ZIPPO DOT COM, INC., Plantiff,

vs.

ZIPPO MANUFACTURING COMPANY, Defendents.


In the United States District Court Northern District of California : No. C 96-4531 SBA


FILED: Dec 19, 1996


Comes now plaintiff ZIPPO DOT COM, INC. (hereinafter "ZIPPO DOT COM"), which alleges the following against defendant ZIPPO MANUFACTURING, INC. ("ZIPPO MANUFACTURING"):

I

JURISDICTION AND VENUE

1. Subject Matter Jurisdiction: This is an action for a declaratory judgment which seeks injunctive relief and a judgment of non-infringement and non-dilution of federally registered trademarks. Subject matter jurisdiction is conferred on this Court under 15 U.S.C. 1121 and 28 U.S.C. 1338(a) (Trademark Disputes), 28 U.S.C. 1332 (Diversity of Citizenship), 15 U.S.C. 1116 (Injunctive Relief Under the Trademark Act), 28 U.S.C. 2201-02 (Federal Declaratory Judgment Act), and 28 U.S.C. 1367 (Supplemental jurisdiction).

2. Venue: Venue is proper in this district against ZIPPO MANRUFACTURING (under 28 U.S.C. 1391(b)) because defendant extensively advertises, offers for sale and sells its trademarked tobacco lighters, knives and other related products throughout California and throughout this district. On information and belief, defendant maintains distribution facilities in California and in this district. Further, the allegations by defendant ZIPPO MANUFACTURING of trademark infringement and trademark dilution (as discussed below) arise from plaintiff's business operations in Sunnyvale, California. For purposes of 28 U.S.C. ? 1391(b), plaintiff is a resident of this district and has its principal place of business in Sunnyvale, California.

II

THE PARTIES

3. Plaintiff ZIPPO DOT COM is a limited liability California corporation. Plaintiff ZIPPO DOT COM operates an Internet news service on the Internet under the trade names "Zippo News Service" and "Super Zippo News Service." Plaintiff ZIPPO DOT COM lawfully registered and is the owner of the Internet domain name "zippo.com". Plaintiff acquired the subject domain name in March 1995 and began using the domain name immediately in connection with Internet news services. Plaintiff ZIPPO DOT COM built an extensive Internet news service through the use of its domain name "zippo.com". On information and belief and as alleged in more detail below, plaintiff ZIPPO DOT COM operates one of the most highly used Internet news services on the Internet and plaintiff's news services are regarded as a highly reputable and reliable Internet news service. Plaintiff ZIPPO DOT COM does not engage in the business of making or offering for sale tobacco lighters and related products, nor does plaintiff promote or offer for sale through its Internet news service tobacco lighters or related products.

4. The defendant ZIPPO MANUFACTURING makes and sells tobacco lighters and related products. ZIPPO MANUFACTURING has its headquarters in Bradford, Pennsylvania. Defendant ZIPPO MANUFACTURING markets and offers for sale its products at locations throughout California and, on information and belief, in this district. As discussed below, defendant's products are marketed and traded through promotional websites on the Internet which enthusiastically promote the use of tobacco products and illegal and elicit narcotics. On information and belief a large segment of defendant's tobacco lighter sales are made at or bv "head shops," i.e., small retail outlets which sell tobacco-related products and drug paraphernalia. Defendant is not engaged in the business of providing on-line Internet news. Defendant and plaintiff are not competitors directly or indirectly.

III

DEFINITIONS AND TECHNICAL BACKGROUND CONCERNING THE INTERNET

5. The Internet: The Internet is an informal, worldwide network of networked computers which are linked together for the purpose of forming a world-wide communication system. The Internet consists of a series of major networks which are connected by high-speed data paths or backbones and smaller networks which are connected with lower speed links. This amalgamation of linked networks form the Internet which transcends geography and comprises a global system of communication.

