Calista Enterprises Ltd. v. Tenza Trading Ltd., --- F.Supp.2d ----, No. 3:13–cv–01045, 2014 WL 3896076 (D. Ore. Aug. 8, 2014)
Calista and Tenza (porntube.com) compete in the adult entertainment industry to stream videos. This case involves trademark claims and counterclaims, including counterfeiting (more evidence for Mark McKenna’s concerns that infringement is collapsing into counterfeiting).
Porntube.com is operated by non-party DreamStar, which is managed by a person who is also a shareholder of a company (FUX) that is a shareholder of Tenza. Content producers upload content to Porntube.com; Tenza makes its money through (1) third-party ads on Porntube.com and (2) payments from content producers when visitors click through and make a purchase. Tenza uses “search engine placement services” to promote its content, but its primary marketing tool is its affiliate program. Operators of other adult sites include links to Porntube.com, and Tenza compensates affiliates on a per-clickthrough basis. Tenza has registered PORNTUBE for its services.
Calista, working with several other corporations, runs websites that that “categorize” and link to third-party websites that stream pornographic videos. In 2009, DreamStar invited Calista to participate in an affiliate program for an adult site, 4tube.com, and then invited it to join a similar program for fux.com. In 2011, DreamStar asked Calista to join the affiliate program for Porntube.com, and was one of the most productive affiliates in the Tenza affiliate program. Calista registered a number of domains containing the words “porn,” “tube,” or “porn” and “tube” in various combinations. Some were used as part of Calista’s participation in these affiliate programs.
Calista’s first registration of a domain name including “porntube,”freshporntube.com, was in 2009. After that until January 2011, Calista had 15 websites with domain names containing both “porn” and “tube” in various combinations. After that August of 2013, Calista used at least an additional 17 domain names containing some permutation of “porntube.” There were at least 14 domain names including “porntube” verbatim, also including goldporntube.com, bookporntube.com (my personal favorite), and cubeporntube.com.
In 2013, Tenza used the UDRP to challenge 13 Calista domain names; a panel ruled in Tenza’s favor, triggering this suit by Calista.
The court denied summary judgment to both parties on whether Porntube was a valid mark. Calista argued that “porn” and “tube” are both generic, making “porntube” generic. Calista’s expert stated that “What most consumers refer to categorically as ‘tube sites’ represents the largest segment (by popularity and traffic counts) of all known adult entertainment streaming video web sites online.” Tube sites, he said, are video aggregation sites.
Tenza argued that “tube” alone wasn’t generic, and that “porn” was merely suggestive because one expert called “porn” a term that was “a fun word” and “a bit tongue in cheek” compared to “pornography.” (“Mommy” is a bit tongue in cheek for a child who’s reached a certain age, but it’s still generic for mother.) Calista’s expert Marc Randazza also said that “porn” is used in phrases such as “food porn and nature porn,” phrases that have “nothing to do with sexuality,” indicating that “porn” is a more socially acceptable term than pornography. (“Brain food” isn’t food; I don’t see how that’s relevant to whether porn is generic for porn, nor do I think the existence of casual and more formal words for the same thing means that either word is non-generic—compare “pub” and “restaurant” and “eatery” or “refrigerator” and “fridge”; not to mention the fact that casualness could be a big part of why a term might be competitively necessary, a key justification for genericness doctrine. None of this is to say I think “Porntube” is obviously generic, but “porn” plainly is.) But the court concluded that the parties’ “conflicting explanations of the meaning of the words ‘porn’ and ‘tube’” prevented it from finding the composite term generic on the ground that both components were generic.
More generally, “generic individual terms can be combined to form valid composite marks.” Dictionary definitions aren’t determinative of public understanding. The key inquiry is whether there is evidence that to the consuming public the primary significance of the term is to identify the service or product and not its source. There was a genuine dispute of material fact about whether the terms “tube” and “porn” are, in isolation, generic terms, and an additional question about their composite use.
