My response to CTT's Third Letter

June 19, 1997

Dear Mr. Klein:

This is a reply to your letter dated May 19, 1997.

Again, I must begin by pointing out that you have failed to provide the information I requested in my previous letter. In particular, you have not provided information on how I can purchase a copy of your client's magazine. Nor have you provided any evidence of there being a likelihood of public confusion between your client's magazine and my Web site.

Your assertion that you have provided me with sufficient information to conclude I am violating your client's trademark rights is clearly false. The three facts you cite in your most recent letter, which you say are the only pertinent facts at this time, are insufficient to support a claim of infringement.

The mere filing of an intent-to-use trademark application, and the notification of the applicant by USPTO that the application is in condition for allowance, do not in and of themselves confer priority rights to a trademark. Such rights can only be secured through use of the mark in commerce. (See, for example, Talk to Me Products Inc. v. Larami Corp., 804 F. Supp. 555 (S.D.N.Y. 1992), aff'd, 992 F.2d 469 (2d Cir. 1993).) In addition, for a successful infringement claim there must be a risk of public confusion (or a famous mark in danger of dilution). In the case of a secondary user who adopted the mark in a separate marketing area before the primary user's registration date, there must also be a showing that the secondary user (or consumers in that user's marketing area) were aware of the primary user's mark at the time the secondary user adopted it. On all counts, your infringement claim falls short.

Because of my sincere desire to avoid any possibility of infringement, I have undertaken at my own expense to obtain your client's trademark application file. That file shows the following:

• Your client did indeed submit an intent-to-use application for the trademark "LIES" on March 21, 1995. The description of goods on the original application was "printed parody publication."

• The application was amended by USPTO on September 6, 1995, with the word "publication" being replaced by the more restrictive term "magazine."

• The mark was published for opposition on January 2, 1996.

• The notice of allowance was issued on March 26, 1996.

• On September 26, 1996 (the deadline for filing the statement of use form), your client requested, and was granted, a six-month extension of time to file the statement of use.

• On March 26, 1997 (the deadline for the six month extension previously granted), your client submitted a magazine cover, along with the required statement of use form. The cover shows an issue date of "Fall 1996," a title of "Lies," and a subtitle of "The Truth About Washington D.C." Just above the issue date it says "Premiere Edition." Elsewhere on the cover it says "A Parody" and "We do it twice a year."

• The trademark application file is stamped with a "Reg. Date" of July 8, 1997. I assume this is the date when USPTO intends to issue the registration.

I confess that I'm curious about the contents of that Fall 1996 issue. Given your evasion of my previous requests for a back issue of your client's magazine, I have tried to obtain a copy of it myself. Interestingly, it does not appear to be possible to buy the Fall 1996 issue of "Lies: The Truth About Washington D.C.," even by calling CTT directly. Nor does your client appear to have published the Spring 1997 issue, which should have been the next issue to appear. Other than the cover submitted to USPTO, I have been unable to find any evidence that your client is actually publishing the magazine.

So, in addition to the three facts you cited in your recent letter, there are some additional facts that a court would likely wish to consider:

1. You lied in your first two letters, when you said that your client had been publishing his magazine "since at least 1994." The first, and apparently the only, issue did not appear until two years later, well after the establishment of my Web site.

2. Having come close to obtaining a federal trademark registration for a "printed parody magazine," your client no longer appears to be interested in publishing such a magazine.

3. The cover submitted to USPTO as evidence of commercial use appears suspect, in the sense that it is not possible to actually purchase that issue of the magazine, nor does your client appear to have any intention of publishing future issues in printed form.

For the sake of discussion, though, let us assume that your client's trademark registration for "LIES" will indeed be issued, and that your client will be able to support his claims of commercial use. Even in that case, you still have presented no evidence that there is any likelihood of confusion between your client's product and my Web site. I assert that there is, in fact, no likelihood of such confusion, and hence, no infringement. Among the facts supporting my position are these:

• Your client's mark is inherently weak. The term "lies" is not distinctive, being a common noun used routinely in writings dealing with parody and satire.

• Your client's mark is further weakened by the existence of at least two other magazines, both of which have been published since before your client's intent to use filing date, and both of which are called "Lies" or "Lies Magazine." One of the two is nationally marketed and distributed, widely recognized, and contains parody and satire (Lies Magazine, LCN Syndicate, 6001-O Lomos NE, #154, Albuquerque, NM 87110, 505/256-7057). It seems unlikely that your client was unaware of this magazine's existence when he filed his application, and I find it surprising that he did not mention it in that document.

• Your client's trademark application is in Class 16, "Paper goods and printed matter." My Web site, were I to register a federal trademark for it, would fall into Class 41, the service category for "Education and entertainment." Both the goods and services themselves and their respective distribution and marketing channels are entirely separate.

• Precisely because I wished to avoid confusion with the two pre-existing "Lies Magazines," I have always taken pains to identify my site only by its unique Internet domain name, "lies.com," never as "Lies" or "Lies Magazine." Nor have I ever identified it as any kind of magazine, but only as a Web site.

