The opinion of the court was delivered by: Owen, District Judge.
Plaintiff ImOn Inc. moves for a preliminary injunction against
defendants ImaginOn, Inc. Both parties are suppliers of "services
or products" on the Internet which, as I recognize and grapple
with hereafter, is one of the most fluid, rapidly developing, and
virtually daily changing areas of commerce that the law has had
to focus upon and endeavor to apply established principles to.
Plaintiff alleges that it has the sole right to use the "IMON"
mark and defendant's use of the mark constitutes trademark
infringement, unfair practices, and unfair competition. For the
reasons below, I decline to grant the preliminary injunction.
Defendant ImaginOn has been using "IMON" in one form or another
since January 1999. At that time, it adopted IMON as its NASDAQ
stock "ticker" symbol. Each press release issued by ImaginOn
after that date identified IMON as ImaginOn's NASDAQ symbol. In
June 1999, ImaginOn acquired the www.imon.com domain name. On
July 15, 1999, ImaginOn announced that it would be introducing a
high-bandwidth "portal" product to be found at its www.imon.com
Internet website. That high-bandwidth portal product eventually
changed from being a portal into the IMON.COMTV software product
hereafter described, and every press release since November 23,
1999, has described the software product IMON. COMTV as allowing
the broadcast of Internet television and not as a portal.
ImaginOn's product, introduced in October of 1999, and called
IMON.COMTV, is essentially a packaged Internet television
delivery tool and is marketed as a "TV station in a box."
IMON.COMTV is a "licensed turnkey [software] package that enables
any website to present interactive television within a standard
browser window on any suitably connected computer." IMON.COMTV
packages a number of ImaginOn's propriety technology products in
one place, and is meant to be customized only with an individual
customer's "logo, colors, website links, and more" and with no
reference to IMON.COMTV.
IMON.COMTV is not marketed to the average Internet user:
startup costs begin at $31,000 (plus an additional $4000 or more
for a host computer server), with additional "hosting" costs that
begin at $7,600 per month. The IMON.COMTV product allows ImaginOn
customers to create and broadcast in their own name alone their
audio-video content over the Internet, and to enhance that
content by allowing viewers to "click" on different areas of the
video and immediately be connected to corresponding e-commerce
pages. The customers control all the content displayed on their
website through IMON.COMTV supplied software. Apparently, what is
unique about this program is that the video may be viewed without
actually being downloaded into the viewer's computer. The video
at all times remains on the Internet. Also provided with the
IMON. COMTV product are video authoring and automated web
research tools. The video authoring tool helps ImaginOn customers
convert existing video into interactive digital video for use
with the IMON.COMTV product. The web research tool, ImaginOn's
Webzinger, allows IMON.COMTV viewers to search the Internet while
viewing digital video feeds. Defendant's "product" is a software
package that would be customized to each purchaser. Through this
software, the purchaser would be allowed to show videos on their
website and would maintain links to ImaginOn's other products.
Turning to plaintiff, ImOn, Inc. was originally incorporated as
Surf Fever, Inc. on May 6, 1999. Sometime in June plaintiff
retained outside counsel to search for potential domain names
registrable in the United States Patent and Trademark Office
(USPTO). On or about June 23, 1999, plaintiff learned that IMON
was a possible name. Plaintiff then targeted the domain names
IMON and I AM ON. The next day on June 24, 1999, plaintiff
requested Thomson & Thomson, an international trademark and
copyright search firm, to provide a common law search on imon.com
or iamon.com relating to an Internet service provider, retail
sales over the Internet, search engine, and advertising services.
Thomson & Thomson responded the same day faxing 31 pages to Ms.
Ruthman, plaintiff's in-house counsel. On or about that day, Ms.
Ruthman, visited the www.imon.com and noted that it was the
website for the North American Cracid Taxonomic Advisory Group,
featuring endangered birds. However, within a week, Ms. Ruthman
learned that www.imon.com had been purchased by ImaginOn.
Apparently, someone from Surf Fever contacted Kristine Miller,
a trademark attorney for the law firm Tucker Flyer located in
Washington, D.C. on or before June 29, 1999, and requested her to
assist Surf Fever in determining the ownership of www.imon.com
and www.imon.net. In turn, Ms. Miller retained James Moy that
same day to investigate the owners of these two domain names.
Though Mr. Moy claims that he prepared a report and responded to
Ms. Miller by June 30, 1999, the contents of that report concerns
events occurring on July 7. Clearly Mr. Moy's report as exhibited
could not have been forwarded to Ms. Miller until July 7, 1999,
at the earliest. As part of Mr. Moy's investigation, he visited
the site www. imon.net. The first page of which displayed the
following: "Your high speed Internet service provider serving
Southern Pennsylvania and coming soon to your
neighborhood." There was also an advertisement for hair, nail,
and skin care and links*fn1 to RollingStone.com and deja.com.
Another page on that website indicated that there had been 91
visitors to the site. On June 30, 1999, Mr. Moy spoke with Mr.
Rick Sundermier, the owner of www. imon.net, learned that Mr.
