constitutes continuing contacts with this state insofar as ATI sells
advertising space and software through the Web site to citizens of
Massachusetts. When software is sold (or even given away so that users will
visit the site) through the Web-site, the software can be transmitted via the
Internet directly to a computer located in Massachusetts; as such, it plainly
comprises doing business here. At least three such sales have taken place. ATI
further "solicits" business by offering advertising space to
Massachusetts citizens for a fee.
Maintaining a Web-site that can
be accessed by Massachusetts citizens, coupled with the other contacts described
above, is engaging in a persistent course of conduct sufficient to satisfy the
requirements of Section 3(d). See Keds Corp. v. Renee Int'l Trading Corp., 888
F.2d 215, 218-19 (1st Cir. 1989); (24) Landmark Bank v.
Machera, 736 F. Supp. 375, 384 (D. Mass. 1990). Digital's cause of action arises
from ATI's continuing course of conduct on a Web-site that allegedly causes
torts inside Massachusetts.
Constitutional Due Process Concerns
In order to establish personal
jurisdiction over a nonresident defendant in a way consistent with due process,
the defendant must either have 1) "substantial, continuous and systematic"
presence in the forum state which would give the court general jurisdiction over
the defendant or 2) certain "minimum contacts" with the forum state
such that maintenance of the suit does not offend "traditional notions of
fair play and substantial justice." See International Shoe Co. v.
Washington, 326 U.S. 310, 314, 90 L. Ed. 95, 66 S. Ct. 154 (1945). The former
confers general jurisdiction: the latter, specific. See Burger King Corp v.
Rudzewicz, 471 U.S. 462, 472-73 & n.15, 85 L. Ed. 2d 528, 105 S. Ct. 2174
(1985) (citations omitted). Plainly, this case involves specific jurisdiction,
framed by the "minimum contacts" test.
In order to find "minimum
contacts," a non-resident defendant must meet the following requirements:
First, the claim underlying the litigation must directly arise out of, or relate
to, the defendant's forum state activities. Second, the defendant's in-state
contacts must represent a purposeful availment of the privilege of conducting
activities in the forum state, thereby invoking the benefits and protections of
that state's laws and making the defendant's involuntary presence before the
state's courts foreseeable. Third, the exercise of jurisdiction must, in light
of the gestalt factors, be reasonable.
United Electrical, Radio and
Machine Workers of America v. 163 Pleasant St. Corp., 960 F.2d 1080, 1089 (1st
Cir. 1992). These three tests have been called relatedness, purposeful availment,
and reasonableness. See Burger King, 471 U.S. at 472-78.
As an initial matter, "we
know . . . that the [relatedness] requirement focuses on the nexus between the
defendant's contacts and the plaintiff's cause of action." Ticketmaster-New
York, Inc. v. Alioto, 26 F.3d 201, 206 (1st Cir. 1994). As the First Circuit
noted in Nowak v. Tak How Investments, Ltd., 94 F.3d 708, 712 (1st Cir.), reh'g
denied en banc (1996), the requirement serves two purposes: First, relatedness
is the "divining rod that separates specific jurisdiction cases from
general jurisdiction cases." Id. Second, it ensures that "the element
of causation remains in the forefront of the due process investigation."
It cannot be disputed that the
underlying claims in this litigation arise directly from and relate to ATI's
forum-state activities, both in the form of its contract with Digital, and in
its subsequent maintenance of a Web-site which allegedly breached that contract
and caused torts in Massachusetts. (25)
Unlike the "relatedness"
test, the purposeful availment test focuses on the deliberateness of the
defendant's contacts. Ticketmaster, 26 F.3d at 207. The contacts with the forum
state must be voluntary -- not based on the unilateral actions of another party
or a third person. Burger King, 471 U.S. at 475. And they must be foreseeable;
the defendant's contacts must be such that he should reasonably be able to
anticipate "being haled into court" in the forum state. World Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 62 L. Ed. 2d 490, 100 S. Ct. 559
ATI argues that it should not be
subject to jurisdiction here because rather than "purposefully availing"
itself of the Massachusetts forum, it did everything in its power to structure
its affairs to avoid this forum. The contract was solicited by Digital;
negotiations were conducted by phone or in California; the contract was not
signed in Massachusetts; while it indicated that Massachusetts law would be the
choice of law, it expressly included no forum selection clause. To the extent
that ATI crossed Massachusetts boundaries at all, it argues, it was because
Massachusetts users chose to dial in.
True enough. ATI may well have
done everything possible to avoid jurisdiction in terms of its contract and
non-Web contacts with Massachusetts. ATI's Web-site, its design, the extent to
which it infringed Digital's trademark, and breached the contract, however,
necessarily changes the equation: This Web-site, in context, creates minimum
Where the minimum contacts on
which jurisdiction is allegedly based are unrelated to the acts comprising the
cause of action, the courts have applied a strict test to determine whether the
defendant's transactions suffice to amount to "purposeful availment."
In Hanson v. Denckla, 357 U.S. 235, 251, 253, 2 L. Ed. 2d 1283, 78 S. Ct. 1228
(1958), for example, where the cause of action did not arise from the
defendant's contacts with the forum state, the Court noted that "it is
essential. . . that there be some act by which the defendant purposefully avails
itself of the privilege of conducting activities within the forum state, thus
invoking the benefits and protections of its laws."
Where the case involves torts
that create causes of action in a forum state (even torts caused by acts done
elsewhere), however, the threshold of purposeful availment is lower. The
defendant allegedly causing harm in a state may understandably have sought no
privileges there; instead the defendant's purpose may be said to be the
targeting of the forum state and its residents. In Calder v. Jones, 465 U.S.
783, 79 L. Ed. 2d 804, 104 S. Ct. 1482 (1984), for example, the Supreme Court
found that those responsible for an article published by the National Enquirer
about the actress Shirley Jones, where the reporters knew that Jones lived and
worked in California, and that she would bear the brunt of the injury in
California, should "anticipate being haled into court there to answer for
the truth of their statements." 465 U.S. at 789-90. ("Petitioners are
primary participants in an alleged wrongdoing intentionally directed at a
California resident, and jurisdiction over them is proper on that basis");
Hugel v. McNell, 886 F.2d 1, 4 (1st Cir. 1989) (holding the same, citing Calder).
