Instead, a panel from the Ninth Circuit U.S. Court of Appeals ruled, a domain name must be used publicly to sell goods or services in order to be protected. The decision, handed down yesterday, means that the owner of the domain name "Moviebuff.com" may not use it to promote its Web site offering movie reviews, news, and industry commentary.
The ruling provides crucial guidance to the countless companies that are aggressively building online identities. Companies generally obtain the right to do business under a given name by being the first to use it. But the three-judge panel's decision makes clear that establishing an online brand goes further.
"Registration with Network Solutions...does not in itself constitute 'use' for purposes of acquiring trademark priority," the panel wrote in a unanimous opinion. Federal law "grants trademark protection only to marks that are used to identify and to distinguish goods or services in commerce--which typically occurs when a mark is used in conjunction with the actual sale of goods or services."
The case pitted Brookfield Communications, which sells entertainment news to the film industry, against West Coast Entertainment, a video rental chain with more than 500 stores. West Coast registered Moviebuff.com in 1996, more than 18 months before Brookfield used the name to market a software database providing information about the film and television industries.
Even though West Coast had used the mark first, Brookfield claimed it had the right to Moviebuff.com. It argued that West Coast's use of the domain name failed to meet a requirement under trademark law that the mark be used to promote a service or good. A federal court in California disagreed, however, ruling that West Coast's intention to use the name to promote its services satisfied the commercial requirements.
The Ninth Circuit's decision overturned the lower court ruling, saying it "contradicts both the express statutory language and the case law, which firmly established that trademark rights are not conveyed through mere intent to use a mark commercially."
The decision went on to say that even West Coast's use of the domain name in mid-1996 to send email to customers was not enough to meet the requirements.
The panel's decision goes well beyond forbidding West Coast from using "moviebuff" in its domain name. It also prevents the company from using the term in so-called metatags, which help search engines find sites related to a particular query. "Using another's trademark in one's metatags is much like posting a sign with another's trademark in front of one's story," the panel wrote.
However, the panel's admonition against using the term is not absolute, the judges said. There is nothing preventing West Coast from advertising that its prices are lower than Moviebuff's. Similarly, the panel said, West Coast is free to use the phrase when it is referring to the term as it is frequently used in the English language.
"The proper term for the 'motion picture enthusiast' is 'Movie Buff,' which West Coast certainly can use," the opinion said. "It cannot, however, omit the space."