9th Circuit

Go to the Web site www.bosleymedical.com and you won't find the cyber-home of the hair-restoration clinic made famous by its late-night infomercials. You'll find pages upon pages of criticism of the company, including information about lawsuits and investigations dating back to 1979.

Not surprisingly, the domain name doesn't belong to the California-based Bosley Medical Institute. It belongs to Michael Kremer, a former patient of the company's Seattle clinic.

Kremer says he received a bad hair transplant at Bosley in 1991 and set up the site 10 years later to warn potential customers of the company's wrongdoings, such as technicians performing procedure rather than doctors. Bosley responded in 2001 by filing suit, Bosley Medical Institute v. Kremer, claiming trademark infringement and dilution.

The 9th Circuit decided in April that using the trademarked name of a business as the domain name of a Web site devoted to commentary and criticism about the business doesn't violate federal trademark law as long as the mark isn't used to sell goods or services.

Nowadays, these types of suits are all too common. Thanks to the Internet, people are able to publicize any kind of information they like at a very low cost. And as "gripe sites"--Web sites set up to complain about a specific product, service, company, organization or individual--continue to pop up, so do lawsuits by trademark holders against the site owners.

But for years the courts have gone back and forth on deciding what is and isn't acceptable use of a trademark on third-party Web sites. Experts hope Kremer will provide some much-needed clarity on the issue of using only a company's trademarked name in a Web address as a means for criticizing the trademark holder. But the courts still have a ways to go.

"In short, the courts are still trying to feel their way through this new frontier of trademark law," says Michael Kahn, partner at Blackwell Sanders Peper Martin in St. Louis. "The domain name realm is just one of several Internet issues where the boundaries have not yet been clearly drawn."

Acting Up

The Lanham Act of 1946 may be able to help courts draw the line. According to the Act, an individual infringes on a trademark if he or she uses it in connection with goods or services in a way that's likely to cause confusion about the origin, sponsorship or approval of those goods.

Applying the Lanham Act in Kremer, the 9th Circuit said that an infringing use of a trademark must be "in connection with the sale, offering for sale, distribution, or advertising of any goods or services." Because Kremer's site didn't attempt to sell anything, display ads or link to Bosley's competitors, the court said he wasn't in violation of the Lanham Act.

However, Bosley argued Kremer was using the site for commercial purposes because it linked to a site called www.bosleymedicalviolations.com, which linked to a discussion group's site that advertised Bosley's competitors. The court rejected that argument, stating it was "too attenuated to render Kremer's site commercial."

"The site is strictly noncommercial," says Paul Alan Levy, lead counsel for Kremer and an attorney at the Washington, D.C.-based Public Citizen Litigation Group, a public interest law firm that works on behalf of consumers. "And trademark laws are about commerce, not consumer commentary."

But Bosley made one last ditch effort to deem the site commercial. It accused Kremer of trying to extort money from the company by trying to sell the domain name to Bosley. This argument, however, fell flat on its face in court for lack of evidence. And ultimately, the court ruled in Kremer's favor. (Attorneys representing Bosley didn't respond to interview requests for this story.)

"This decision is really a great victory for free speech, not because it's couched in First Amendment terms, but because it provides First Amendment-like protection in construction of the Lanham Act so consumer critics throughout the 9th Circuit are protected in the right to do what my client did," Levy says.

But not all similar cases have gone the consumers' way.

In one case in the 4th Circuit in 2001, People for the Ethical Treatment of Animals v. Doughney, PETA prevailed. In that case, an individual purchased the domain name www.peta.org and created a Web site that encouraged people to eat meat--something PETA, a non-profit animal rights organization, strongly frowns upon.

PETA argued the site prevented people from reaching PETA's official site. And the 4th Circuit agreed--saying Internet users looking for information about the PETA organization may become confused and frustrated when they arrived at the site to the point they wouldn't continue to search for PETA's official site.

"Unlike Kremer, however, in that case the court focused not on the commercial use of the site, but on whether the registration of that name by the defendant prevented consumers from obtaining or using the services of PETA," Kahn explains.

Sorting It Out

While the courts have been struggling to decide what is and isn't trademark infringement when a person registers only the trademark name as his or her domain name, there are two other types of cases similar to these the courts have had a much easier time figuring out.

The first set of cases to circulate through the courts were the "sucks.com" domain name suits, where a consumer set up a Web site to criticize a company's practices and used the company name followed by sucks.com as the domain name, e.g. www.chryslersucks.com.

"The courts generally find those to be noninfringing uses of the trademark protected by the First Amendment," Kahn says.

Then there are the cases in which a person registers a domain name using a famous trademark to trick people into visiting the Web site, which has nothing to do with the mark. "The courts have had a much easier time dealing with these types of cases," Kahn says, adding they almost always find in favor of the plaintiff.

The most famous of these cases was Coca-Cola Company v. Purdy, in which the defendant registered several domain names, including www.mycocacola.com, to publish his anti-abortion Web sites. The 8th Circuit found that type of conduct was illegal because the site promoted the defendant's personal agenda and had nothing at all to do with the Coke trademark. Other courts have followed suit on the issue.

The issue in Kremer, however, isn't so black and white. And Kahn fears the 9th Circuit's decision in the case may have negative repercussions on trademark holders.

"First, it could add to the clutter on the Internet by encouraging those desiring to criticize companies to register domain names that resemble official domain names," he explains. "And second, it could spook companies into mass registrations in an effort to get control over every possible variant of domain name with regard to their trademark."

Levy disagrees, and believes this decision is a major victory for the little guy.

"Mike Kremer is just an individual, who doesn't have resources to go stand in front of every one of Bosley's offices in the country," he says. "He can't get his message out if he can't use the Internet effectively, and he can't get his message out if he can't use certain domain names to call attention to the subject matter of his Web site. Allowing him to do so was a really important First Amendment step for the 9th Circuit to take. And I applaud the other circuits that have done the same."

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