Dudley v. Healthsource Chiropractic, Inc.
883 F. Supp. 2d 377, 2012 WL 3253194, 107 U.S.P.Q. 2d (BNA) 1665 (2012)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Neither a senior common law user of a trademark nor a junior federal registrant can claim exclusive rights to use the mark on the internet. Concurrent use of the mark online is permissible so long as it is not done in bad faith to intentionally intrude upon the other user's established geographic territory.
Facts:
- In 2003, Donald R. Dudley established a chiropractic practice in Monroe County, NY, and began operating under the name 'Health-Source Chiropractic'.
- Dudley promoted his practice through local advertising and, in January 2004, registered the domain name healthsourcechiropractic.com.
- In 2005, Chris Tomshack founded HealthSource Chiropractic, Inc., a national chiropractic franchise, in Ohio.
- On November 25, 2005, unaware of Dudley's practice, Tomshack filed an intent-to-use trademark application with the U.S. Patent and Trademark Office (PTO) for 'HealthSource Chiropractic'.
- Tomshack registered the domain name healthsourcechiro.com on March 16, 2006, and launched the first franchise in April 2006.
- The PTO officially registered the 'HS HealthSource' logo mark to Tomshack on July 10, 2007.
- In April 2007, Stephen T. Divito opened a HealthSource Inc. franchise in Rochester, NY. Upon discovering Dudley's existing practice, Divito and Tomshack agreed to operate the Rochester location under the name 'HealthQuest Chiropractic' to avoid confusion.
Procedural Posture:
- Donald R. Dudley sued HealthSource Chiropractic, Inc. and Stephen T. Divito in the U.S. District Court for the Western District of New York for trademark infringement, cybersquatting, and unfair competition.
- Defendants filed an answer and a counterclaim seeking a declaratory judgment that they had not infringed on Plaintiff's mark.
- Plaintiff's motion for a preliminary injunction was denied by the district court on September 30, 2008.
- Both Plaintiff and Defendants subsequently filed cross-motions for summary judgment, which are the subject of this decision.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a junior user who is a federal registrant of a trademark infringe upon a senior common law user's rights by using the mark on the internet, which is accessible within the senior user's geographic territory?
Opinions:
Majority - Telesca, J.
No, a junior federal registrant's use of a trademark on the internet does not infringe on a senior common law user's rights because neither party can claim exclusive rights to the internet. The internet is a global communication medium, not a divisible geographic territory. Granting exclusive internet rights to the senior common law user would undermine the nationwide scope of federal registration, while granting them to the federal registrant would unfairly harm the senior user's ability to compete in their own territory. Therefore, concurrent use online is necessary and permissible, provided that a user does not act in bad faith to target another's specific geographic market, for instance, through localized internet advertising. In this case, HealthSource Inc. took reasonable measures to avoid intruding on Dudley's territory, such as renaming its Rochester franchise and removing it from the corporate website. The confusion Dudley cited, such as search engine rankings and misdirected emails, is not the type of mistaken purchasing decision that trademark law is designed to prevent.
Analysis:
This decision adapts traditional, geographically-based trademark principles to the borderless nature of the internet. It establishes that the internet is a shared space where concurrent lawful users of a mark must coexist, rejecting the notion that it can be claimed as an exclusive territory. The ruling sets a key precedent that a senior user's 'zone of exclusivity' does not extend to monopolizing a mark online. Instead, the focus shifts from preventing all online overlap to prohibiting bad faith encroachment, such as intentionally targeting a competitor's local market through online tools.
