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100302

Nissan v. Nissan

Is a trademark dispute a case of David v. Goliath or a corporation fending off a greedy opportunist?

By Stephen Cass, Associate Editor

inve01.jpg 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."

 

Advertising at issue
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.

 

By 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 1959."

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 in 1991.

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 confusion.

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 quickly dispelled.


Test Your IP IQ
How much do you know about patents, trademarks, and copyrights, which is known collectively as intellectual property (IP)? To test your knowledge of current laws and regulations affecting inventions and creations, take Spectrum Online's IP IQ Quiz.


Nissan what?
The question of initial confusion—and hence the entire case—may 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."

Dutcher disputes 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.


Harry Goldstein, Editor

ILLUSTRATION: DAVID PLUNKERT



 

 
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