ABSTRACT

Following two remands from the Ninth Circuit, the District of Nevada found that defendant’s use of EVISA in both its domain name evisa.com and as a trademark on its website for an English-language school was likely to dilute the famous VISA mark for credit-card services.  Defendant argued that its use of the EVISA mark was “easily and immediately” distinguishable from the VISA mark based on the context in which the two marks appeared.  The court disagreed, holding that on its face, defendant’s evisa.com domain name offered no such context, thus making the different contexts represented by the parties’ websites “largely irrelevant” for purposes of assessing the similarity of the parties’ marks.

CASE SUMMARY

FACTS

Plantiff Visa International Service Association (“Visa”), the global financial-services company that owns the trademark VISA for credit-card and other financial services, sued defendant regarding its registration and use of the domain name evisa.com and use of the mark EVISA in connection with an English-language school in Japan named “Eikaiwa Visa.”  In October 2002, the district court granted Visa’s motion for partial summary judgment on its trademark dilution claim applying a likelihood-of-dilution standard.  On appeal, the Ninth Circuit vacated and remanded the case to the district court in January 2004 based on the Supreme Court’s intervening Moseley v. V Secret Catalogue decision in 2003, which established an actual dilution rather than likelihood-of-dilution standard.  Following the remand, Congress enacted the Trademark Dilution Revision Act (“TDRA”) in 2006, which specified a likelihood-of-dilution standard.  The district court, however, still applied the prior Federal Trademark Dilution Act (“FDTA”) on remand, based on the Ninth Circuit’s decision in Jada Toys v. Mattel in which it applied the FTDA to a case filed before the TDRA’s enactment.  The district court again granted summary judgment for Visa on its dilution claim and defendant appealed.  Following the district court’s second grant of summary judgment, the Ninth Circuit reversed its prior ruling in Jada Toys and applied the TDRA, even though that case was filed before the TDRA’s enactment.  Based on that decision, Visa filed a motion for relief from the district court’s final judgment based on the court’s “mistake” in applying the FTDA instead of the TDRA.  Pursuant to the district court’s request, the Ninth Circuit remanded the case back to the district court to consider Visa’s motion.

ANALYSIS

Applying the TDRA, the district court granted Visa’s motion, finding that Visa met its burden of proof of showing that defendant’s use of “evisa” as both a domain name and as a mark on its website created a likelihood of dilution with Visa’s VISA mark.  First, the court found that the VISA mark was famous on a nationwide scale based on evidence of the mark’s length of use (the mark was widely advertised in various media for 25+ years); the duration, extent, and geographic reach of advertising and publicity under the mark (more than $1 billion spent on advertising in the United States from 1997-2000 alone); the extent of sales under the mark ($1.3 trillion in sales in 2006 alone and the VISA card was accepted at more than 6.3 million U.S. locations); consumer survey results (survey evidence showed a 99% level of aided recognition of the VISA mark and an 85% level of unaided recognition); and the mark’s federal registration status (Visa owned 66 registrations for VISA-formative marks).  The court also found that the VISA mark was arbitrary for financial and banking services, and thus was inherently distinctive.

Second, the court held that defendant made commercial use of the VISA mark.  The Ninth Circuit previously held in Thane International v. Trek Bicycle that “the mark used by the alleged diluter must be identical, or nearly identical, to the protected mark.”  Moreover, in Jada Toys II, the Ninth Circuit stated that to be nearly identical, two marks “must be similar enough that a significant segment of the target group of customers sees the two marks as essentially the same.”  Here, the district court reiterated its earlier finding that the only difference between the two marks was defendant’s addition of the letter “e” as a prefix, which was “commonly used to denote the online version of a business.”  Third, the court held that defendant commenced use of its mark after the VISA mark had become famous.

