Sir, we have not seen this case disclosed in your 10K SB, could you please amend it to properly reflect the facts?:
"TRADEMARKS
The act of embedding Playboy's trademark into the meta tags of defendant's website was the "epitome" of blurring
under the federal dilution laws. In fact, the misuse of meta tags showed "willfulness." Consequently, $3 million in
damages were awarded to Playboy for the false associations created by a Hong Kong based defendant in its domain
name, e-mail, website, and meta tags.
Playboy Enterprises, which owns multiple registered trademarks of "Playboy" and "Playmate," has, with its licensees,
spent considerable time and money promoting the trademarks worldwide. Playboy owns two Internet sites that feature
its trademarks, as well as photographs, articles, Playboy merchandise, videos, and subscription information.
AsiaFocus, a foreign corporation with its principal place of business in Hong Kong or the Virgin Islands, created
websites soliciting sales of merchandise and of subscriptions for viewing adult nude photo collections. These sites were
accessible throughout the United States.
Playboy's trademarks were used by AsiaFocus in (1) the domain names asian-playmates.com and
playmates-asian.com; (2) their e-mail address; and (3) embedded in its meta tags (the websites' source code, visible
only to search engines that look for specific words or phrases specified by users). The marks were also used in
connection with the sale of goods. Playboy received at least one letter from a consumer who believed that Playboy was
sponsoring AsiaFocus. Playboy sued, among others, two individuals representing AsiaFocus, for various trademark
infringement claims. The suit was referred to a magistrate for a recommendation on several issues (Playboy Enterprises,
Inc. v. AsiaFocus International, Inc., et al., No. 97-734-A (ED VA April 10, 1998), BNA, 3 ECLR 18).
Host Site Behavior Known by Individuals?
The magistrate had recommended that the individual defendants be viewed as having participated in the infringing acts.
Defendant Daley was the director of AsiaFocus and was listed as the Administrative Contact for its registered domain
names. The magistrate found that when
Daley designated himself as the "Administrative Contact" for the Internet site, by contract he was thereby holding
himself out as a person who was "aware of the behavior of the hosts [of the site], and [able to] take prompt action on
reports of problems . . . a responsible person who has the authority to enforce these actions himself or delegate them to
someone else."
Id. at 600 (citation omitted). The magistrate therefore concluded that Daley willfully participated in the infringing acts,
and that his continuing participation in the infringement was blatant, even after Playboy's cease-and-desist demand, so
that his acts rose to the level of bad faith misconduct.
Personal Jurisdiction Over Individuals
The court also concluded that it had jurisdiction over each defendant under the Virginia Code covering defendants that
cause tortious injury in the forum if they regularly do business or engage in a persistent course of conduct in the state
((sec)8.01-328.1(A)(4)). As the defendants did not appear in the action, the court held that in the default-judgment
context, jurisdiction clearly existed. Personal jurisdiction also existed under the Virginia Code because each act of
access to the defendants' Internet site by a Virginia computer user completed a tortious injury by an act in the
commonwealth ((sec)8.01-328.1(A)(3)).
Minor Differences Do Not Preclude Liability
While the defendants' domain names used "playmate" in a slightly different manner than did Playboy, minor differences
between the registered mark and the unauthorized use of the mark did not preclude liability under the Lanham Act.
Among the goods offered under the asianplaymates name were key chains, calendars, and pens. Playboy owns federal
trademark registrations for each of these types of goods. It also presented evidence of at least one instance of
consumer confusion. The magistrate therefore found a strong likelihood that the consuming public would believe that
the defendants' website was sponsored by or somehow affiliated with Playboy.
Meta Tags Show Willfulness
The magistrate also concluded that the defendants were liable for trademark dilution under (sec)43c of the Lanham
Act. The court found that Playboy presented sufficient evidence to establish that the blurring of the distinctiveness of
"Playmate" and "Playboy" was willful. This finding of willfulness was
further established by [the] purposeful tactic of embedding the trademarks Playmate and Playboy in the hidden
computer source code. This strategy epitomizes the "blurring" of Playboy's trademarks. When a search engine led a
consumer to the asian-playmates Web site in response to a search of Playboy's trademarks, the consumer would
probably believe that the defendants' Web site was affiliated with Playboy.
Id. at 602.
Maximum Statutory Award
As was true in Playboy Enterprises, Inc. v. Sanfilippo et al., the magistrate recommended a stiff damage award (see
"Playboy Wins Millions, but Loses to Former Playmate," 24 CLTR 12, June 1998). He noted that Playboy's damages
were compounded by the accessibility of the infringing sites, the defendants' successful number of hits, and the blatant
display of Playboy's trademarks. In addition, the willful infringement embodied in the offending websites was sufficiently
broad and blatant to warrant award of the maximum statutory amount of $1,000,000. In the magistrate's view, the
offer for sale of four different types of merchandise on the infringing Internet sites warranted lower individual statutory
amounts. The magistrate recommended an award of $500,000 for each merchandise category. He also found an
award of attorney's fees warranted.
Copyright Roditti Reports Inc. Jul/Aug 1998" |