6. Domain Names: Every computer linked to the Internet must have a numeric address in order to be identified. The numeric Internet address functions much like a street address or a telephone number and enables other computers on the network to route messages to that address. This numeric address is called an IP (i.e., "Internet Protocol") address and expressed numerically, e.g., 111.878.103.21.

7. Because the numeric IP address is difficult to remember, the Internet authorities permit the assignment of a word or name to an IP address for each IP address, e.g., ""freeways.com" for Alamo Rent-a-Car. These names are referred to as "domain names." A domain name consists of a top level designation which designates the type of organization or user of the domain name. The following top level domain names used consist of: .com (for commercial business, company or organization) (e.g., "plymouthcars.com"); .edu (for educational institutions) (e.g., "stanford.edu"); .net (for any host associated with network administration) (e.g., "sprintlink.net"); .org (for private organizations which are nonacademic, nongovernmental, and noncommercial); .gov (for governmantal sites) (e.g., "nasa-gov"); and .mil (for military sites) (e.g., "usmc.mil").

8. On information and belief, Network Solutions, Inc., ("Network Solutions"), a private company located in Herndon, Virginia is authorized pursuant to a contract with the National Science Foundation to issue domain names for use on the Internet. Pursuant to its Internet domain name policy, as approved by the National Science Foundation, Network Solutions issues domain names on a "first come, first served" basis. Plaintiff ZIPPO DOT COM lawfully registered and acquired the domain names "zippo.com"; "zippo.net" and "zipponews.com" first and before all other persons or entities, including defendant ZIPPO MANUFACTURING. (Hereinafter plaintiff's domain names will be referred to as "the subject domain names" unless referred to separately).

9. A unique Internet numeric address and domain name are required because the Intemet computers must be able to find the IP address among the vast array of networked computers. For this reason, there cannot be more than one specific domain name. There can, however, be enumerable similar, but not identical, domain names. Consequently, plaintiff's domain names and defendant's domain name "zippomfg.com" are similar, but not identical, and both constitute unique IP addresses on the Intemet. Plaintiff's use of the subject domain names, including "zippo.com", in no way restricts or interferes with defendant's use of the domain name "zippomfg.com" and/or the other several domain names registered by defendant.

10. A domain name can function in connection with a person's or an entity's electronic mail (e-mail) address or the domain name can function as the address which forms part of the URL (i.e., uniform resource locator) for a person's or entity's website, e.g., "www.zippo.com". Plaintiff uses the domain name "zippo.com" lawfully and legitimately in connection with its Internet news services known as "Zippo's News Service" and "Super Zippo's News Service." Both of these news services can be accessed through websites maintained and hosted on computers or servers owned and located in Sunnyvale, California. Defendant's trademark for "ZIPPO" and defendant's product line of "Zippo" tobacco lighters in no way influenced the selection of the subject domain names by plaintiff. Plaintiff did not select the subject domain names for the purpose of selling it to defendant or any other person or entity and, as set forth below, plaintiff would be irreparably damaged if this court or any other court ordered plaintiff to stop using the subject domain name "zippo.com" as well as the other subject domain names. In the event plaintiff lost use of its domain name, plaintiff's damages would well exceed $50,000.

11. Defendant ZIPPO MANUFACTURING registered numerous Internet domain names with Network Solutions. On information and belief, the domain names registered by defendant ZIPPO MANUFACTURING, include: "zippolighter.com", "lighter.com", and "zippomfg.com".

12. Websites Generally and Defendant's Website: A website can serve many functions. In the commercial context, websites are growing in popularity and used as a means of providing information on the Internet on a variety of topics and for a variety of purposes. Defendant ZIPPO MANUFACTURING operates a single web site which can be accessed using the several domain names acquired by defendant, including "zippolighter.com", "lighter.com" and "zippomfg.com". The defendant's website is not extensively serviced or updated by the defendant and essentially serves as a billboard or electronic advertisement for the defendant's tobacco lighters including defendant's product line of "Zippo Pinup" lighters (discussed below). Defendant's website offers no information of general public interest or benefit and is designed solely to promote the sale of defendant's tobacco lighters and.related products on information and belief, defendant's website (as well as defendant's other collective marketing efforts) is apparently targeted to young men and promotes tobacco smoking through the use of defendant's lighters marketed and sold under the Zippo? trademark. Defendant's website is hosted on a computer or server of an Internet Service Provider known as Spec.Net located in Hicksville, New York.

