Playboy Goes After AOL

Gretchen Gallen
SAN FRANCISCO, Calif. – A three-year lawsuit between Playboy Enterprises and drew to an end this week in a U.S. appeals court, and the 50-year-old bunny came out the winner.

Playboy sued in 1999, along with Netscape, alleging that the two companies had infringed on the 'Playboy' and 'Playmate' trademarks in Internet searches and banner ads that did not link to official Playboy content.

Since the lawsuit filing, Redwood City, Calif.-based Excite@Home, parent company of, declared bankruptcy in September of 2001, and Netscape has since been bought by AOL/Time Warner.

In December 2001, Excite@Home, a high-speed Internet access provider, laid off about 400 workers as it prepared to shutter its doors. At one point during the end of its run, Excite was being courted by AT&T in a $307 million bid for its cable assets, but the telecom withdrew and Excite went under.

In its lawsuit, Playboy named around 400 words used in misleading banner ads that insinuated a relationship to Playboy Enterprises, Reuters reported.

Playboy argued in its lawsuit that was using its trademark in a deliberately confusing manner and that traditional trademark law should be transferable to the electronic medium.

Playboy's central argument was that the misleading banner ads "tarnished and diluted" the Playboy brand name.

Playboy lost the first round in the suit in 2001, but the appeals court this week decided that the Playboy trademark should be protected regardless of how it is transferred throughout the Internet.

Playboy's attorney in the case said that his client fully intends to pursue for damages regardless of its bankruptcy status, according to Reuters.

The appeals court also reinstated Playboy's right to proceed in a trademark infringement suit against Netscape Communications Inc., now under the vast wingspan of AOL/Time Warner. Playboy is most likely to go after damages somewhere in the seven figures, sources say.

"The decision makes clear that the rules apply in the actual world with equal force to the virtual world," Playboy's attorney was quoted as saying. "In the Internet as in the actual world, trademarks are not to be used in a way that is confusing or that dilutes the value of the mark."