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Brookfield Communications, Inc. v. West Coast Entertainment Corporation

Court of Appeals for the Ninth Circuit
174 F.3d 1036, 50 U.S.P.Q. 2d (BNA) 1545, 99 Cal. Daily Op. Serv. 2899 (1999)
ELI5:

Rule of Law:

Using a competitor's trademark in a website's domain name creates a likelihood of consumer confusion, and using that same mark in the website's metatags creates actionable 'initial interest confusion,' both of which constitute trademark infringement under the Lanham Act.


Facts:

  • Brookfield Communications, Inc. began marketing and selling computer software with a searchable entertainment-industry database under the 'MovieBuff' trademark around December 1993.
  • West Coast Entertainment Corporation, a video rental chain, had used the service mark 'The Movie Buffs Movie Store' in connection with its retail video rental services since at least 1988.
  • On February 6, 1996, West Coast registered the domain name 'moviebuff.com' with Network Solutions, Inc.
  • Sometime in 1996, Brookfield attempted to register 'moviebuff.com' but was informed West Coast had already registered it.
  • In 1996 or 1997, Brookfield began using its own websites to sell its 'MovieBuff' software and to offer a subscription-based, online searchable database also marketed under the 'MovieBuff' mark.
  • In October 1998, Brookfield learned that West Coast intended to launch a website at 'moviebuff.com' which would feature a searchable entertainment database similar to Brookfield's product.
  • On November 11, 1998, West Coast issued a press release announcing the imminent launch of its website at 'moviebuff.com'.

Procedural Posture:

  • Brookfield Communications, Inc. sued West Coast Entertainment Corporation in the U.S. District Court for the Central District of California, alleging trademark infringement and unfair competition.
  • Brookfield applied for a temporary restraining order (TRO) to enjoin West Coast's use of the 'moviebuff.com' domain name.
  • The district court construed the TRO application as a motion for a preliminary injunction and subsequently denied it.
  • The district court found that West Coast was the senior user of the mark and that Brookfield had not established a likelihood of confusion.
  • Brookfield, the appellant, filed a notice of appeal with the U.S. Court of Appeals for the Ninth Circuit, challenging the district court's denial of the preliminary injunction.
  • The Ninth Circuit granted Brookfield's emergency motion for an injunction pending the outcome of the appeal.

Locked

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Issue:

Does a competitor's use of a company's trademark as the second-level domain name for its website and in the website's metatags constitute trademark infringement and unfair competition in violation of the Lanham Act?


Opinions:

Majority - O’Scannlain, Circuit Judge

Yes, a competitor's use of a company's trademark in a domain name and in website metatags constitutes trademark infringement. First, the court determined that Brookfield was the senior user of the 'MovieBuff' mark. It rejected West Coast's 'tacking' argument, finding that its prior mark, 'The Movie Buffs Movie Store,' was not the legal equivalent of 'moviebuff.com.' Furthermore, the court held that mere registration of a domain name does not constitute 'use' in commerce for trademark purposes; West Coast's first cognizable use was its public announcement in November 1998, long after Brookfield had established rights in the 'MovieBuff' mark. Second, applying the eight-factor Sleekcraft test, the court found a strong likelihood of confusion from the use of the domain name 'moviebuff.com.' The marks are virtually identical, the products (searchable online movie databases) are in direct competition, and both parties use the internet as a primary marketing channel. Finally, the court held that using 'MovieBuff' in metatags creates 'initial interest confusion.' This occurs when a competitor unlawfully diverts potential customers to its own site by using the senior user's trademark, thereby improperly benefitting from the senior user's goodwill, even if the confusion is dispelled before a sale is made.



Analysis:

This is a landmark case that established how traditional trademark law applies to the then-emerging commercial internet. The decision confirmed that domain names function as source identifiers and are subject to the same likelihood-of-confusion analysis as traditional trademarks. Critically, the court's adoption of the 'initial interest confusion' doctrine for metatag use created a new and powerful theory of liability for trademark infringement, extending protection beyond simple source confusion to the diversion of web traffic. This ruling has had a profound impact on cybersquatting litigation and the practices of online marketing and search engine optimization, setting a precedent that a company cannot use a competitor's mark to lure away its customers online, even if the confusion is only temporary.

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