JUDGES: Judge Susan Illston, United States District Court, Northern District of California.

OPINION: FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER GRANTING FINAL DEFAULT JUDGMENT FOR PLAINTIFF

FINDINGS OF FACT & CONCLUSIONS OF LAW

1. Plaintiff Online Partners.Com Inc. filed this action October 30, 1998, claiming trademark infringement, unfair competition, dilution, and constructive trust under the Trademark Act of 1946, as amended ("Lanham Act"), and the laws of the State of California.

2. Defendant was validly served with the Summons and Complaint of plaintiff on November 5, 1998, in accordance with  [*2]  law.

3. Defendant has not appeared in this action, and has failed to plead or otherwise respond to the Summons or Complaint of plaintiff within the time required by the Federal Rules.

4. Defendant is not an infant or incompetent person or in the military service or otherwise exempted under the Soldier's and Sailors' Civil Relief Act of 1940.

5. Defendant has not responded to the complaint and summons and, in accordance with the Federal Rules, the Clerk of this Court entered default in this action against defendant on March 2, 1999. See Declaration of Neil A. Smith, counsel to plaintiff.

6. Defendant is in default, and the Court finds no just cause for not entering this Default Judgment against defendant.

7. This Court has jurisdiction over this action pursuant to Section 39 of the Lanham Act, 15 U.S.C. § 1121; and pursuant to Title 28 of the United States Code, 28 U.S.C. §§ 1331, 1338, and 1367.

8. Plaintiff is a Delaware corporation having a principal place of business at 1700 17th Street, San Francisco, California, 94107.

9. Defendant is a Florida corporation, and runs an active Internet Web site soliciting business through the  [*3]  use of the Internet domain name "gaynet.com" which is the subject matter of this suit.

10. Plaintiff has shown that defendant has at least one member in this District who was signed up and paid by credit card in this district using the Internet address "gaynet.com."

11. As set forth in the findings below, defendant has by its actions at least for the purpose of granting this default injunction, purposefully availed itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of the forum State's laws. Moreover, plaintiff's causes of action arise out of, and are related to, defendant's contacts with the forum State.

JURISDICTION AND VENUE

12. California construes its long-arm statute to allow personal jurisdiction over a nonresident litigant to the maximum extent allowed by the federal constitution. Cal. Civ. Proc. Code § 410.10; Peterson v. Highland Music, Inc., 140 F.3d 1313, 1317 n.2 (9th Cir. 1998), cert. denied, 119 S. Ct. 446 (1998).

13. Defendant's GAYNET Internet Web site using the Internet domain name "gaynet.com" and the trademark and service mark GAYNET.COM is made available  [*4]  throughout the United States, including California, where plaintiff is headquartered, and from where plaintiff distributes its Internet publication under the GAY.NET trademark and service mark under its Federally Registered Trademark.

14. Plaintiff has shown that defendant's Internet Web site is active, as opposed to passive, and actively solicits membership in a subscription service whereby members fill out a form, and provide a payment, by a credit card, to plaintiff or its designated agent or subscription service. Plaintiff has shown at least one member in this District who subscribed to the subscription service being offered by or through defendant under the domain name "gaynet.com," which is the subject of this suit.

15. This Court has personal jurisdiction over defendant because: a) defendant engaged in conduct that was intended to and did result in harmful effects to plaintiff, and plaintiff's GAY.NET trademark in the United States, including California; and b) defendant has solicited business and made sales and has at least one subscriber in California, and defendant may be a cybersquatter, having registered the trademark of plaintiff in this district, and that there is jurisdiction  [*5]  under Panavision Int'l. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998).

16. Because of the nature of defendant's business and membership service, targeting the gay men's population, defendant's business would be directed, in part, to the population of the City of San Francisco, in this District, which has a large gay men's population. Personal jurisdiction exists here in part because defendant's contacts with California under the domain name form the basis for plaintiff's claims in this action.

