District Court Rules Domain Name "E-fringement" of Famous Mark Constitutes Dilution Under Pre-Moseley Federal Trademark Dilution Act

Visa International Service Association v. JSL Corporation involves a long-running dispute betwen the Visa credit card company that owns the famous "Visa" mark, and the use of the "evisa.com" domain name by the owner of a language services company.

In 2002, the district court granted summary judgment in favor of Visa, finding that JSL's use of the domain name violated the Federal Trademark Dilution Act as a matter of law. In so ruling, however, the court applied the "likelihood of dilution" standard.  This is the standard that was subsequently rejected by the U.S. Supreme Court in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003), which interpreted the FTDA to require the owner of a famous mark to show not merely a "likelihood of dilution," but "actual dilution."

The Moseley opinion was rendered while JSL's appeal from the district court ruling was pending in the Ninth Circuit Court of Appeals, and the appeals court shortly thereafter remanded the case for reconsideration in light of the ruling in Moseley.  But in 2006, the legal ground shifted again, this time with the 2006 enactment of amendments to the FTDA that legislatively reinstated the "likelihood of dilution" standard. Yet again the ground shifted in 2007, when the Ninth Circuit in Jada Toys, Inc. v. Mattel, Inc. (9th Cir. 2007) ruled that cases filed prior to the amendment of the FTDA must be judged under the Mosely "actual dilution" standard.

So, when the district court finally reconsidered the case late last year, it was required to apply the "actual dilution" standard.  In December 2007, the court upheld its prior ruling and concluded that even under the "heightened standard" of actual dilution, Visa is entitled to summary judgment:

This court noted in its October 22, 2002, order that

        a "significant purpose of a domain name is to identity the entity that owns the website," and "[u]sing a company's name or trademark as a domain name is also the easiest way to locate the company's web site." Panavision Int'l, L.P. [v.] Toeppen, 141 F.3d 1316, 1327 (9th Cir. 1988)].

        Therefore, if customers use a search engine to find Plaintiff's Web site and are forced to wade through hundred of Web sites, they may never find Plaintiff's official Web site. Id. As "e" is a commonly used prefix to denote the online version of a business, <evisa.com> presents a serious impediment to customers trying to locate the Visa Web site. Finally, permitting Defendant's unauthorized use of the Visa mark would put Plaintiff's name and reputation at the mercy of Defendant. Id. at 1327.

Id. at 22-23 (footnote omitted).

As this court made clear, Defendant's use of the EVISA mark weakens the ability of the VISA mark to identify its respective goods and services because internet users who enter the domain name <evisa.com> are not brought to Plaintiff's website. Rather, they are brought to Defendant's language services website, which makes use of the VISA trademark with only an added "e." As noted, the use of an "e" before a trademark is commonly used to denote the online version of a business. 3 Thus, internet users entering the <evisa.com> domain name would find, in that instance, the Visa mark does not correspond to its payment card services. This dilution therefore reduces the capacity of the VISA mark to identify the goods and services of its owner.

Visa Int’l Service Assoc. v. JSL Corp., No. 2:01-CV-00294, 2007 U.S. Dist. LEXIS 95334 (D. Nev. Dec. 27, 2007)