• There is essentially no public awareness of your client's product.

• Your client has never promoted or distributed his magazine via the Internet, which is the only place where I have ever marketed or distributed my Web site.

I previously asked you to indicate what particular action or actions of mine you were referring to when you claimed infringement. You have not responded directly to that question, but your position can be inferred from other statements. For example, I freely offered to alter my Web site to eliminate any content that was confusingly similar to your client's magazine. You ignored that offer, while demanding that I relinquish the "lies.com" domain name itself.

The position you are arguing is that the mere operation of a Web site under the domain name "lies.com" constitutes a violation of your client's trademark. You stated this explicitly in your second letter, when you said that "unauthorized use of a domain name which includes a protected trademark is in direct conflict with federal trademark law." You cited five court cases that you said supported that position, though as I previously pointed out, none of the decisions in those cases actually does support it.

Since that time I have located another decision that sums up the issue well. Ruling in Lockheed Martin Corp. v. NSI, 96-cv-7438, C.D. Cal., March 19, 1997, Judge Dean D. Pregerson (who, coincidentally, authored the Panavision decision that was among the five you cited), wrote:

The Court begins with the observation that "unlike a patent or copyright, a trademark does not confer on its owner any rights in gross or at large." MDT Corp. v. New York Stock Exchange, Inc., 858 F. Supp. 1028, 1032 (C.D. Cal. 1994) (citing Traeger v. Gordon-Allen, Ltd., 71 F.2d 786, 768 (9th Cir. 1934)); see also Anheuser-Busch, Inc. v. Balducci Publications, 28 F.3d 769, 777 (8th Cir. 1994) (noting that "unlike copyright and patent owners, trademark owners have no rights in gross"). Therefore, the law does not per se prohibit the use of trademarks or service marks as domain names. Rather, the law prohibits only uses that infringe or dilute a trademark or service mark owner's mark. Moreover, innocent third party users of a trademark or service mark have no duty to police the mark for the benefit of the mark's owner. MDT, 858 F. Supp. at 1034. Consequently, the mere fact that a person registered a SKUNK WORKS or a variation thereof as a domain name does not mean that the person infringed or diluted Lockheed's mark.

There are other precedents in this area. I previously referred you to the preliminary injunction granted to the owner of the clue.com domain name, preventing Hasbro from interfering with his use of it (Clue Computing, Inc. v. Network Solutions, Inc., No. 96-CIV-694-5, Colo. Boulder County Dist. Ct.). A similar injunction was granted to the plaintiff in Giacalone v. Network Solutions, Inc., No. 96-CIV-20434, N.D. Cal., preliminary injunction entered June 13, 1996, in a case involving the ty.com domain name.

Again, just for the sake of discussion, let us examine one more possibility (although I consider it an exceedingly remote one): that you actually are able to demonstrate a risk of public confusion between my Web site and your client's magazine. Even then, I believe my Web site would have priority over your client's trademark rights with respect to presenting parody under the designation "lies.com" on the Internet.

My first use of the designation "lies.com" occurred in December, 1995. This was after your client's constructive use date of March, 1995, but well before your client's (presumed) trademark registration date of July, 1997. My use was clearly "innocent," in the sense that neither I nor anyone in my marketing area had any knowledge of your client's use of the mark. Indeed, it would have been impossible for anyone to know of it, since your client had not actually begun using it, except for submitting the intent-to-use application to USPTO. Under U.S. trademark law, an "innocent secondary user" such as myself has priority rights with respect to a primary user who subsequently registers the mark, at least within the limited marketing territory where the mark was originally put into use by the secondary user.

I believe a compelling case can be made that the Internet represents a distinct marketing territory for trademark purposes. Information that is available over the Internet is instantly available to any Internet user, regardless of that user's physical location. In effect, the distance between any two points on the Internet is zero. Conversely, a document that is not available via the Internet (a printed magazine, for example), might just as well be on the moon as far as the Internet's users are concerned.

The Internet as a marketing territory therefore is inherently distinct from non-Internet territories. Your client cannot claim to have locked up the right to use the lies.com domain name on the Internet by virtue of filing an intent-to-use application for a printed magazine called "Lies," any more than a non-federally-registered operator of Acme Dry Cleaning in Portland, Maine, can claim priority over a party who subsequently (and innocently) establishes an Acme Laundry Service in San Diego, California.

The more I investigate this matter, the more obvious it becomes that your client cannot legitimately claim infringement. He simply covets the lies.com domain name, and hopes that the threat of an infringement suit will intimidate me into abandoning it.

I remain willing to work with you to avoid any possibility of my Web site's infringing on your client's rights. If you have any evidence supporting your claims of infringement, please provide it to me.

As always, your client is free to contact me directly if he wishes to resolve these issues amicably.

Sincerely,

John Callender

cc: George Rafter