17. Internet jurisdiction cases have looked at the active nature of a defendant's Web site to find jurisdiction. For example, Internet cases have found purposeful availment by examining the "level of interactivity and commercial nature of the exchange of information that occurs on the website." Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997) ("Zippo") (nonresident defendant's interactive Web site actively engaged in business with many forum residents constitutes purposeful availment). Cf. Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 419 (9th Cir. 1997) ("Cybersell") (following the rationale of Zippo, court held  [*6]  nonresident defendant's passive noninteractive Web site not constituting purposeful availment); Inset Systems, Inc. v. Instruction Set, Inc., 937 F. Supp. 161, 165 (D. Ct. 1996) (finding personal jurisdiction where nonresident defendant's Web site solicits business in the forum state); Maritz, Inc. v. Cybergold, Inc., 947 F. Supp. 1328, 1330 (E.D. Mo. 1996) (personal jurisdiction supported where nonresident defendant's interactive Web site was used by forum residents and generated business leads). See also, Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320-24 (9th Cir. 1998). (Where a defendant operates a Web site that advertises and solicits business for defendant, provides an e-mail address for state residents to contact defendant, and provides a product order form, courts have found personal jurisdiction to exist in the forum state.) Park Inns Intl, Inc. v. Pacific Plaza Hotels, Inc., 5 F. Supp. 2d 762, 764-66 (D. Ariz. 1998). Similarly, here, where defendant operates a Web site that advertises defendant's services, and that offers and provides a subscription service accessible to, and joined by, California  [*7]  residents, personal jurisdiction is proper over defendant in California.

18. Here, defendant's Web site is not only an active subscription service, but plaintiff has shown that defendant's Web site would have, by its content, been directed at least in part to the population of this District, and plaintiff has provided evidence of membership by a resident of this District. This, together with defendant's having admitted the well-pleaded allegations of plaintiff's complaint, provides a basis for jurisdiction here.

19. Accordingly, this Court has subject matter jurisdiction over this action under 15 U.S.C. § 1121 and 286 U.S.C. §§ 1331 and 1338(a) and 1338(b), and has supplemental jurisdiction under 28 U.S.C. § 1367(a) over plaintiff's claims under California law.

THE ACTIVITIES OF PLAINTIFF AND DEFENDANT

20. Plaintiff provides and distributes its Internet publications throughout the United States, including California.

21. Plaintiff's Internet Web site provides the ability of users of the Internet to communicate with each other through a "chat" room capability, to send private messages to each other as electronic  [*8]  mail or "e-mail", to meet others through a service provided by plaintiff, to provide personal advertising or personal ads, and provides various information, advice and news relating to many subjects of current and contemporaneous interest to the gay community.

22. Plaintiff has been distributing its printed publications and its Internet-based publication throughout the United States and to residents of California under the trademark and service mark GAY.NET since 1994.

23. Plaintiff has used its GAY.NET trademark in interstate commerce on the Internet's World Wide Web, and in advertising and the sale of and offering of services and goods throughout the United States since at least as early as 1994.

24. As established in the Complaint, plaintiff has adopted, used and registered the trademark GAY.NET in the United States for its Internet-based information and educational services business. Plaintiff's information and educational services under the GAY.NET trademark have received wide and favorable recognition throughout the United States and other countries for providing quality education and information services to the gay community. This is very important, particularly in that rural  [*9]  communities throughout the United States, where, unlike San Francisco, such information and educational services may not be openly available to members of the public.

25. Plaintiff's Internet Web site using the GAY.NET trademark and domain name has been featured in many articles and publications in magazines, newspapers, and Internet news publishers, including Newsweek magazine, the Miami Herald, the Washington Post and Wired magazine.

26. Plaintiff obtained federal registration for its GAY.NET trademark for printed publications and computer services, including providing a computer database and a computer bulletin board in the field of gay information, on April 7, 1998, based upon an application filed November 7, 1994, which issued on April 7, 1998, as United States Trademark Registration No. 2,149,815 (the "Federally Registered Trademark"). Complaint Exhibit 1.

27. Pursuant to 15 U.S.C. § 1091, by its registration, plaintiff's trademark GAY.NET has been found to be capable of distinguishing plaintiff's services in the marketplace, and thus functioning as a trademark.

28. In a manner similar to many newspapers, magazines and other publications,  [*10]  plaintiff has made the natural extension of its publication on the Internet through the use of the World Wide Web, and by advertising and its marketing through the Internet.