13. As discussed below, the Internet news services offered by plaintiff and accessible through the use of the "zippo.com" domain name has an excellent reputationas a reliable and accessible source for news on the Internet. For that reason, the domain name "zippo.com" is referenced as a reliable Internet news source and linked on numerous websites throughout the world. Through Plaintiff's efforts, the domain name "zippo.com" has had a consistent presence on the Internet, providing both a commercial and public service to hundreds of thousands of people around the world. Plaintiff's websites and services have been noted approvingly in numerous texts on the Internet and received awards. Plaintiff's news services now enjoy widespread recognition as a preeminent and highly reputable Internet news service. Plaintiff would be irreparably damaged in the event a court ordered that it could no longer use its domain name and/or ordered a transfer of its domain name to the defendant, a tobacco lighter manufacturer in an entirely different market and with essentially little, if any, business connection to the Internet. On information and belief, defendant would be unjustly and unfairly enriched if defendant was permitted use the "zippo.com" domain which has world-wide recognition on the Internet as the domain name of plaintiff ZIPPO DOT COM.

IV

PLANTIFF'S BUSINESS OPERATIONS

14. Internet News Generally: Internet news is news information which is accessible on the Internet. Numerous entities offer and provide Internet news from and generated by literally countless newsgroups which are too enumerable to list in this complaint. Newsgroups on the Internet include, for example, the White House, many major corporations, most major universities, private and charitable organizations, and individuals who coalesce on the Internet because of a particular interest on a specific topic. On information and belief, the newsgroups' topics on the Internet and the substance and content of Internet news range from newsgroups discussing nuclear physics, to news information propagated and posted on the Internet by major corporations and universities, to newsgroups pertaining to hobbies. Many major corporations provide Internet news, Silicon Graphics, Inc., Microsoft IBM, Dell Computer Corporation and Hewlett-Packard Company. Virtually all major telecommunications companies (e.g., AT&T, Sprint, MCI, etc.) offer Internet news. Virtually all major on-line providers (e.g., American On-Line, CompuServ, Prodigy, MicroSoft News, etc.) offer Internet news. Most major educational institutions around the world offer and provide Internet news. Numerous Internet Service Providers (companies that access to larger Internet companies, e.g., AT&T, in order to provide on-line access for smaller companies or individuals) offer and provide Internet news services.

15. Plaintiff's Internet News Services: Plaintiff's news services provide and offer news from Internet newsgroups and other news information on the Internet. Plaintiff offers three levels of service: Original Zippo's News Service - which is free to the public; Original Zippo's Membership News and Super Zippo's Membership News - both of which are by subscription access only. Original Zippo's news is completely free and accessible on the Internet and provides free public access to approximately 4,500 newsgroup as well as numerous other news information sources, and stories or features of general public interest, including Plaintiff's Internet Gallery (discussed below) Original Zippo's News Service and Super Zippo's News service offer 5,000 and 18,000 newsgroups, respectively, as well as a variety of features discussed below. The membership rate for Original Zippo's News Service is $12 per year and the subscription rate for Super Zippo's News Service is $9.95 per month, $39.95 for six months and $69.95 for one year.

