a trademark dispute a case of David v. Goliath or a corporation
fending off a greedy opportunist?
By Stephen Cass,
High profile intellectual
property cases usually center on patent, copyright, or trade secret disputes.
But Uzi Nissan, a kindly looking, white-haired 52-year-old Israeli émigré
is locked in a multimillion-dollar legal battle over whether or not his
use of the nissan.com Internet domain name infringes upon Japan's Nissan
Motor Co.'s trademark. At the heart of the matter is the impact of the
global Internet on trademark law, which traditionally has been strongly
influenced by geographic considerations.
So far, things are
not looking good for Uzi. Rather than allowing the question of infringement
to go to trial on 15 October, California's U.S. District Court summarily
ruled on 27 August that Nissan Motor's trademark had been infringed.
The story begins
in 1994 when Uzi Nissan set up a Web site for his Raleigh, N.C., company,
Nissan Computer Corp., and registered it as nissan.com. A year later he
received a letter from Nissan Motor stating that the company had a concern
over Nissan Computer's use of that domain name. Uzi Nissan ignored the
letter and in 1996 registered the nissan.net domain name as well.
Toward the end of
the 1990s and at the height of the Internet boom, Nissan Motor opened
negotiations with Nissan Computer to obtain the nissan.com and nissan.net
domain names. On 14 October 1999, Nissan Motor's e-business manager, Merrill
Davis, visited Uzi Nissan in Raleigh. "I told him the domain name is not
for sale," remembers Nissan. Instead, they "discussed different options."
Then, on 29 November, President Bill Clinton signed the Anti-Cybersquatting
Consumer Protection Act into law. The act was designed to protect companies
from people who registered domain names based on other people's trademarks
with the sole intent of selling, often for exorbitant sums, the domain
name to the trademark owner.
In December, Davis
visited Nissan Computer again. "Everything was changed: all [Davis] wanted
was a price for the domain names," Uzi Nissan told IEEE Spectrum. According
to him, he kept refusing to sell and the meeting dragged on for two hours
until "I finally got tired of [Davis] and I said...'$15 million. Do you
understand now I don't want to sell?' [Davis] went outside...within two
minutes their attorneys called me and said they're filing a lawsuit. So
obviously he came here to entrap me."
Nissan Motor views events differently. When Uzi Nissan registered nissan.com
in 1994, "there wasn't an understanding of the power of the Internet as
a marketing tool," admits Leland Dutcher, counsel for Nissan Motor. But
in 1999 the auto company "became concerned that a very large number of
[customers] were going looking for us at a Web site at nissan.com that
we didn't have."
Nissan Motor, whose
Web site is at nissandriven.com, was also irked when, according to Dutcher,
Uzi Nissan began displaying automobile-related advertising on his site
in late 1999. This move, says Dutcher, transformed the simple home page
of a local computer company "into a Web site that was calculated and designed
to exploit the fact that the vast majority of hits he was getting were
from people looking for us."
Uzi Nissan says if
that had been the intent, "there would have been no other advertisers
there but automotive...[approximately] four out of 23 advertisers were
automotive related." However, in a summary judgment, the California court
ruled that having any auto-related advertising on the site was confusing
and hence an infringement of Nissan Motor's trademark. But the court did
dismiss Nissan Motor's claim of cyber squatting, ruling that Nissan Computer
registered nissan.com in 1994 in good faith.
any other name
Dutcher believes that Nissan Motors is entitled to the exclusive use of
the nissan.com domain name. "There are many companies in the United States
that have the word Nissan in them, and we don't object to that." He says
that as part of a deal for Nissan Computers' domain names, Nissan Motor
was willing to replace them with the domain name nissancomputer.com, "but
the word Nissan by itself belongs to Nissan Motor Co., and it has since
However, Nissan Computer's
attorney Neil Greenstein argues that the 1959 date has little relevance
to this case because the Nissan trademark was not used in the United States
until the mid-1980s; before that, Nissan Motor used the Datsun brand name.
