Has eBay become so powerful that it can successfully claim to be the only “Bay” on the Internet? That’s what it argued in a recent Ninth Circuit Court of Appeals trademark infringement case. In that case, Perfumebay.com, Inc. v. eBay, Inc., – – – F.3d – – – (9th Cir. November 5, 2007), the court upheld a federal district court decision from the Central District of California which ruled that the term “PerfumeBay” and “perfumebay.com” infringed the mark of Internet giant eBay.
When reviewing possible trademark infringement, courts analyze factors which have become known as the Sleekcraft factors. These factors include (1) strength of the mark, (2) proximity or relatedness of the goods, (3) the similarity of the marks, (4) evidence of actual confusion, (5) the marketing channels used, (6) the degree of care customers are likely to exercise in purchasing the goods, (7) the defendant’s intent in selecting the mark, and (8) the likelihood of expanding into other markets. Where the use of the mark is primarily on the Internet, however, the three key factors are the similarity of the marks, the relatedness of the goods and services, and the parties’ simultaneous use of the Internet as a marketing channel.
The court found that the marks were similar because Perfumebay includes the term eBay in its entirety, and found infringement because both used the Internet simultaneously and both sites sold perfume. The similarity of the marks was more pronounced when Perfumebay’s mark was used as “PerfumeBay.” Significantly, even when Perfumebay used separate words for advertising, Perfume Bay, the domain name www.perfumebay.com still contained eBay’s mark in its entirety because domain names cannot have spaces. Even though Perfumebay typically used a stylized starfish between “Perfume” and “Bay” in its logo, that did not help in the similarity analysis. And while the marks are pronounced differently, have different meanings, and Perfumebay uses a dissimilar look in its logo, the court stated that the way the marks are utilized in the marketplace is determinative. “Internet users do not utilize verbal communication as a basis for the services that they seek. The likelihood of confusion, therefore, does not arise in a vacuum, but rather from the manner in which ‘perfumebay’ is used on the internet.”
Perfumebay’s founder testified that she “envisioned a bay filled with ships importing perfumes from all parts of the world and this bay would be the place where perfume lovers could go to locate the selection of fragrances.” In the court’s view, however, the fact “that the term may convey different impressions to different individuals is irrelevant to a likelihood of confusion analysis.” Again, the court fell back to the fact that the mark “eBay” was found in its entirety within “perfumebay.”
eBay could not convince the court that it should be the only “Bay” on the Internet, however. It was only successful in persuading the court that it is the only permissible “eBay” on the Net. eBay’s Vice President for Litigation was “concerned about any use of bay which is likely to lead consumers into thinking that the web site is sponsored, affiliated, endorsed by [eBay], or one where they’re basically frontally assaulting the brand by treating bay as a generic reference to online commerce. He was also concerned that the use of a generic word plus ‘bay’ would lessen the distinctiveness of eBay’s trademark.” The court didn’t go that far, thankfully, and enjoined only the use of “perfumebay” as a single word. Thus, use of the term “Bay” without the “e” was permitted.
However, that still would seem to prohibit any use of a domain name with the letters “ebay” in them. For example, www.littlebay.com advertises vacation rentals in the Florida Keys. Under Perfumebay.com, eBay could challenge Little Bay’s website as infringing its mark. After all, the domain name contains the mark “ebay” in its entirety, they both advertise on the Internet, and eBay also sells travel packages for Florida vacations. The site www.bluebay.com is another example. BlueBay also sells travel packages, advertises on the Internet, and the domain name contains the conjoined letters “ebay” in their entirety.
A significant factor in the court’s analysis was the strength of the eBay mark. Even though use of the generic term “Bay” without the familiar “e” was at least implied to be infringing, the court refrained from enjoining its use. The Ninth Circuit seemed clear that it would have upheld that injunction also, stating that “the district court did not clearly err in declining to enjoin” such use.
Perfumebay has vowed to continue fighting this decision, and it has filed for an emergency stay of the injunction. It has also indicated that it plans to seek review by the U.S. Supreme Court. Perhaps the Supreme Court will grant review and provide further guidance on trademark infringement in the use of domain names. Until then, there is only one authorized “eBay” on the web, and Little Bay, Blue Bay, and anyone else who uses the conjoined letters “ebay” in a domain name have reason to be nervous.