The First Circuit addressed what
it called the "classic analogy for an out of state libel: the gunman firing
across a state line." Ticketmaster, 26 F.3d at 208. (27)
In that case, as in the case before me, it was the action of a resident of
Massachusetts (a reporter calling a source in California who allegedly made
libelous statements which were then printed in the Boston Globe here) that
arguably formed the basis of the assertion of jurisdiction over the foreign
defendant. (28) See id. at 208-12. Therefore that court held
the defendant's action of answering the phone and making an allegedly libelous
comment during an interview initiated by the Massachusetts reporter constituted
purposeful availment, although only by a "bare minimum." Id. at 212. (29)
Similarly, in Keeton v. Hustler
Magazine, Inc., 465 U.S. 770, 781, 79 L. Ed. 2d 790, 104 S. Ct. 1473 (1984), the
Court held: "Respondent produces a national publication aimed at a
nationwide audience. There is no unfairness in calling it to answer for the
contents of that publication wherever a substantial number of copies are
regularly sold and distributed." Web-sites are modern analogs of national
publications; potentially innumerable "copies" can be (and are)
regularly "distributed" wherever there is access to the World-Wide
Trademark infringement is
similar to libel. Burger King, 471 U.S. at 469-70 n.11. Indeed, a similar
question to the one before me, namely the extent to which trademark infringement
outside a state may provide the basis for jurisdiction, has been explicitly left
open by the Supreme Court. Id. ("We need not address the extent to which
the tortious act provisions of Florida's long arm statute. . . may
constitutionally extend to out-of-state trademark infringement" (citing
Calder, 465 U.S. at 788-89; Keeton, 465 U.S. at 776.)). (30)
In an analogous case, Thomas Jackson Publishing, Inc. v. Buckner, 625 F. Supp.
1044 (D. Neb. 1985), the Court applied Calder's "effects" test to
sustain jurisdiction when it found that the defendant's alleged infringement of
plaintiff's copyrighted song was conduct "purposefully directed" at
Here, when ATI posted a Web-site
which over time more and more mirrored the site of a Massachusetts corporation,
arguably in violation of Digital's trademark rights and the licensing agreement,
a site that plainly would attract Massachusetts residents, and did so, it, like
the petitioners in Calder, should have anticipated being haled into a
Massachusetts court to answer for its acts. Every day, potentially thousands of
Massachusetts residents visit ATI's Web-site; and each "call" is
"answered" by the display of allegedly tortious materials that cause
harm here, there, and everywhere (but especially here). Since ATI knows that
Digital is located here, the purposeful availment prong is met: ATI's conduct,
by allegedly causing trademark infringement that it knows will have an effect on
consumers in this state, and an especially harmful effect on Digital, whose
trademark rights are at issue, see Panavision Int'l, L.P. v. Toeppen, 938 F.
Supp. 616, 621-22 (C.D. Ca. 1996), satisfies the constitutional "purposeful
availment" due process tests.
Test (Featuring Gestalt Factors)
Satisfying the purposeful
availment tests does not end the due process inquiry. Jurisdiction must still
comport with "traditional notions of 'fair play and substantial justice.'"
Nowak, 94 F.3d at 717 (citing International Shoe, 326 U.S. at 320 (which quoted
Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 61 S. Ct. 339 (1940))). The
First Circuit enumerated the following five "gestalt factors" to be
used to determine the fairness and reasonableness of asserting personal
jurisdiction: (1) the defendant's burden of appearing, (2) the forum state's
interest in adjudicating the dispute, (3) the plaintiff's interest in obtaining
convenient and effective relief, (4) the judicial system's interest in obtaining
the most effective resolution of the controversy, and (5) the common interests
of all sovereigns in promoting substantive social policies.
Id. (citing 163 Pleasant St.
Corp., 960 F.2d at 1088 (citing Burger King, 471 U.S. at 477)). While "the
gestalt factors may tip the constitutional balance," id., in this case they
serve to buttress the constitutionality of this Court's assertion of
jurisdiction. Moreover, "a strong showing of reasonableness may serve to
fortify a more marginal showing of relatedness and purposefulness." Id. (citing
Ticketmaster, 26 F.3d at 210 (citing Donatelli v. National Hockey League, 893
F.2d 459, 465 (1st Cir. 1990))).
a. The "Onerous" Burden Of Appearance
While ATI does have to cross the
continent to appear in this Court, and this is somewhat "onerous,"
Ticketmaster, 26 F.3d at 210, that may well be the price of its agreeing to do
business involving the Internet under the circumstances of this case; if one
does something that could cause a tort in another state, then this inconvenience
should be considered by potential foreign defendants before they act. The First
Circuit recently indicated "this factor is only meaningful where a party
can demonstrate some kind of special or unusual burden." Pritzker v. Yari,
42 F.3d 53, 64 (1st Cir. 1994). This burden was not found simply in the need to
travel from New York to Puerto Rico, where the forum state in that case was. Id.
The distance by plane between California and Boston can scarcely be more onerous
than that between Puerto Rico and New York. Also, there is no evidence that
Digital chose this forum to "harass" or "vex" ATI. See
Ticketmaster, 26 F.3d at 211. This factor neither supports nor undermines the
reasonableness of this Court's jurisdiction.
Massachusetts's Interest In This Lawsuit
Clearly this factor
heavily favors the assertion of jurisdiction. Trademark infringement allegedly
occurs here, and "a forum state has a significant interest in obtaining
jurisdiction over a defendant who causes tortious injury within its borders."
Nowak, 94 F.3d at 718 (citing Ticketmaster, 26 F.3d at 211); see Keeton, 465
U.S. at 776 (holding that "it is beyond dispute that New Hampshire has a
significant interest in redressing injuries that actually occur within the
State"). Digital is one of the largest corporations in Massachusetts, and
it is the one that suffers the most from the alleged tort of its trademark
rights in AltaVista being infringed.
c. The Convenience Of This Particular Venue
This Court will "accord
deference to" Digital's "choice of a Massachusetts forum," a
forum that is more convenient for it than any other. Nowak, 94 F.3d at 718. Its
primary counsel is situated here, as are its executives who negotiated the
license agreement that ATI allegedly breached. This factor too, weighs heavily
in favor of jurisdiction.
Administration of Justice
"Usually this factor is a
wash." Id. So too here. The only aspect of this factor that cuts in favor
of the assertion of jurisdiction is that the trademark license agreement that
gives rise to this litigation contains a provision which states, in
"General Provisions" § 10.3, that this "Agreement is made and
shall be construed and interpreted under and in accordance with the laws of the
Commonwealth of Massachusetts (but not including the choice of law rules thereof)."
While I have no doubt that other federal district courts could construe this
agreement in accordance with Massachusetts law effectively, this Court does, of
necessity, have somewhat more experience in the area. Thus, to the extent that
this factor weighs in at all, it, too, supports jurisdiction here.
Pertinent Policy Arguments
The policy questions are
somewhat more complicated. On the one hand, it is troubles me to force
corporations that do business over the Internet, precisely because it is
cost-effective, to now factor in the potential costs of defending against
litigation in each and every state; anticipating these costs could make the
maintenance of a Web-based business more expensive. On the other hand, it is
also troublesome to allow those who conduct business on the Web to insulate
themselves against jurisdiction in every state, except in the state (if any)
where they are physically located.
Massachusetts has an interest in
protecting its citizens from confusion, and its corporations from trademark
infringement. It has a further interest in alerting its citizens who maintain
Web-sites for business purposes that there is a chance that they may be haled
into court in any state where their Web-site potentially causes harm or
transacts business. On the whole, this factor leans toward this Court's
assertion of jurisdiction over ATI.
