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PANAVISION INTERNATIONAL, L.P., a
Delaware Limited Partnership,
No. 97-55467
Plaintiff-Appellee,
D.C. No.
v.
CV-96-03284-DDP-
DENNIS TOEPPEN; NETWORK
JRx
SOLUTIONS, INC., a District of
OPINION
Columbia Corporation,
Defendants-Appellants.

Appeal from the United States District Court
for the Central District of California
Dean D. Pregerson, District Judge, Presiding

Argued and Submitted
March 3, 1998--Pasadena, California

Filed April 17, 1998

Before: Melvin Brunetti, David R. Thompson and
Thomas G. Nelson, Circuit Judges.

Opinion by Judge Thompson

_________________________________________________________________

COUNSEL

Joseph D. Murphy, Meyer, Capel, Hirschfeld, Muncy, Jahn &
Aldeen, P.C., Champaign, Illinois, for the defendant-
appellant.

William E. Thomson, Kaye, Scholer, Fierman, Hays & Han-
dler, Los Angeles, California, for the plaintiff-appellee.

OPINION

THOMPSON, Circuit Judge:

This case presents two novel issues. We are asked to apply
existing rules of personal jurisdiction to conduct that
occurred, in part, in "cyberspace." In addition, we are asked
to interpret the Federal Trademark Dilution Act as it applies
to the Internet.

Panavision accuses Dennis Toeppen of being a "cyber
pirate" who steals valuable trademarks and establishes
domain names on the Internet using these trademarks to sell
the domain names to the rightful trademark owners.

The district court found that under the "effects doctrine,"
Toeppen was subject to personal jurisdiction in California.
Panavision International, L.P. v. Toeppen, 938 F. Supp. 616,
620 (C.D. Cal. 1996). The district court then granted sum-
mary judgment in favor of Panavision, concluding that Toep-
pen's conduct violated the Federal Trademark Dilution Act of
1995, 15 U.S.C. S 1125(c), and the California Anti-dilution
statute, California Business & Professions CodeS 14330.
Panavision International, L.P. v. Toeppen, 945 F. Supp. 1296,
1306 (C.D. Cal. 1996).

Toeppen appeals. He argues that the district court erred in
exercising personal jurisdiction over him because any contact
he had with California was insignificant, emanating solely
from his registration of domain names on the Internet, which
he did in Illinois. Toeppen further argues that the district court
erred in granting summary judgment because his use of
Panavision's trademarks on the Internet was not a commercial
use and did not dilute those marks.

We have jurisdiction under 28 U.S.C. S 1291 and we
affirm. The district court's exercise of jurisdiction was proper
and comported with the requirements of due process. Toeppen
did considerably more than simply register Panavision's
trademarks as his domain names on the Internet. He registered
those names as part of a scheme to obtain money from
Panavision. Pursuant to that scheme, he demanded $13,000
from Panavision to release the domain names to it. His acts
were aimed at Panavision in California, and caused it to suffer
injury there.

We also conclude Panavision was entitled to summary
judgment under the federal and state dilution statutes. Toep-
pen made commercial use of Panavision's trademarks and his
conduct diluted those marks.

I

BACKGROUND

The Internet is a worldwide network of computers that
enables various individuals and organizations to share infor-
mation. The Internet allows computer users to access millions
of web sites and web pages. A web page is a computer data
file that can include names, words, messages, pictures,
sounds, and links to other information.

Every web page has its own web site, which is its address,
similar to a telephone number or street address. Every web
site on the Internet has an identifier called a "domain name."
The domain name often consists of a person's name or a com-
pany's name or trademark. For example, Pepsi has a web page
with a web site domain name consisting of the company
name, Pepsi, and <.com>, the "top level" domain designation:
<Pepsi.com>. 1

The Internet is divided into several "top level " domains:
<.edu> for education; <.org> for organizations; <.gov>
               for
government entities; <.net> for networks; and <.com> for
"commercial" which functions as the catchall domain for
Internet users.

Domain names with the <.com> designation must be regis-
tered on the Internet with Network Solutions, Inc. ("NSI").
NSI registers names on a first-come, first-served basis for a
$100 registration fee. NSI does not make a determination
about a registrant's right to use a domain name. However,
NSI does require an applicant to represent and warrant as an
express condition of registering a domain name that (1) the
applicant's statements are true and the applicant has the right
to use the requested domain name; (2) the "use or registration
of the domain name . . . does not interfere with or infringe the
rights of any third party in any jurisdiction with respect to
trademark, service mark, trade name, company name or any
other intellectual property right"; and (3) the applicant is not
seeking to use the domain name for any unlawful purpose,
including unfair competition.

A domain name is the simplest way of locating a web site.
If a computer user does not know a domain name, she can use
an Internet "search engine." To do this, the user types in a key
word search, and the search will locate all of the web sites
containing the key word. Such key word searches can yield
hundreds of web sites. To make it easier to find their web
sites, individuals and companies prefer to have a recognizable
domain name.

