Panavision International v. Toeppen

Panavision International v. Toeppen, United States Court of Appeals for the Ninth Circuit 1998, 141 F.3d 1316

Facts: Plaintiff held a trademark for the name Panavision and Panaflex in connection with their selling of motion picture camera equipment. The Defendant was a cybersquatter who established the website, Panavision.com. The website contained photos of the city of Pana, Illinois. Plaintiff contacted Defendant to tell them to stop using their trademark. The D offered to "settle the matter" for $13,000 in exchange for the domain name.

Panavision filed this action against Toeppen in the District Court for the Central District of California. Panavision alleged claims for dilution of its trademark under the Federal Trademark Dilution Act of 1995, 15 U.S.C. 1125(c), and under the California Anti-dilution statute, California Business and Professions Code 14330.

The court held that D's acts of registering for domain names of Panavision's trademarks dilluted those marks within the meaning of the Federal Trademark Dilution Act.

The court examined two issues here: the personal jurisdiction issue involving cyberspace (we will disregard this issue to focus on IP/trademark issue) and how the Federal Trademark Dilution Act applies to the internet. The Court looked at the definition of dilution as "the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake or deception. Here, Defendant did not challenge the district court's determination that Panavision's trademark is famous, that his alleged use began after the mark became famous, or that the use was in commerce. Toeppen challenges the district court's determination that he made "commercial use" of the mark and that this use caused "dilution" in the quality of the mark. The Plaintiff called D a "cyberpirate" who purchased domain names, in anticipation of extorting money from the trademarks' owners. The court ruling strongly factored in that D's acts were not as innocent as he led on.

Ultimately, the Court found that while cyber squatters did not fall under the traditional definitions of blurring and tarnishment, they did fall under the broad definition of dilution under the Lanham Act 45. The court found that Panavision customers would become frustrated if they could not find the company website through domain search, and the Panavision trademarked would dilute as a result. They furthered with the idea that prospective users searching for P's service would stumble upon D's site and instead of searching further, due to frustration, anger, or the belief that P's site does not exist, would search no further.
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