16. Original Zippo News comprises several components consisting of: Internet News (consisting of 20,000 categories of information divided by over 300 hierarchies and sources from over 300 countries in 15 different languages covering topics ranging from fan club information to scientific discussion groups); Editorial (covering matters of general public interest (e.g., election issues, affirmative action, etc.)); Application Software Library (offering free on-line access to over 200 titles of Internet related software in accordance with the permission granted by the Internet related software in accordance with the permission granted by the publisher); Internet Image Archives (consisting of a collection of images from Internet news); Non-Commercial Websites of some of plaintiff's subscribers (consisting of non-commercial web sites (no language or images not suitable for children are allowed); Links and Awards (consisting of a free section which features hyperlinks to other websites for purposes of obtaining expanded information); and an E-mail post office. Attached hereto as Exhibit A are true and correct copies of pages taken from the Original Zippo's News Service website. Exhibit A shows the front or "home page" of the website. Exhibit B shows the page which is obtained by clicking the reference for "Live News" on the home page and illustrates that news from NBC, CNN, USA Today, ESPN and Fox Network is available and provided by plaintiff's news service. Additionally, and through membership subscription, subscribers of plaintiff's Internet news service can receive up to the minute stories from both United Press International (UPI) and Sports Ticker. News and information received from UPI and Sports Ticker is provided to plaintiff under agreements with both UPI and Sports Ticker. Plaintiff's contractual relationships with both UPI and Sports Ticker will be substantially harmed in the event a court orders that plaintiff can no longer use its domain name.

17. Zippo News Service has received numerous Internet awards and/or been recognized: top 25 websites accessed by America On-Line subscribers (over 7 million users) and given the "AOL Member's Choice Award"; top 5% award by Lycos, the highest ranked and most prestigious search and information site on the Internet; and top ratings by all of the major search and information sites, including Magellan, Netguide and Infoseek.

18. Presently, innumerable sites on the Internet, ranging from major corporations, e.g., Sprint, to major universities, e.g., Syracuse University, refer their users to plaintiff's news service. Plaintiff's Zippo's News Services is referenced and users to plaintiff's news service. Plaintiff's Zippo's News Services is referenced and linked to numerous websites for companies, organizations, educational institutions,and news and other media companies, including, but not limited to: Companies - Davis Rental & Sales, The Art Machine, Cyberport, Panacom, Infomanage and HotWired; Groups - the California Alliance for Consumer Protection; Universities American University (Washington, D.C.), Syracuse University; News and Media Groups - News Channel 19 in Tennessee, KXRO AM Radio (Seattle, Washington) (which does the play-by-play broadcasting for the Seattle Mariners, Seattle Supersonics and Washington State Urtiversity). On many of these websites just mentioned, Zippo's News Service is referenced along with numerous other highly reputable news services, including CNN Business News, USA Today, San Francisco Examiner, San Jose Mercury News, etc. Attached as Exhibit C are true and correct copies of pages from these websites just discussed which reference and link to plaintiff's news services.

19. Plaintiff's News Service Provides a Public Benefit: On information and belief, numerous aspects of the information provided by Plaintiff serves the public benefit. For example, plaintiff's news service offers "Gallery" free of charge to all Internet users. Gallery is a monthly collection of works from artists, musicians, photographers, writers and hobbyists ranging from the novice to prize winning professionals. The participating artists are not compensated and placement is competitive. Over the past few months, Gallery has featured the work of photographer Richard Ellis, a two time Pulitzer Prize nominee and Rob Borland, whose work has appeared in the National Geographic. Additionally, Gallery has also featured work of published writers and musical bands. Attached as Exhibit D are true and correct copies of pages from Gallery which are currently featured on Plaintiff's website and accessible for free by the public.

