Case Name: PALANTIR TECHNOLOGIES INC, v. PALANTIR.NET, INC.
(2008 U.S. Dist. LEXIS 6448)
Court: UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
Facts of the case: Palantir.net is a corporation which engages in web design. The domain name "palantir.net" was acquired in 1997 and in 2006, the company was issued the federal service mark for the term “Palantirâ€. Palantir.net's clients include educational and cultural institutions, as well as financial and corporate clients and nonprofit and professional organizations. It also works on projects for Fortune 500 companies. In addition to web design, Palantir.net, which now has 11 full-time employees plus free lancers, offers complex database and multimedia software development services. In early 2007 one of Palantir.net's employees viewed a job advertisement posted by a company identifying itself as Palantir. The job was posted by PTI on the 37signals job board which describes itself as a place to find the "best and brightest web minds." PTI was created in 2004. Its website describes its two products, Palantir Government and Palantir Financial, as "revolutionizing information analysis and management, providing superior human-driven systems to explore and analyze the subtle connections that exist within vast networks of heterogeneous information." PTI admits that it "customizes" its software products for clients, but denies that it is in the business of developing customized software for clients, as is Palantir.net. PTI describes Palantir.net's business as designing software that creates databases that are then filled or "populated" with the client's data, whereas PTI uses its existing software (slightly modified for each client) to access data from diverse sources and assist the user in drawing connections between that data.
Procedural Posture: Soon after Palantir.net learned of PTI it sent a cease and desist letter. The parties engaged in talks, but in July 2007 PTI filed this declaratory judgment action seeking a ruling that it does not infringe Palantir.net's trademark. PTI sought to transfer this case to Illinois, but the Court denied the motion. Palantir.net filed counterclaims for trademark infringement and shortly thereafter filed this motion for a preliminary injunction.
Holding: The Lanham Act provides national protection of trademarks in order to secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers. The test for trademark infringement is the likelihood of confusion. Here, the parties' only dispute is whether PTI's use of "palantir" is "likely to cause confusion" as to its products' and services' "origin, sponsorship, or approval." The standard test for likelihood of confusion is whether a reasonably prudent consumer is likely to be confused as to the origin of the good or service bearing one of the marks. In determining the likelihood of confusion, the court weight eight factors:
1. Strength of the Mark – favors Plaintiff; The scope of the trademark protection that the law gives marks depends upon the strength of the mark, with stronger marks receiving greater protection than weak ones. A mark which is hemmed in on all sides by similar marks on similar goods cannot be very 'distinctive'. It is merely one of a crowd of marks. In such a crowd, customers will not likely be confused between any two of the crowd and may have learned to carefully pick out one from the other. The "palantir" mark is not part of a crowded field. PTI offers no evidence that other palantir marks or similar marks are in use in the market. Therefore, the "palantir" mark is entitled to strong trademark protection which favors Palantir.net.
2. Similarity of the marks – favors Plaintiff; Obviously, the greater the similarity between the two marks at issue, the greater the likelihood of confusion. The marks are identical. They sound the same and have the same meaning.
3. The proximity or relatedness of the goods or services – favors Plaintiff; Related goods are generally more likely than unrelated goods to confuse the public as to the producer of the goods. Here, both companies offer products and services relating to the computer software industry generally, and their lines of business include database analysis and management specifically. Their lines of business are not identical, but are certainly related. PTI's emphasis on the fact that it primarily sells a productPalantir Government and Palantir Financialwhereas Palantir.net sells a servicecustomized software applicationsis a distinction without much significance. Both companies offer clients the ability to manage and analyze data through software.
4. Marketing channels used – favors Plaintiff; PTI also argues that confusion is unlikely because neither it nor Palantir.net market on the Internet or through any similar channel. Instead, PTI uses salespersons who make pitches in person and Palantir.net relies on word of mouth. Both companies, however, have websites and use their websites to describe their services and as a way for interested customers to contact them. It is easy to imagine how confusion might occur. If PTI had no presence on the Internet, its case would be stronger. But not only does it have an Internet presence, it has put resources into building that presence such that it is now the first site that is listed when one Google's "palantir." PTI also maintains a Palantir Technology blog.
5. Nature of goods and degree of care – favors Plaintiff; The more expensive the product or service, and the more sophisticated the consumer, the less likely there is to be confusion. Here, it is unlikely consumers would ultimately purchase PTI's product on the mistaken belief that it was being provided services by Palantir.net. But the consumer might be confused when he initially investigates Palantir.net's services and mistakenly believes that PTI's website is the company the consumer intended to investigate.
6. Intent – neutral; When an alleged infringer knowingly adopts a mark similar to another's, courts will presume an intent to deceive the public. The evidence here suggests that PTI negligently failed to conduct a trademark review before it began using the palantir mark and apparently did not even perform an Internet search, since such a search would have identified Palantir.net. But the evidence does not demonstrate that PTI was aware of Palantir.net.
7. Evidence of actual confusion – neutral; Palantir.net has not produced any evidence of consumer actual confusion. However, because evidence of actual confusion can be difficult to obtain, its absence is 'generally unnoteworthy' and is given little probative weight.
8. Likelihood of expansion of product lines – neutral; In light of the relatedness of the services presently offered by the parties, this factor does not bear on the Court's analysis.
Conclusion: Palantir.net has easily proven the existence of serious questions going to the merits; indeed, the Court finds that it has also demonstrated a probable success on the merits given (1) the virtual identity of the marks, (2) the strength of the mark, (3) the relatedness of the goods, and (4) both parties' use of the Internet. The balance of hardships also tips sharply in Palantir.net's favor given its long-time use of the mark, the importance of the mark to word-of-mouth referrals, and PTI's recklessness in adopting the mark for its young business without first searching for any similar trademarks. Palantir.net's motion for a preliminary injunction was therefore GRANTED.