29. Plaintiff's GAY.NET Internet Web site and Internet publication and trademark are recognized throughout plaintiff's market area in the United States and in California, and has been distributed for more than four years, and plaintiff has acquired substantial goodwill and recognition in the gay community, members of which communicate and receive information over the Internet, and recognize plaintiff's Federally Registered Trademark as an indication of the source of plaintiff's Internet publication, and as a source of the information, advertising, goods and services of plaintiff.

30. Uncontroverted by defendant through its failure to answer, is plaintiff's allegation that, with full knowledge and awareness of plaintiff's Internet Web site and plaintiff's use of the GAY.NET trademark for computer services and publications, and plaintiff's use of the GAY.NET mark, defendant began using the Internet domain name "gaynet.com" and the mark GAYNET.COM as an Internet domain name and a trade name and service mark on the  [*11]  Internet, accessible throughout the United States and the state of California.

31. Defendant's GAYNET Web site using the Internet domain name "gaynet.com" and the trademark and service mark GAYNET.COM is made available throughout the United States, including California, where plaintiff is headquartered, and from where plaintiff distributes its Internet publication under the GAY.NET trademark and service mark under plaintiff's Federally Registered Trademark.

32. Defendant publishes material and offers services to the gay community on the Internet Web page of defendant under the domain name "gaynet.com" and the universal resource locator (URL) "<http://www.gaynet.com>", promoting the services of defendant, including membership in defendant for the purposes of providing and receiving information, providing a chat room and discussion services, and for providing membership and other services. Exhibit 2 to the Complaint. (Portions of the pictures on defendant's Web site have been redacted from the Exhibit.)

33. Defendant states on its Web-based publication services "Copyright 1998 (c) gaynet.com and AtlanticNet Media Corporation". Exhibit 2 to the Complaint.

34. Uncontroverted by defendant,  [*12]  through its failure to answer the complaint, is plaintiff's allegation that defendant has various licensing and other business relationships with third-party companies, which receive business, referrals, and "click-through" referrals through the Internet, and which benefit by and are fostered by defendant's use of the GAYNET service mark and "gaynet.com" domain name.

35. Defendant's Internet Web site contains material which is erotic, and material which should not be made available to the general public, and particularly to children under 18. Without even joining defendant's membership service and without even assent through a "click-on" link indicating a user is over 18, a user can view on the home page of defendant's Web site under the domain name "gaynet.com", pictures showing male genitalia and parts of the male anatomy.

36. It appears, and defendant has not controverted, that defendant has substantial membership and Internet "hits" or "traffic" from users/customers viewing defendant's Web site from California and the Northern District of California, which has a substantial gay community. Plaintiff has shown at least one member in the district.

37. Uncontroverted by defendant  [*13]  through its failure to answer is plaintiff's allegation that defendant includes among its members and listings of persons advertising for companions, numerous listings of persons in the Northern District of California, and surrounding areas.

38. It clearly appears that users of the Internet who are familiar with plaintiff and plaintiff's Internet Web site and plaintiff's Internet publications under plaintiff's Federally Registered Trademark, and who are seeking plaintiff on the Internet, will go to or are likely to go to defendant's "gaynet.com" domain name Web site in search of plaintiff, plaintiff's GAY.NET publications and/or the Internet Web site for such services of plaintiff.

39. It clearly appears, and defendant has not controverted the allegation, that defendant's domain name registration and offering of Internet publication services and an Internet Web site under the domain name "gaynet.com" has caused and will continue to cause actual confusion among members of the public as they use the Internet, if they are familiar with plaintiff's GAY.NET service mark and plaintiff's GAY.NET Federally Registered Trademark.

40. It clearly appears that defendant's use of the "gaynet.  [*14]  com" domain name and GAYNET name as a part thereof is likely to cause and is causing confusion, mistake, or deception of persons familiar with plaintiff's Internet Web site and publications, and with plaintiff's Federally Registered Trademark.

41. It clearly appears, and defendant has not controverted the allegation, that users of the Internet in the United States and in California, familiar with plaintiff and plaintiff's Internet publication offered under plaintiff's trademark GAY.NET and Federally Registered Trademark, who come across defendant's Web site at the domain name "gaynet.com", with erotic advertising and erotic pictures, are likely to believe that such erotic pictures and advertising is done with the approval of or under the authorization of plaintiff and in connection with or the sponsorship or approval of plaintiff's Internet Web site under the domain name "gay.net" and plaintiff's Federally Registered Trademark.

