Playboy Hits Aol With Internet Suit

Playboy Enterprises, the adult entertainment group, was given the go-ahead yesterday to sue internet service provider AOL for copyright infringement, a decision that could have broad implications for the still fluid rules governing trademarks online.

The ruling by a panel of appeals court judges reopens a case first filed in Los Angeles in 1999. The case is related to the use of the words "playboy" and "playmate" as signposts in the Netscape online search engine.

The words were included in a list of about 400 such as "sex" or certain body parts that would identify users interested in buying adult-themed merchandise. People typing those words into the search engine would automatically be sent banner advertising for various adult-themed sites that were not associated with Playboy Enterprises.

Playboy argued in its suit that the links tarnished and diluted its brand name by associating its trademark with inferior products. Barry Felder, a lawyer for Playboy, said the firm was seeking damages "well into seven figures."

He said: "There are all types of methods used by search engines and internet advertisers to sell products, and I believe that the principles established here - that one cannot use trademarks in a confusing way on the internet - will have an impact on other cases. The decision makes clear that rules applied in the actual world have equal force in the virtual world."

An AOL spokesman said the company was disappointed by the ruling. He said the firm, which acquired Netscape in 1999 and is now part of Time Warner, was "assessing and considering the legal options available".

Judge Thomas Nelson wrote in the panel's ruling that the "evidence suggests, at a minimum, that defendants do nothing to alleviate confusion, even when asked to do so by their advertisers, and that they profit from confusion".