Panavision holds registered trademarks to the names
"Panavision" and "Panaflex" in connection with motion pic-
ture camera equipment. Panavision promotes its trademarks
through motion picture and television credits and other media
advertising.

In December 1995, Panavision attempted to register a web
site on the Internet with the domain name <Panavision.com>.
It could not do that, however, because Toeppen had already
established a web site using Panavision's trademark as his
domain name. Toeppen's web page for this site displayed
photographs of the City of Pana, Illinois.

On December 20, 1995, Panavision's counsel sent a letter
from California to Toeppen in Illinois informing him that
Panavision held a trademark in the name Panavision and tell-
ing him to stop using that trademark and the domain name
<Panavision.com>. Toeppen responded by mail to Panavision
in California, stating he had the right to use the name
<Panavision.com> on the Internet as his domain name. Toep-
pen stated:

       If your attorney has advised you otherwise, he is try-
       ing to screw you. He wants to blaze new trails in the
       legal frontier at your expense. Why do you want to
       fund your attorney's purchase of a new boat (or
       whatever) when you can facilitate the acquisition of
       `PanaVision.com' cheaply and simply instead?

Toeppen then offered to "settle the matter" if Panavision
would pay him $13,000 in exchange for the domain name.
Additionally, Toeppen stated that if Panavision agreed to his
offer, he would not "acquire any other Internet addresses
which are alleged by Panavision Corporation to be its
property."

After Panavision refused Toeppen's demand, he registered
Panavision's other trademark with NSI as the domain name
<Panaflex.com>. Toeppen's web page for <Panaflex.com>
simply displays the word "Hello."

Toeppen has registered domain names for various other
companies including Delta Airlines, Neiman Marcus, Eddie
Bauer, Lufthansa, and over 100 other marks. Toeppen has
attempted to "sell" domain names for other trademarks such
as <intermatic.com> to Intermatic, Inc. for $10,000 and
<americanstandard.com> to American Standard, Inc. for
$15,000.

Panavision filed this action against Toeppen in the District
Court for the Central District of California. Panavision
alleged claims for dilution of its trademark under the Federal
Trademark Dilution Act of 1995, 15 U.S.C. S 1125(c), and
under the California Anti-dilution statute, California Business
and Professions Code S 14330. Panavision alleged that Toep-
pen was in the business of stealing trademarks, registering
them as domain names on the Internet and then selling the
domain names to the rightful trademark owners. The district
court determined it had personal jurisdiction over Toeppen,
and granted summary judgment in favor of Panavision on
both its federal and state dilution claims. This appeal fol-
lowed.

II

DISCUSSION

A. Personal Jurisdiction

A district court's determination that personal jurisdiction
can properly be exercised is a question of law reviewable de
novo when the underlying facts are undisputed. Fireman's
Fund Ins. Co. v. National Bank of Coops., 103 F.3d 888, 893
(9th Cir. 1996). A district court's factual findings regarding
jurisdiction are reviewed for clear error. Adler v. Federal Rep.
of Nig., 107 F.3d 720, 723 (9th Cir. 1997).

[1] There is no applicable federal statute governing per-
sonal jurisdiction in this case. Accordingly, we apply the law
of California, the state in which the district court sits. Core-
Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1484 (9th
Cir. 1993). California's long-arm statute permits a court to
exercise personal jurisdiction over a defendant to the extent
permitted by the Due Process Clause of the Constitution. Cal.

Code Civ. P. S 410.10; Gordy v. Daily News, L.P., 95 F.3d
829, 831 (9th Cir. 1996). The issue we address, therefore, is
whether the requirements of due process are satisfied by the
district court's exercise of personal jurisdiction over Toeppen.
Core-Vent, 11 F.3d at 1484.

[2] Personal jurisdiction may be founded on either general
jurisdiction or specific jurisdiction.

1. General Jurisdiction

[3] General jurisdiction exists when a defendant is domi-
ciled in the forum state or his activities there are "substantial"
or "continuous and systematic." Helicopteros Nacionales de
Colombia, S.A. v. Hall, 
466 U.S. 408, 414
 -16 (1984). The dis-
trict court correctly concluded that it did not have general
jurisdiction over Toeppen. Toeppen is domiciled in Illinois
and his activities in California are not substantial or continu-
ous and systematic. See Toeppen, 938 F. Supp. at 620.

2. Specific Jurisdiction

[4] We apply a three-part test to determine if a district court
may exercise specific jurisdiction:

       (1) The nonresident defendant must do some act or
       consummate some transaction with the forum or per-
       form some act by which he purposefully avails him-
       self of the privilege of conducting activities in the
       forum, thereby invoking the benefits and protections
       of its laws; (2) the claim must be one which arises
       out of or results from the defendant's forum-related
       activities; and (3) exercise of jurisdiction must be
       reasonable.

Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270
(9th Cir. 1995) (quotation omitted).

The first of these requirements is purposeful availment.

       a. Purposeful Availment

The purposeful availment requirement ensures that a non-
resident defendant will not be haled into court based upon
"random, fortuitous or attenuated" contacts with the forum
state. Burger King Corp. v. Rudzewicz, 
471 U.S. 462
, 475
(1985). This requirement is satisfied if the defendant "has
taken deliberate action" toward the forum state. Ballard v.
Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). It is not required
that a defendant be physically present or have physical con-
tacts with the forum, so long as his efforts are "purposefully
directed" toward forum residents. Id.

        i. Application to the Internet

Applying principles of personal jurisdiction to conduct in
cyberspace is relatively new. "With this global revolution
looming on the horizon, the development of the law concern-
ing the permissible scope of personal jurisdiction based on
Internet use is in its infant stages. The cases are scant." Zippo
Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1123
(W.D. Pa. 1997). We have, however, recently addressed the
personal availment aspect of personal jurisdiction in a case
involving the Internet. See Cybersell, Inc. v. Cybersell, Inc.,
130 F.3d 414 (9th Cir. 1997).

In Cybersell, an Arizona corporation, Cybersell, Inc.
("Cybersell AZ"), held a registered servicemark for the name
Cybersell. A Florida corporation, Cybersell, Inc. ("Cybersell
FL"), created a web site with the domain name
<cybsell.com>. The web page had the word "Cybersell" at the
top and the phrase, "Welcome to Cybersell!" Id. at 415.
Cybersell AZ claimed that Cybersell FL infringed its regis-
tered trademark and brought an action in the district court in
Arizona. We held the Arizona court could not exercise per-
sonal jurisdiction over Cybersell FL, because it had no con-
tacts with Arizona other than maintaining a web page
accessible to anyone over the Internet. Id. at 419-420.

In reaching this conclusion in Cybersell, we carefully
reviewed cases from other circuits regarding how personal
jurisdiction should be exercised in cyberspace. We concluded
that no court had ever held that an Internet advertisement
alone is sufficient to subject a party to jurisdiction in another
state. Id. at 418. In each case where personal jurisdiction was
exercised, there had been "something more" to "indicate that
the defendant purposefully (albeit electronically) directed his
activity in a substantial way to the forum state. " Id. Cybersell
FL had not done this, and the district court could not exercise
personal jurisdiction over it.

Personal jurisdiction was properly exercised, however, in
CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996).
There, the Sixth Circuit held that a Texas resident who had
advertised his product via a computer information service,
CompuServe, located in Ohio, was subject to personal juris-
diction in Ohio. The court found that the Texas resident had
taken direct actions that created a connection with Ohio. Id.
at 1264. He subscribed to CompuServe, he loaded his soft-
ware onto the CompuServe system for others to use, and he
advertised his software on the CompuServe system. Id.

[5] In the present case, the district court's decision to exer-
cise personal jurisdiction over Toeppen rested on its determi-
nation that the purposeful availment requirement was satisfied
by the "effects doctrine." That doctrine was not applicable in
our Cybersell case. There, we said: "Likewise unpersuasive is
Cybersell AZ's reliance on Panavision International v. Toep-
pen, 938 F. Supp. 616 (C.D. Cal. 1996), [the district court's
published opinion in this case], where the court found the
`purposeful availment' prong satisfied by the effects felt in
California, the home state of Panavision, from Toeppen's
alleged out-of-state scheme to register domain names using
the trademarks of California companies, including Panavision,
for the purpose of extorting fees from them. Again, there is
nothing analogous about Cybersell FL's conduct." Cybersell,
130 F.3d at 420 n.6.

Our reference in Cybersell to "the effects felt in California"
was a reference to the effects doctrine.

        ii. The Effects Doctrine

[6] In tort cases, jurisdiction may attach if the defendant's
conduct is aimed at or has an effect in the forum state. Ziegler
v. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995); see
Calder v. Jones, 
465 U.S. 783
 (1984) (establishing an "effects
test" for intentional action aimed at the forum state). Under
Calder, personal jurisdiction can be based upon: "(1) inten-
tional actions (2) expressly aimed at the forum state (3) caus-
ing harm, the brunt of which is suffered--and which the
defendant knows is likely to be suffered--in the forum state."
Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1486
(9th Cir. 1993).

[7] As the district court correctly stated, the present case is
akin to a tort case. Panavision, 938 F. Supp. at 621; see also
Ziegler, 64 F.3d at 473 (application of the purposeful avail-
ment prong differs depending on whether the underlying
claim is a tort or contract claim). Toeppen purposefully regis-
tered Panavision's trademarks as his domain names on the
Internet to force Panavision to pay him money. Panavision,
938 F. Supp. at 621. The brunt of the harm to Panavision was
felt in California. Toeppen knew Panavision would likely suf-
fer harm there because, although at all relevant times Panavi-
sion was a Delaware limited partnership, its principal place of
business was in California, and the heart of the theatrical
motion picture and television industry is located there. Id. at
621-622.

