Deciding whether various forms of the trademark “Perfumebay” infringe upon the trademark “eBay,” the U.S. Court of Appeals for the Ninth Circuit upheld the district court’s finding that the trademark “perfumebay” was likely to be confused with “eBay,” and affirmed an injunction barring the use of “conjoined forms” of the mark. The Ninth Circuit also upheld the lower court’s finding that “non-conjoined forms” of the mark (i.e., Perfume Bay) do not create a likelihood of confusion. In overturning the lower court’s finding of no likelihood of dilution, the Ninth Circuit held that “non-conjoined forms” of the mark could, nevertheless, dilute the “eBay” mark. Perfumebay.com Inc. v. eBay Inc., Case Nos. 05-56794, -56902 (9th Cir., Nov. 5, 2007) (Rawlinson, J.).

When considering claims of trademark infringement online, courts apply the “internet trilogy” of Sleekcraft factors in evaluating confusion: similarity of the marks; relatedness of the goods and services; the parties’ simultaneous use of the Web as a marketing channel. The court found similarity between the marks given that “perfumebay” incorporates the “eBay” mark in its entirety, the “perfumebay” domain names fully incorporate the “eBay” mark and search engine results yield both “perfumebay” and “eBay” links.

The other two factors similarly weighed against Perfumebay. Both eBay and Perfumebay sell similar products on the internet, and both utilize the internet for marketing and advertising. Analyzed from how the marks are used on the internet, as opposed to how they are pronounced or what they mean, the court upheld the finding of a likelihood of confusion between “perfumebay” and “eBay.”

The court, however, affirmed the finding of no likelihood of confusion with regard to the “non-conjoined versions” of “Perfume Bay.” The separated forms of the mark do not include eBay’s entire mark, thus, according to the court, eliminating the confusion when conjoined forms are used in online advertising, search engine results or as domain names (as non-conjoined marks cannot be registered as domain names).

The court overturned the district court’s finding of no likelihood of dilution. Focusing on the strength of the “eBay” mark, the Court found that Perfumebay’s use of the suffix “Bay” may cause consumers to no longer associate the usage of the ‘Bay’ suffix with eBay’s unique services, causing the “uniqueness” of eBay’s mark to be diluted in direct proportion to the extent internet users disassociate the “eBay” mark with eBay’s services. In a footnote to its opinion, the court stated that even the non-conjoined forms of “Perfume Bay” mark could have a dilutive effect on the distinctiveness of the “eBay” mark.

Practice Note: The difference between the likelihood of confusion and no confusion in this case was the space between two words. Nevertheless, the court found that either form of the “Perfume Bay” mark could cause consumers to “dissociate” the uniqueness of the “eBay” mark. The court’s position on dilution seems to minimize the importance of the “equitable balance” that it discusses in connection with confusion. Also, the weight given to the distinctiveness factor may indicate that the Ninth Circuit has now lowered the threshold showing required to establish dilution under the Lanham Act.