Appeal from the United States District Courtfor the Central District of CaliforniaDean D. Pregerson, District Judge, PresidingArgued and SubmittedMarch 3, 1998--Pasadena, CaliforniaFiled April 17, 1998Before: Melvin Brunetti, David R. Thompson andThomas 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.OPINIONTHOMPSON, Circuit Judge:This case presents two novel issues. We are asked to applyexisting rules of personal jurisdiction to conduct thatoccurred, in part, in "cyberspace." In addition, we are askedto interpret the Federal Trademark Dilution Act as it appliesto the Internet.Panavision accuses Dennis Toeppen of being a "cyberpirate" who steals valuable trademarks and establishesdomain names on the Internet using these trademarks to sellthe 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 of1995, 15 U.S.C. S 1125(c), and the California Anti-dilutionstatute, 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 inexercising personal jurisdiction over him because any contacthe had with California was insignificant, emanating solelyfrom his registration of domain names on the Internet, whichhe did in Illinois. Toeppen further argues that the district courterred in granting summary judgment because his use ofPanavision's trademarks on the Internet was not a commercialuse and did not dilute those marks.We have jurisdiction under 28 U.S.C. S 1291 and weaffirm. The district court's exercise of jurisdiction was properand comported with the requirements of due process. Toeppendid considerably more than simply register Panavision'strademarks as his domain names on the Internet. He registeredthose names as part of a scheme to obtain money fromPanavision. Pursuant to that scheme, he demanded $13,000from Panavision to release the domain names to it. His actswere aimed at Panavision in California, and caused it to sufferinjury there.We also conclude Panavision was entitled to summaryjudgment under the federal and state dilution statutes. Toep-pen made commercial use of Panavision's trademarks and hisconduct diluted those marks.IBACKGROUNDThe Internet is a worldwide network of computers thatenables various individuals and organizations to share infor-mation. The Internet allows computer users to access millionsof web sites and web pages. A web page is a computer datafile 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 website 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 pagewith a web site domain name consisting of the companyname, Pepsi, and <.com>, the "top level" domain designation:<Pepsi.com>. 1The Internet is divided into several "top level " domains:<.edu> for education; <.org> for organizations; <.gov> forgovernment entities; <.net> for networks; and <.com> for"commercial" which functions as the catchall domain forInternet 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 determinationabout a registrant's right to use a domain name. However,NSI does require an applicant to represent and warrant as anexpress condition of registering a domain name that (1) theapplicant's statements are true and the applicant has the rightto use the requested domain name; (2) the "use or registrationof the domain name . . . does not interfere with or infringe therights of any third party in any jurisdiction with respect totrademark, service mark, trade name, company name or anyother intellectual property right"; and (3) the applicant is notseeking 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 usean Internet "search engine." To do this, the user types in a keyword search, and the search will locate all of the web sitescontaining the key word. Such key word searches can yieldhundreds of web sites. To make it easier to find their websites, individuals and companies prefer to have a recognizabledomain name.Panavision holds registered trademarks to the names"Panavision" and "Panaflex" in connection with motion pic-ture camera equipment. Panavision promotes its trademarksthrough motion picture and television credits and other mediaadvertising.In December 1995, Panavision attempted to register a website on the Internet with the domain name <Panavision.com>.It could not do that, however, because Toeppen had alreadyestablished a web site using Panavision's trademark as hisdomain name. Toeppen's web page for this site displayedphotographs of the City of Pana, Illinois.On December 20, 1995, Panavision's counsel sent a letterfrom California to Toeppen in Illinois informing him thatPanavision 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 Panavisionin 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 Panavisionwould pay him $13,000 in exchange for the domain name.Additionally, Toeppen stated that if Panavision agreed to hisoffer, he would not "acquire any other Internet addresseswhich are alleged by Panavision Corporation to be itsproperty."After Panavision refused Toeppen's