Webloyalty. Com, Inc. v. Consumer Innovations, LLC

388 F. Supp. 2d 435, 76 U.S.P.Q. 2d (BNA) 1192, 2005 U.S. Dist. LEXIS 21049, 2005 WL 2347166
CourtDistrict Court, D. Delaware
DecidedSeptember 26, 2005
DocketCIV.A. 04-90-KAJ
StatusPublished
Cited by7 cases

This text of 388 F. Supp. 2d 435 (Webloyalty. Com, Inc. v. Consumer Innovations, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Webloyalty. Com, Inc. v. Consumer Innovations, LLC, 388 F. Supp. 2d 435, 76 U.S.P.Q. 2d (BNA) 1192, 2005 U.S. Dist. LEXIS 21049, 2005 WL 2347166 (D. Del. 2005).

Opinion

POST-TRIAL FINDINGS OF FACT AND CONCLUSIONS OF LAW

JORDAN, District Judge.

I. INTRODUCTION

Webloyalty.com, Inc. (“Webloyalty”) brought this action against Consumer Innovations, LLC (“Cl”), alleging that Cl willfully infringed Webloyalty’s copyrights, U.S. Copyright Registration Nos. TX 5842219 and TX 5875671, and that Cl’s use in commerce of Webloyalty’s materials caused confusion such that Cl’s activities constituted unfair competition and a false designation of origin in violation of the Lanham Act, 15 U.S.C. § 1125(a). Web-loyalty is asking for statutory damages for copyright infringement, actual damages under the Lanham Act, injunctive relief, and attorneys’ fees and costs. This matter was tried before me on February 22, 2005. The following are my post-trial findings of fact and conclusions of law, issued pursuant to Federal Rule of Civil Procedure 52(a).

II. FINDINGS OF FACT 1

1. Webloyalty is a Delaware corporation with its principal place of business in Norwalk, Connecticut. Webloyalty is a provider of membership discount programs. (Trial Transcript [“Tr.”] at 37-38.)

2. Cl is a limited liability company organized under the laws of Arizona with its principal place of business in Phoenix, Arizona. Cl is also a provider of membership discount programs. (Tr. at 88.)

3. Webloyalty is the owner of U.S. Copyright Registration No. TX 5842219, registered on November 20, 2003, for material "titled “Reservation Rewards ‘COF’ — Coupon” that was first published on Sep *439 tember 15, 2003. (Plaintiffs Trial Exhibit [“PTX”] 1.) The material protected by this copyright is referred to herein as the “Webloyalty Sell Page” or “Sell Page.” (Tr. at 73-74.)

4. Webloyalty is the owner of U.S. Copyright Registration No. TX 5875671, registered on February 17, 2004, for material titled “Special Offer Banner” that was first published on December 9, 2003. (PTX 67.) The material protected by this copyright is referred to herein as the “Webloyalty Banner” or “Banner.” (Tr. at 91.)

5. On November 24, 2003, Webloyalty began using its Sell Page with the sales confirmation web page of a company called Walter Drake that sells products online. (Tr. at 89.) The Webloyalty Sell Page displayed a copyright symbol. (PAX 2; Tr. at 123-24.) On December 9, 2003, Webloyalty began using its Banner with the Walter Drake confirmation page. (Tr. at 92.) Webloyalty used its Sell Page and Banner to market its Reservation Rewards program in the following way: Webloyalty displayed its Banner on Walter Drake’s sales confirmation page so that the Banner is visible to consumers after they make a purchase from Walter Drake. The Banner reads in part, “Click here to claim your Special Offer,” and, if consumers click the Banner, they are directed to the Webloyalty Sell Page and are able to sign up for Webloyalty’s program. (Tr. at 45-46, 79-80.)

6. In late 2003, Cl was approached by a company called List Services that informed Cl about a potential marketing opportunity with Walter Drake. (Tr. at 125.) Walter Drake would give Cl the opportunity to connect its own sell page to the Walter Drake confirmation page, setting up a head-to-head test between the sell pages of Cl and Webloyalty. (Tr. at 48, 125.)

7. Matthew Gordon, Director of Interactive Marketing at Cl (Tr. at 151), testified that he created a Cl sell page for use with the Walter Drake confirmation page in December 2003 and January 2004. (Tr. at 126).

8. On December 16, 2003, Gordon made an online purchase from Walter Drake, clicked on the Webloyalty Banner, examined the Webloyalty Sell Page, and joined Webloyalty’s Reservation Rewards program. (Tr. at 53, 122-23; PTX 36.)

9. On December 17, 2003, Gordon sent an e-mail to Hungry Mind, a company that designs internet sites, attaching a first draft of text for a Cl Sell Page. (Tr. at 130; PTX 43.) This draft was nearly identical to Webloyalty’s Sell Page, except for seven paragraphs which described the particular terms of the Cl Traveler Innovations reward program (which differed from the terms of Webloyalty’s program). (Tr. at 121-22; PTX 43A). Within this identical language, the Cl draft sell page actually included Webloyalty’s customer service telephone number in the following sentence: “If, at any time, you are not completely satisfied during your trial [membership in the program] or thereafter simply call Traveler Innovations toll free at 1-888-688-5995 to let us know you wish to cancel ....” (Tr. at 133; PTX 43A.)

10. Before connecting its sell page to the Walter Drake site on January 15, 2004, Cl generated additional drafts. In one intermediate draft of January 13, 2004, the language on Cl’s sell page contained slight differences from the Webloyalty Sell Page. (PTX 44.) But the final version that was connected to the Walter Drake site on January 15 (PTX 3) was revised in a manner that made the text in certain portions virtually identical to the Webloyalty Sell Page (PTX 2). (Tr. at 139-45.) The final Cl Sell Page was connected with the Walter Drake site for approximately one *440 month — from January 15 to February 16, 2004. (Tr. at 208.)

11. To connect Walter Drake customers to the Cl Sell Page, Cl used a banner (PTX 7) that is identical to the Webloyalty Banner except that “Reservation Rewards” was replaced by “Traveler Innovations.”

12. Gordon and Jason Edwards (Cl’s President) testified that, as of December 2003, they knew that copying was wrong. (Tr. at 122, 124, 176-78.) Gordon understood the meaning of the copyright symbol. (Tr. at 122-24.)

III. CONCLUSIONS OF LAW

1. The Court has jurisdiction over the subject matter of this action under 28 U.S.C. § 1338(a); jurisdiction over the parties and venue for this action are uncontested.

A. Copyright Infringement

2. In an action for copyright infringement under 17 U.S.C. § 501, the plaintiff must show by a preponderance of the evidence that its copyright registrations are valid and that the defendant copied the registered works. Dam Things from Denmark v. Russ Berrie & Co., 290 F.3d 548, 561 (3d Cir.2002). Copying is proven by showing that the defendant had access to the protected work and that there is a substantial similarity between the two works. Id. The test for substantial similarity is subdivided into two considerations. Id. at 562. The first consideration, actual copying, is established by showing the defendant’s access to the copyrighted work coupled with “probative” similarity between the two works. Id.

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388 F. Supp. 2d 435, 76 U.S.P.Q. 2d (BNA) 1192, 2005 U.S. Dist. LEXIS 21049, 2005 WL 2347166, Counsel Stack Legal Research, https://law.counselstack.com/opinion/webloyalty-com-inc-v-consumer-innovations-llc-ded-2005.