Trademark Law - Initial Interest Confusion Doctrine 4th Circuit

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This is a reproduction of the article from http://adlawbyrequest.com/inthecourts/Chambord82001.shtml. It is presented in it's entirity. Some emphasis has been added.

Federal Judge Says Initial Interest Confusion Unimportant For Websites
August 20, 2001

A senior federal judge in the U.S. District Court for the Eastern District of Pennsylvania recently issued an opinion with major ramifications for the application of trademark law to domain names. Ruling that the longstanding trademark concept of "initial interest confusion" does not apply to Websites, Judge Edmund V. Ludwig dismissed a trademark infringement case filed by Chatam International, Inc., the makers of Chambord liqueur, against Bodum, Inc., a company that markets coffee makers under the mark "Cafetiere Chambord" for registering the domain name "chambord.com". In his opinion, Judge Ludwig wrote that "initial interest confusion" is unimportant on the Web because Web surfers have become used to visiting numerous sites before finding the one they seek.
Judge Ludwig likened the race for domain names to the competition between companies to be the first to market with new products. "Internet surfers are inured to the false starts and excursions awaiting them in this evolving medium," wrote Judge Ludwig. "And while more governmental and industry-driven regulation could make it easier on the public, what this case may represent is that the traditional commercial advantage of getting out ahead at the front of the marketplace is not confined to competitive products."
Filed under the Anticybersquatting Consumer Protection Act, Chatam's complaint alleged that its mark would be diluted by the use of the word "Chambord" in a domain name held by another registrant. However, unlike the situation in so many other cases, in this case both parties had legitimate rights in the mark, albeit for different products. Judge Ludwig found that Bodum's registration had not been made in bad faith, the primary requirement for transfer of a domain name to an aggrieved plaintiff under the Act, because Bodum held rights in the word for identification of its coffee maker products. Judge Ludwig further determined that Bodum had "reasonably believed the use of the name was fair or otherwise lawful." As a result, Bodum did not commit cyberpiracy when it registered the domain name. Chatam has not yet decided whether to appeal the decision.
Why This Matters: Domain name disputes arise when a domain name registrant registers a name that includes a trademark owned by another party. In most such disputes, the registrant accused of cybersquatting has no rights in the included mark. This case, however, addresses a situation in which both parties to a domain name dispute hold legitimate rights in a mark. In that situation, Judge Ludwig's decision holds that the first legitimate party to register the domain name containing the mark wins.