demand, he registeredPanavision'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 othercompanies including Delta Airlines, Neiman Marcus, EddieBauer, Lufthansa, and over 100 other marks. Toeppen hasattempted to "sell" domain names for other trademarks suchas <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 DistrictCourt for the Central District of California. Panavisionalleged claims for dilution of its trademark under the FederalTrademark Dilution Act of 1995, 15 U.S.C. S 1125(c), andunder the California Anti-dilution statute, California Businessand Professions Code S 14330. Panavision alleged that Toep-pen was in the business of stealing trademarks, registeringthem as domain names on the Internet and then selling thedomain names to the rightful trademark owners. The districtcourt determined it had personal jurisdiction over Toeppen,and granted summary judgment in favor of Panavision onboth its federal and state dilution claims. This appeal fol-lowed.IIDISCUSSIONA. Personal JurisdictionA district court's determination that personal jurisdictioncan properly be exercised is a question of law reviewable denovo when the underlying facts are undisputed. Fireman'sFund Ins. Co. v. National Bank of Coops., 103 F.3d 888, 893(9th Cir. 1996). A district court's factual findings regardingjurisdiction 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 lawof California, the state in which the district court sits. Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1484 (9thCir. 1993). California's long-arm statute permits a court toexercise personal jurisdiction over a defendant to the extentpermitted by the Due Process Clause of the Constitution. Cal.Code Civ. P. S 410.10; Gordy v. Daily News, L.P., 95 F.3d829, 831 (9th Cir. 1996). The issue we address, therefore, iswhether the requirements of due process are satisfied by thedistrict court's exercise of personal jurisdiction over Toeppen.Core-Vent, 11 F.3d at 1484.[2] Personal jurisdiction may be founded on either generaljurisdiction 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 deColombia, S.A. v. Hall,
466 U.S. 408, 414
-16 (1984). The dis-trict court correctly concluded that it did not have generaljurisdiction over Toeppen. Toeppen is domiciled in Illinoisand 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 courtmay 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 AvailmentThe purposeful availment requirement ensures that a non-resident defendant will not be haled into court based upon"random, fortuitous or attenuated" contacts with the forumstate. Burger King Corp. v. Rudzewicz,
471 U.S. 462
, 475(1985). This requirement is satisfied if the defendant "hastaken deliberate action" toward the forum state. Ballard v.Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). It is not requiredthat a defendant be physically present or have physical con-tacts with the forum, so long as his efforts are "purposefullydirected" toward forum residents. Id. i. Application to the InternetApplying principles of personal jurisdiction to conduct incyberspace is relatively new. "With this global revolutionlooming on the horizon, the development of the law concern-ing the permissible scope of personal jurisdiction based onInternet use is in its infant stages. The cases are scant." ZippoMfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1123(W.D. Pa. 1997). We have, however, recently addressed thepersonal availment aspect of personal jurisdiction in a caseinvolving 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 nameCybersell. A Florida corporation, Cybersell, Inc. ("CybersellFL"), created a web site with the domain name<cybsell.com>. The web page had the word "Cybersell" at thetop 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 inArizona. 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 pageaccessible to anyone over the Internet. Id. at 419-420.In reaching this conclusion in Cybersell, we carefullyreviewed cases from other circuits regarding how personaljurisdiction should be exercised in cyberspace. We concludedthat no court had ever held that an Internet advertisementalone is sufficient to subject a party to jurisdiction in anotherstate. Id. at 418. In each case where personal jurisdiction wasexercised, there had been "something more" to "indicate thatthe defendant purposefully (albeit electronically) directed hisactivity in a substantial way to the forum state. " Id. CybersellFL had not done this, and the district court could not exercisepersonal jurisdiction over it.Personal jurisdiction was properly exercised, however, inCompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996).There, the Sixth Circuit held that a Texas resident who hadadvertised 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 hadtaken 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 headvertised 