Internet Personal Jurisdiction Cases
Digital has met its burden of
adducing facts likely to support this Court's proper assertion of jurisdiction
over ATI. Four other district courts, faced with various versions of this issue,
have reached the same conclusion: In certain situations, maintenance of a
Web-site can subject one to personal jurisdiction in foreign courts. See
Panavision, 938 F. Supp. at 622-23; Inset Systems, Inc. v. Instruction Set,
Inc., 937 F. Supp. 161, 163-65 (D. Conn. 1996); Maritz, Inc. v. Cybergold, Inc.,
947 F. Supp. 1328, 1996 U.S. Dist. LEXIS 14978, at *6-7 (E.D. Mo. August 19,
1996); Edias Software Int'l v. Basis Int'l Ltd., 947 F. Supp. 413, 419-20 (D. Az.
1996). A case that reached a different conclusion, Bensusan Restaurant Corp. v.
King, 937 F. Supp. 295, 299 (S.D.N.Y. 1996), did so because it found that the
allegedly infringing activity of the Web-site at issue (maintained by a local
club in Missouri, and targeting only that local area) neither caused confusion
in New York, nor was aimed at New York residents. In effect, in Bensusan, the
Web-site functioned like a local paper; it was not intended to reach a national
audience, and had no effect on New York citizens. Id.
ATI, in contrast, targets a
national audience. It may not have made many sales or transacted much business
in Massachusetts, but it has made at least three sales to residents here
involving its Web-site. ATI does and seeks business in Massachusetts. And in the
context of trademark infringement, it has long been the law that harm is caused
by the very offer of an infringing work, even if not one single sale is made.
See Editorial Musical Latino Americana v. Mar Int'l Records, Inc., 829 F. Supp.
62, 64-65 (S.D.N.Y. 1993) (collecting cases).
Taking into account all the
relevant facts which are likely to exist, this Court's assertion of jurisdiction
over ATI is proper. ATI's motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2) is
A. Preliminary Injunction Standard
The granting of a preliminary
injunction in actions for trademark infringement under § 43(a) of the Lanham
Act requires a showing that: (1) the plaintiff may suffer irreparable injury
absent an injunction; (2) equitable balancing weighs in favor of plaintiff when
measuring the harm the injunction would do to defendants; (3) plaintiff is
likely to succeed on the merits; and (4) public interest favors granting the
preliminary injunction. See, e.g., Camel Hair and Cashmere Institute of America,
Inc. v. Associated Dry Goods Corp., 799 F.2d 6, 12 (1st Cir. 1986).
In the context of trademark
infringement, if Digital can show it is likely to prevail on the merits of its
infringement claims (and hence has shown it is likely to prevail on the breach
of license claim), two consequences follow. First, there is a presumption that
plaintiff will suffer irreparable injury absent an injunction. See id. at 14-15.
Second, the preliminary injunction will be held to be beneficial, and in the
public interest, "given the societal value of full disclosure and fair
competition, together with the policy of the law to provide at least minimal
protection to established trade names. . . ." Hypertherm, Inc. v. Precision
Products, Inc., 832 F.2d 697, 700 (1st Cir. 1987); see also Calamari Fisheries,
Inc. v. The Village Catch, Inc., 698 F. Supp. 994, 1015 (D. Mass. 1988) ("Preventing
consumer confusion is clearly in the public interest.").
Thus, in the trademark context,
the "heart of this test [for preliminary injunctions] is the second and
third steps, which present the question whether the harm caused plaintiff
without the injunction, in light of the plaintiff's likelihood of eventual
success on the merits, outweighs the harm the injunction will cause defendants."
Calamari Fisheries, 698 F. Supp. at 1005 (noting that this test applies "particularly
in actions arising out of the Lanham Act").
For purposes of this motion, the
Court accepts that if the plaintiff can make an adequate showing of likelihood
of success on the merits for both its breach of license and trademark
infringement claims, it has suffered and may continue to suffer irreparable harm
absent an injunction; further, an injunction would be in the public interest, to
prevent consumer confusion.
B. Breach Of
The Trademark License
The first question is whether
Digital has demonstrated that it is likely to prevail on its claim that ATI has
breached the licensing agreement concerning "AltaVista." Any "sales
of goods or services under the mark which are outside the area of consent
granted in the license are regarded as infringements of the mark." McCarthy
on Trademarks and Unfair Competition, § 25.06, at p. 44 (3d ed. 1996) (hereinafter
1. Terms Of
The "AltaVista" License Agreement
On March 19, 1996, Digital
entered into an assignment and license-back arrangement with ATI, whereby ATI
assigned "all right, title and interest in and to said trademark" in
exchange for valid consideration; on that same day Digital granted a license to
ATI to use the "AltaVista" mark in two clearly specified ways: as part
of ATI's corporate name, "Altavista Technologies, Inc.," and as the
domain name of its Web-site "www.altavista.com." The license states
ATI shall have the right to use the mark in these two ways "and in
accordance with and subject to the terms and conditions of this agreement."
The parties dispute the meaning and import of this "and in accordance"
clause of the AltaVista "License Grant."
ATI argues that the "and in
accordance" language allows for a third category of permitted uses of
"AltaVista" in addition to the two specified uses. Digital disagrees;
it contends the "and" clause is not permissive, but rather a
limitation on the two specified uses. I agree. ATI can use "AltaVista"
only in the two specified ways, and then only so long as these uses are in
accordance with and subject to the terms and conditions of the license
The license agreement directs
that it "is made and shall be construed and interpreted under and in
accordance with the laws of the Commonwealth of Massachusetts (but not including
the choice of law rules thereof)." Neither side contests this choice of law;
nor do I find any basis for doing so.
The Supreme Judicial Court
recently reiterated some of its rules of contract construction: We have said
that a contract should be construed to give it effect as a rational business
instrument and in a manner which will carry out the intent of the parties.
Similarly, the Restatement expounds that an interpretation which gives a
reasonable, lawful, and effective meaning to all the terms is preferred to an
interpretation which leaves a part unreasonable, unlawful, or of no effect.
Starr v. Fordham, 420 Mass. 178,
192, 648 N.E.2d 1261 (1995) (internal quotation marks and citations omitted).
The License Grant, section 1.1,
expressly authorizes only two uses. Under the prevailing maxim of Massachusetts'
contract law, expressio unius est exclusio alterius, an express grant of
permitted uses precludes other uses. See FDIC v. Singh, 977 F.2d 18, 22 (1st Cir.