Sundermier "did not have any services or products called `Imon,'"
and asked Mr. Sundermier to consider selling the domain name to
him. At this time, Mr. Moy knew only that he was negotiating for
an undisclosed principal. Mr. Sundermier said he would think
about the offer. Mr. Moy also learned that Mr. Sundermier had
incorporated Imon.net, Inc. under the laws of Pennsylvania as
recently as June 25, 1999. Presumably, Ms. Miller forwarded this
information to Surf Fever.
Despite being aware of Sundermier's corporation and website
offering high speed Internet service, on July 13, 1999, two weeks
after plaintiff learned that ImaginOn had purchased
www.imon.com and two days before ImaginOn announced its
intention to launch a high bandwidth portal on www.imon.com and
4 weeks before Moy bought www.imon.net, Surf Fever filed an
application to register in the United States Patent and Trademark
Office (USPTO) the mark IMON with regard to Internet services,
indicating on the application that it intended to use the mark in
commerce. I observe, and of this more later, that the application
requires the applicant to sign a declaration which states that
he/she believes the applicant to be entitled to use
such mark in commerce; to the best of his/her
knowledge and belief no other person, firm,
corporation, or association has the right to use the
above identified mark in commerce, either in the
identical form thereof or in such near resemblance
thereto as to be likely, when used on or in
connection with the goods/services of such other
person, to cause confusion, or to cause mistake, or
Also following that application, on July 22, 1999, Surf Fever
requested Thomson & Thomson to provide a state corporate name
search for the mark IMON. On July 28, 1999, Thomson & Thomson
responded and indicated that Imon.net, Inc. was a Pennsylvania
Sometime between June 30, 1999 and July 28, 1999, Mr. Moy
received instructions from Ms. Miller to buy the domain name
www.imon.net from Mr. Sundermier. Mr. Moy negotiated with Mr.
Sundermier in early August and on August 11, 1999, contracted for
the assignment and sale of rights, title, and interest in the
www.imon.net domain name. Mr. Sundermier also assigned to Mr.
Moy the right to sue for past infringement of the name. Two days
before this sale, on August 9, 1999, Surf Fever amended its
certificate of incorporation to change its name to ImOn, Inc.
Apparently through oversight, Mr. Moy never transferred the
rights in the name to ImOn, Inc. until December 21, 1999, when
Mr. Moy and ImOn, Inc. executed a contract stating that the
effective date of the transfer is August 11, 1999. Thus, the
www.imon.net site appeared to the world to be Mr. Moy's until
December 21, 1999, since it was registered to him.
Plaintiff ImOn, Inc. has a business strategy of being a
business-to-business marketer of Internet access and portal
services. As Mr. Farber, Imon's acting president, extensively
testified, they market to two levels of customers. The first
level customer is big business corporations. ImOn offers that
customer the "product" of Internet access. Its marketing plan is
to allow big business corporations the ability to offer to its
customers free Internet access through ImOn. ImOn's plan is to
become affiliated with these big corporations and tie into their
marketing stream. Such corporations
would offer to its customers free Internet access as an added
benefit, for example, after purchasing $50.00 worth of goods or
visiting the store a certain number of times or whatever. ImOn
might offer its access software through the big corporation's
mailings or by handing it out in a store. ImOn's second level of
customers are that big corporation's customers. Once that
corporation's customers logon to the Internet through ImOn, they
would be brought to an opening page which would exhibit the logos
of both ImOn and the name of that large business. That opening
page would also include some that big corporation's
advertisements. In addition, that page would also be a portal
page containing a search engine, news, advertising, and
e-commerce. ImOn would not charge a fee to the large business or
its customers, but ImOn's plans are to earn revenue through the
banner advertisements displayed at the bottom ImOn's cobranded
portal screen and the e-commerce trade generated. E-commerce
trade refers to business generated when a customer purchases a
product from a website after obtaining access to that site by a
direct link from another site, and the portal that created the
access to the company from which an individual made a purchase is
compensated with a commission. So ImOn would make money through
commissions and after a certain number of people had viewed the
banner advertisements. Aside from the customers gained through
ImOn's affiliation with large businesses, ImOn expects to have
visitors to their website solely for purposes of using ImOn's
portal services. Through these visitors, ImOn also expects to
earn money through e-commerce commissions or because they viewed
a banner advertisement. Plaintiff's "product" is basically a
service agreement or contract with a partner to give Internet
access and portal services to that partner's customers.
Against this factual background, plaintiff asserts that its and
defendant's marks are identical, both plaintiff's and defendant's
services are competitive, and the services are delivered through
similar channels, namely, the Internet. Plaintiff therefore
argues that consumers are likely to be confused, and that
plaintiff is entitled to a preliminary injunction.
The purpose of a preliminary injunction is "to keep the parties
while the suit is goes on, as far as possible in the respective
positions they occupied when the suit began" and to preserve the
court's ability to render a meaningful decision after a trial on
the merits. WarnerVision Entertainment v. Empire of Carolina,
Inc., 101 F.3d 259, 261-62 (2d Cir. 1996). A preliminary
injunction is an extraordinary and drastic measure that should
not be routinely granted, Mazurek v. Armstrong, 520 U.S. 968,
972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997), because it is "one
of the most drastic tools in the arsenal of judicial remedies."
Hanson Trust PLC v. SCM Corp., 774 F.2d 47, 60 (2d Cir. 1985).
The granting of a preliminary injunction ...