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 satisfiedby the "effects doctrine." That doctrine was not applicable inour Cybersell case. There, we said: "Likewise unpersuasive isCybersell AZ's reliance on Panavision International v. Toep-pen, 938 F. Supp. 616 (C.D. Cal. 1996), [the district court'spublished opinion in this case], where the court found the`purposeful availment' prong satisfied by the effects felt inCalifornia, the home state of Panavision, from Toeppen'salleged out-of-state scheme to register domain names usingthe trademarks of California companies, including Panavision,for the purpose of extorting fees from them. Again, there isnothing 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'sconduct is aimed at or has an effect in the forum state. Zieglerv. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995); seeCalder v. Jones,
465 U.S. 783
(1984) (establishing an "effectstest" for intentional action aimed at the forum state). UnderCalder, 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 thedefendant 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 isakin to a tort case. Panavision, 938 F. Supp. at 621; see alsoZiegler, 64 F.3d at 473 (application of the purposeful avail-ment prong differs depending on whether the underlyingclaim is a tort or contract claim). Toeppen purposefully regis-tered Panavision's trademarks as his domain names on theInternet to force Panavision to pay him money. Panavision,938 F. Supp. at 621. The brunt of the harm to Panavision wasfelt 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 ofbusiness was in California, and the heart of the theatricalmotion picture and television industry is located there. Id. at621-622.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.3d410 (7th Cir. 1994). There, the Indianapolis Colts brought atrademark infringement action in the district court in Indianaagainst the Canadian Football League's new team, the"Baltimore CFL Colts." Id. at 411. The Seventh Circuit heldthat the Baltimore CFL Colts team was subject to personaljurisdiction in Indiana even though its only activity directedtoward Indiana was the broadcast of its games on nationwidecable television. Id. Because the Indianapolis Colts used theirtrademarks in Indiana, any infringement of those marks wouldcreate an injury which would be felt mainly in Indiana, andthis, coupled with the defendant's "entry" into the state by thetelevision broadcasts, was sufficient for the exercise of per-sonal jurisdiction. Id. Toeppen argues he has not directed any activity towardPanavision in California, much less "entered" the state. Hecontends that all he did was register Panavision's trademarkson the Internet and post web sites using those marks; if thisactivity 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 Internetis not sufficient to subject a party domiciled in one state tojurisdiction in another. Cybersell, 130 F.3d at 418. As we saidin Cybersell, there must be "something more" to demonstratethat the defendant directed his activity toward the forum state.Id. Here, that has been shown. Toeppen engaged in a schemeto register Panavision's trademarks as his domain names forthe 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 ofbusiness and where the movie and television industry iscentered.3 Under the "effects test," the purposeful availmentrequirement necessary for specific, personal jurisdiction issatisfied. b. Defendant's Forum-Related ActivitiesThe second requirement for specific, personal jurisdictionis that the claim asserted in the litigation arises out of thedefendant's forum related activities. Ziegler, 64 F.3d at 474.We must determine if the plaintiff Panavision would not havebeen injured "but for" the defendant Toeppen's conductdirected toward Panavision in California. See Ballard, 65 F.3dat 1500.[9] This requirement is satisfied. Toeppen's registration ofPanavision's trademarks as his own domain names on theInternet had the effect of injuring Panavision in California.But for Toeppen's conduct, this injury would not haveoccurred. Panavision's claims arise out of Toeppen'sCalifornia-related activities. c. Reasonableness[10] Even if the first two requirements are met, in order tosatisfy the Due Process Clause, the exercise of personal juris-diction must be reasonable. Ziegler, 64 F.3d at 474-75. Forjurisdiction to be reasonable, it must comport with "fair playand 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 mustpresent a compelling case that the presence of some otherconsiderations 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 hisactivities at Panavision in California. This placed the burdenon him to "present a compelling case that the presence ofsome other considerations would render jurisdictionunreasonable." Id.