1992); Chatham Pharmaceuticals, Inc. v. Angier Chemical Co., 347 Mass. 208, 211,
196 N.E.2d 852 (1964). Section 1.1 of the License says: Digital hereby grants to
ATI a nonexclusive, nontransferable license to use the trademark 'AltaVista' (the
"Mark") as part of the corporate name 'Altavista Technologies, Inc.'
and as part of the url 'http://www.altavista.com, and in accordance with and
subject to the terms and conditions of this Agreement. . . . (32)
There is no comma between the two specified uses (the corporate name and the url);
there is, however, a comma after the enumeration of these two expressly licensed
The interpretation that gives
effective and reasonable meaning to this clause is that ATI can use the "AltaVista"
mark in two and only two contexts: as part of its corporate name, and as part of
its Web-site's domain name. Any other use is likely to be a breach. The license
adds, in the "and" clause, that ATI must only use "AltaVista"
in accordance with and subject to the terms and conditions of the license
agreement, including the express two-use limitation. (33)
But while the agreement
expressly authorizes only two uses for the mark "AltaVista," ATI
argues that the agreement does not bar it from using the mark alongside some
other name or identifier. ATI claims it has the right to continue to market
"AltaVista Howdy" software, for example. The sentence "this
License does not grant ATI the right to use the Mark as the name of a product or
service offering," according to ATI, raises the question of whether "the
name" means that ATI cannot use "AltaVista" as the sole name of a
product or service offering, but that it can couple "AltaVista" with
some other name.
Digital argues that the clause
means ATI cannot use "AltaVista" as the name of product or service
offerings at all, even as an "umbrella" or housemark. (34)
Digital goes so far as to argue that ATI cannot market products or services with
"AltaVista Technology, Inc." as part of a product or service name
where "AltaVista" is effectively used as a mark: namely, where the use
of the "AltaVista" mark overshadows the word "Technology."
For the following reasons, I agree.
Nothing written in the license
agreement expressly precludes ATI from using "AltaVista" in
conjunction with "Technology, Inc.," its full corporate name, as part
of a product or service name. The last sentence of section 1.1, states that the
license "does not grant ATI the right to use the Mark as the name of a
product or service offering" (emphasis added); alongside that is the fact
that the agreement does allow ATI to use it in its full corporate name. (35)
Nevertheless, trademark law
concerning corporate or trade names supports Digital's proffered construction of
the license agreement on this point. (36) The rule is that a
"'Trade name' as defined by federal law cannot be registered under the
Lanham Act." McCarthy, § 9.13, at pp. 24-25 & nn.2-6 (citing cases).
The "reasoning behind the rule . . . is that a trade name is usually
adopted for the purpose of identifying the company and distinguishing it from
other producers, rather than the trademark purpose of identifying goods, and
distinguishing them from those produced by other producers." Id. § 9:13,
at p. 24. Likewise the gist of the license agreement is that ATI may use "AltaVista"
as part of its corporate or "trade" name ("Altavista Technology,
Inc.") to distinguish the company, but may not use it as an identifying
mark for a product or service.
Moreover, this reading is
supported by the rest of the license: Section 2.2 notes that "ATI agrees
that any and all use of the Mark shall inure to the benefit of Digital." In
section 2.3, ATI "acknowledges that this agreement does not grant to it the
right to adopt or use any name or mark confusingly similar to the Mark without
the written consent of Digital, other than as provided herein." And in
section 3.1, entitled "Quality Control," ATI is obliged to "use
its best efforts to ensure that all products sold and services rendered while
using the Mark shall be of a high standard and of such style, appearance and
quality as to protect and enhance the Mark and the goodwill associated therewith."
These sections, taken together,
strongly suggest that ATI cannot directly profit from its use of "AltaVista,"
nor adopt any mark confusingly similar to "AltaVista," nor use "AltaVista"
in any "style" or "appearance" that would detract from or
cause confusion concerning Digital's "AltaVista" mark. Thus, ATI
cannot use "AltaVista" as a mark at all, although it can continue to
use "AltaVista" in its full corporate name and Web address.
Breach(es) Of The Licensing Agreement
As of May 22, 1996, on its
Web-site ATI used "AltaVista" three times: None of these uses was as
part of its corporate name. One use was at the top of the page, in the ATI
"AltaVista" logo; a second use was the offer of free demo versions of
"AltaVista software"; and below that the third use was a smaller
"AltaVista" logo standing alone. All three of these uses likely
breached the licensing agreement, as "AltaVista" was used apart from
ATI's full corporate name, and as both a trade and service mark. Similarly, on
August 8, 1996, there were three uses of "AltaVista" on the ATI
Web-site, each of which likely constituted a breach. On September 5, 1996, ATI's
Web-site still had three likely breaches, for even though it now included the
word "Technology" after "AltaVista" twice, it did not do so
as part of the corporate name "AltaVista Technology, Inc." The word
"AltaVista" itself was in large, bold type, suggesting it was
functioning as a trade or service mark, since it conveyed a commercial,
source-identifying impression. (38) The same apparent
breaches were in evidence on ATI's Web-site on October 28, 1996.
By November 15, 1996, there was
some indication that ATI was attempting to cure these breaches: As of this date,
ATI's Web-site used "AltaVista" only as part of its full corporate
name; "AltaVista" itself, however, was presented to the user in such
large, bold, distinctive letters that "AltaVista" may still have
served to function as a trade or service mark, in breach of the license
Infringement And Unfair Competition
Since it likely breached its
license, ATI cannot use that license as a defense to an action for trademark
infringement. See Birthright v. Birthright, Inc., 827 F. Supp. 1114, 1134 (D.N.J.
1993) ("where defendants' previous use of the mark occurred with
plaintiff's permission, plaintiff must also establish that a defendant's use of
the mark is unauthorized"); cf. S&R Corp. v. Jiffy Lube Int'l, Inc.,
968 F.2d 371, 375 (3d Cir. 1992) ("To prevail on an infringement claim. . .
Jiffy Lube must demonstrate as well that Durst's use of the marks was
unauthorized."); Costello Publishing Co. v. Rotelle O.S.A., 216 U.S. App.
D.C. 216, 670 F.2d 1035, 1041 (D.C. Cir. 1981) ("if any breach constituted
a failure to satisfy a condition to the copyright license, an infringement of
copyright as well as a breach of contract may have resulted"). Having
concluded its use of "AltaVista" may well be unauthorized, I now
analyze ATI's use of the "AltaVista" mark to determine whether it
constituted trademark infringement and unfair competition. (40)
The relevant portion of the
Lanham Act, 15 U.S.C. § 1125(a), involves false representations: Under this
section, plaintiff is required to prove the following three elements to succeed
in an infringement suit: (1) the ownership of a distinctive mark entitled to
trademark protection; (2) the use of that name in interstate commerce; and (3)
its use by another in a manner likely to cause confusion as to the origin of the
goods or services. Calamari Fisheries, 698 F. Supp. at 1006 (citation omitted).
Digital has clearly satisfied
the first two of these requirements: It is the owner by use and assignment of
the distinctive mark "AltaVista," a mark used in commerce both by
Digital and ATI. I turn then to the likelihood of confusion caused by any
unlicensed, unauthorized uses of "AltaVista."
"Likelihood of confusion is
'an essential element of a claim of trademark infringement,' whether it arises
under state or federal law." Astra Pharmaceutical Products, Inc. v. Beckman
Instruments, Inc., 718 F.2d 1201, 1205 (1st Cir. 1983) (quoting Pignons S. A. de
Mecanique de Precision v. Polaroid Corp., 657 F.2d 482, 486-87 (1st Cir. 1981)).