(2008 U.S. Dist. LEXIS 6448)
Court: UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
Facts of the case: Palantir.net is a corporation which engages in web design. The domain name "palantir.net" was acquired in 1997 and in 2006, the company was issued the federal service mark for the term “Palantirâ€. Palantir.net's clients include educational and cultural institutions, as well as financial and corporate clients and nonprofit and professional organizations. It also works on projects for Fortune 500 companies. In addition to web design, Palantir.net, which now has 11 full-time employees plus free lancers, offers complex database and multimedia software development services. In early 2007 one of Palantir.net's employees viewed a job advertisement posted by a company identifying itself as Palantir. The job was posted by PTI on the 37signals job board which describes itself as a place to find the "best and brightest web minds." PTI was created in 2004. Its website describes its two products, Palantir Government and Palantir Financial, as "revolutionizing information analysis and management, providing superior human-driven systems to explore and analyze the subtle connections that exist within vast networks of heterogeneous information." PTI admits that it "customizes" its software products for clients, but denies that it is in the business of developing customized software for clients, as is Palantir.net. PTI describes Palantir.net's business as designing software that creates databases that are then filled or "populated" with the client's data, whereas PTI uses its existing software (slightly modified for each client) to access data from diverse sources and assist the user in drawing connections between that data.
Procedural Posture: Soon after Palantir.net learned of PTI it sent a cease and desist letter. The parties engaged in talks, but in July 2007 PTI filed this declaratory judgment action seeking a ruling that it does not infringe Palantir.net's trademark. PTI sought to transfer this case to Illinois, but the Court denied the motion. Palantir.net filed counterclaims for trademark infringement and shortly thereafter filed this motion for a preliminary injunction.
Holding: The Lanham Act provides national protection of trademarks in order to secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers. The test for trademark infringement is the likelihood of confusion. Here, the parties' only dispute is whether PTI's use of "palantir" is "likely to cause confusion" as to its products' and services' "origin, sponsorship, or approval." The standard test for likelihood of confusion is whether a reasonably prudent consumer is likely to be confused as to the origin of the good or service bearing one of the marks. In determining the likelihood of confusion, the court weight eight factors:
1. Strength of the Mark – favors Plaintiff; The scope of the trademark protection that the law gives marks depends upon the strength of the mark, with stronger marks receiving greater protection than weak ones. A mark which is hemmed in on all sides by similar marks on similar goods cannot be very 'distinctive'. It is merely one of a crowd of marks. In such a crowd, customers will not likely be confused between any two of the crowd and may have learned to carefully pick out one from the other. The "palantir" mark is not part of a crowded field. PTI offers no evidence that other palantir marks or similar marks are in use in the market. Therefore, the "palantir" mark is entitled to strong trademark protection which favors Palantir.net.
2. Similarity of the marks – favors Plaintiff; Obviously, the greater the similarity between the two marks at issue, the greater the likelihood of confusion. The marks are identical. They sound the same and have the same meaning.
3. The proximity or relatedness of the goods or services – favors Plaintiff; Related goods are generally more likely than unrelated goods to confuse the public as to the producer of the goods. Here, both companies offer products and services relating to the computer software industry generally, and their lines of business include database analysis and management specifically. Their lines of business are not identical, but are certainly related. PTI's emphasis on the fact that it primarily sells a product
4. Marketing channels used – favors Plaintiff; PTI also argues that confusion is unlikely because neither it nor Palantir.net market on the Internet or through any similar channel. Instead, PTI uses salespersons who make pitches in person and Palantir.net relies on word of mouth. Both companies, however, have websites and use their websites to describe their services and as a way for interested customers to contact them. It is easy to imagine how confusion might occur. If PTI had no presence on the Internet, its case would be stronger. But not only does it have an Internet presence, it has put resources into building that presence such that it is now the first site that is listed when one Google's "palantir." PTI also maintains a Palantir Technology blog.
5. Nature of goods and degree of care – favors Plaintiff; The more expensive the product or service, and the more sophisticated the consumer, the less likely there is to be confusion. Here, it is unlikely consumers would ultimately purchase PTI's product on the mistaken belief that it was being provided services by Palantir.net. But the consumer might be confused when he initially investigates Palantir.net's services and mistakenly believes that PTI's website is the company the consumer intended to investigate.
6. Intent – neutral; When an alleged infringer knowingly adopts a mark similar to another's, courts will presume an intent to deceive the public. The evidence here suggests that PTI negligently failed to conduct a trademark review before it began using the palantir mark and apparently did not even perform an Internet search, since such a search would have identified Palantir.net. But the evidence does not demonstrate that PTI was aware of Palantir.net.
7. Evidence of actual confusion – neutral; Palantir.net has not produced any evidence of consumer actual confusion. However, because evidence of actual confusion can be difficult to obtain, its absence is 'generally unnoteworthy' and is given little probative weight.
8. Likelihood of expansion of product lines – neutral; In light of the relatedness of the services presently offered by the parties, this factor does not bear on the Court's analysis.
Conclusion: Palantir.net has easily proven the existence of serious questions going to the merits; indeed, the Court finds that it has also demonstrated a probable success on the merits given (1) the virtual identity of the marks, (2) the strength of the mark, (3) the relatedness of the goods, and (4) both parties' use of the Internet. The balance of hardships also tips sharply in Palantir.net's favor given its long-time use of the mark, the importance of the mark to word-of-mouth referrals, and PTI's recklessness in adopting the mark for its young business without first searching for any similar trademarks. Palantir.net's motion for a preliminary injunction was therefore GRANTED.