20. Accessing Sexually Oriented Information on the Internet Generally and by Adult's Through Plaintiff's Subscription Membership: Some information posted on the Internet by various users or "newsgroups" includes material that is sexually oriented or sexually graphic, including pictures of minors in sexual contexts. Most, if not all, major on-line news providers, including, but not limited to, Microsoft, America On-Line, and CompuServ provide access to such sexually graphic material or information, including what some persons would consider to be child pornography. Unlike most on-line news providers or Internet news services, plaintiff does not allow its subscribers to access postings of pictures of minors in sexual contexts. Plaintiff, does, however, allow adult subscribers access to certain specific use or newsgroups, not suitable for children, and which contains sexually explicit pictures or discussion(s). No information of a sexually explicit nature is accessible through plaintiff's free website news service. Plaintiff permits access by adults to such content under guidelines posted on plaintiff's website. The subscriber's agreement to these terms is a pre-condition to subscription. The subscriber must (a) confirm that he/she is an adult; (b) affirmatively accept or dedine access to restricted newsgroups; and (c) use their private password provided by plaintiff to access such restricted newsgroups. Subscribers are admonished on plaintiff's website: "do not give your password to minors." Attached as Exhibit E are pages from plaintiff'swebsite reflecting these policies. Further, plaintiff actively pohces its websites for "spam" - i.e., postings concerning pyramid schemes, posting of pictures of minors in sexual contexts, or other improper postings. Persons engaged in "spamming" are, at a minimum, removed from service by plaintiff. On any given day, there are approximately 2.5 million articles of information of various types and, of that amount, less than 1% of the information contains sexually explicit content. Apart from its website content, plaintiff has not and does not originate any content which it provides to any of person using its Internet news services, for free or by subscription.

21. Plaintiff's Dependence on Its Domain Name: Every service provided by plaintiff, including, but not limited to, e-mail, ftp (file transfer protocol), http or Web use, news reader (nntp), and telnet are all dependent upon the use of the primary domain name "zippo.com". All of plaintiff's computers and/or servers must use the zippo.com domain name to function in order to provide the services offered by the plaintiff. All computers on the Internet, which are presently linked in any fashion to any of plaintiff's services must use the primary domain name "zippo.com". All services offered by plaintiff use and depend upon the "zippo.com" domain name. including "Zippo's News Service" and "Super Zippo's News Service." Plaintiff's business operation would experience irreparable harm in the event a court ordered plaintiff to cease use of its domain name.

V

DEFENDANT'S BUSINESS OPERATIONS

22. Defendant makes, markets and sells tobacco lighters and other related products, including knives. These products are marketed and sold using defendant's federally registered trademarks for "ZIPPO". On information and belief, defendant's products are marketed to mostly young males and promote the use of tobacco products. Defendant promotes its products by featuring "pinup girls" on the front face of defendant's tobacco lighters. These "pinup girls" are displayed in sexually suggestive poses and defendant promotes the sale of its tobacco lighters featuring defendant's "pinup girls" with the advertising tag line stating: "[the pinup girls] inspire dreams to hold on to." Attached as Exhibit F to this complaint is a true and correct copy of defendant's advertisement which appeared in the San Francisco Chronicle on December 1, 1996 and featuring defendant's pinup girls. Attached as Exhibit G is a true and correct copy of a page from defendant's website promoting the Zippo pinup girls. As evidenced by Exhibits F and G, the defendant's trademarks are displayed in association with women in sexually suggestive poses. On information and belief, the relevant consumers of defendant's products associate defendant's trademarks with tobacco smoking. On information and belief, defendant's marketing efforts attempt to suggest and create an association in the mind of the relevant consumer between a woman in a sexually suggestive pose and defendant's tobacco lighters.

23. Defendant's tobacco lighter products are sold throughout the San Francisco bay area by and through small and local "head shops", i.e., small local shops which sell tobacco products, drug paraphernalia, sexually explicit material and, in some instances, sexual toys or equipment. Presently, defendant's tobacco lighters are sold in at least 20 such "head shops" located throughout the San Francisco bay area including but not limited to: (1) a head shop in Berkeley, California which prominently displays and sells Defendant's tobacco lighters along with hardcore pornographic material; and (2) a head shop in Pittsburgh, California which prominently displays and sells Defendant's tobacco lighters along with drug pipes, other drug paraphernalia, books on drug usage (ecstacy and opium), hard core pornography, and sexual toys, including bondage and domination wear.