(41) In Pignons, the First Circuit established the following
non-exhaustive list of factors used in assessing the "likelihood of
confusion" between marks: the similarity of the marks; the similarity of
the goods; the relationship between the parties' channels of trade; the
relationship between the parties' advertising; the classes of prospective
purchasers; evidence of actual confusion; the defendants' intent in adopting its
mark; and the strength of the plaintiff's mark.
Id. at 487; see also Astra, 718
F.2d at 1205 (enumerating the Pignons test, noting these factors are "to be
used as guides in assessing the likelihood of confusion"); Aktiebolaget
Electrolux v. Armatron Int'l, Inc., 999 F.2d 1, 4 (1st Cir. 1993) ("No one
factor is conclusive as to likelihood of confusion, and the district court must
consider each."). I turn then, to an application of Pignons' eight factors
to the trade and servicemark "AltaVista."
Of The Two "AltaVista" Marks
The two marks at
issue are remarkably similar; "similarity is determined on the basis of the
total effect of the designation, rather than a comparison of individual features."
Pignons, 657 F.2d at 487 (internal quotation marks and citation omitted). The
Pignons court held: We and other courts have indicated that in certain
circumstances, otherwise similar marks are not likely to be confused where used
in conjunction with the clearly displayed name and/or logo of the manufacturer.
Id. at 487 (citations omitted);
Astra Pharmaceutical, 718 F.2d at 1205 ("It is well settled that under
certain circumstances otherwise similar marks are not likely to be confused
where used in conjunction with the clearly displayed name and/or logo of the
manufacturer."). Here, however, ATI's logo, a mountain range through which
runs the word "AltaVista," is markedly similar to Digital's "AltaVista"
logo. The total similarity between the two marks as they are used on the parties'
respective Web-sites is unmistakable.
Courts consider the totality of
circumstances surrounding the use of the marks: "Similarity of the marks
must be considered in light of what occurs in the marketplace, taking into
account the 'circumstances surrounding the purchase of the goods' or services."
Calamari Fisheries, 698 F. Supp. at 1009 (citation omitted). Both parties use
"AltaVista" as integral parts of Web-sites, both in the context of
offering Web search services.
Digital has satisfied its burden
of demonstrating that the two marks evaluated in the context of their use on
Internet Web-sites offering similar services are strikingly similar in
Of The Goods And Services
Both companies provide search
engine services, Digital its own, and ATI, Digital's (via a "framed"
link thereto). Both companies sell computer software under the "AltaVista"
mark. Both companies utilize their Web-sites to advertise: Digital its own
products and services, ATI, others'. See Maritz, Inc. v. Cybergold, Inc., #
4:96CV013400, at p. 8 (E.D. Mo., Aug. 29, 1996). Their goods and services are
for all intents and purposes the same. Id.
3. Channels Of
"The overlap between the
parties' trade channels, advertisers, and markets are three factors
conventionally analyzed together." Copy Cop, Inc. v. Task Printing, Inc.,
908 F. Supp. 37, 45 (D. Mass. 1995). Here, again, there can be no serious
dispute that both parties are now direct competitors in the same trade, selling
computer software and Internet services, and that they compete for the same
class of prospective purchasers, namely users of the Web. Both Digital and ATI
also advertise their own products and services on their respective Web-sites.
"Actual confusion is often
taken to be the most persuasive possible evidence that there is a likelihood of
confusion." Id. (citation omitted). Digital has introduced evidence of
actual confusion, including a Wall Street Journal article of October 18, 1996,
that observes inter alia: "Every day, hundreds of thousands of Web users
looking for Digital's AltaVista (www.altavista.digital.com) accidentally call up
the home page for Jack Marshall's AltaVista (www.altavista.com)." David
Kirkpatrick, Tale of Two AltaVista WebSites Teaches Useful Marketing Lesson,
WALL ST. J. (October 18, 1996), at B18. This may be serious actual confusion of
users. Advertisers may have also been confused; according to the same article:
There are some advertisers who thought they were buying space on the popular
Digital site-which boasts some 20 million "hits" each day.
Auto-by-Tel's Mr. Davis says he believed that the two sites were related - until
a Wall Street Journal reporter explained the distinction. 'Frankly, I wasn't
aware' there was any difference, he says.
Id. The evidence of actual
confusion of both advertisers and consumers obviously weighs strongly in
Intent In Adopting The "AltaVista" Mark
ATI has attested to the fact
that it uses "AltaVista" in anticipation of benefiting from Digital's
use of the mark. The license agreement, however, specifies that "any and
all use of the Mark shall inure to the benefit of Digital" which is "the
sole and exclusive owner of the Mark, and the goodwill associated therewith."
I find that ATI has used and uses AltaVista as a trade and service mark
precisely to capture some of the benefits of Digital's use of the mark, and
goodwill associated therewith.
Strength Of The "AltaVista" Mark
In trademark law, the spectrum
of categories into which any mark involving words may fall, "in their
ascending order of eligibility for protection. . . are: (1) generic, (2)
descriptive, (3) suggestive, and (4) arbitrary and fanciful." S.S. Kresge
Co. v. United Factory Outlet, Inc., 598 F.2d 694, 696 (1st Cir. 1979). Generic
marks are entitled to the least protection (if any), while arbitrary and
fanciful marks, such as Kodak or Polaroid, and suggestive marks, like American
Express or Visa, are entitled to the most protection against infringement.
AltaVista is a suggestive mark, a strong and well known mark into which
significant amounts of money and energy have been invested, and as such it is
entitled to very strong protection. Copy Cop, 908 F. Supp. at 46. Again, this
factor strongly favors Digital.
All told, there is a strong
likelihood of confusion between ATI's AltaVista Web-site and Digital's. ATI's
Web-site is a service, one that sells advertising space and software, and also
functions as a gateway to Digital's AltaVista search service site. ATI's uses of
the "AltaVista" mark on its Web-site are unauthorized and may cause
tremendous confusion among Web users, both consumers and advertisers alike.
Digital has met its burden of
proving the likelihood that ATI has breached its license to use the "AltaVista"
mark. Preliminary injunctive relief, designed to stop irreparable harm that
could be caused by such confusion, is therefore appropriate here. Any harm to
ATI caused by this injunction does not outweigh harm that might be done to
Digital by the ongoing infringement of its mark.
The World-Wide Web is growing at
a tremendous pace, with new sites and multitudes of new users everyday. Digital
has acquired the right to control the use of the AltaVista mark, and nothing in
its license with ATI allows the defendant to capitalize on Digital's significant
investments of time, energy, and money in creating one of the most recognized
marks in use on the Web. Moreover, in the Internet arena, where "surfing"
(moving quickly from Web-page to Web-page) is a prevalent activity the harm to
Digital may be exacerbated. A user "surfing" sites may easily be
confused into thinking ATI's "AltaVista" Web-site belongs to Digital.
