Court Bars Use of Rival Trademark
Apr. 24, 1999
LOS ANGELES (AP) _ A federal appeals court outlawed a stealth weapon in the Internet commerce wars by forbidding companies from using their rivals' trademarks to steal business through Web sites.
The ruling from the 9th U.S. Circuit Court of Appeals involves the practice of including a competitors' trademark or brand name in an Internet site, either as the address or through what are known as ``meta-tags.''
The ``meta-tags'' are embedded in a Web page's coding. They can't be seen but a search program can detect them. The result is that millions of consumers looking for a particular trademark may find themselves pointed to the competitor's Web site.
The appeals court compared the practice to ``posting a sign with another's trademark in front of one's store.''
The Thursday ruling, which is binding in California and eight other Western states, is one of the latest to interpret trademark law for the high-stakes field of electronic commerce.
``Because e-commerce is new, some businesses feel there are no laws in place that govern their actions,'' said Jonathan Rosenoer of the consulting firm Arthur Anderson. ``The court is saying this is not the Wild West.''
The case involved Brookfield Communication Inc., a Los Angeles-based company that sells entertainment industry software. In a suit filed last year, it accused West Coast Entertainment of infringing on its trademark, ``MovieBuff.''
Brookfield said the company, one of the nation's largest video rental chains, improperly took the Web address www.moviebuff.com and included it in the coding.
A federal judge initially ruled against Brookfield, saying West Coast Entertainment registered the address first and thus had some right to use it. But the appeals court ordered the judge to issue a permanent injunction barring West Coast from using the Web address or meta-tags.
Rivals still would be permitted to use competitors' trademarks for product comparisons and other legitimate uses.
``This decision helps to protect intellectual property, which is driving our booming economy,'' said Richard Lee Stone, a lawyer for Brookfield. ``Brand names have value, and this helps companies preserve that value.''