42. The Internet publication provided by plaintiff under the Federally Registered Trademark is provided with care and in an effort not to offend the reader or user of plaintiff's Web site on the Internet, so that the perceived association by the public of defendant's  [*15]  Internet Web site with the initial display of erotic advertising and erotic pictures, is likely to cause injury to and tarnish the business and personal reputation of plaintiff and its Internet publication and the services offered under plaintiff's Federally Registered Trademark GAY.NET.

THERE IS A VIOLATION OF THE LAW

43. Plaintiff, doing business under the trade name and service mark GAY.NET, brings claims for federal trademark infringement (Count I), federal unfair competition (Count II), federal dilution (Count III), unfair competition under California law (Count IV), dilution under California law (Count V), and constructive trust under California law (Count VI). Plaintiff's claims may be placed in three groups: (1) the trademark/service mark infringement and unfair competition claims (Counts I, II and IV); (2) the dilution claims (Counts III and V); and (3) the equitable claim (Count VI). These groups of claims are discussed below.

A. The Service Mark Infringement And Unfair Competition Claims

44. "The facts which will support a suit for infringement of a trademark and one for unfair competition are substantially the same." E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1288 n.2 (9th Cir. 1992).  [*16]  To succeed on its federal service mark infringement claim, plaintiff must prove "(1) ownership of a valid mark, (2) use by the defendant of the same or similar mark, and (3) that there is a likelihood of confusion." Alchemy II, Inc. v. YES! Entertainment Corp., 844 F. Supp. 560, 569 (C.D. Ca. 1994), citing HMH Publishing Co. v. Lambert, 482 F.2d 595, 598 (9th Cir. 1973). All of the elements of plaintiff's trademark/service mark infringement and unfair competition claims are satisfied here.

1. Plaintiff's GAY.NET Mark Is Valid

45. Plaintiff, GAY.NET's federal registration for its GAY.NET mark is evidence of the validity of the mark, of plaintiff's ownership of the mark and its right to use the marks in commerce that Congress may regulate on or in connection with the services specified in the registrations, and that the GAY.NET mark is capable of distinguishing plaintiff's services in the marketplace.

46. Moreover, as a result of the extensive marketing efforts by plaintiff, and the recognition of plaintiff's GAY.NET mark, through use on the Internet and recognition in several publications, plaintiff's GAY.NET mark has become distinctive to designate  [*17]  plaintiff, it's GAY.NET Web site, and to distinguish plaintiff and its services from others in the marketplace, and to identify the source or origin of plaintiff's services. Use of the GAY.NET service mark "to identify and distinguish the services" (definition of "service mark" in the Lanham Act, 15 U.S.C. § 1127) of plaintiff publishing on the Internet, represents use in commerce establishing trademark rights. Such use is "use in a way sufficiently public to identify or distinguish the marked goods [or services] in an appropriate segment of the public mind as those of the adopter of the mark." Brookfield Communications, Inc. v. West Coast Entertainment Corp. 174 F.3d 1036, 1999 WL 232014 (9th Cir. 1999) (quoting New West Corp. v. NYM Co. of Cal. 595 F.2d 1194, 1200 (9th Cir. 1979)).

47. As a result of the extensive efforts by plaintiff, the GAY.NET mark has become well known and widely recognized to consumers. Complaint at PP 8-16. Thus, plaintiff, GAY.NET has strong common law rights in addition to the rights plaintiff owns as a result of its federal trademark registration.

2. Defendant Has Used A Similar Mark In Interstate  [*18]  Commerce

48. As discussed above, defendant uses the mark GAYNET.COM to operate its erotic content and subscription business prominently on its Web site to promote the business and sell its services. Defendant's mark creates the same commercial impression as plaintiff's GAY.NET mark. Defendant's Web site is accessible throughout in the United States, and its use of the mark GAYNET.COM has a substantial effect on United States commerce and consumers, and is in commerce that Congress may regulate. For example, defendant presents promotional materials on its Web site to United States consumers, provides an e-mail address to contact defendant, and consumers subscribe to purchase access to receive materials from defendant.