24. On information and belief, defendant permits and/or expressly authorizes the promotion of its tobacco lighters and other related products on Internet websites which expressly promote the use of hemp, marijuana and psychedelic drugs (including LSD and ecstasy). Attached hereto as Exhibit H is the front page or home page of a website which expressly promotes the growing, use and legalization of illegal narcotics. Defendant's trademark and products are prominently referenced in this website.

25. On information and belief, the relevant consumers of defendant's products associate defendant's trademarks with illegal and elicit mind altering drugs. Defendant permits or expressly authorizes the promotion of its lighters through various Internet websites which activity promote the use of tobacco smoking. Attached hereto as Exhibit I is the front page or home page of a website which promotes the use of tobacco products. On information and belief, the Surgeon General and most reputable medical and health associations and organizations around the world, including the American Medical Association and the American Cancer Society, have publicly condemned the harmful effects of tobacco smoking. On information and belief, numerous medical studies considered reliable by such world-leading health associations and organizations have concluded that tobacco smoking is a leading cause of lung cancer and other related diseases. Accordingly, and on information and belief, the relevant consumers of defendant's products associate use of the defendant's products with one of the nation's (and the world's) leading cause of death and disease.

VI

DEFENDANT'S TRADEMARKS FOR "ZIPPO" AND PLANTIFF'S APPLICATIONS   FOR TRADEMARKS AND SERVICE MARKS

Defendant is the owner of numerous federally registered trademarks for "ZIPPO" for uses related to a broad range of tobacco lighters and related products. On information and belief, defendant has no federally registered service marks, but recently filed an application with the United States Patent and Trademark Office ("USPTO") for a service mark for "ZIPPO FAMILY STORE AND MUSEUM" for "museum services" and "retail store services". On information and belief, this service mark is used by defendant to promote defendant's tobacco lighters and related products. On information and belief, defendant has no federally registered trademarks or service marks for any use related to Internet news services, Internet on-line services or for any goods or services related to the Internet. On information and belief, defendant has no state or common law trademarks or service marks for use related to Internet news services, Internet on-line services, or for any goods or services related to the Internet.

26. On information and belief and without admission or concession, any goodwill or reputation enjoyed by defendant through the use of defendant's trademarks "ZIPPO" is confined to defendant's tobacco lighters and related products and in no way relates to Intemet news services or Internet on-line services and exists solely in relation to defendant's tobacco lighters and related products.

27. On information and belief, the word "Zippo" is used as a common law trademark for uses unrelated to uses covered by defendant's trademarks. On information and belief, the word "zippo" is very common and used commonly as slang to suggest nothing, or losing everything, or starting from scratch, etc.

28. The United States Patent and Trademark Office ("USPTO") recently began to permit a domain name to be registered as a trademark or service mark, providing all other requirements for registration exists. Plaintiff recently filed applications for various servi ce marks: "ZIPPO'S, THE DAILY NEWS" and "SUPER ZIPPO'S NEWS SERVICE" for "information services on global exchange network"; "ZIPPO'S DIRECT READ NEWS" for accessing and reading global information network news and for "ZIPPO DOT COM" for an Internet access software package. With the exception of "SUPER ZIPPO'S NEWS SERVICE", these applications are pending before the USPTO and have not been published in the Official Gazette for opposition. To date, none of these applications which use or incorporate the word"zippo" have been rejected by the USPTO. "SUPER ZIPPO'S NEWS SERVICE" was published in the Official Gazette and defendant filed an opposition with USPTO. Defendant asserts and alleges that it will file opposition to all of these applications when the applications are published. Plaintiff has not applied for a trademark for "ZIPPO" in any classification.

VII

STATEMENT OF THE DISPUTE

29. This case involves "reverse domain name hijacking," which occurs when the owner of a registered trademark in a particular classification asserts spurious claims of trademark infringement and trademark dilution against the owner of a domain name which is similar to or identical to the registered trademark. Defendant attempts to hijack plaintiff's domain name, which now enjoys considerable recognition on the Internet, by asserting baseless allegations of trademark infringement and trademark dilution and by suing plaintiff, a small company, in a remote location. The allegations are made in this case by defendant without regard to the fact that defendant cannot show likelihood of confusion or trademark dilution caused by plaintiff's use of the subject domain names because domain names are not trademarks. Regardless, even if the domain names constitute trademarks, the subject domain names are used in a totally different classification than any of defendant's trademarks.