Moreover, it is a harm that may be felt especially in Massachusetts, where
Digital is located and where Internet users are therefore more likely to be
aware of AltaVista, and correspondingly more likely to be confused by ATI's
Confusion may well be lessened
by express compliance with the license agreement: ATI's recent efforts at
compliance with the license agreement, however, are a classic case of too little,
ATI is therefore ENJOINED as set
forth in the accompanying ORDER.
Dated: March 12, 1997
NANCY GERTNER, U.S.D.J.
After hearing on plaintiff
Digital Equipment Corporation's ("Digital") motion for preliminary
injunction, it is hereby ORDERED that, until final adjudication of this matter,
defendant Altavista Technology, Inc. ("ATI") and its officers,
directors, employees, agents, subsidiaries, distributors, dealers, and all
persons in active concert or participation with any of them are hereby
restrained and enjoined from:
(1) using the AltaVista mark in
any fashion other than as part of the URL (i.e., Internet address) "http://www.altavista.com"
and as part of ATI's full corporate name "AltaVista Technology, Inc."
in which each element of the full corporate name is displayed in the same form
including but not limited to size, typeface, and color;
(2) using the AltaVista mark as
permitted in subpart (1) above unless ATI's Web page at http://www.altavista.com
and every other web page at that site prominently displays the following
disclaimer in font size that is at least 4 points larger than the font size of
80% of the text on the Web page and is visible when each such page is accessed:
Altavista Technology, Inc. is not affiliated with Digital Equipment Corporation,
AltaVista Internet Software, Inc. or the AltaVista Internet Search Service. The
AltaVista Internet Search Service may be found at http://www.altavista.digital.com.
(3) using the AltaVista mark as
a trademark or service mark to identify any product or service offering,
including but not limited to software products and advertising services;
(4) using on its Web page at
http://www.altavista.com or elsewhere, a link (without any search boxes), direct
or indirect, to Digital's AltaVista Internet Search Service that creates the
false impression that ATI's Web site is Digital's AltaVista Search Service; and
(5) otherwise infringing or
diluting in any manner the AltaVista mark or making any unauthorized use of the
U.S. District Judge
more general information about the Internet, see generally, ACLU v. Reno, 929 F.
Supp. 824, 830-38 (E.D. Pa. 1996).
"search engine" is the software and database architecture that allows
a user to search the World-Wide Web ("the Web"). The Web, "fast
becoming the most well-known" way of using the Internet, consists of a
series of displayed documents which can contain text, images, sound, animation,
moving video etc. See ACLU v. Reno, 929 F. Supp. at 836. A group of related
documents sharing a Web "address" is commonly called a "Web-site."
A "search service" refers both to the search engine software and the
way the search service appears to users. Search services are often used to find
information or locate sites on the Web. For more information about the Web and
Web-sites, see generally Shea v. Reno, 930 F. Supp. 916, 929 (S.D.N.Y. 1996)
(World Wide Web refers to the collection of sites available on the Internet).
url is the domain name of a host computer. A domain name functions as an address
on the Internet, see MTV Networks v. Curry, 867 F. Supp. 202, 204 nn.1-2 (S.D.N.Y.
1994). Those who are connected to the Internet can access a Web-site or a
person's electronic mail address by way of its domain name. Id.
Throughout the course of this opinion "ATI's Web-site" refers to the
Web-site accessible via the domain name "www.altavista.com.
Before the assignment, ATI's Web-site had a distinctively Western theme and
motif: the product offered on the site was called "MediaWrangler"; it
featured a representation of a horse and the greeting "Howdy Pardner!"
An "AltaVista" mark was prominently displayed at the top of the page.
"link" or "hyperlink" is "highlighted text or images
that, when selected by the user, permit him to view another, related Web
document." Shea, 930 F. Supp. at 929. Using links "a user can move
seamlessly between documents [or sites], regardless of their location. . .
"click," in Internet parlance, is to point the mouse or cursor on a
given space or group of words and then literally to click by pushing a button;
to click on a "link" on a Web-site is to then be "transported"
to that spot. Thus, if a visitor were to "click" on the highlighted
text "Download free demo versions of AltaVista software," one would
likely be transported to the place in the network where one could proceed to
have a "demo" of that software electronically transmitted to one's own
software allowed one to design and create Web-pages.
"Banner ads" are advertisements that are often active links to
Web-sites in which a product or service is advertised. See Banner Ads On
Internet Attract Users, N.Y. Times, December 3, 1996, at D1.
While Digital's quality control claim might seem to concede that ATI had some
right to use the "AltaVista" mark, a closer examination of the license
agreement shows this is not likely to be the best interpretation of Clause 3.1.
The crucial portion of the license agreement, Clause 1.1, is discussed more
fully in the preliminary injunction section of this opinion.
This space contained banner ads on August 8, 1996 and on October 28, 1996. On
September 5, 1996, there appeared to be a banner ad for Digital's AltaVista
search service (with the link superimposed on Digital's "AltaVista"
mountain range logo). On October 28, 1996, this space contained a banner ad for
Auto-By-Tel, a service whereby one could "Buy and insure new cars and
trucks on line."
This impression is created by a Web technique known as "framing."
Framing refers to the process whereby one Web site can be visited while
remaining in a previous Web site. Thus, while still appearing to be at ATI's
site, and while still able to view its advertising, one could now have traveled
to Digital's site, which would appear inside the "frame" of ATI's site.
See Maura Welch, Framing the News, BOSTON GLOBE, February 27, 1997, at D4.
The Supreme Judicial Court of Massachusetts has interpreted Massachusetts's
long-arm statute as "an assertion of jurisdiction over the person to the
limits allowed by the Constitution of the United States." Good Hope
Industries, Inc. v. Ryder Scott Co., 378 Mass. 1, 6, 389 N.E.2d 76 (1979); see
Foster-Miller, 46 F.3d at 144 n.3. As the First Circuit has suggested in
Foster-Miller, however, the satisfaction of the Massachusetts long-arm statute
does not necessarily satisfy the constitutional due process requirement of
"reasonableness," discussed infra. 46 F.3d at 144 n.3.
See U.S. v First Nat. City Bank, 379 U.S. 378, 381, 13 L. Ed. 2d 365, 85 S. Ct.
528 (1965) (applying forum state's long-arm statute in a federal question case);
DeJames v. Magnificence Carriers, 654 F.2d 280, 283 (3d Cir.), cert. denied, 454
U.S. 1085, 70 L. Ed. 2d 620, 102 S. Ct. 642 (1981) (holding Fed.R.Civ.P. 4
requires Federal District Courts to apply the long-arm statute of the state in
which they sit in effecting service of process in federal question cases);
Editorial Musical Latino Americana v. Mar Int'l Records, Inc., 829 F. Supp. 62,
64 (S.D.N.Y. 1993) (same). See also United Electrical, Radio and Machine Workers
v. 163 Pleasant Street Corp., 960 F.2d 1080, 1086 (1st Cir. 1992) ("the
minimum contacts doctrine, while imposing no direct state-by-state constraint on
a federal court in a federal question case, acts indirectly as a governing
mechanism for the exercise of personal jurisdiction).