3. Defendant's Use Of GAYNET.COM Is Likely To Cause Confusion With Plaintiff's GAY.NET Mark

49. The likelihood of confusion element is satisfied by the established facts. The Ninth Circuit considers the following eight factors in determining whether confusion is likely:
 
1. Evidence of actual confusion;
 
2. Strength of the mark;
 
3. Similarity of the marks;
 
4. Proximity of the goods;
 
5. Defendant's intent in selecting the mark;
 
6. Marketing  [*19]  channels used;
 
7. Type of goods and the degree of care likely to be exercised by the purchaser; and
 
8. Likelihood of expansion of the product lines.
 
Official Airline Guides, Inc. v. Goss, 6 F.3d 1385, 1391 (9th Cir. 1993); AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348 (9th Cir. 1979). Brookfield Communications, Inc. v. West Coast Entertainment Corp., supra. A consideration of these factors in light of the established facts in this case clearly shows the likelihood of confusion.

50. Defendant's prominent use of the mark GAYNET.COM has caused actual confusion. Persons seeking plaintiff's Web site have mistakenly gone to defendant's Web site because of the similarity in names. Complaint PP 25-26. Such complaints are based on the mistaken assumption that plaintiff, GAY.NET, sponsors or is affiliated with, the defendant's Web site. Courts have uniformly recognized that actual confusion is the best evidence of likelihood of confusion. See, e.g., Exxon Corp. v. Texas Motor Exchange, Inc., 628 F.2d 500, 506 (5th Cir. 1975); Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366, 383 (7th Cir. 1976),  [*20]  cert. denied 429 U.S. 830, 50 L. Ed. 2d 94, 97 S. Ct. 91 (1976); see also Sardi's Rest. Corp. v. Sardie, 755 F.2d 719, 724 (9th Cir. 1985) (evidence of actual confusion is strong proof of likelihood of confusion). This is because evidence of actual confusion is persuasive proof of future confusion. AMF, 599 F.2d at 352.

51. Likelihood of confusion is also shown by the recognition and fame of plaintiff, GAY.NET mark. Plaintiff, GAY.NET mark is well-known and widely recognized among consumers. Complaint PP 8-16. The GAY.NET mark is well known or famous within the gay community. A famous or well-known mark is strong and is "entitled to broader protection than a suggestive, weak, or commonplace mark." Steinway & Sons v. Robert Demars & Friends, 1981 U.S. Dist. LEXIS 15169, 210 U.S.P.Q. (BNA) 954, 958 (C.D. Cal. 1981); Kenner Parker Toys v. Rose Art Indus., Inc., 963 F.2d 350, 354-55 (Fed. Cir. 1992), cert. denied 506 U.S. 862, 121 L. Ed. 2d 126, 113 S. Ct. 181 (1992).

52. Similarly, defendant's use of a very similar mark in connection with the offering of the same service is persuasive evidence  [*21]  of likelihood of confusion. In this case, defendant also operates a gay community Web site on the Internet under the mark GAYNET.COM. This site prominently features the mark GAYNET.COM on the first page and other pages throughout the site. Complaint Exh. 2. Defendant's mark contains the identical mark of plaintiff's GAY.NET registered word mark, Id. at Exhibit B, and uses lower case letters similar to those found in plaintiff's use. Where the marks at issue, as well as the services on which they are used, are identical or highly similar, the likelihood of confusion increases markedly.

53. Additionally, the facts undisputed by defendant's default show that defendant intended to trade on plaintiff, GAY.NET's goodwill in using its GAYNET.COM service mark. Complaint P 17. While a showing of intent is not necessary to support a finding of a likelihood of confusion, Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175, 1178 (9th Cir. 1988), the admitted facts in this case show that defendant was or should have been aware of plaintiff's famous GAY.NET mark when defendant registered the www.gaynet.com domain name and began to use the mark GAYNET.COM prominently on its Web  [*22]  site. Complaint PP 8-17. As the Ninth Circuit stated, "When an alleged infringer knowingly adopts a mark similar to another's, courts will presume an intent to deceive the public." Official Airline Guides, 6 F.3d at 1394; AMF, 599 F.2d at 354.

