Applied Information Sciences Corp. v. eBay, Inc.
2007 U.S. App. LEXIS 29871, 85 U.S.P.Q. 2d (BNA) 1527, 511 F.3d 966 (2007)
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Rule of Law:
The owner of a federally registered trademark establishes a valid, protectable interest sufficient for an infringement claim simply by virtue of the registration. The owner is not required to show that the defendant's allegedly infringing use is on the same goods or services specified in the registration; that question is properly analyzed under the 'likelihood of confusion' prong of the infringement test.
Facts:
- Applied Information Sciences Corp. (AIS) is a vendor of specialized software.
- In 1998, the U.S. Patent and Trademark Office issued AIS a federal trademark registration for 'SmartSearch' for use on 'computer software and instruction manuals sold together which allow the user to retrieve information from on-line services.'
- AIS marketed and sold its 'SmartSearch' products from 1995 to 2004.
- In 2000, eBay, Inc. (eBay), an online auction website, began using the words 'Smart Search' as a hyperlink on its homepage.
- Clicking the 'Smart Search' link on eBay's site took users to a page with advanced search options for the auction website.
- In late 2001, AIS contacted eBay, demanding that it either pay a license fee for using the mark or cease its use.
- eBay refused AIS's demands.
Procedural Posture:
- AIS sued eBay in federal district court for federal trademark infringement and state unfair competition.
- Both parties moved for summary judgment.
- The district court granted summary judgment in favor of eBay, ruling that AIS did not have a valid, protectable interest in the mark as used by eBay.
- The district court denied eBay's subsequent motion for attorney's fees.
- AIS appealed the district court's grant of summary judgment to the U.S. Court of Appeals for the Ninth Circuit.
- eBay cross-appealed the district court's denial of its motion for attorney's fees.
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Issue:
Does a federally registered trademark owner, in order to establish a valid, protectable interest for an infringement claim, have to show that the defendant’s allegedly infringing use is on the same type of goods or services specified in the registration?
Opinions:
Majority - Fisher, Circuit Judge
No. A federally registered trademark owner does not have to show that the defendant's allegedly infringing use is on the same goods or services to establish a valid, protectable interest. The court reasoned that a trademark infringement claim involves a two-part analysis: (1) whether the plaintiff has a valid, protectable interest, and (2) whether the defendant's use is likely to cause confusion. A federal registration constitutes prima facie evidence of a valid interest for the goods specified in the registration, satisfying the first prong. The scope of remedies for infringement, governed by 15 U.S.C. § 1114, is broader and extends to the use on 'any goods or services' likely to cause confusion. Therefore, the district court erred by conflating the two prongs and concluding AIS lacked a protectable interest because eBay's use was not on goods identical to those in AIS's registration. However, the court affirmed summary judgment for eBay on other grounds, as AIS failed to produce any evidence of likelihood of confusion, the second essential element of its claim.
Analysis:
This decision clarifies the proper analytical framework for trademark infringement cases involving non-competing goods. It reinforces the principle that the validity of a mark and the scope of its protection against infringement are distinct inquiries. By holding that a federal registration alone satisfies the plaintiff's initial burden of showing a valid interest, the court prevents premature dismissals of infringement claims where the parties' goods are not identical. This ruling solidifies that the critical question of relatedness between goods or services is properly addressed within the multi-factor 'likelihood of confusion' analysis, not as a threshold validity issue.