What's more, Uzi Nissan had been operating a number of businesses in the
United States named after him since 1980, before founding Nissan Computer
Uzi Nissan's use
of his family name in earlier businesses is irrelevant, counters Dutcher,
who adds, "The domain name is owned by a company called Nissan Computer
Corp. And that company is not using its name as the domain name; it's
using our trademark as the domain name." By 1991 "over four million cars
had been sold in the United States with the name Nissan on them....The
vast majority of the people who type nissan.com expect to find us at the
other end, precisely because that brand is famous."
Certainly, it is
not unusual for a trademark to have more than one owner, and this is normally
acceptable as long as customers can easily distinguish between the brands.
For example, the trademark "Ace" is owned by both a hardware chain and
a car rental company. Famous trademarks, however, receive additional protections
under trademark law under the concept of dilution. Dilution differs from
normal trademark infringement, where confusion between two products or
services is the usual litmus test, because dilution can occur even when
there is no confusion.
Disney Corp., for
instance, can prevent someone from using the name "Mickey Mouse Military
Supplies" because it blurs and tarnishes Disney's famous trademark. The
Disney trademark is diluted even though there is little likelihood of
a customer confusing the entertainment conglomerate with an arms dealer.
For trademark owners
that are in similar businesses, however, geographic separation has been
the key to distinguishing them in the past. A hotel in Maine that uses
the "Commodore" trademark, for instance, is not infringing on the trademark
of a similarly named hotel in Miami because there would be no risk of
customers confusing the two. However, on the World Wide Web, geographic
distinctions are frequently erased, greatly increasing the chances of
Is Nissan Motor entitled
to the nissan.com name regardless of whether or not Nissan Computer hosts
auto-related advertisers? "Federal courts have generally required that
there be some confusion, even in dilution cases," observes Stephen Elias,
an attorney and author of Trademark: Legal Care for Your Business and
Product Name. Nissan Computer claims that any surfer can easily distinguish
between it and Nissan Motor, and so there is no confusion. But Nissan
Motor argues that many users will type nissan.com into their browsers
with the expectation of going to the Nissan Motor site, and ending up
instead at the Nissan Computer site creates initial confusion, however
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The question of initial confusionand hence the entire casemay
hinge on the details of modern browsing habits. Nissan Computer's Greenstein
notes the prevalent use of search engines such as Google, which provide
a list of links with accompanying descriptive snippets. Referring to a
report by Jupiter Research (Darien, Conn.), an Internet analysis firm,
he said, "We have evidence that shows that people don't automatically
[type nissan.com into their browser], that many people go to a search
engine first." If the average surfer is choosing to visit either Nissan
Motor or Nissan Computer based on search engine descriptions, that would
eliminate initial confusion. Dutcher feels that the use of search engines
has not eliminated routine direct entry of domain names, saying, "Even
though I use search engines all the time, if I know a company's particularly
famous, like Kodak, I'll just type the name."
Dutcher says that
Nissan Motor would have preferred to avoid going to court and that it
had offered Uzi Nissan a "multimillion-dollar" settlement in exchange
for the domain name. Uzi Nissan rejected their terms, noting that he has
already spent over $2 million in legal fees and that the case has exacted
a heavy toll on both his business and personal life. While he may have
been persuaded to sell the domain name for a suitable fee initially, his
treatment at the hands of Nissan Motor makes him unwilling to relinquish
the name to them. As he puts it: "I believe that every person has the
right to know what can happen to them if they have something that a bullish
corporation like Nissan [Motor] wants."
the notion that Nissan Motor has been a bully. "We have put a lot of money
on the table, and it just hasn't been enough," he says.
As for Uzi Nissan,
he'll have to wait until 15 October, when the court will determine remedies
(which could easily include giving the nissan.com name to Nissan Motor)
to decide if he's had enough with the legal process. "We'll have to wait
and see what remedy the judge orders before making a decision on whether
or not to appeal," says Nissan Computer's Greenstein. Updates will be
available on the IEEE Spectrum Web site at http://www.spectrum.ieee.org/WEBONLY/wonews/oct02/invenissan.html.