54. Courts have been particularly reluctant to accept a defendant's argument that it adopted the mark independently, in good faith, where plaintiff's mark is well known and famous. Guess?, Inc. v. Hermanos, 993 F. Supp. 1277, 1283 (C.D. Cal. 1997) (defendant's explanation that its adoption was independent "appears a bit flimsy, particularly when [Plaintiffs mark] is widely recognized ... as an indicator of source.") Thus, the high degree of similarity of the marks, coupled with the fame of plaintiff's GAY.NET mark, uncontroverted by defendant, supports a finding of bad faith in this case.

55. As demonstrated above, the admitted facts establish a likelihood of confusion. Accordingly, judgment should be entered for plaintiff on its trademark infringement and unfair competition claims (Counts I, II, and IV).

B. The Dilution Claims

56. The admitted facts also establish plaintiff's dilution  [*23]  claims. For example, to prevail on its Federal Dilution Claim (Count III), plaintiff must prove the following:
 
1. Plaintiff's GAY.NET mark was famous before defendant began its wrongful use of the mark; and
 
2. Defendant's use causes dilution of the distinctiveness of plaintiff's GAY.NET mark. 15 U.S.C. § 1125(c).

57. The Federal Dilution Act defines dilution as "the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of--(1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake or deception . . ." 15 U.S.C. § 1127. A claim for dilution under the California Statute, Cal. Bus. & Prof. Code § 14330 (1991), is subject to the same analysis as a federal claim. Panavision, supra, 141 F.3d at 1324.

58. The established facts show that plaintiff's GAY.NET mark is well known and famous and had achieved such fame before defendant's wrongful use of the mark. This finding is compelled by plaintiff, GAY.NET's advertising and promotion of its Web site using the mark, as well as the wide-recognition  [*24]  and public recognition of the mark in many magazine articles and newspapers. See Complaint P 12.

59. The established facts also show that defendant's use of GAYNET.COM has diluted the distinctive quality of plaintiff, GAY.NET famous mark, both by blurring and tarnishment. "Tarnishment occurs when a famous mark is improperly associated with an inferior or offensive product or service." Id. at n.7 (citations omitted). "Blurring occurs when a defendant uses a plaintiff s trademark to identify the defendant's goods or services, creating the possibility that the mark will lose its ability to serve as a unique identifier of the plaintiff s product." Id.

60. Numerous courts have held that where a defendant uses a famous or well-known mark in connection with pornographic or sexually oriented products and services inconsistent with the image maintained by the trademark owner, the mark has been tarnished. See Toys "R " US, Inc. and Geoffrey, Inc., v. Akkaoui, 1996 U.S. Dist. LEXIS 17090, 40 U.S.P.Q.2D (BNA) 1836, 1838 (N.D. Cal. 1996) (mark used in Web site to selling "a variety of sexual devices and clothing" under the name ADULTS R US and domain name "adultsrus.com") dilutes  [*25]  plaintiff's family of trademarks ending in "R" US including TOYS "R" US, KIDS "R" US, etc., citing Hasbro, Inc v. Internet Entertainment Group, Ltd., 1996 U.S. Dist. LEXIS 11626, 40 U.S.P.Q.2D (BNA) 1479 at *I (W.D. Wash. Feb. 9, 1996); Archdiocese of St. Louis v. Internet Entertainment Group, Ltd., 34 F. Supp. 2d 1145, 1999 WL 66022 at 8 (E.D.Mo. 1999). Similarly, defendant's prominent use of GAYNET.COM without even screening for adult, non-children viewers in connection with its Web site promoting and selling erotic or pornographic images, tarnishes the GAY.NET mark.

61. Defendant's use of the "gaynet.com" domain name and GAYNET.COM mark incorporating plaintiff's GAY.NET service mark in connection with the provision of chatroom and subscription services, also dilutes plaintiff's GAY.NET mark by blurring. To the extent that defendant develops consumer recognition for its services under the GAYNET.COM mark, the capacity of plaintiff's GAY.NET mark to serve as a unique identifier of plaintiff as GAY.NET, is diminished. See Complaint PP 45-47 and 55-57.

