Internet Provider Enjoined from Using "ISPWest" as Mark

by Thomas Long, Legal Editor, CCH Trademark Law Guide

A jury's determination that an Internet service provider's "ISWest" trademark was infringed by a competitor's use of the mark "ISPWest" has been upheld by the U.S. Court of Appeals in San Francisco. The competitor was permanently enjoined from using the ISPWest mark and the domain name ISPWest.com in connection with any product or service.

Jury Instructions

The verdict was not the result of an improper jury instruction, the court held. The challenged instruction followed the Model Civil Instructions by identifying the elements of trademark infringement and by listing the eight Sleekcraft factors for determining the likelihood of confusion. After listing these factors, the instruction parted from the model instructions by emphasizing the importance of the factors of the similarity of the parties' marks, the relatedness of the parties' services, and the parties' simultaneous use of the Internet as a marketing tool. This instruction was an accurate reflection of the law in the Ninth Circuit regarding Internet cases, the court said. Ninth Circuit precedent placed greater import on the "Internet Troika" factors than the other Sleekcraft factors in such cases.

Laches

The complaining ISP's claims were not barred by laches, the court decided. The laches period began in 1998, when the complaining ISP first became aware of the rival's existence. Although the rival did not offer high-speed Internet access services at that time, both parties offered general Internet access, e-mail services, and web hosting in the same geographic area under remarkably similar names.

The complaining ISP did not file suit until 2005 --more than six years later --but the competitor was not prejudiced by this delay, in the court's view. Although the rival had expanded its business from 2,000 customers to 13,000 during the delay period, it had not spent the time in the interim developing brand recognition of its ISPWest mark.

The vast majority of the rival's $1.5 million in advertising expenditures was devoted to "pay-per-click" ads, which funneled consumers to the rival's website based on their interest in a particular type of service. This type of advertising created little or no brand awareness, according to the court. The rival typically did not even use its ISPWest mark in the ads.

The rival also failed to show that it would have to undertake considerable advertising expenditures to change its name, in the court's view.

Injunctive Relief

The scope of the injunction was appropriate, the court said. The court rejected the competitor's contention that, even if it were prohibited from using the mark to promote its DSL services, it should not be prohibited from using the mark to promote other services that did not prompt the complaining ISP's lawsuit. The district court did not abuse its discretion in determining that the prevention of consumer confusion required the competitor to abandon all usage of the mark, in the appellate court's view.

Dissent

In a dissenting opinion, Circuit Judge Andrew J. Kleinfeld contended that laches should have barred the claims. The majority's holding on prejudice defied circuit precedent, in the dissenting judge's view, in that previous cases had not required a showing of "brand awareness" or "public association" to establish prejudice for purposes of a laches defense. The "new and unfair" standard for prejudice created by the majority holding would practically "eviscerate" the defense of laches in trademark law, he said.

Internet Specialties West, Inc., 9th Cir., ¶61,386

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