The harm to Panavision is similar to the harm to the India-
napolis Colts football team in Indianapolis Colts, Inc. v. Met-
ropolitan Baltimore Football Club Ltd. Partnership, 34 F.3d
410 (7th Cir. 1994). There, the Indianapolis Colts brought a
trademark infringement action in the district court in Indiana
against the Canadian Football League's new team, the
"Baltimore CFL Colts." Id. at 411. The Seventh Circuit held
that the Baltimore CFL Colts team was subject to personal
jurisdiction in Indiana even though its only activity directed
toward Indiana was the broadcast of its games on nationwide
cable television. Id. Because the Indianapolis Colts used their
trademarks in Indiana, any infringement of those marks would
create an injury which would be felt mainly in Indiana, and
this, coupled with the defendant's "entry" into the state by the
television broadcasts, was sufficient for the exercise of per-
sonal jurisdiction. Id. 

Toeppen argues he has not directed any activity toward
Panavision in California, much less "entered" the state. He
contends that all he did was register Panavision's trademarks
on the Internet and post web sites using those marks; if this
activity injured Panavision, the injury occurred in cyberspace.2

[8] We agree that simply registering someone else's trade-
mark as a domain name and posting a web site on the Internet
is not sufficient to subject a party domiciled in one state to
jurisdiction in another. Cybersell, 130 F.3d at 418. As we said
in Cybersell, there must be "something more" to demonstrate
that the defendant directed his activity toward the forum state.
Id. Here, that has been shown. Toeppen engaged in a scheme
to register Panavision's trademarks as his domain names for
the purpose of extorting money from Panavision. His conduct,
as he knew it likely would, had the effect of injuring Panavi-
sion in California where Panavision has its principal place of
business and where the movie and television industry is
centered.3 Under the "effects test," the purposeful availment
requirement necessary for specific, personal jurisdiction is
satisfied.

       b. Defendant's Forum-Related Activities

The second requirement for specific, personal jurisdiction
is that the claim asserted in the litigation arises out of the
defendant's forum related activities. Ziegler, 64 F.3d at 474.
We must determine if the plaintiff Panavision would not have
been injured "but for" the defendant Toeppen's conduct
directed toward Panavision in California. See Ballard, 65 F.3d
at 1500.

[9] This requirement is satisfied. Toeppen's registration of
Panavision's trademarks as his own domain names on the
Internet had the effect of injuring Panavision in California.
But for Toeppen's conduct, this injury would not have
occurred. Panavision's claims arise out of Toeppen's
California-related activities.

       c. Reasonableness

[10] Even if the first two requirements are met, in order to
satisfy the Due Process Clause, the exercise of personal juris-
diction must be reasonable. Ziegler, 64 F.3d at 474-75. For
jurisdiction to be reasonable, it must comport with "fair play
and substantial justice." Burger King, 
471 U.S. at 476
.
"[W]here a defendant who purposefully has directed his activ-
ities at forum residents seeks to defeat jurisdiction, he must
present a compelling case that the presence of some other
considerations would render jurisdiction unreasonable." Core-
Vent, 11 F.3d at 1487 (citing Burger King, 
471 U.S. at 476
-
77).

[11] As we have said, Toeppen purposefully directed his
activities at Panavision in California. This placed the burden
on him to "present a compelling case that the presence of
some other considerations would render jurisdiction
unreasonable." Id.

[12] In addressing the question of reasonableness, we con-
sider seven factors: (1) the extent of a defendant's purposeful
interjection; (2) the burden on the defendant in defending in
the forum; (3) the extent of conflict with the sovereignty of
the defendant's state; (4) the forum state's interest in adjudi-
cating the dispute; (5) the most efficient judicial resolution of
the controversy; (6) the importance of the forum to the plain-
tiff's interest in convenient and effective relief; and (7) the
existence of an alternative forum. Burger King, 471 U.S. at
476-77. No one factor is dispositive; a court must balance all
seven. Core-Vent, 11 F.3d at 1488.

The district court found that Toeppen had not presented a
compelling case that jurisdiction was unreasonable.
Panavision, 938 F. Supp. at 622. We agree. The balance of
the Burger King factors which we articulated in Core-Vent
tips in favor of the exercise of personal jurisdiction.

        i. Purposeful Interjection

[13] "Even if there is sufficient`interjection' into the state
to satisfy the purposeful availment prong, the degree of inter-
jection is a factor to be weighed in assessing the overall rea-
sonableness of jurisdiction under the reasonableness prong."
Core-Vent, 11 F.3d at 1488 (citing Insurance Company of
North America v. Marina Salina Cruz, 649 F.2d 1266, 1271
(9th Cir. 1981)). Here, the degree of interjection was substan-
tial.