62. The admitted facts establish service mark dilution under both the Federal Dilution Act and the California  [*26]  Dilution Statute. Accordingly, judgment should be entered for plaintiff, GAY.NET on its federal and California dilution claims (Counts III and V).

C. Plaintiff's Equitable Claim

63. Defendant's unauthorized use of the GAYNET.COM mark in the manner described above, unjustly enriches defendant at plaintiff's expense, as defendant is trading on plaintiff's goodwill in its famous mark. Complaint PP 17-57 and PP 59-62. This profit by defendant at the plaintiff's expense and unjust enrichment, supports entry of a constructive trust over the domain name of defendant and other relief warranted by the equities of the case. Maier Brewing Co. v. Fleischmann Distrib. Corp., 390 F.2d 117, 123 (9th Cir. 1968), cert. denied 391 U.S. 966, 20 L. Ed. 2d 879, 88 S. Ct. 2037 (1968). Judgment should be entered for plaintiff's on its equitable claim, and the court should exercise an equitable lien over the domain name "gaynet.com" and transfer it to plaintiff, as prayed for in the Complaint, P 62. A domain name is intellectual property and may be attached under the law. See Umbro Int'l. Inc. v. 326851 Canada, Inc., 48 Va. Cir. 139, 1999 WL 117760 (Va. Cir. Ct.).  [*27]

64. Accordingly the court finds that defendant's use of the "gaynet.com" domain name, and GAYNET name as a part thereof, is likely to cause and is causing confusion, mistake, or deception of persons familiar with plaintiff's Internet Web site and publications, and with plaintiff's Federally Registered Trademark, and is likely to dilute the distinctiveness of plaintiff's trademark.

RELIEF

A. Plaintiff, GAYNET Should Be Granted A Permanent Injunction

65. As demonstrated above, defendant's actions are infringing and diluting plaintiff's GAY.NET mark, and resulting in damages to plaintiff and unjust enrichment to defendant. In trademark cases, once the plaintiff establishes a likelihood of confusion between the plaintiff's mark and the defendant's, it is ordinarily presumed the plaintiff will suffer irreparable harm if injunctive relief is not granted. Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 612 n.3 (9th Cir. 1989). By defendant's default, injury and tarnishment is deemed admitted. Complaint PP 29, 37-38, 42, 46-47, 52, 55-56, et seq. Thus, plaintiff is entitled to an injunction, as prayed for in its Complaint.

B. Plaintiff Should Be Awarded  [*28]  Its Reasonable Attorney Fees And Costs

66. Plaintiff, GAY.NET, also seeks an award of its reasonable attorney fees pursuant to Section 35(a) of the Lanham Act, which authorizes such an award "in exceptional cases." 15 U.S.C. § 1117(a); Committee for Idaho's High Desert, Inc. v. Yost, 881 F. Supp. 1457 (9th Cir. 1996). Indeed, "a district court abuses its discretion if it fails to consider an award of fees where a defendant's bad faith has been established." Imagineering, Inc. v. Van Klassens, Inc., 851 F. Supp. 532, 538 n.7 (S.D.N.Y. 1994), affd in part and rev'd in part or other grounds, 53 F.3d 1260 (Fed-Cir. 1995) cert. denied 516 U.S. 909 (1995); see also J. Thomas McCarthy, 5 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION, § 30:100 (4th ed. 1996) (where there is proof of intentional infringement, it is an abuse of discretion not to award attorney fees).

67. A Lanham Act case is exceptional if the infringement is "malicious, fraudulent, deliberate, or willful." S. Rep. No. 93-1400, 93d Cong., 2d Ses's. (1978). The admitted facts and the notoriety of plaintiff's trademark show that  [*29]  this is an exceptional case. Defendant knew or should have known that its site was accessible to children without screening and likely to be associated with plaintiff's GAY.NET Web site by consumers in the United States. It appears, and defendant has not controverted the allegations that defendant is knowingly and intentionally damaging plaintiff, by using a mark incorporating plaintiff's trademark. It appears that defendant knows or should know that these materials will dilute plaintiff's mark and/or tarnish plaintiff's mark. Through defendant's use of the mark, defendant is trying to trade upon on plaintiff's Web site's vast goodwill in the GAY.NET mark.