On the composite question in particular, Calista pointed to over 3200 registered domain names uisng “porntube,” with more using the variant “porn-tube” and “tubeporn.” Tenza’s own expert explained his “conservative” belief that one-quarter to one-third of all free adult-entertainment websites describe themselves as being a “porn tube.” Tenza argued that there was no evidence of use of these domain names. Of the “porntube”-using domain names listed by Calista in response to an interrogatory, there were at most 45 unique registrants. Tenza’s argument that this potential use was de minimis presented a question of fact, as did Tenza’s criticism of using Google search as a mechanism of determining use.
Calista argued that Tenza itself used “porn tube” generically to describe a type of video. Tenza’s website title description says: “Watch FREE porn videos at PornTube.com with new porn tube videos added daily.” Tenza also used “porn tube” in various captions of videos, though it wasn’t clear whether the references were to material on the website or external material. Tenza’s expert described this as an attempt to describe the content of videos, “written with the widest variety of high traffic catch phrase and search terms.” Tenza argued that although these references should have been capitalized, used as one word, and followed by ®, these small errors do not mean that Tenza meant to use the phrase “porn tube” to indicate the type of product rather than the source. The court found this to be a jury question.
Dictionary definitions were also not dispositive, as the parties disagreed about which dictionaries to use, and Tenza maintained that Webster’s Third was more appropriate; it didn’t mention “television” as a definition for “tube.” (Really?) Again, there was a genuine dispute of material fact.
Generic use in media: Calista argued that it identified several dozen generic uses of the phrase “porn tube” in adult-entertainment news sources and magazines, television news shows, and academic journals. Tenza’s expert conceded that with some media sources, the phrases “tube site” and “porn tube” were used interchangeably. Tenza argued that these references were “hearsay” (no, they weren’t, because they weren’t offered for the truth of the matter asserted), and offered articles that didn’t use “porn tube” generically but instead used “tube site.” This question was again better left for a factfinder, which could use the media evidence to find either for or against genericity. Likewise with testimony about the opinions of people in the trade.
Consumer surveys: The court first resolved some evidentiary disputes: consumer surveys were relevant here because the legal standard required the court to look at the composite mark as a whole; combinations of old words to create new phrases can be nongeneric. Tenza’s survey might be excludable because the expert defined “adult streaming video” wrongly (he thought it meant live interaction), but that didn’t matter because even if the survey were excluded summary judgment for Calista would be inappropriate. Other weaknesses in the survey universe (e.g., failure to exclude respondents who were part of the adult entertainment industry) went only to weight, not admissibility.
Calista also challenged the survey’s reliability because, immediately after asking, “Would you say PORNTUBE is a brand name or a common name,” the survey asked “Which of the following are names of adult entertainment streaming video websites of which you have heard?” While Calista argued that this would inflate the number of respondents claiming to recognize Porntube, the court didn’t find it enough to doom the survey. The survey first asked about several different names or terms, with “Porntube” the fifth listed. Then the survey listed ten adult-entertainment streaming websites, including listing “porntube” last. Calista’s criticisms might carry weight, but the survey questionnaire didn’t suggest its own answer. “[T]he first question, about recognizing certain words as brand names or common names, is not directly related to the next question, which asks survey participants if they are aware of certain adult-entertainment streaming video websites.” Thus, Calista’s objections went to weight and not admissibility at this stage.
Tenza argued that its survey plus that of Calista’s expert proved nongenericity. Calista’s expert surveyed 247 qualified respondents and found that 49% of the respondents recognized “porn tube” as a brand name, while the remainder called it common or weren’t sure. Tenza’s expert by contrast found that 79% of the 840 qualified respondents identified “PORNTUBE” as a brand name, and 51% said yes when asked if “PORNTUBE” was as an adult-entertainment website they had heard of.
Ultimately, the overall question of genericity was for a finder of fact.
So too with infringement. Although Calista used “porntube,” it also added arbitrary and suggestive words, which might or might not be enough to change the sight and sound of the domain names enough to distinguish its use. The difference between the parties’ services—an affiliate site that categorizes videos and directs viewers to other sites, versus a destination site that provides content—also might or might not matter. For actual confusion, Tenza’s survey found that “for Calista’s prefixed websites using the phrase ‘PORNTUBE,’ between 24 and 34 percent of the consumers believed that the sites were associated with ‘the PORNTUBE brand.’” Tenza was also served with a DMCA takedown for largeporntube.com, owned by Calista. Again, this wasn’t enough—a jury could find it more than de minimis, but the court wasn’t going to do so at this stage. Marketing channels were the same, but that doesn’t matter because everyone uses the internet, per Network Automation.
