S&L Vitamins made this motion for summary judgment on its declaratory judgment complaint, and to dismiss the
counterclaims of defendant Australian Gold. S&L buys tanning lotion made by AG at retail tanning salons, in quantity, and hence these salons give S&L a favorable price. S&L then sells that merchandise on the Internet, truthfully describing it to consumers using the brand
names and product descriptions on the bottles. No law regulates or prohibits the purchase and sale of tanning lotion, on the Internet or elsewhere, regardless of quantity or where the seller purchased it.
Trademark law, of course, is designed to protect consumers by preventing customer confusion, not to protect a manufacturer?s inflated price structure and network of distributors by preventing truthful, accurate advertising and providing leverage via the expense of federal
litigation. AG?s claim that the S&L website could be confused with its own merely because S&L sells AG products is preposterous and supported by no evidence of actual confusion, no survey and no expert testimony. In addition, the emerging consensus in this Circuit is that search-engine advertising does not constitute ?trademark use? that could give rise to infringement liability. Moreover, S&L?s activities are protected under the first sale and nominative fair use doctrines, which permit the sale and advertisement of a trademark-protected product, without regard to the trademark owner?s approval. Similarly, AG?s dilution claims for are baseless; their marks have no fame.
AG also claimed that S&L interfered with the contracts between AG and its distributors. Yet after three years of investigation and litigation, there was no proof that S&L ever did business with a distributor; no proof that S&L was awareof specific distribution agreements with specific
distributors as required by the law; and no proof that S&L owned, controlled or otherwise connived with affiliated retailers to induce distributors to sell to S&L.
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