[14] Toeppen's acts were aimed at Panavision in Califor-
nia. He registered Panavision's trademarks as his domain
names, knowing that this would likely injure Panavision in
California. In addition, he sent a letter to Panavision in Cali-
fornia demanding $13,000 to release his registration of
<Panavision.com>. The purposeful interjection factor weighs
strongly in favor of the district court's exercise of personal
jurisdiction.

        ii. Defendant's Burden in Litigating

[15] A defendant's burden in litigating in the forum is a
factor in the assessment of reasonableness, but unless the
"inconvenience is so great as to constitute a deprivation of
due process, it will not overcome clear justifications for the
exercise of jurisdiction." Caruth v. International Psychoana-
lytical Ass'n, 59 F.3d 126, 128-29 (9th Cir. 1995) (citing Roth
v. Garcia Marquez, 942 F.2d 617, 623 (9th Cir. 1991)).

[16] The burden on Toeppen as an individual living in Illi-
nois to litigate in California is significant, but the inconve-
nience is not so great as to deprive him of due process. As the
district court stated, " `in this era of fax machines and dis-
count air travel' requiring Toeppen to litigate in California is
not constitutionally unreasonable." Panavision, 938 F. Supp.
at 622 (quoting Sher v. Johnson, 911 F.2d 1357, 1365 (9th
Cir. 1990)).

        iii. Sovereignty

[17] This factor concerns the extent to which the district
court's exercise of jurisdiction in California would conflict
with the sovereignty of Illinois, Toeppen's state of domicile.
Core-Vent, 11 F.3d at 1489. Such a conflict is not a concern
in this case. The allegations in support of Panavision's state
law claim and those in support of its federal claim under the
Trademark Dilution Act require the same analysis. The fed-
eral analysis would be the same in either Illinois or California.
In this circumstance, the exercise of jurisdiction by a federal
court in California does not implicate sovereignty concerns of
Illinois.

        iv. Forum State's Interest

[18] "California maintains a strong interest in providing an
effective means of redress for its residents tortiously injured."
Gordy v. Daily News, L.P., 95 F.3d 829, 836 (9th Cir. 1996)
(citing Sinatra v. National Enquirer, Inc., 854 F.2d 1191,
1200 (9th Cir. 1988)). Panavision's principal place of busi-
ness is in California. This factor weighs in Panavision's favor.

        v. Efficient Resolution

[19] This factor focuses on the location of the evidence and
witnesses. Caruth, 59 F.3d at 129. It is no longer weighed
heavily given the modern advances in communication and
transportation. Id. In any event, due to the limited amount of
evidence and few potential witnesses in the present litigation,
this factor is probably neutral.

        vi. Convenient & Effective Relief for Plaintiff

[20] In evaluating the convenience and effectiveness of
relief for the plaintiff, we have given little weight to the plain-
tiff's inconvenience. Ziegler, 64 F.3d at 476. It may be some-
what more costly and inconvenient for Panavision to litigate
in another forum, but the burden on Panavision is relatively
slight. This factor is essentially neutral, perhaps weighing
slightly in Toeppen's favor.

        vii. Alternative Forum

[21] Panavision has not demonstrated the unavailability of
an alternative forum. In this case, Illinois is an alternative
forum. As stated above, it may be more costly and inconve-
nient for Panavision to litigate in Illinois, but this is not an
unreasonable burden. This factor weighs in Toeppen's favor.

[22] In balancing the Burger King factors, we conclude that
although some factors weigh in Toeppen's favor, he failed to
present a compelling case that the district court's exercise of
jurisdiction in California would be unreasonable.

[23] We conclude that all of the requirements for the exer-
cise of specific, personal jurisdiction are satisfied. The district
court properly exercised personal jurisdiction over Toeppen.
We next consider the district court's summary judgment in
favor of Panavision on its trademark dilution claims.

B. Trademark Dilution Claims

The Federal Trademark Dilution Act provides:

       The owner of a famous mark shall be entitled . . . to
       an injunction against another person's commercial
       use in commerce of a mark or trade name, if such
       use begins after the mark has become famous and
       causes dilution of the distinctive quality of the mark
       . . . .

15 U.S.C. S 1125(c).

The California Anti-dilution statute is similar. See Cal. Bus.
& Prof. Code S 14330. It prohibits dilution of "the distinctive
quality" of a mark regardless of competition or the likelihood
of confusion. The protection extends only to strong and well
recognized marks. Panavision's state law dilution claim is
subject to the same analysis as its federal claim.

[24] In order to prove a violation of the Federal Trademark
Dilution Act, a plaintiff must show that (1) the mark is
famous; (2) the defendant is making a commercial use of the
mark in commerce; (3) the defendant's use began after the
mark became famous; and (4) the defendant's use of the mark
dilutes the quality of the mark by diminishing the capacity of
the mark to identify and distinguish goods and services. 15
U.S.C. S 1125(c).

