The United States District Court for the 9th Circuit has reversed and remanded the summary judgment granted by the district court to Netscape Communications (Netscape) and Excite in a case of “keying” brought against them by Playboy Enterprises (Playboy). Both defendants were found to have infringed and diluted Payboy’s “Playboy” and “Playmate” registered trademarks. “Keying” is a practice that allows advertisers to target individuals with certain interests by linking advertisements to pre-identified terms, lists of which were found to be kept by Netscape, and to include the aforesaid trademarks in the case at hand. Thus a person conducting a search using either word have had banner ads for adult-oriented material appear on her screen, which are neither related to Playboy nor labeled properly indicated their source, which results in consumer confusion and .capitalizing on its good will.
With regards to the trademark infringement claim asserted by Playboy, defendants’ defenses based on fair, nominative and functional use were rejected by the court on the grounds that (i) a fair use may not be confusing, (ii) the availability of other terms besides both trademarks to draw consumers towards the adult materials advertised, and (iii) there not being a case for functional defense at hand.
Concerning the trademark dilution claim, the court also found issues of fact, and thus reversed and remanded for further proceedings. Such issues relate to the famousness of the marks, which are also used by several other companies, as asserted by defendants. The reverse and remand was also due to the fact that the district court applied an overruled standard of review for withstanding summary judgment requiring a showing of actual dilution, same which has been clarified by the Supreme Court.
It should be noted that the court declined to rule upon whether either defendant was a direct or contributorily infringer, notwithstanding the fact that defendants require advertisers to link their ads to the lists of words predefined by them.