Interstellar Starship Services, Ltd. v. Epix, Inc.
2002 WL 31096706, 304 F.3d 936 (2002)
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Rule of Law:
The use of a domain name identical to a registered trademark does not constitute trademark infringement through initial interest confusion when the parties' goods or services are unrelated, the trademark is relatively weak, and the domain name holder did not act in bad faith. A finding of trademark infringement does not automatically require the forced transfer of the domain name; courts retain discretion to fashion a more limited remedy.
Facts:
- Since 1984, Epix, Inc. has manufactured and sold electronic imaging hardware and software under its trademark EPIX, which it registered with the U.S. Patent and Trademark Office in 1990.
- Epix markets its products, which retail for $395 to $2000, to sophisticated consumers such as universities and research laboratories.
- In 1995, Michael Tchou, president of Interstellar Starship Services (ISS), registered the domain name 'www.epix.com'.
- Tchou testified that he chose the name 'epix' because it connoted 'electronic pictures' ('e' for electronic, 'pix' for pictures).
- ISS primarily used the 'epix.com' website to promote the Clinton Street Cabaret, a theater troupe that performs 'The Rocky Horror Picture Show', featuring pictures of the actors and performance information.
- Initially, the website also included technical information about Tchou's digital image manipulation tools and consulting services, which was later removed after the legal dispute began.
- At least eight other companies have registered the EPIX mark or a close variation for a variety of goods.
Procedural Posture:
- Interstellar Starship Services (ISS) sued Epix, Inc. in federal district court, seeking a declaratory judgment that its use of 'epix.com' did not infringe Epix's trademark.
- Epix filed counterclaims for federal trademark infringement and unfair competition, as well as Oregon trademark infringement and dilution.
- The district court initially granted summary judgment in favor of ISS, finding no likelihood of confusion.
- Epix, as appellant, appealed to the U.S. Court of Appeals for the Ninth Circuit, which reversed and remanded the case, finding there were disputed issues of material fact.
- On remand to the district court, Epix amended its complaint to add a claim under the Anticybersquatting Consumer Protection Act (ACPA).
- Following a bench trial, the district court found that ISS's past use of the site to promote technical services did infringe, but its current use for a theater troupe did not. The court found no cybersquatting or dilution.
- The district court issued a limited injunction against future infringing uses but allowed ISS to retain ownership of the domain name.
- Epix, as appellant, appealed the district court's judgment to the U.S. Court of Appeals for the Ninth Circuit.
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Issue:
Does a party's use of a domain name that is identical to another's registered trademark for unrelated, non-commercial purposes create a likelihood of initial interest confusion sufficient to constitute trademark infringement and warrant a forced transfer of the domain name?
Opinions:
Majority - Trott
No, a party's use of a domain name identical to a registered trademark for unrelated purposes does not necessarily create a likelihood of initial interest confusion or require a forced transfer of the domain. The court affirmed the district court's holding, finding no actionable initial interest confusion because the products offered by Epix (electronic imaging equipment) and ISS (a website about 'The Rocky Horror Picture Show') were extraordinarily different. The court applied the eight-factor 'Sleekcraft' test and found that while the marks were identical, other factors weighed heavily against a likelihood of confusion. Specifically, the goods were unrelated, Epix's mark was relatively weak (used by many companies), Epix's customers were sophisticated and exercised a high degree of care, and there was no evidence of bad faith intent by Tchou. The court reasoned that any consumer who mistakenly arrived at ISS's website would realize 'in one hot second' they were in the wrong place, and ISS could not financially capitalize on this momentary confusion. The court also held that the cybersquatting claim failed due to the lack of bad faith, and the limited injunction crafted by the district court, which prohibited infringing uses but allowed ISS to retain the domain name, was a proper exercise of judicial discretion.
Analysis:
This decision refines the doctrine of initial interest confusion in the context of the internet, establishing that the mere use of a trademark as a domain name is not a per se infringement. It clarifies that for initial interest confusion to be actionable, there must be more than a momentary misdirection, particularly when the goods are unrelated and the defendant is not capitalizing on the plaintiff's goodwill. The case solidifies the principle that courts should conduct a full, fact-specific analysis using the 'Sleekcraft' factors rather than relying solely on the identity of the marks. This ruling protects good-faith domain registrants who use common or descriptive terms for non-competing purposes and confirms that a forced transfer of a domain name is a remedy typically reserved for clear cases of cybersquatting, not all instances of infringement.