Toeppen does not challenge the district court's determina-
tion that Panavision's trademark is famous, that his alleged
use began after the mark became famous, or that the use was
in commerce. Toeppen challenges the district court's determi-
nation that he made "commercial use" of the mark and that
this use caused "dilution" in the quality of the mark.

1. Commercial Use

[25] Toeppen argues that his use of Panavision's trade-
marks simply as his domain names cannot constitute a com-
mercial use under the Act. Case law supports this argument.
See Panavision International, L.P. v. Toeppen, 945 F. Supp.
1296, 1303 (C.D. Cal. 1996) ("Registration of a trade[mark]
as a domain name, without more, is not a commercial use of
the trademark and therefore is not within the prohibitions of
the Act."); Academy of Motion Picture Arts & Sciences v.
Network Solutions, Inc., _______ F. Supp. _______, 1997 WL 810472
(C.D. Cal. Dec. 22, 1997) (the mere registration of a domain
name does not constitute a commercial use); Lockheed Martin
Corp. v. Network Solutions, Inc., 985 F. Supp. 949 (C.D. Cal.
1997) (NSI's acceptance of a domain name for registration is
not a commercial use within the meaning of the Trademark
Dilution Act).

Developing this argument, Toeppen contends that a domain
name is simply an address used to locate a web page. He
asserts that entering a domain name on a computer allows a
user to access a web page, but a domain name is not associ-
ated with information on a web page. If a user were to type
<Panavision.com> as a domain name, the computer screen
would display Toeppen's web page with aerial views of Pana,
Illinois. The screen would not provide any information about
"Panavision," other than a "location window " which displays
the domain name. Toeppen argues that a user who types in
<Panavision.com>, but who sees no reference to the plaintiff
Panavision on Toeppen's web page, is not likely to conclude
the web page is related in any way to the plaintiff, Panavision.

[26] Toeppen's argument misstates his use of the Panavi-
sion mark. His use is not as benign as he suggests. Toeppen's
"business" is to register trademarks as domain names and then
sell them to the rightful trademark owners. He "act[s] as a
`spoiler,' preventing Panavision and others from doing busi-
ness on the Internet under their trademarked names unless
they pay his fee." Panavision, 938 F. Supp. at 621. This is a
commercial use. See Intermatic Inc. v. Toeppen, 947 F. Supp.
1227, 1230 (N.D. Ill. 1996) (stating that "[o]ne of Toeppen's
business objectives is to profit by the resale or licensing of
these domain names, presumably to the entities who conduct
business under these names.").

[27] As the district court found, Toeppen traded on the
value of Panavision's marks. So long as he held the Internet
registrations, he curtailed Panavision's exploitation of the
value of its trademarks on the Internet, a value which Toep-
pen then used when he attempted to sell the
<Panavision.com> domain name to Panavision.

In a nearly identical case involving Toeppen and Intermatic
Inc., a federal district court in Illinois held that Toeppen's
conduct violated the Federal Trademark Dilution Act.
Intermatic, 947 F. Supp. at 1241. There, Intermatic sued
Toeppen for registering its trademark on the Internet as Toep-
pen's domain name, <intermatic.com>. It was "conceded that
one of Toeppen's intended uses for registering the Intermatic
mark was to eventually sell it back to Intermatic or to some
other party." Id. at 1239. The court found that "Toeppen's
intention to arbitrage the `intermatic.com' domain name cons-
titute[d] a commercial use." Id. See also Teletech Customer
Care Management, Inc. v. Tele-Tech Co., 977 F. Supp. 1407
(C.D. Cal. 1997) (granting a preliminary injunction under the
Trademark Dilution Act for use of a trademark as a domain
name).

Toeppen's reliance on Holiday Inns, Inc. v. 800 Reserva-
tion, Inc., 86 F.3d 619 (6th Cir. 1996), cert. denied, 117 S. Ct.
770 (1997) is misplaced. In Holiday Inns, the Sixth Circuit
held that a company's use of the most commonly misdialed
number for Holiday Inns' 1-800 reservation number was not
trademark infringement.

Holiday Inns is distinguishable. There, the defendant did
not use Holiday Inns' trademark. Rather, the defendant
selected the most commonly misdialed telephone number for
Holiday Inns and attempted to capitalize on consumer confu-
sion.

A telephone number, moreover, is distinguishable from a
domain name because a domain name is associated with a
word or phrase. A domain name is similar to a "vanity
number" that identifies its source. Using Holiday Inns as an
example, when a customer dials the vanity number "1-800-
Holiday," she expects to contact Holiday Inns because the
number is associated with that company's trademark. A user
would have the same expectation typing the domain name
<HolidayInns.com>. The user would expect to retrieve Holi-
day Inns' web page.4

[28] Toeppen made a commercial use of Panavision's
trademarks. It does not matter that he did not attach the marks
to a product. Toeppen's commercial use was his attempt to
corporation." Id. at 95.

sell the trademarks themselves.5 Under the Federal Trademark
Dilution Act and the California Anti-dilution statute, this was
sufficient commercial use.