Fourth, applying the TDRA’s six nonexclusive factors set forth in Section 43(c)(2)(B) of the Lanham Act, the court held that defendant’s use of the EVISA mark and evisa.com domain name was likely to cause dilution by blurring the distinctiveness of the VISA mark.  Regarding the degree-of-similarity factor, defendant argued that its EVISA mark was “easily and immediately distinguishable” from the VISA mark both “visually and intellectually” based on “the context on which the two marks actually appear.”  Defendant also argued that “when EVISA is taken in the context of the <evisa.com> website, that mark is remarkably dissimilar from the VISA mark.”  The court disagreed, however, pointing out that defendant’s use of the EVISA mark was not limited to the content of its website.  Rather, because defendant also used the EVISA mark as the domain name for its website, defendant “used the EVISA mark in a setting where context-specific factors, such as the appearance of [d]efendant’s homepage, are largely irrelevant.”  Accordingly, in the context of a domain name, the court found that the VISA and EVISA marks were “very similar.”

The remaining blurring factors also favored VISA or were neutral.  The VISA mark was arbitrary and had a “moderately high” level of inherent distinctiveness.  As to whether Visa engaged in substantially exclusive use of the VISA mark, although defendant failed to present any evidence of third-party use of VISA as a trademark, the court noted that it was Visa’s burden to show the absence of a genuine issue of material fact.  The court thus deemed this factor neutral.  The VISA mark also carried a “very high degree of recognition” with the general public based on the consumer survey evidence noted above.  However, there was no evidence that defendant intended to create an association with the famous VISA mark.  The court pointed to defendant’s submission of evidence that its owner selected the EVISA mark as a contraction of the words “Eikaiwa Visa,” the name of defendant’s language school, and that he selected “Eikaiwa Visa” because “Eikaiwa” is the Japanese word for English and the word “visa” connoted “the ability to travel, both linguistically and physically, through the English-speaking world.”  This factor thus weighed against a finding of blurring.

Regarding the factor of whether there is “any actual association” between the EVISA and VISA marks, Visa submitted a survey showing that 73% of survey respondents “mentioned VISA when asked whether EVISA reminded them of another brand name.”  Defendant argued that this survey was inadmissible because it “completely removed the context within which the survey responder could relate the image to anything and was specifically not reproduced in the context of how they would have come to the page reflecting the ‘evisa’ image,” and it was “presented only to business owners, and not to consumers, which is not comparable to the relevant population-[defendant’s] consumer/customers.”  The court rejected these arguments because the survey did present the EVISA mark in the context of defendant’s website as it appeared shortly before Visa filed this lawsuit in 2001, and defendant in discovery stated that its customers, with one exception, were businesses.

The court also discussed a prior Ninth Circuit dilution case decided under the FTDA, Panavision, in which the court held that the defendant’s use of the domain name panavision.com diluted the plaintiff’s PANAVISION mark because a “significant purpose of a domain name is to identify the entity that owns the website.”  The court found Panavision’s reasoning “still persuasive” here to defendant’s EVISA mark, especially given the common use of the letter “e” to denote the online version of a business.

In sum, the four blurring factors that favored Visa constituted “an exceptionally strong showing” that supported the conclusion that the EVISA mark was likely to cause blurring of the VISA mark as a matter of law.  In doing so, the court noted that the degree to which consumers actually associated the EVISA and VISA marks was a more important factor than defendant’s intent to create such an association.  It also held that Visa’s failure to submit any evidence regarding the extent to which it was engaged in substantially exclusive use of the VISA mark was not fatal, noting that the blurring factors were “discretionary and nonexclusive,” and “the inherent difficulty of proving the nonexistence of a fact, that is, that there are not others using the VISA mark.”

The court thus enjoined defendant from using or registering the EVISA mark and from using the evisa.com domain name.

CONCLUSION

Although the website context in which a mark is used is often relevant in a trademark infringement analysis, the same is not necessarily true for trademark dilution claims involving domain names.  When the similarity-of-marks factor is considered and the only difference between the parties’ marks is a generic descriptor like the letter “e,” as was the case with defendant’s EVISA mark and Visa’s VISA mark, the domain name provides no differences in context and renders any differences in context between the parties’ websites “largely irrelevant.”