California District Court Finds in Favor of Intel Corporation, Denying ANIPs Motion to Dismiss in Trademark Infringement and Cybersquatting Lawsuit Brought to Protect the Intel Trademark

July 15th, 2010

On Monday July 12, 2010, U.S. District Court Judge Charles Breyer rendered a decision that Intel Corp.’s (Intel) lawsuit against Americas News Intel Publishing, LLC (ANIP) survived ANIP’s motion to dismiss.

trademark infringementThe case is Intel Corporation v. Americas News Intel Publishing, LLC, U.S.D.C. for the Northern District of California. 2010 U.S. Dist. Lexis 69386 (N.D. Cal. July 12, 2010). No. C 09-05085 CRB.

From the facts alleged in its complaint, Plaintiff Intel is a “a world-famous company that develops, manufactures and sells a wide variety of computer, communications and Internet-related products and services,” Compl. P 11, and that “over eighty-six percent (86%) of the general public who associate the term ‘intel’ with any word, definition, or mark, associate the term with Intel Corportation.” Compl. P 12.

Also as alleged in the complaint, Defendant ANIP “offers consulting services and newsletter subscriptions on business, economics, travel and politics in Mexico under the trade name AMERICAS NEWS INTEL PUBLISHING and the trademarks LATIN INTEL and LATIN INTEL TRADE CENTER.” Compl. P 9. ANIP “promotes its services on the World Wide Web at the addresses and” Compl. P 9.

Intel alleged that it is harmed by ANIP’s conduct which includes trademark-infringement and cyber-squatting on Intel’s “Intel” registered brand mark. The real harm and confusion, Intel argues, is from ANIP’s use of “Intel” in conjunction with the business of reporting business and news trends affecting Mexico that would be important to successful US companies, multinational business executives, and other business professionals. Intel argues that ANIP’s conduct is infringing on the “Intel” brand by targeting many of the same customers and doing business with many actual customers of Intel while offering the same or similar products and services.

In its complaint, Intel asserts eight causes of action enumerated below;

(1) Trademark Infringement, in violation of 15 U.S.C. § 1114;
(2) False Designation of Origin, in violation of 15 U.S.C. § 1125(a);
(3) Federal Trademark Dilution, in violation of 15 U.S.C. § 1125(c);
(4) Injury to Business Reputation and Dilution under California law;
(5) Infringement under California law;
(6) Common Law Passing Off and Unfair Competition;
(7) Unfair Competition, in violation of Cal. Bus. Prof. Code § 17200;
(8)  Federal Cybersquatting, in violation of 15 U.S.C. § 1125(d).

Judge Breyer found that Intel’s amended complaint set forth allegations sufficient to survive Defendant ANIP’s motion to dismiss and that all eight causes of action remain viable.

Trademark infringement claim 1;

Breyer outlined the requirements of a successful claim for trademark infringement;

“To state a claim for infringement of a registered trademark, a plaintiff must plausibly allege that (1) it owns a registered trademark; (2) its use of that mark began before the defendant’s use; (3) the defendant’s use is without the plaintiff’s consent; and (4) the defendant’s use is likely to cause confusion, or to cause mistake, or to deceive.”

Defendant ANIP’s argument against trademark infringement;
ANIP attempted to argue against the trademark infringement claim by asserting two main arguments.

First, that Intel failed to allege facts sufficient to establish that ANIP “used” the “Intel” trademark because any use by ANIP of “Intel” was in its generic or common sense. Here ANIP declared it use of “Intel” was ever only in a generic or common sense and referenced caselaw to note that, “where a defendant uses a word “for its literal dictionary definition,” the defendant cannot be held liable for trademark infringement.”

This first rebut argument from ANIP appears to have some standing. Indeed, Judge Breyer noted that ANIP’s use of the term “Intel” appears to be consistent with the term’s common meaning. Despite this admission however, Breyer ruled that dismissing Intel’s complaint on this ground would be premature because, “ANIP’s use of the additional, arguably redundant, term “intel” could plausibly be viewed as an effort to “free-rid[e] on [Intel’s] marks.”

Second, ANIP asserted that Intel failed to allege that its use of “Intel” is likely to deceive or confuse the public.

In addressing the likelihood of confusion and false designation of origin claim 2, Breyer considered eight factors stemming from the Sleekcraft test. AMF, Inc., v. Sleekcraft Boats, 599 F.2d 341, 349 (9th Cir. 1979);

(1) strength of the mark;
(2) relatedness of the goods and services;
(3) similarity of the marks;
(4) evidence of actual confusion;
(5) marketing channel used;
(6) type of goods and the degree of care likely to be exercised by the purchaser;
(7) the defendant’s intent in selecting the mark; and
(8) likelihood of expansion of the product lines.

Because Breyer was reviewing Intel’s allegations to survive a motion to dismiss, he assumed all reasonable allegations as true and was able to conclude that;

“Nearly all the Sleekcraft factors weigh in favor of a finding that customer confusion is likely. Accordingly, has stated a plausible trademark infringement and false designation of origin cause of action.”

3rd claim, federal trademark dilution;

Breyer then addressed Intel’s third claim, for federal trademark dilution. He noted that;

“To state a claim for trademark dilution, a plaintiff must show that “(1) the mark is famous and distinctive; (2) the defendant is making use of the mark in commerce; (3) the defendant’s use began after the mark became famous; and (4) the defendant’s use of the mark is likely to cause dilution by blurring or dilution by tarnishment.” Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 634 (9th Cir. 2008).

ANIP brought up a defense it had previously used to address the “use” of the trademark issue. It claimed that Intel’s dilution claim fails because ANIP was using the term “Intel” in its generic or common sense. However, Breyer had already asserted that it would be premature to dismiss Intel’s suit on this ground and that reasoning was sufficient to defeat ANIP’s defense to the federal trademark dilution allegation

Claims 4 thru 7 are all state law claims and survive for the same reasons as the federal claims.

Claim 8, federal cybersquatting;
For the final claim, Intel alleges that ANIP’s registration of the domain names and constitutes unlawful cybersquatting, in violation of 15 U.S.C. § 1125(d).

Breyer made note that to succeed in a claim for cybersquatting a plaintiff must inclusively show that;

(1) defendant registered, trafficked in or used a domain name that is identical to, confusing similar to, or dilutive of,
(2) plaintiff’s distinctive or famous mark,
(3) with a bad faith intent to profit. 15 U.S.C. § 1125(d)(1)(B)(1).

In regards to ANIP’s conduct constituting cybersquatting, the district court rendered its judgment;

“The allegation that ANIP’s websites prominently feature Intel’s trademarks and products, combined with the fact that ANIP’s domain names use and emphasize the term “intel,” is sufficient to state a plausible claim that ANIP registered its domain names with the bad faith intent to “divert business from the trademark holder to the domain name holder.”

Conclusion: Intel succeeded in this initial defense of all eight of its claims and ANIP’s motion to dismiss is denied.

Although this California district court decision in favor of Intel was only over a motion to dismiss and is therefore by no means a final verdict in the outcome of Intel’s suit against ANIP, it nevertheless represents an important early victory for Intel Corporation in terms of defending its intellectual property rights on a global level.

It will be interesting to follow this case as the parties involved delve in to dispute at length the issues and arguments briefly raised in this decision for ANIP’s motion to dismiss. Any Internet Lawyer concerned with intellectual property should be sure to stay abreast of developments in caselaw around the issues raised in this decision, especially with an eye on trademark-infringement and cyber-squatting.