30. In March 1996, defendant approached plaintiff and sought to obtain plaintiff's domain name "zippo.com." Plaintiff unequivocally rejected defendant's request and so advised defendant's representative. On information and belief, at the time defendant attempted to obtain plaintiff's domain name, defendant had already acquired several domain names and was engaged in creating its own website to promote its tobacco lighters and related products. Consequently, plaintiff's use of the domain name in no way restricted defendant from obtaining a domain name identical to its company name, "zippomfg.com", and in no way restricted defendant from creating and maintaining a website accessible through the use of a domain name identical to defendant's company name.

31. Plaintiff's use of the domain name "zippo.com" does not trade upon any goodwill or reputation enjoyed by defendant as related to its tobacco lighters and related products.

32. On or about November 18, 1996, defendant sued plaintiff in the United States District Court for the Western District of Pennsylvania alleging that plaintiff's use and inclusion of the word "zippo" in a variety of contexts, including in plaintiff's domain name, constituted trademark dilution, trademark infringement and false designation of origin under the Lanham Act. Defendant also sued plaintiff for state law claims under Pennsylvariia law. Primary among the defendant's allegations in the action filed in Pennsylvania (hereinafter the "Pennsylvania action") is that adult oriented and sexually oriented Internet postings can be accessed by an Internet user and that the word "zippo" will appear somewhere in the address for that posting. On information and belief, plaintiff alleges that defendant has misrepresented facts to the district court in Pennsylvania through the allegations asserted in its complaint and other pleadings filed in the Pennsylvania action.

33. By its Pennsylvania action, defendant ZIPPO MANUFACTURING seeks an injunction ordering plaintiff to forfeit its lawfully acquired domain names, including "zippo.com". Plaintiff will be irreparably harmed in the event this court or any other court orders plaintiff to cease use of its domain names.

34. On information and belief, plaintiff alleges that defendant ZIPPO MANUFACTURING is intentionally acting in bad faith by bringing the Pennsylvania action against plaintiff and by threatening to oppose plaintiff's trademark applications once they are published for opposition and by opposing plaintiff's trademark.

VIII

FIRST CAUSE OF ACTION - DECLARATORY RELIEF

35. Plaintiff ZIPPO DOT COM realleges and incorporates by reference paragraphs 1 through 34 above and all Exhibits attached and incorporated herein.

36. Based on the facts set forth above, an actual controversy has arisen and now exists between plaintiff ZIPPO DOT COM and defendant ZIPPO MANUFACTURING regarding whether or not plaintiff's use of the word "zippo" and use of the domain names referenced above infringes defendant's trademarks and/or constitutes trademark dilution and/or false designation of origin and/or can serve as the basis for any relief under any federal or state law. A dispute also exists as to whether defendant may lawfully challenge and/or oppose plaintiff's pending service applications.

37. Plaintiff has no other prompt and expeditious remedy to protect plaintiff's business and plaintiff's domain names and trademark applications. Under the circumstances alleged, a judicial determination is necessary and appropriate in order to determine the rights of the plaintiff.

IX

SECOND CAUSE OF ACTION - TRADEMARK MISUSE

(Under Federal Law)

38. Plaintiff ZIPPO DOT COM realleges and incorporates by reference paragraphs I through 37 above and all Exhibits attached and incorporated herein.

39. On information and belief, plaintiff alleges that defendant ZIPPO MANUFACTURING obtained its trademark registrations based on its statements to the USPTO that it was claiming only trademark protection for uses as described in the trademark applications and for nothing else.

