## Facts

- Panavision International, L.P., headquartered in California, owned federally registered “Panavision” and “Panaflex” trademarks for motion picture camera equipment.
- Network Solutions, Inc. registered “.com” domain names on a first-come, first-served basis without adjudicating trademark rights.
- Dennis Toeppen, an Illinois resident, registered “panavision.com” and “panaflex.com.”
- The “panavision.com” site displayed a map of Pana, Illinois, and Toeppen claimed the site was noncommercial.
- Toeppen had a broader practice of registering domain names corresponding to well-known marks and seeking payment from mark owners.
- After Panavision discovered Toeppen’s registrations, Toeppen demanded $13,000 to release the domain names.
- Panavision alleged it was blocked from using its marks as domain names and that its Internet identity and goodwill were harmed in California.

## Issues

1. Whether California could exercise specific personal jurisdiction over an out-of-state defendant whose domain-name conduct occurred from another state but was directed at a California trademark owner.
2. Whether registering and holding “panavision.com” and “panaflex.com” to extract payment from the trademark owner constituted “commercial use” in commerce under the Federal Trademark Dilution Act (FTDA).
3. Whether the conduct diluted Panavision’s famous marks under the FTDA and California’s anti-dilution statute.

## Decision

- The Ninth Circuit affirmed summary judgment for Panavision.
- California’s exercise of specific personal jurisdiction over Toeppen satisfied due process under the effects doctrine because his conduct was intentionally directed at a California company and caused injury in California.
- Toeppen’s conduct constituted “commercial use” under the FTDA because he used the trademarks as leverage in an attempted sale to Panavision.
- The registrations and attempted sale diluted Panavision’s famous marks under both the FTDA and California law by impairing Panavision’s ability to use the marks as domain names and weakening their source-identifying function on the Internet.

## Legal Principles

- Specific personal jurisdiction may be based on intentional acts expressly aimed at the forum that cause harm the defendant knows is likely to be suffered there (effects doctrine).
- Internet-based conduct can support purposeful direction when the defendant targets a forum resident for economic gain, even if the technical acts (such as registration) occur elsewhere.
- “Commercial use” for federal dilution can include using another’s famous mark as a bargaining chip to obtain money, even where the associated webpage content is not itself commercial advertising.
- Dilution under federal and California law can be found without proof of confusion, competition, or actual economic injury when the use lessens a famous mark’s capacity to identify and distinguish the owner’s goods or services, including by preventing the owner from using the mark as a domain name.

## Conclusion

The Ninth Circuit held that a domain-name registrant who targets a California trademark owner by registering the owner’s famous marks as domain names and demanding payment is subject to personal jurisdiction in California and liable for dilution because the scheme is commercial use that diminishes the marks’ source-identifying value online.


Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998)