Goto.com, Inc. v. Walt Disney Co.

U.S. Court of Appeals for the Ninth Circuit
202 F.3d 1199 (2000)

ELI5:

Rule of Law:

In trademark infringement cases involving the internet, the three most important factors in assessing the likelihood of confusion are the similarity of the marks, the relatedness of the services, and the simultaneous use of the web as a marketing channel. A strong showing on these three factors is sufficient to establish a likelihood of confusion.

Facts:

In December 1997, GoTo.com, a company operating a pay-for-placement internet search engine, began using a logo featuring the words 'GO' and 'TO' in white, stacked vertically inside a green circle, often set against a yellow square background.
In April 1998, The Walt Disney Company (Disney) commissioned a design firm to create a logo for its new web portal, the 'Go Network,' which integrated various Disney-owned websites and included a search engine.
The firm designed a logo for Disney that resembled a traffic light, featuring the word 'GO' in white inside a green circle, which was set within a yellow square.
Disney's chairman, Michael Eisner, approved this logo in August 1998.
In December 1998, Disney began a beta-launch of its Go Network, prominently displaying its new logo on all its interconnected sites.
On December 22, 1998, shortly after the beta-launch, GoTo.com complained to Disney about the similarity of the logos and its use on the Go Network.
Despite GoTo.com's complaint, Disney continued to use the logo.

Procedural Posture:

GoTo.com, Inc. filed a lawsuit against The Walt Disney Company and others in the U.S. District Court for the Central District of California, alleging trademark infringement under the Lanham Act.
GoTo.com moved for a preliminary injunction to stop Disney from using its 'Go Network' logo.
The district court granted GoTo.com's motion for a preliminary injunction.
The district court later amended the preliminary injunction order.
Disney (appellant) filed a timely notice of appeal to the U.S. Court of Appeals for the Ninth Circuit, challenging the district court's grant of the preliminary injunction against it. GoTo.com is the appellee.
The Court of Appeals granted Disney's motion to stay the injunction pending an expedited appeal.

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Issue:

Does The Walt Disney Company's 'Go Network' logo create a likelihood of confusion with GoTo.com's logo under the Lanham Act, given that both are used for competing search engine services on the internet?

Opinions:

Majority - O'Scannlain

Yes, The Walt Disney Company's logo creates a likelihood of confusion with GoTo.com's logo. In the context of the internet, the analysis for likelihood of confusion is streamlined, focusing on three key factors: the similarity of the marks, the relatedness of the services, and the use of the web as a common marketing channel. Here, the marks are 'glaringly similar' in appearance, especially in their color scheme (white text, green circle, yellow square). Both companies offer directly competing services as they both operate internet search engines. Finally, both use the web as their marketing channel, which exacerbates the likelihood of confusion because the marks can be encountered simultaneously on the same screen. The court found other traditional factors, such as intent and evidence of actual confusion, to be of diminished importance in the internet context, where consumer care is low due to the negligible cost of navigating between sites.

Analysis:

This decision is significant for adapting traditional trademark law to the unique environment of the internet. By establishing a 'trinity' of key factors (mark similarity, service relatedness, and shared web channel), the court created a more streamlined and focused test for online infringement cases. The ruling de-emphasizes the importance of an infringer's intent and the need for evidence of actual confusion, recognizing the fast-paced and low-attention nature of web browsing. This precedent makes it easier for senior trademark users to protect their brands online and holds that web users are generally considered unsophisticated and easily confused.

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