40. On information and belief, the USPTO limited the scope of the issued trademarks to such specific uses as described by defendant and rejected broader claims of use as part of the estabIished practices of the federal government and in order to permit others to use the same mark in other trademark classifications.

41. The statutory scheme applicable to the registration of U.S. trademarks is designed to limit the registration of trademarks to exactly the products claimed in the application and those actually in use or intended to be used. Numerous statutory provisions applicable to trademark registrations are designed to limit applicants to specific fields of use and permit other applicants to use the same or similar marks without conflict and/or confusion in the marketplace.

42. While trademark law grants the owner of registered trademarks broad enforcement and remedial powers against infringers, trademark law also imposes a duty upon owners of registered trademarks to exercise those rights which they have a good faith and justified basis to assert under the law. For this reason, the law grants the power to a federal court to "determine the right to registration, order the cancellation of registrations, in whole or in part ... and otherwise rectify the register with respect to registrations." 15 U.S.C. 1119. Further, federal courts have the inherent equitable power to grant such other relief against a trademark owner as the court deems is justified and appropriate.

43. On information and belief, defendant ZIPPO MANUFACTURING's challenge of plaintiff's use of the subject domain names, suit for trademark infringement, trademark dilution, and other claims asserted in the Pennsylvania action and defendant's intended plan to oppose all of plaintiff's trademark applications once published constitutes bad faith use of the defendant's trademarks for illegal and improper purpose. These actions by defendant constitute trademark misuse.

44. Defendant conduct is oppressive, malicious and fraudulent and is designed for the purpose of unlawfully extending the scope of defendant's trademarks of uses far outside of any reasonable expectation under established trademark law and for the purpose of hijacking plaintiff's domain names, which now have considerable recognition and constitue an extremely valuable asset to any business, especially plaintiff's.

45. Based upon 15 U.S.C. 1119 and this Court's inherent equitable power, this Court has the power to rectify this trademark misuse and prevent defendant's hijacking by canceling one or more of defendant's trademarks or to fashion some other appropriate remedy. Further, this Court has the equitable and legal power to award the full scope of legal fees and costs that plaintiff was required to incur in bringing this action and defending the Pennsylvania action to protect itself from the misuse of trademark laws by the defendant. An award of such legal fees and costs is and will be justified under section 15 U.S.C. 1117.

X

THIRD CAUSE OF ACTION - UNFAIR COMPETITION

(Under California Law)

46. Plaintiff ZIPPO DOT COM realleges and incorporates by reference paragraphs 1 through 45 above and all Exhibits attached and incorporated herein.

47. Defendant's conduct and activities and threatened conduct and activities constitute a violation of California common law on unfair competition and the California Business and Professions Code ?? 17200 et seq.

48. Plaintiff is and will be irreparably damaged by defendant's conduct and activities and plaintiff will suffer irreparable harm unless defendant's conduct and activities are enjoined.

XI

DEMAND AND PRAYER FOR RELIEF

Wherefore, plaintiff prays for judgment:

1. For a declaration from this Court that plaintiff's registration, use and possession of the subject domain names neither infringes defendant's trademarks nor dilutes the trademarks in any manner nor constitutes a violation of any federal or state law;

2. For a declaration from this Court that pIantiff may continue to use and enjoy the subject domain names without interference of any type by the defendant;

3. For injunctive relief enjoining defendant from interfering with or challenging plaintiff's use of the subject domain names and enjoining defendant from challenging or opposing plaintiff's pending trademark and/or service mark applications with the USPTO referenced above.

4. For attorneys' fees and costs incurred by the plaintiff;

5. For damages as authorized in favor of plaintiff under any applicable provision of federal or state law;

6. For an Order of this Court canceling the trademark registrations of defendant ZIPPO MANUFACTURING by reason of its unlawful and unjustified trademark misuse as described above and to be proven at time of trial or such other equitable relief as this court may deem just, appropriate and proper to address defendant's trademark misuse;

7. For costs incurred by plaintiff;

8. For such other and further civil and equitable relief as this Court may deem just and proper.


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