Trademark disputes a go-go

In a report issued last week, the National Arbitration Forum (NAF) said that its domain name resolutions climbed by a whopping 21 percent in 2006 from the prior year. Indeed, the NAF handled 1,658 Internet trademark disputes in 2006, the largest filing year in the history of the NAF domain name dispute program.

Since the inception of the program, the NAF has presided over more than 7,600 Internet domain name disputes. A number of famous trademarks have been at stake in the proceedings, such as trademarks relating to the New York Yankees, George Foreman, Vin Diesel and Louis Vuitton.

What's the upshot? Trademark holders are more than willing to go after and seek the transfer of domain names that incorporate their marks. Meanwhile, domain name registrants at times are digging in their heels and are trying to keep the domain names they have registered. There seems to be no let-up in this fertile dispute area. In fact, there appears to be a real uptick in such cases.

One such case surrounded the use of "Mr. Charbucks" in the sale of a rival coffee brand to Starbucks.

Starbucks filed suit in federal court in New York against Wolfe's Borough Coffee. Starbucks claimed that Wolfe's sale of coffee under the name of "Mister Charbucks" or "Mr. Charbucks" infringed and diluted the "Starbucks" famous trademark for coffee.

The trial judge concluded that Starbucks had failed to meet its burden of proving trademark infringement and trademark dilution under the Federal Trademark Dilution Act (FTDA). Not surprisingly, Starbucks appealed.

The U.S. Supreme Court previously had construed the FTDA to require a showing of actual dilution rather than a likelihood of dilution. In response to that construction, Congress amended the FTDA, effective as of October 6, 2006, to entitle the owner of a famous mark to an injunction against a user of that mark that is "likely to cause dilution" of the famous mark.

Because the trial had required Starbucks to prove actual dilution, and given the amendment to the FTDA, the federal appellate court vacated the trial judgment and remanded the case back to the trial court so that the trial judge would decide the case based on the amended FTDA.

Thus, the trial court now is called upon to decide whether Starbucks can prove a likelihood of dilution of its famous mark, rather than actual dilution.

One might think that if Starbucks could not prove actual dilution, it might not be able to prove a likelihood of dilution. On the other hand, "Mr. Charbucks" really does have a similar sounding ring to the famous "Starbucks" mark. The question becomes whether consumers truly would associate "Mr. Charbucks" with Starbucks, and if so, whether such association would dilute the Starbucks mark.

This is clear: Trademark disputes are alive and well in America in 2007.