[12] In addressing the question of reasonableness, we con-sider seven factors: (1) the extent of a defendant's purposefulinterjection; (2) the burden on the defendant in defending inthe forum; (3) the extent of conflict with the sovereignty ofthe defendant's state; (4) the forum state's interest in adjudi-cating the dispute; (5) the most efficient judicial resolution ofthe controversy; (6) the importance of the forum to the plain-tiff's interest in convenient and effective relief; and (7) theexistence of an alternative forum. Burger King, 471 U.S. at476-77. No one factor is dispositive; a court must balance allseven. Core-Vent, 11 F.3d at 1488.The district court found that Toeppen had not presented acompelling case that jurisdiction was unreasonable.Panavision, 938 F. Supp. at 622. We agree. The balance ofthe Burger King factors which we articulated in Core-Venttips in favor of the exercise of personal jurisdiction. i. Purposeful Interjection[13] "Even if there is sufficient`interjection' into the stateto 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 ofNorth 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 domainnames, knowing that this would likely injure Panavision inCalifornia. 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 weighsstrongly in favor of the district court's exercise of personaljurisdiction. ii. Defendant's Burden in Litigating[15] A defendant's burden in litigating in the forum is afactor in the assessment of reasonableness, but unless the"inconvenience is so great as to constitute a deprivation ofdue process, it will not overcome clear justifications for theexercise of jurisdiction." Caruth v. International Psychoana-lytical Ass'n, 59 F.3d 126, 128-29 (9th Cir. 1995) (citing Rothv. 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 thedistrict court stated, " `in this era of fax machines and dis-count air travel' requiring Toeppen to litigate in California isnot constitutionally unreasonable." Panavision, 938 F. Supp.at 622 (quoting Sher v. Johnson, 911 F.2d 1357, 1365 (9thCir. 1990)). iii. Sovereignty[17] This factor concerns the extent to which the districtcourt's exercise of jurisdiction in California would conflictwith the sovereignty of Illinois, Toeppen's state of domicile.Core-Vent, 11 F.3d at 1489. Such a conflict is not a concernin this case. The allegations in support of Panavision's statelaw claim and those in support of its federal claim under theTrademark 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 federalcourt in California does not implicate sovereignty concerns ofIllinois. iv. Forum State's Interest[18] "California maintains a strong interest in providing aneffective 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 andwitnesses. Caruth, 59 F.3d at 129. It is no longer weighedheavily given the modern advances in communication andtransportation. Id. In any event, due to the limited amount ofevidence 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 ofrelief 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 litigatein another forum, but the burden on Panavision is relativelyslight. This factor is essentially neutral, perhaps weighingslightly in Toeppen's favor. vii. Alternative Forum[21] Panavision has not demonstrated the unavailability ofan alternative forum. In this case, Illinois is an alternativeforum. As stated above, it may be more costly and inconve-nient for Panavision to litigate in Illinois, but this is not anunreasonable burden. This factor weighs in Toeppen's favor.[22] In balancing the Burger King factors, we conclude thatalthough some factors weigh in Toeppen's favor, he failed topresent a compelling case that the district court's exercise ofjurisdiction in California would be unreasonable.[23] We conclude that all of the requirements for the exer-cise of specific, personal jurisdiction are satisfied. The districtcourt properly exercised personal jurisdiction over Toeppen.We next consider the district court's summary judgment infavor of Panavision on its trademark dilution claims.B. Trademark Dilution ClaimsThe 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 distinctivequality" of a mark regardless of competition or the likelihoodof confusion. The protection extends only to strong and wellrecognized marks. Panavision's state law dilution claim issubject to the same analysis as its federal claim.[24] In order to prove a violation of the Federal TrademarkDilution Act, a plaintiff must show that (1) the mark isfamous; (2) the defendant is making a commercial use of themark in commerce; (3) the defendant's use began after themark became famous; and (4) the defendant's use of the markdilutes the quality of the mark by diminishing the capacity ofthe mark to identify and distinguish goods and services. 