"PerfumeBay" Enjoined, "Perfume Bay" Continues

In PERFUMEBAY.COM, INC. V EBAY INC. (November 5, 2007), the U.S. Court of Appeals for the Ninth Circuit concluded that the district court did not clearly err in declining to enjoin uses of the non-conjoined versions of Perfume Bay:

. . . The district court’s injunction maintained an equitable balance with respect to the disputed marks. The injunction reduces consumer confusion by eliminating the conjoined forms of “perfumebay.” The conjoined forms encompass all of eBay’s trademark, thus creating confusion when utilized in domain names, online advertising, and search engine results. Although eBay’s argument is persuasive, given the common suffix “Bay,” eBay failed to establish clear error. The separated
forms of “perfume” and “bay” do not include eBay’s entire mark. Unlike the conjoined forms, the non-conjoined forms do not resemble one another in the same manner. The district court’s more limited injunction, therefore, “balanced the conflicting interests both parties have in the unimpaired continuation of their trademark use.” Interstellar Starship Servs., 304 F.3d at 948 (citation omitted). This is particularly true in view of the fact that non-conjoined forms, such as “Perfume Bay,” cannot be utilized as domain names.

{Footnote 11: Although there was no clear error in the district court’s finding that the non-conjoined forms did not create a likelihood of confusion in this case, non-conjoined forms may nevertheless have a dilutive effect. “Dilution . . . protects the distinctiveness of a particular mark whether or not the products compete or consumer confusion exists. Because dilution and likelihood of confusion tests are directed at different actions, it does not make sense to import the relatively subjective similarity of the marks test from the likelihood of confusion context into the dilution context.” Thane, 305 F.3d at 906 (citations omitted).}

IV. CONCLUSION

The district court did not clearly err in finding that conjoined forms of “perfumebay” created a likelihood of consumer confusion. The district court, therefore, properly
enjoined Perfumebay from utilizing such infringing marks.

The district court also did not clearly err in finding that the non-conjoined forms of Perfumebay’s mark, such as Perfume Bay, did not create a likelihood of confusion.
However, the district court erred in holding that Perfumebay’s marks did not produce a likelihood of dilution, as the marks are nearly identical to eBay’s mark.

The district court also erred in finding that eBay acted with unclean hands in its advertising, as the record did not affirmatively demonstrate the requisite intent to deceive. The district court did not abuse its discretion by declining to award attorneys’ fees to Perfumebay, and correctly rejected eBay’s breach of contract claim.