68. Plaintiff has advised the court that it does not seek damages at this point. Because of defendant's failure to participate in the legal process and the inability of discovery, plaintiff is unaware of the extent of its losses and has advised the court that it will not pursue them, if the injunctive relief and attorneys' fees and other relief is granted.

69. Accordingly plaintiff's requests for injunctive relief and equitable relief are granted.

ORDER

IT IS THEREFORE ORDERED, ADJUDGED AND DECREED:

1. That defendant, its  [*30]  officers, directors, predecessors, successors, assigns and others having knowledge of the order, is permanently enjoined and restrained from directly or indirectly:

a) using the domain name "gaynet.com" or any other mark, word, name, trade name, or domain name containing "gaynet" which is so similar to plaintiff's GAY.NET mark and domain name as to be likely to cause confusion, mistake, or deception, or to which defendant is not equitably entitled, or

b) using the name or mark "gaynet" or "gay.net" or the domain name "gaynet.com", or other colorable variations thereof, or any colorable variation of plaintiff's GAY.NET trademark, as a trademark, trade name, or Internet domain name, including "gaynet.com", in connection with publishing or providing information on the Internet or any other media, or

c) doing any other act or thing calculated or likely to induce the belief that defendant's business or Internet Web page is in any way affiliated, connected, associated, sponsored, licensed, or authorized by or with plaintiff, or

d) doing any other act or thing likely to dilute the distinctiveness of plaintiff's GAY.NET trademark.

2. IT IS FURTHER ORDERED that, defendant shall transfer  [*31]  custody and control of the domain name at issue here, "gaynet.com," to plaintiff and shall assign the domain name "gaynet.com" to plaintiff. This transfer may be accomplished by the parties under the rules and procedures of Network Solutions, Inc., or such other methods of transfer.

3. IT IS FURTHER ORDERED that defendant, its agents, servants, employees, predecessors, franchisees, licensees, advertisers, and all others in active concert or participation with any of them, having notice of the order of this court, by personal service or otherwise be required, in accordance with 15 U.S.C. § 1118, to deliver up for destruction all labels, signs, prints, packages, digital image or Web site copy, in any media or form, in their possession, custody or control bearing the names or marks "gaynet.com", "gaynet" or "gay.net", or any other reproduction, counterfeit, copy or colorable imitation of plaintiff's Federally Registered Trademark and that all plates, molds, matrices, computer media, disks, computer memory, or other media containing such information be delivered up for destruction or deleted, with evidence and proof of such deletion to be provided in verified form  [*32]  to the court and to plaintiff.

4. IT IS FURTHER ORDERED that defendant be required to immediately notify in writing, or by electronic mail (e-mail), all publishers of directories, lists, banner advertisements or search engines in which the "gaynet.com" domain name and/or the "gaynet" name appears in reference to defendant or defendant's services or defendant's Internet Web site, to delete all references to defendant for or under this name or this domain name from such directories or listings, or from their cache memories, and/or from all future directories in which the name might otherwise appear in reference to defendant.

5. IT IS FURTHER ORDERED that defendant shall immediately notify in writing, and by electronic mail (e-mail), all publications, or Web sites in which advertisements, banners, references, hyperlinks or metatags appear or are known to reference or to refer to defendant's "gaynet.com" domain name or defendant's "gaynet" name, directing them to cancel all advertisements and references to defendant as and under such names or as "gaynet.com".

6. IT IS FURTHER ORDERED that, to the extent not accomplished by this order, the assignment of the domain name "gaynet.com",  [*33]  shall be held in trust for the benefit of plaintiff, and assigned under the principles of law and equity to plaintiff.

7. Plaintiff may be entitled to an award of its damages, including its lost profits and defendant's profits, such damages to be trebled for the willfulness of defendant's acts, and its reasonable attorneys' fees, and costs, but no award is made at this time, at the request of plaintiff.

8. IT IS FINALLY ORDERED that defendant be required in accordance with 15 U.S.C. § 1116, and other laws, to file with the court and serve on plaintiff a report in writing, under oath, setting forth in detail the manner and form in which defendant has complied with the terms of the order of this court.

Signed and Entered this 18th day of January 2000.

Judge Susan Illston

United States District Court

Northern District of California