On consumer care, blessedly the court didn’t treat Playboy’s assertions about the easy divertability of adult entertainment consumers as binding, deeming it “dicta.” Neither party presented evidence on “the psychology or ‘divertability’ of a consumer of adult-entertainment streaming videos on the Internet, thus Playboy is not particularly helpful to either party on this issue.” However, since the content on both parties’ sites was free, that tipped in favor of finding likely confusion.
Intent: because of the debate over genericity, Calista’s intent was also ambiguous. As for likely expansion into other markets, “[t]he Court finds, and both parties agree, that given the identity of the parties’ respective services, this factor is unimportant,” which seems to contradict the court’s earlier, more uncertain holding on the relatedness of the services (not to mention its counterfeiting reasoning, up next). Regardless, there was a genuine dispute of fact on likely confusion as a whole.
Counterfeiting: A counterfeit is “a spurious designation that is identical with, or substantially indistinguishable from,” a registered mark and that is applied to the goods (or services) covered by the registration. The court found a genuine dispute about whether Calista’s domain names were “identical with” or “substantially indistinguishable from” the registration, given the dispute over the validity and strength of Tenza’s mark. A mere “colorable imitation” is not counterfeiting.
Plus, it was disputed whether PORNTUBE “was registered for use on the same goods to which the infringer applied the mark,” since proximity of the goods was in dispute. The parties disagreed about the relationship of an affiliate website to a destination site. “Although both websites offer clips of adult-entertainment streaming videos, there may be a meaningful distinction between the way in which these clips are offered to consumers.” Summary judgment denied to both sides.
Comment: Missing here is any discussion of what the registration says, which ought to be dispositive, but may have been overlooked because of the increasing identity between infringement (which supposedly just looks at consumer confusion) and counterfeiting. FYI: “Entertainment services, namely, providing a website featuring adult entertainment; Entertainment services, namely, providing a website featuring photographs, videos, related film clips, and other multimedia materials in the field of adult entertainment.” I don’t see a limitation to destination sites.
Cybersquatting: Again, there was a genuine dispute on whether Calista’s domain names were “confusingly similar” to Porntube. Some of the statutory bad faith factors were also debatable, especially given the genericity dispute.
Calista argued laches. The Lanham Act has no explicit statute of limitations, so the court borrowed—here from fraud, which it thought was the most analogous state claim (2 years); going past the limitations period would trigger a presumption of laches. Calista argued that Tenza’s principle knew of Calista’s tubepornmix.com website as early as October 2009 and knew about Calista’s goldporntube.com in June 2010, while he was working with Calista through the 4tube.com and fux.com affiliate programs. He sent Calista an error log report that referenced goldporntube.com in March 2011, and Calista was one of Tenza’s top affiliates for more than two years, so Calista argued that Tenza should’ve known about the domain names.
Tenza argued that it didn’t have constructive knowledge, because the early communications occurred before its principal actually became involved with Tenza. It also argued that the error log wasn’t sufficient notice, and that even assuming it was on notice then, it filed its UDRP action on March 25, 2013, only 17 days past the two-year laches time period. This created a genuine dispute of material fact on when Tenza knew or should have known.
Laches also requires prejudice. Calista argued that it expanded its business during the time Tenza should have acted to protect the mark, and that Tenza’s delay caused Calista prejudice because it was building a valuable business around the disputed domains. This would depend on when Tenza was on constructive knowledge, so it didn’t allow summary judgment for Tenza.
Tenza did win summary judgment on Calista’s claim for damages for loss of revenue it otherwise would’ve received for being a Tenza affiliate, legal fees, and lost domain name value. Calista didn’t identify evidence in response to Tenza’s motion for summary judgment. As a matter of law, Calista wasn’t entitled to money damages, though if it ultimately prevailed on its Lanham Act claims it could still move for an attorney’s fees award.