R. Johnson and David G. Post, Law and Borders--The Rise of Law in Cyberspace, 48
Stan. L. Rev. 1367, 1369-71 (1996) [hereinafter "Law and Borders"].
Earlier versions of this article were published in the September, 1996, and
November, 1996, issues of The DataLaw Report.
As these facts are determined preliminarily, they are to be considered neither
issue preclusive, nor the "law of the case." Boit, 967 F.2d at 677.
Ultimately, it does not matter for jurisdictional purposes whether these sales
were made because a computer user clicked while accessing ATI's Web-site, or by
calling a toll-free telephone number, or by answering mail. The reality is that
a Web-site is accessible by people in Massachusetts, they have accessed ATI's
Web-site, and ATI's actions resulted in purchases being made by Massachusetts
Droukas v. Divers Training Academy, Inc., 375 Mass. 149, 376 N.E.2d 548 (1978),
a publication advertising marine engines was distributed in Massachusetts,
resulting in a single sale to a Massachusetts resident of allegedly damaged
engines. The Court noted that it "viewed the sale of the engines to the
defendant [sic] as an isolated transaction, with slight effect on the commerce
of the Commonwealth." Id. at 154. The addition of advertising which reached
into the Commonwealth, although a "but for" cause of the sale, was not
sufficient to change the equation.
Droukas stands for the
proposition that when contacts are otherwise slight, general advertising alone
will not suffice to confer jurisdiction, even if it leads to a single sale. But
see, A-Connoisseur Transportation Corp. v. Celebrity Coach, Inc., 742 F. Supp.
39, 42 (D. Mass. 1990) (citing both Gunner v. Elmwood Dodge. Inc., 24 Mass. App.
Ct. 96, 99, 506 N.E.2d 175 (1987), and Kleinerman v. Morse, 26 Mass. App. Ct.
819, 822, 533 N.E.2d 221 (1989)). In A-Connoisseur, Gunner, and Kleinerman, the
courts agreed that general advertising that happened to circulate in
Massachusetts, in contrast to advertising aimed specifically at Massachusetts
residents, was inadequate standing alone. Nevertheless, in all three cases, the
Court found that the requirements of Section 3 (a) were otherwise met through
other contacts between the parties.
jurisdiction where the contacts, including the advertising, are different both
in degree and in kind -- when there is persistent advertising and solicitation
of business from Massachusetts residents, even if it involves only a single --
sale, or when the cause of action arises from the advertising itself. In Tatro
the defendant solicited conference business from all over the country, resulting
in the holding of one conference at the defendant's hotel. Thereafter, the hotel
made contact with the Massachusetts parties to inquire about holding its
conference at the defendant's hotel the following year, together with a proposal
setting the terms of the conference. The plaintiff was injured during her stay
at the hotel and sought to sue the defendant in Massachusetts. See Tatro, 416
Mass. at 771-72. Moreover, under Tatro, advertising may permit the assertion of
jurisdiction where the cause of action arises from the advertising itself. See
contacts in the instant case are more like those in Tatro than those in Droukas:
more contacts, more sales,and a cause of action arising from the advertising --
the Web page -- itself.
Numerous courts have held that jurisdiction can be based on the broadcasting of
a television program (or advertising) into the forum state, when the cause of
action arises, as it does here, from the broadcast itself (insofar as broadcast
is analogous to the maintenance of a Web-site accessible in a given state). See,
e.g., Indianapolis Colts, Inc. v. Metropolitan Baltimore Football Club Ltd.
Partnership, 34 F.3d 410, 412 (7th Cir. 1994) (holding television broadcast into
Indiana supports personal jurisdiction over defendant there); Holmes v. TV-3,
141 F.R.D. 692, 696 (W.D. La. 1991) (same); Viacom Int'l, Inc. v. Three Star
Telecast, Inc., 639 F. Supp. 1277, 1280 (D.P.R. 1986) (same); Thomas Jackson
Publishing, Inc. v. Buckner, 625 F. Supp. 1044, 1046 (D. Neb. 1985) (same);
Tonka Corp. v. TMS Entertainment, Inc., 638 F. Supp. 386, 390-91 (D. Minn. 1985)
(same); United Medical Laboratories, Inc. v. CBS, Inc., 256 F. Supp. 570, 572
(D. Ore. 1966) (holding Walter Cronkite, producer of a television news program,
subject to personal jurisdiction based on the broadcast of the program into
While Rye sustained the deceit and fraud claim, it also held that advertising
which gives rise to a cause of action cannot be considered the transacting of
business. The latter holding was expressly disapproved of in Tatro, 416 Mass. at
infringement is a tort which involves misrepresentation. See Keds Corp., 888
F.2d at 218
Section 3(d) has been said to reflect the theory of "general"
jurisdiction, even though Section 3's over-arching "arising from"
language, applicable to each sub-section, clearly "adopts the theory of 'specific'
personal jurisdiction...." See Landmark Bank v. Machera, 736 F. Supp. 375,
383-84 (D. Mass. 1990); see also Burger King Corp. v. Rudzewicz, 471 U.S. 462,
472-73 & n.15, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985) ("'Specific'
jurisdiction contrasts with 'general' jurisdiction, pursuant to which 'a State
exercises personal jurisdiction over a defendant in a suit not arising out of or
related to the defendant's contacts with the forum.'" (quoting Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.9, 80 L. Ed. 2d 404,
104 S. Ct. 1868 (1984), other citation omitted)). Section 3(d) embraces specific
jurisdiction as well, and does so in this case.
Keds Corp. states that deriving "substantial revenue" from the
commonwealth is one of the "requirements" of Section 3(d). See Keds
Corp. v. Renee Int'l Trading Corp., 888 F.2d 215, 218-19 (1st Cir. 1989) (inserting
the word "and" into Section 3(d) before "derive substantial
revenue" and holding this to be "the second of the two requirements of
the statute") . The First Circuit appears to have read Section 3(d) as
conjunctive in holding that "substantial revenue" was "the"
-- as opposed to "a" -- second requirement of Section 3(d). In fact,
the statute is disjunctive, and satisfied by the causation of a tortious injury
in the commonwealth coupled with any one of a number of second "requirements,"
including engaging in "any other persistent course of conduct" even if
the foreign defendant does not derive substantial revenue from the state. See
Welsh v. Derwinski, 14 F.3d 85, 86-87 (1st Cir. 1994); see also Cleary v. Knapp
Shoes, Inc., 924 F. Supp. 309, 317 (D. Mass. 1996) (noting Welsh stands for the
proposition that "inadvertent language in prior opinion is not binding").
In the present case,
therefore, I do not reach the issue of whether ATI has derived "substantial
revenue" from Massachusetts.
