The Nissan Motor Company of Japan had sold its cars in the United States under the brand name Datsun for many years. In the late 1980s, the company changed its branding policy and began selling cars in the U.S. market with the name of Nissan. However, the company did not realize that the Web would become an important marketing tool and did not register the name nissan.com as soon as it became available.
Nissan was not the only auto company to miss an opportunity to register its brand's domain name early. General Motors had registered the domain gm.com in 1992, but it had not registered generalmotors.com. The company had to purchase that name from Gil Vanorder, who had registered it in 1997. Vanorder's site featured a cigar-smoking, uniform-wearing cartoon character named "General John C. Motors." Volkswagen (which had registered vw.com when it first became available) successfully sued Virtual Works (an ISP) to obtain the domain name vw.net. Other auto companies have purchased or sued (with mixed results) to obtain domain names that included their product brand names. DaimlerChrysler was able to purchase dodge.com in 2001 from theLondon financial software company that had registered it originally. Ford had to sue National A-1 Advertising to obtain the right to use lincoln.com. However, Ford was unsuccessful in its attempts to obtain mercury.com. That name was owned by the New York City information technology services company, Mercury Technologies, which is now owned by Hewlett-Packard.
In 1991, Uzi Nissan formed a company named Nissan Computer Corp. in North Carolina to sell computer hardware and provide related repair and consulting services. Nissan's company also offered networking hardware for sale, along with related services. In 1994, the company registered the name nissan.com. In 1996, the company registered the domain name nissan.net and began offering ISP services to individuals and companies at that Web site.
In 1995, he received a letter from a lawyer representing Nissan Motor Co. The letter requested information about how Nissan was planning to use the domain name nissan.com. Because he was operating a computer company and Nissan Motor Co. was an auto company, Nissan decided there would be no potential confusion in customers' minds about the relationship (or lack thereof) between Nissan Computer and Nissan Motor Co. Nissan did not respond to the letter. The lawyer did not follow up with any other contact, so Nissan considered the issue closed.
In 2000, Nissan Motor Co. sued Nissan Computer under the U.S. Anticybersquatting Consumer Protection Act for $10 million and the exclusive right to use the names nissan.com and nissan.net. Uzi Nissan argued in court that he was just using his family name (which is a common name in the Middle East) to which he had a basic right, that he had no intent to profit from the name (he was unwilling to sell it to Nissan Motor Co. at any price), and that there was little likelihood that his computer store would be confused in the minds of the consumers with the international auto company of the same name. Nissan Motor Co. argued that its brand name was so well known that any alternative use of the name would be confusing to consumers.
In 2002, opinions issued by the California Superior Court and the U.S. Ninth Circuit District Court held that Nissan Computer had not acted in bad faith when it acquired the disputed domain names. However, the court ruled that Nissan Computer could no longer use the domain names for commercial purposes because of the potential confusion it could create in the minds of consumers. Nissan Computer would have to find a different domain name for its business. The court also ordered that Nissan could not place any advertising on his Web sites at nissan.com or nissan.net and prohibited him from placing disparaging remarks or negative commentary about Nissan Motor Co. (or links to such remarks or commentary) on the two sites. The court did not, however, order the transfer of the two domain names to Nissan Motor Co. The Web Links for this chapterincludes links to the Web sites operated today by Nissan Computer and Nissan Motor Co. In 2005, the U.S. Supreme Court refused to hear Nissan Motor Co.'s appeal of the lower court rulings, which allows them to stand.
Required:
1. U.S. courts sometimes appoint advisors (often called Special Masters) to help them decide cases that involve complex business or technical issues. Assume you are a business advisor to a court that is hearing an appeal of the Nissan Motor Co. v. Nissan Computer Corp. case. In about 200 words, explain why Nissan Motor Co. is so concerned about the use of these two domain names and how a monetary damages judgement of $10 million could be justified (if you do not believe that the monetary damages are justified, explain why).
2. In about 200 words, provide an outline of the ethics of the position taken by Uzi Nissan in this dispute.