According to the complaint, Aerial Images, Inc. (“AEI”), Terraserver’s predecessor in interest, worked with Microsoft and Compaq back in the mid 1990s to develop a website database of worldwide satellite imagery – with AEI providing the satellite imagery and Microsoft and Compaq providing the hardware and software. Terraserver maintains that its agreement with Microsoft and Compaq at the time was that AEI would keep the name “Terraserver” because “Microsoft and Compaq were simply using Aerial Images, Inc.’s name (Terraserver) and imagery to test their hardware and software systems.” As evidence of such tacit approval, Terraserver points to the fact that on March 9, 1998, AEI applied to register the mark
TERRA SERVER for “computer services, namely providing a database featuring photographic images and geographic information.” The mark registered on March 21, 2000 – without any objection from Microsoft or Compaq . The registration, however, was cancelled on December 23, 2006, when Terraserver failed to file a Section 8 Declaration of Continued Use – apparently because Terraserver was no longer using the mark “Terra Server” (with a space), but instead was using the mark Terraserver (no space).
The satellite imagery website and database was launched in 1997 using the domain name address “Terraserver.com.” Terraserver further maintains that when its “arrangement” with Microsoft and Compaq ended in 2000, the parties again agreed that AEI would continue to own and use the domain name “Terraserver.com,” which AEI, and later Terraserver, continued to do.
Terraserver argues that through extensive marketing of its website worldwide, the domain name terrserver.com has acquired a secondary meaning and is recognized as a source identifier for Terraserver’s web-based satellite imagery database.
Terraserver also holds two registrations for the marks
TERRASERVER and
TERRASERVER-USA. The TERRASERVER mark was applied for as a use-in-commerce application on July 21, 2003 (March 1, 1998 was claimed as the first date of use in commerce) for “a computer database available through an internet website that provides photographic images and geographic imagery obtained from satellites.” The mark registered December 21, 2004. The TERRASERVER-USA mark was applied for as an intent-to-use application on December 16, 2003 for “displaying the satellite and aerial images of others on a computer server.” The mark registered on June 13, 2006.
According to Terraserver, Microsoft began operating its “Terraserver-usa.com” website in the summer of 2003 (Note: the
Internet Archive suggests a date of around June 7, 2003 – about a month and a half before Terraserver submitted its TERRASERVER application). Terraserver asserts that Microsoft has continued to operate its website despite Terraserver’s demands “on numerous occasions” that Microsoft stop using its registered trademarks.
Terraserver cites two examples of “actual confusion” to support its case. The first is the Wikipedia entry for
Terraserver which describes user confusion between the two.
[Comment: We all know how reliable Wikipedia evidence is, especially for demonstrating likelihood of confusion.] The second example is a
USPTO office action which initially refused to register TERRASERVER-USA on the basis of likelihood of confusion with the TERRA SERVER mark (with the space)
[Comment: How exactly does that show actual confusion between Microsoft’s site and Terraserver’s site?].
Terraserver’s causes of action are for registered trademark infringement under Section 32 of the Lanham Act (15 U.S.C. §1114), false designation of origin/unfair competition under Section 43(a) of the Lanham Act (15 U.S.C. §1125(a)), trademark dilution under Section 43(c) of the Lanham Act (15 U.S.C. §1125(c)), and unfair and deceptive trade practices under Chapter 75 of the North Carolina General Statutes. Terraserver seeks injunctive relief, actual damages, treble damages, costs and attorneys’ fees
Vegas™Esq Comments:
One interesting nuance with respect to Terraserver’s TERRASERVER-USA application is that the filing date of this “intent-to-use” application was several months after Terraserver acknowledges Microsoft already had its own website up and running at the domain name
http://www.terraserver-usa.com./ While the dates of first use for this mark are claimed as May 1, 2003 (which coincidentally is several days before the terraserver-usa.com domain name was registered by Microsoft), this date of first use is based on a Statement of Use filed by Terraserver on March 23, 2006. What is even more interesting is that when you plug the web page included in one of the Specimens of Use (
http://www.terraserver.com/providers/Terraserver-USA.asp) into the
Internet Archive, the web page seems to have made its first appearance around February 8, 2006 – just before the page was submitted as a specimen of use and several months after Terraserver’s initial specimens of use (submitted September 20, 2005) had been rejected as inadequate (Terraserver submitted a picture of a hat displaying the TERRASERVER-USA mark and an address label). Furthermore, if Terraserver had really been using the TERRASERVER-USA mark since May 1, 2003, wouldn’t one think that the company, already a high profile internet site, would have been saavy enough to acquire the same domain name address? Unless, of course, Terraserver was not actually using the make at the time. Ever heard of
Occum’s Razor?
Terraserver may have an uphill battle to fight to the extent it is relying upon its TERRASERVER-USA registration. Given the suspiciousness surrounding its claimed use of the mark, Terraserver had better be prepared to show more concrete evidence that it was legitimately using in commerce the TERRASERVER-USA as declared in its Statement of Use.
Indeed, by including TERRASERVER-USA as a basis for infringement, Terraserver may have muddied up what otherwise would have been a much cleaner case of infringement against TERRASERVER-USA based on the TERRASERVER mark alone and opened itself up to an “unclean hands” defense by Microsoft.
Another interesting nuance with respect to Terraserver’s TERRASERVER application is that the specimen of use provided by Terraserver was a copy of the website showing “terraserver®.com.” The PTO apparently had no objection to the presence of the ® symbol on the specimen, and presumably, the ® was based on the “Terra Server” registration in existence at that time. Nonetheless, such use (or misuse) of the ® symbol also makes the TERRASERVER registration vulnerable to claims of “unclean hands” (see prior blog post
here) although not to the same degree as TERRASERVER-USA given the reasonable explanation for using the ® symbol under the circumstances.
Finally, the big question is why Terraserver waited so long to pursue this action when it appears as if it could have been brought back in 2003 . . .unless there is something else going on here that is not apparent from the complaint (something in the “agreement” between Terraserver, Microsoft, and Compaq). By waiting so long, Terraserver may be vulnerable to a laches defense by Microsoft – the length of delay appears to be almost five years, there does not appear to be any excuse for such delay, and Terraserver had the opportunity to act sooner. Because North Carolina has a three year statute of limitations for tort actions (
see N.C.Gen.Stat. Sec. 1-52), the burden will be on Terraserver to prove that application of the defense would be inequitable (as opposed to Microsoft having the burden of showing that laches should apply).
The different classifications is not what led the PTO to overlook the obvious similarities between the two marks. The PTO’s search focused solely on the mark “XS” (and “X S”) without transposing the letters and most likely would not have discovered XS’s registration anyway even if XS’s goods had been classified in class 32. Nonetheless, it does raise the question as to why the two types of energy drinks are classified in two separate classifications.
On May 1, 2008, a company named Showtech Merchandising, Inc. filed a trademark infringement lawsuit in Nevada District Court against various John Does, Jane Does, and ABC Company. See Merchandising, Inc v. Various John Does, et al, Case. No. 