In Nowak, the Court dealt at length with the question of how "causation"
is defined in connection with the "relatedness" prong, whether it was
"but for" test, recently suggested by the Massachusetts Supreme
Judicial Court in Tatro, or a more rigorous, "proximate cause"
analysis, which had been the First Circuit's standard. The result was mixed,
what the Court described as a "small overlay" of "but for"
on "proximate cause." Id. at 715. However causation is defined under
this test, it is clear that the instant facts meet it.
yet another context, the Court has noted that "under modern principles
of...in personam jurisdiction" state courts have jurisdiction over acts
committed beyond their territorial boundaries that create a nuisance in their
state." Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493, 500, 28 L. Ed. 2d
256, 91 S. Ct. 1005 (1970).
The better analogy in this case is that of a defendant repeatedly firing a
shotgun into a crowd across the state line, not aiming at anyone in particular,
but knowing nonetheless that harm in the forum state may be caused by its
actions outside it.
in Ticketmaster, a Massachusetts resident in the instant case did something
pro-active to get access to the suspect material; in order to access ATI's
Web-site, users must "call it up" or take some similar action.
In reviewing the "gestalt" factors, however, the Court concluded that
considerations of fair play and substantial justice cut against the exercise of
personal jurisdiction in Massachusetts.
Presumably, the Burger King Court was touching upon an issue that is even more
prevalent in this case: in Calder, the Court found jurisdiction because the harm
hurt the plaintiff most where he lived; thus being haled into California, where
the defendants knew the subject of their allegedly libelous story resided, was
held constitutional. Calder, 465 U.S. at 785-90. In the case at bar, the alleged
harm would not only effect Digital, but also consumers who might be confused by
allegedly infringing uses of "AltaVista." Such was the Court's holding
in Keeton v. Hustler Magazine Inc., 465 U.S. 770, 776, 79 L. Ed. 2d 790, 104 S.
Ct. 1473 (1984) ("false statements of fact harm both the subject of the
falsehood and the readers of the statement"). Thus the case before me is a
poignant combination of Calder's "hits hardest at home" and Keeton's
"hits hard everywhere" "effects" tests.
It is axiomatic that a valid, licensed use of another's mark would not
constitute trademark infringement. See McCarthy, § 18.14, at pp. 64-65. The
corollary, that a non-licensed use could automatically constitute trademark
infringement, is suggested by Professor McCarthy in the context of licensees not
protecting the quality of the products or services sold under the mark. See id.
§ 25.06, at pp. 44-45 (collecting cases). Digital alleges that the quality of
ATI's Web-site, as well as its style and appearance, fail to protect the "AltaVista"
mark and the goodwill associated therewith. Accordingly, it contends that the
services and products being offered for sale by ATI are non-authorized.
If the license has been
breached, it is obviously not a valid defense against a claim of trademark
infringement. I turn next to the question of whether ATI's unauthorized uses of
"AltaVista" are likely to constitute infringements of Digital's mark.
There appears to be a missing close-quotation mark, which presumably should be
placed after ATI's url (immediately after ".com,"
word "and," as used in this context in the license agreement, is
extraneous; the clause could as easily (and more clearly) have been drafted to
grant ATI a license to use AltaVista in the two specified ways " in
accordance with and subject to the terms and conditions of this Agreement."
"house mark" is a mark that appears in conjunction with different
"product marks" or "service marks" emanating from a single
"house" or company. McCarthy, § 7.01[d], at p.
be sure, if Digital did not intend for these clauses to broadly preclude ATI
from offering products or services with ATI's full corporate name as part of the
name of these product or services, there would have been no need for a clause
expressly clarifying ATI's right to use the mark to identify itself.
consider the concepts of "corporate" and "trade" names to be
identical. See McCarthy, § 9:13-16, pp. 24-31. Professor McCarthy notes: If
a corporate name is used in full with its address on letterheads and advertising,
it is probably not being used in a servicemark sense. Similarly, the inclusion
of a corporate designator, such as 'Inc.' or 'Corp.' is a factor strongly
pointing to a solely trade name use, especially when the name appears in close
proximity to a corporate address.
Id. at § 9:15, p. 28.
In the present case, the express uses of "AltaVista" which the license
allows ATI are in its address on the Web and as part of its corporate name; this
buttresses the conclusion that ATI may not use the mark (even imbedded within
the corporate name) as a trade or servicemark.
ATI argues that this language allows them to sell products and services "using
the mark" as a mark. That is one interpretation; another equally plausible
interpretation of this language is that any products or service which ATI sells
while using the mark as its corporate name or on its Web-site must be of a
certain quality level, otherwise Digital, as trademark holder, would risk
abandonment of the mark due to lack of adequate quality control thereof. See
Franchised Stores of New York, 394 F.2d 664 at 668-69; 15 U.S.C. §§ 1055,
1064, 1127. Thus quality control is an affirmative duty placed on trademark
owners, see id., and such language is therefore pro forma in trademark licensing
agreements. McCarthy, § 18.16[1-4].
It was presented "in a distinctively bolder, larger and different type of
lettering . . . [that] thus does more than merely convey information about a
corporate relationship." See In re Univar Corp., 20 U.S.P.Q.2D (BNA) 1865,
1869 (TTAB 1991).
The record does not reflect whether these changes were made by November 6, 1996,
the date upon which Digital has claimed it could exercise its right to terminate
the license agreement.
I do not now hold that
these breaches were direct violations of section 3.1 concerning "Quality
Control," the only kind of violations for which the license expressly
allows Digital to terminate upon ninety days notice. Digital sent a Notice of
Termination to ATI's president, Jack Marshall, on August 8, 1996.
this point would even ATI's complete compliance with the license moot the
granting of a preliminary injunction against it. See Pic Design Corp. v.
Bearings Specialty Co., 436 F.2d 804, 809 (1st Cir. 1971) ("In view of the
extent of defendant's apparent misconduct and the lateness of its attempts at
reformation, we find no abuse of discretion on the part of the district court in
granting this injunction.")
"Unfair competition is almost universally regarded as a question of whether
the defendant is passing off his goods or services as those of the plaintiff by
virtue of substantial similarity between the two, leading to confusion on the
part of potential customers." Boston Professional Hockey Ass'n, Inc. v.
Dallas Cap & Emblem Mfg., Inc., 510 F.2d 1004, 1010 (5th Cir.), cert. denied
423 U.S. 868, 46 L. Ed. 2d 98, 96 S. Ct. 132 (1975). Since "the same facts
which would support an action for trademark infringement would also support an
action for unfair competition," id., I will deal with the two claims in
combined fashion, referring to them for the remainder of this opinion as
trademark infringement claims.
Since servicemarks (which "distinguish one's services from those offered by
others") and trademarks are for the most part functional equivalents,
"the distinction between the two types of marks is irrelevant... [and]
cases discussing either apply." Boston Athletic Ass'n v. Sullivan, 867 F.2d
22, 23, n.1 (1st. Cir. 1989). For the present case it is irrelevant that ATI has
used AltaVista as both a servicemark for its Web-site and as a trademark for its