15U.S.C. S 1125(c).Toeppen does not challenge the district court's determina-tion that Panavision's trademark is famous, that his allegeduse began after the mark became famous, or that the use wasin commerce. Toeppen challenges the district court's determi-nation that he made "commercial use" of the mark and thatthis 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 ofthe trademark and therefore is not within the prohibitions ofthe 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 domainname does not constitute a commercial use); Lockheed MartinCorp. v. Network Solutions, Inc., 985 F. Supp. 949 (C.D. Cal.1997) (NSI's acceptance of a domain name for registration isnot a commercial use within the meaning of the TrademarkDilution Act).Developing this argument, Toeppen contends that a domainname is simply an address used to locate a web page. Heasserts that entering a domain name on a computer allows auser 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 screenwould 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 displaysthe domain name. Toeppen argues that a user who types in<Panavision.com>, but who sees no reference to the plaintiffPanavision on Toeppen's web page, is not likely to concludethe 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 thensell 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 unlessthey pay his fee." Panavision, 938 F. Supp. at 621. This is acommercial use. See Intermatic Inc. v. Toeppen, 947 F. Supp.1227, 1230 (N.D. Ill. 1996) (stating that "[o]ne of Toeppen'sbusiness objectives is to profit by the resale or licensing ofthese domain names, presumably to the entities who conductbusiness under these names.").[27] As the district court found, Toeppen traded on thevalue of Panavision's marks. So long as he held the Internetregistrations, he curtailed Panavision's exploitation of thevalue 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 IntermaticInc., a federal district court in Illinois held that Toeppen'sconduct violated the Federal Trademark Dilution Act.Intermatic, 947 F. Supp. at 1241. There, Intermatic suedToeppen for registering its trademark on the Internet as Toep-pen's domain name, <intermatic.com>. It was "conceded thatone of Toeppen's intended uses for registering the Intermaticmark was to eventually sell it back to Intermatic or to someother party." Id. at 1239. The court found that "Toeppen'sintention to arbitrage the `intermatic.com' domain name cons-titute[d] a commercial use." Id. See also Teletech CustomerCare Management, Inc. v. Tele-Tech Co., 977 F. Supp. 1407(C.D. Cal. 1997) (granting a preliminary injunction under theTrademark Dilution Act for use of a trademark as a domainname).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 Circuitheld that a company's use of the most commonly misdialednumber for Holiday Inns' 1-800 reservation number was nottrademark infringement.Holiday Inns is distinguishable. There, the defendant didnot use Holiday Inns' trademark. Rather, the defendantselected the most commonly misdialed telephone number forHoliday Inns and attempted to capitalize on consumer confu-sion.A telephone number, moreover, is distinguishable from adomain name because a domain name is associated with aword or phrase. A domain name is similar to a "vanitynumber" that identifies its source. Using Holiday Inns as anexample, when a customer dials the vanity number "1-800-Holiday," she expects to contact Holiday Inns because thenumber is associated with that company's trademark. A userwould 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'strademarks. It does not matter that he did not attach the marksto a product. Toeppen's commercial use was his attempt tocorporation." Id. at 95.sell the trademarks themselves.5 Under the Federal TrademarkDilution Act and the California Anti-dilution statute, this wassufficient commercial use.2. Dilution[29] "Dilution" is defined as "the lessening of the capacityof a famous mark to identify and distinguish goods or ser-vices, regardless of the presence or absence of (1) competitionbetween the owner of the famous mark and other parties, or(2) likelihood of confusion, mistake or deception. " 15 U.S.C.S 1127.6Trademark 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 trademarkitself is being sold, unattached to any other goods or services." Id. at 1010.The court concluded that trademark law should protect the trademarkitself. "Although our decision here may slightly tilt the trademark lawsfrom the purpose of protecting the public to the protection of the businessinterests 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 theinvestment 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 dilutedthe 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 foundthat Toeppen's conduct diminished "the capacity of thePanavision marks to identify and distinguish Panavision'sgoods and services on the Internet." Id. See also Intermatic,947 F. Supp. at 1240 (Toeppen's registration of the domainname, "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, TeleTechCustomer Care