AOL Loses Round in AT&T; Suit
America Online Inc. reported good news on the holiday sales front on Monday, but the No. 1 online service also lost its bid to bar AT&T;’s Internet unit from using the term “You Have Mail,” and other terms AOL has popularized, while AOL’s trademark lawsuit is pending.
AOL said subscribers used its service to buy $1.2 billion in goods and services from Internet retailers during the six-week holiday season, according to figures gathered by Internet Research Group of Radnor, Pa. AOL said that between Nov. 26 and Dec. 27, 1.25 million of its more than 15 million members shopped online for the first time.
“It’s clear that this past holiday shopping season marks a turning point--when shopping online really became a key part of consumers’ shopping patterns,” AOL President Bob Pittman said.
Also on Monday, U.S. District Judge Claude Hilton in Alexandria, Va., rebuffed AOL’s arguments that rights to the phrase “You Have Mail” and the terms “IM” and “Buddy List” were clearly owned by AOL.
AOL indicates the arrival of e-mail with the phrases “You’ve Got Mail” and “You Have Mail,” and the service uses “IM” and “Buddy List” in its Instant Message and Buddy Chat functions. AOL filed a trademark-infringement suit against AT&T;’s WorldNet Service on Dec. 22, seeking to block its use of the phrases and terms.
The suit is being closely watched in the Internet community, legal experts say. Because the Internet is still a relatively new medium, the trademark rights of Internet providers and users are still being established. Hilton denied AOL’s request for a temporary restraining order against AT&T; as the case proceeds to trial.
“We’re pleased that Judge Hilton has rejected this attempt by AOL to appropriate common Internet terms for its own exclusive use,” said James Cicconi, AT&T;’s general counsel and executive vice president for law and government affairs.
“This ruling helps all ISPs [Internet service providers], Web companies and Internet users by recognizing that the common language of the Web is not owned by AOL or anyone else,” Cicconi added.
AOL officials said AT&T; was trying to capitalize on the buzz generated by the growing use of e-mail and the recently released movie in which AOL is featured.
“AT&T; is trying to get a free ride on a term that has been historically associated with AOL,” said spokeswoman Tricia Primrose.
Primrose said that AOL is in the process of registering “You’ve Got Mail” and “IM” as trademarks and that “Buddy List” is already a federally registered trademark with AOL. A company that uses a name or logo for a period of time, however, can claim trademark rights to it, she said.
“There are probably no three more recognizable words associated with a company than ‘You’ve Got Mail,’ ” she said.
In Time Warner Inc.’s “You’ve Got Mail,” starring Meg Ryan and Tom Hanks, AOL is the Internet service by which the two meet electronically and fall in love.
AT&T;’s use of certain phrases “is clearly timed to conjure up in the minds of consumers the folksy, cheerful relationship between AOL and its subscribers promoted in the film,” AOL’s lawyers said in the suit.
AOL said it has been using “You Have Mail” and “You’ve Got Mail” in connection with its automatic e-mail notification services for nearly a decade.
AT&T;’s product, which was announced Dec. 15, detracts from AOL’s distinctiveness and will confuse customers into believing AT&T;’s product is affiliated with AOL, the suit argues.
On the New York Stock Exchange, AOL shares fell $6.31 to close at $148.81, and AT&T; shares rose $2.13 to close at $77.78.