2. Dilution

[29] "Dilution" is defined as "the lessening of the capacity
of a famous mark to identify and distinguish goods or ser-
vices, regardless of the presence or absence of (1) competition
between the owner of the famous mark and other parties, or
(2) likelihood of confusion, mistake or deception. " 15 U.S.C.
S 1127.6

Trademark dilution on the Internet was a matter of Con-
gressional concern. Senator Patrick Leahy (D-Vt.) stated:

       [I]t is my hope that this anti-dilution statute can help
       stem the use of deceptive Internet addresses taken by
       those who are choosing marks that are associated
       with the products and reputations of others.

141 Cong. Rec. S 19312-01 (daily ed. Dec. 29, 1995) (state-
ment of Sen. Leahy). See also Teletech Customer Care Man-
with this case stems from the fact that a reproduction of the trademark
itself is being sold, unattached to any other goods or services." Id. at 1010.
The court concluded that trademark law should protect the trademark
itself. "Although our decision here may slightly tilt the trademark laws
from the purpose of protecting the public to the protection of the business
interests of plaintiffs, we think that the two become . . . intermeshed . . . ."
Id. at 1011. "Whereas traditional trademark law sought primarily to pro-
tect consumers, dilution laws place more emphasis on protecting the
investment of the trademark owners." Panavision, 945 F. Supp. at 1301.
6 The Lanham Act, 15 U.S.C. S 1127, provides definitions for the Trade-
mark Dilution Act, 15 U.S.C. S 1125(c).

agement, Inc. v. Tele-Tech Co., Inc., 977 F. Supp. 1407, 1413
(C.D. Cal. 1997).

To find dilution, a court need not rely on the traditional def-
initions such as "blurring" and "tarnishment."7 Indeed, in con-
cluding that Toeppen's use of Panavision's trademarks diluted
the marks, the district court noted that Toeppen's conduct var-
ied from the two standard dilution theories of blurring and tar-
nishment. Panavision, 945 F. Supp. at 1304. The court found
that Toeppen's conduct diminished "the capacity of the
Panavision marks to identify and distinguish Panavision's
goods and services on the Internet." Id. See also Intermatic,
947 F. Supp. at 1240 (Toeppen's registration of the domain
name, "lessens the capacity of Intermatic to identify and dis-
tinguish its goods and services by means of the Internet.").

This view is also supported by Teletech. There, TeleTech
Customer Care Management Inc., ("TCCM"), sought a pre-
liminary injunction against Tele-Tech Company for use of
TCCM's registered service mark, "TeleTech," as an Internet
domain name. Teletech, 977 F. Supp. at 1410. The district
court issued an injunction, finding that TCCM had demon-
strated a likelihood of success on the merits on its trademark
dilution claim. Id. at 1412. The court found that TCCM had
invested great resources in promoting its servicemark and
Teletech's registration of the domain name <teletech.com> on
the Internet would most likely dilute TCCM's mark. Id. at
1413.

Toeppen argues he is not diluting the capacity of the
Panavision marks to identify goods or services. He contends
that even though Panavision cannot use <Panavision.com>
and <Panaflex.com> as its domain name addresses, it can still
promote its goods and services on the Internet simply by
using some other "address" and then creating its own web
page using its trademarks.

[30] We reject Toeppen's premise that a domain name is
nothing more than an address. A significant purpose of a
domain name is to identify the entity that owns the web site.8
"A customer who is unsure about a company's domain name
will often guess that the domain name is also the company's
name." Cardservice Int'l v. McGee, 950 F. Supp. 737, 741
(E.D. Va. 1997). "[A] domain name mirroring a corporate
name may be a valuable corporate asset, as it facilitates com-
munication with a customer base." MTV Networks, Inc. v.
Curry, 867 F. Supp. 202, 203-204 n.2 (S.D.N.Y. 1994).

[31] Using a company's name or trademark as a domain
name is also the easiest way to locate that company's web
site. Use of a "search engine" can turn up hundreds of web
sites, and there is nothing equivalent to a phone book or direc-
tory assistance for the Internet. See Cardservice, 950 F. Supp.
at 741.

[32] Moreover, potential customers of Panavision will be
discouraged if they cannot find its web page by typing in
"<Panavision.com," but instead are forced to wade through
hundreds of web sites. This dilutes the value of Panavision's
trademark. We echo the words of Judge Lechner, quoting
Judge Wood: "Prospective users of plaintiff's services who
mistakenly access defendant's web site may fail to continue
to search for plaintiff's own home page, due to anger, frustra-
tion or the belief that plaintiff's home page does not exist."
Jews for Jesus v. Brodsky, _______F. Supp. _______, No. CIV A.
98-274 (AJL), 1998 WL 111676 (D.N.J., Mar. 6, 1998) at *22
(Lechner, J., quoting Wood, J. in Planned Parenthood, 1997
WL 133313 at *4); see also Teletech, 977 F. Supp. at 1410
(finding that use of a search engine can generate as many as
800 to 1000 matches and it is "likely to deter web browsers
from searching for Plaintiff's particular web site").

