If someone doing business under the name “As American As Doughnuts” makes representations to you, be suspicious, as the origin of doughnuts is in dispute, with some crediting the Dutch.

As is the origin of SPUDNUTS, which are doughnuts made from potato flour.

In any event, defendant allegedly represents to plaintiff that it is the owner of the SPUDNUTS trademark for doughnuts and after plaintiff pays the money ($6000) , the owner of the federal registration for SPUDNUTS shows up.

The facts may be more complex than the complaint makes out (dramatic pause).   Someone owned a prior registration for SPUDNUTS for retail bakery services including doughnuts, which was cited against defendant’s pending application for SPUDNUT for prepared potato flour mixes for doughnuts and doughnuts.   This occurs around the time the complaint alleges defendant was making its claims of ownership to plaintiff.

However, according to Wikipedia, SPUDNUTS have been around a while and ownership is in dispute.   Defendant appears to claim to have purchased ‘something’ from the ‘original’ owners.  Plaintiff has now purchased the registration from the prior registrant,  so this is an infringement action (for what it’s worth, there’s no breach of contract, fraud, unjust enrichment or other state tort that refers to the original representation of ownership.

Image source here.

Complaint Spudnets

Plaintiff, Norman Seabrook, is the president of the NYC Correction Officers’ Benevolent Association (“COBA”).  Defendant is running for the presidency of COBA and registered NORMANSEABROOK.COM, which resolves to a website supporting his candidacy.  Plaintiff alleges dilution, federal cybersquatting, NY right to privacy, NY deceptive practices and NY unlawful registration of a domain name (Business Law Section 148), which reads in pertinent part:

§ 148. Unlawful registration of domain name.

1. No person or entity shall register a domain name that consists of the name of another living person, or a name substantially and confusingly similar thereto, without
that person’s or entity’s consent, with the specific intent to profit
from such name by selling the domain name for financial gain to that
person or any third party.

The federal cybersquatting cause has to solve the personal name conundrum – namely, was the personal name used as a trademark. This (alleged) fact pattern seems to be the sort of thing that would have concerned the NY state legislature when drafting a local cybersquatting statute relating to personal names, and yet it is conceivable that this defendant doesn’t want to sell the name.

Complaint Seabrook Ny State

Advanced Systems and Network Automation are head-to-head competitors for expensive ($1k to $10k) software packages. Advanced Systems owns the trademark ActiveBatch, which Network Automation purchased as a keyword on Google and Bing.

Its keyword ads:  ” . . . begin with phrases such as “Job Scheduler,” “Intuitive JobScheduler,” or “Batch Job Scheduling,” and end with the company’s web site address, www.NetworkAutomation.com.   The middle line reads:  “Windows Job Scheduling + MuchMore.  Easy to Deploy, Scalable. D/L Trial.”

Although Network did provide its URL in the ad, the Court later states that Network “did not clearly identify itself” (page 3250).

Advanced Systems had prevailed at the lower court, obtaining a preliminary injunction.  Network Automation appealed to the Ninth Circuit.

First time reading of the case:

1.  Ninth Circuit agrees with Second Circuit that purchase of a trademark as a keyword is use in commerce by the advertiser.

2.  If every one uses the same marketing channel (the Internet), then the identity of marketing channels between the parties is not an important Sleekcraft confusion factor. (page 3245).  Me: Maybe the Internet (or Google) isn’t one marketing channel.

3.  It can no longer be assumed that consumers show a low degree of care when searching on the Internet (page 3247).  After all, they are now shopping for $10k software packages.

4.  In comparison to search engines at the time of Playboy v Netscape, search engine results are more clearly identified these days (lessening the effect of defendants who do not ‘clearly identify themselves’ (page 3250).

Short summary: district court made too many errors in the Sleekcraft confusion analysis to support a finding of source confusion.  The prelim was reversed.

What I think is notable about the decision is (1) the number of times that the Court noted that things are different now from the 1999 MOVIE BUFF decision (Brookfield v West Coast Entertainment, 174 F.3d 1036 (9th Cir 1999)); (2) it could have gone the Initial Interest Confusion route on this one, and didn’t.

I look forward to reading reactions from folk like Prof Goldman on this one.

Decision Network Automation