Management Inc., ("TCCM"), sought a pre-liminary injunction against Tele-Tech Company for use ofTCCM's registered service mark, "TeleTech," as an Internetdomain name. Teletech, 977 F. Supp. at 1410. The districtcourt issued an injunction, finding that TCCM had demon-strated a likelihood of success on the merits on its trademarkdilution claim. Id. at 1412. The court found that TCCM hadinvested great resources in promoting its servicemark andTeletech's registration of the domain name <teletech.com> onthe Internet would most likely dilute TCCM's mark. Id. at1413.Toeppen argues he is not diluting the capacity of thePanavision marks to identify goods or services. He contendsthat even though Panavision cannot use <Panavision.com>and <Panaflex.com> as its domain name addresses, it can stillpromote its goods and services on the Internet simply byusing some other "address" and then creating its own webpage using its trademarks.[30] We reject Toeppen's premise that a domain name isnothing more than an address. A significant purpose of adomain name is to identify the entity that owns the web site.8"A customer who is unsure about a company's domain namewill often guess that the domain name is also the company'sname." Cardservice Int'l v. McGee, 950 F. Supp. 737, 741(E.D. Va. 1997). "[A] domain name mirroring a corporatename 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 domainname is also the easiest way to locate that company's website. Use of a "search engine" can turn up hundreds of websites, 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 bediscouraged if they cannot find its web page by typing in"<Panavision.com," but instead are forced to wade throughhundreds of web sites. This dilutes the value of Panavision'strademark. We echo the words of Judge Lechner, quotingJudge Wood: "Prospective users of plaintiff's services whomistakenly access defendant's web site may fail to continueto 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, 1997WL 133313 at *4); see also Teletech, 977 F. Supp. at 1410(finding that use of a search engine can generate as many as800 to 1000 matches and it is "likely to deter web browsersfrom 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, 947F. 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 unimaginableamount 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 dilutedthose marks within the meaning of the Federal TrademarkDilution Act, 15 U.S.C. S 1125(c), and the California Anti-dilution statute, Cal.Bus. & Prof. Code S 14330.IIICONCLUSIONToeppen engaged in a scheme to register Panavision'strademarks as his domain names on the Internet and then toextort money from Panavision by trading on the value ofthose names. Toeppen's actions were aimed at Panavision inCalifornia and the brunt of the harm was felt in California.The district court properly exercised personal jurisdictionover Toeppen.We also affirm the district court's summary judgment infavor of Panavision under the Federal Trademark DilutionAct, 15 U.S.C. S 1125(c), and the California Anti-dilutionstatute, Cal.Bus. & Prof. Code S 14330. Toeppen made com-mercial use of Panavision's trademarks and his conductdiluted 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 particulargeographic location in the same sense that an individual does.") However,in Core-Vent, we stated that Calder v. Jones,
465 U.S. 783
(1984), doesnot preclude a determination that a corporation suffers the brunt of harmin its principal place of business. Core-Vent, 11 F.3d at 1487. Panavisionwas previously a limited partnership and is now a corporation. Undereither form of business organization, however, the brunt of the harm suf-fered by Panavision was in the state where it maintained its principal placeof business, California.3 We discuss the nature of Panavision's injury in following Part B.4 See Carl Oppedahl, Analysis and Suggestions Regarding NSI DomainName 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 Hockey7 Blurring occurs when a defendant uses a plaintiff's trademark to iden-tify the defendant's goods or services, creating the possibility that themark will lose its ability to serve as a unique identifier of the plaintiff'sproduct. 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 CombinedShows, Inc. v. Utah Div. of Travel Development, 955 F. Supp. 605, 614-15 (E.D. Va. 1997) (discussing the inadequacies of current definitions ofblurring and determining that blurring requires consumers to mistakenlyassociate a defendant's mark with a plaintiff's famous trademark).Tarnishment occurs when a famous mark is improperly associated withan inferior or offensive product or service. McCarthy, S 24:104 at 24-172to 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 onComputer Law: The Evolving Law of the Internet-Commerce, FreeSpeech, Security, Obscenity and Entertainment, 471 Prac. L. Inst. 151(1997).