EToys Offers to End Trademark Fight Against Collective

After a bruising battle with Internet activists who portrayed it as an enemy of art and free speech, online retailer EToys.com is pursuing peace. It offered this week to drop its trademark protection case against Etoy.com, an award-winning European artists’ collective that lost its domain name because of the Santa Monica-based toy seller’s action.

The case had sparked protests, including a boycott against EToys and anarchist-backed calls for “digital riots” and “virtual sit-ins” aimed at crashing the retailer’s computer servers. The company reported banner Christmas sales, although it was the target of a deluge of angry mail and scores of Internet protest sites lambasted EToys as a Scrooge at the height of the holiday shopping season.

“We’ve received over the last several weeks a lot of e-mails and letters from members of the arts community and Internet community. They’ve overwhelmingly urged us to find a way to peacefully coexist with the Etoy group, and we’ve decided to do that,” EToys.com spokesman Ken Ross said.

In conciliatory faxes to the artists’ attorney, an EToys lawyer pledged to “take all necessary steps” to allow Etoy to reestablish its domain, etoy.com, which it has been barred from using since Nov. 29 by a court order.

Etoy’s multimedia artists--they call themselves “human Net agents”--oppose the commercialization of the Internet and devote themselves to tweaking the nose of corporate culture. The collective has been active since 1994 and is now based in Zurich. It registered its domain name two years before the toy company went online but did not obtain a U.S. trademark.

In Los Angeles County Superior Court, EToys won a temporary injunction with its argument that its trademark and brand name were being harmed by the activities of the artists, whose Web projects sometimes include profanity or nudity. The company said there was a “danger to children” who might mistakenly log on to the Etoy site by failing to type an “s” in the Web address. EToys also argued that it could lose business because of the confusion.

EToys attorney Bruce A. Wessel proposed this week that both parties drop their legal actions--the Etoy group had filed a counterclaim--so they “may once again coexist as good neighbors on the Internet.” EToys offered to pay Etoy as much as $25,000 to cover its attorneys’ fees.

The settlement proposal includes a polite request, but not a precondition, that the collective consider placing any “profanity, nudity and violence” on another site. Etoy’s attorney, Chris Truax, said any effort by the toy seller to dictate Etoy content would be rejected out of hand.

“Etoy is a well-respected art group in Europe,” he said. “EToys just doesn’t get their art. EToys has to accept that Etoy has a valuable social contribution to make and that they have every right to be online.”

An Etoy spokesman in Zurich who goes by the name Agent Zai said Thursday that the retailer should apologize and take immediate action to restore the art group’s domain registration at Network Solutions Inc. in Herndon, Va.

“Our Web site was down for a month, whole links are gone, about 70 e-mail addresses were unreachable--and they think they can just turn the clock back and say there was a little misunderstanding?” Zai asked. “Our domain is still down, and that’s what counts for us.”