[33] Toeppen's use of <Panavision.com> also puts Panavi-
sion's name and reputation at his mercy. See Intermatic, 947
F. Supp. at 1240 ("If Toeppen were allowed to use`interma-
tic.com,' Intermatic's name and reputation would be at Toep-
pen's mercy and could be associated with an unimaginable
amount of messages on Toeppen's web page.").

[34] We conclude that Toeppen's registration of Panavi-
sion's trademarks as his domain names on the Internet diluted
those marks within the meaning of the Federal Trademark
Dilution Act, 15 U.S.C. S 1125(c), and the California Anti-
dilution statute, Cal.Bus. & Prof. Code S 14330.

III

CONCLUSION

Toeppen engaged in a scheme to register Panavision's
trademarks as his domain names on the Internet and then to
extort money from Panavision by trading on the value of
those names. Toeppen's actions were aimed at Panavision in
California and the brunt of the harm was felt in California.
The district court properly exercised personal jurisdiction
over Toeppen.

We also affirm the district court's summary judgment in
favor of Panavision under the Federal Trademark Dilution
Act, 15 U.S.C. S 1125(c), and the California Anti-dilution
statute, Cal.Bus. & Prof. Code S 14330. Toeppen made com-
mercial use of Panavision's trademarks and his conduct
diluted those marks.

AFFIRMED. the end

_______________________________________________________________

FOOTNOTES

1 We use the arrow keys (< >) to set out a domain name or a web site.
These arrows are not part of the name or the site.
2 In a subset of this argument, Toeppen contends that a large organiza-
tion such as Panavision does not suffer injury in one location. See Cyber-
sell, 130 F.3d at 420 (A corporation "does not suffer harm in a particular
geographic location in the same sense that an individual does.") However,
in Core-Vent, we stated that Calder v. Jones, 
465 U.S. 783
 (1984), does
not preclude a determination that a corporation suffers the brunt of harm
in its principal place of business. Core-Vent, 11 F.3d at 1487. Panavision
was previously a limited partnership and is now a corporation. Under
either form of business organization, however, the brunt of the harm suf-
fered by Panavision was in the state where it maintained its principal place
of business, California.
3 We discuss the nature of Panavision's injury in following Part B.
4 See Carl Oppedahl, Analysis and Suggestions Regarding NSI Domain
Name Trademark Dispute Policy, 7 Fordham Intell. Prop. Media & Ent.

5 See Boston Pro. Hockey Assoc., Inc. v. Dallas Cap & Emblem Mfg.,
Inc., 510 F.2d 1004 (1975), which involved the sale of National Hockey

7 Blurring occurs when a defendant uses a plaintiff's trademark to iden-
tify the defendant's goods or services, creating the possibility that the
mark will lose its ability to serve as a unique identifier of the plaintiff's
product. Ringling Bros.-Barnum & Bailey, Combined Shows, Inc. v. B.E.
Windows, Corp., 937 F. Supp. 204, 209 (S.D.N.Y. 1996) (citing Deere &
Co. v. MTD Prods., Inc., 41 F.3d 39, 43 (2d. Cir. 1994)); Thomas McCar-
thy, McCarthy on Trademarks and Unfair Competition, S 24:68 at 24-111
(4th ed. 1997); see also Ringling Bros.-Barnum & Bailey Combined
Shows, Inc. v. Utah Div. of Travel Development, 955 F. Supp. 605, 614-
15 (E.D. Va. 1997) (discussing the inadequacies of current definitions of
blurring and determining that blurring requires consumers to mistakenly
associate a defendant's mark with a plaintiff's famous trademark).

Tarnishment occurs when a famous mark is improperly associated with
an inferior or offensive product or service. McCarthy, S 24:104 at 24-172
to 173; Ringling Bros., 937 F. Supp. at 209 (citing Hormel Foods Corp.
v. Jim Henson Prods., Inc., 73 F.3d 497, 506 (2d. Cir. 1996)).
8 This point was made in a recent legal periodical:

        The domain name serves a dual purpose. It marks the location
       of the site within cyberspace, much like a postal address in the
       real world, but it may also indicate to users some information as
       to the content of the site, and, in instances of well-known trade
       names or trademarks, may provide information as to the origin of
       the contents of the site.

Peter Brown, New Issues in Internet Litigation, 17th Annual Institute on
Computer Law: The Evolving Law of the Internet-Commerce, Free
Speech, Security, Obscenity and Entertainment, 471 Prac. L. Inst. 151
(1997).