WASHINGTON -- Terri Welles isn't just a nude model, the proud owner of a sex site and the 1981 Playboy Playmate of the Year.
Thanks to a lawsuit brought by Playboy, Welles has become famous for much more than merely shedding her clothes for photographers.
In a unanimous decision, a panel of federal judges from the Ninth Circuit Court of Appeals said last Friday that terriwelles.com could feature the term "Playmate of the Year" because it did not infringe upon the trademarks of Playboy Enterprises (PEI).
Playboy had accused the aging centerfold queen, who has appeared in 13 issues of the magazine and 18 newsstand specials, of allegedly infringing upon the bunny company's famous trademarks by including them in the text and meta tags of her website. The complaint threw the intellectual property book at Welles, charging trademark infringement, dilution, false designation of origin and unfair competition.
But the three-judge panel, in an opinion written by Thomas Nelson, said that Welles had the right to use what amounted to her previous job title -- even if her porn site competed with Playboy's rather more famous homepage by hawking a $19.95 a month membership.
"We conclude that Welles' uses of PEI's trademarks are permissible, nominative uses. They imply no current sponsorship or endorsement by PEI. Instead, they serve to identify Welles as a past PEI 'Playmate of the Year,'" the judges said.
The judges mostly agreed with an earlier decision by U.S. District Judge Judith Keep in San Diego.
"The marks are clearly used to describe the title she received from PEI in 1981, a title that helps describe who she is," the panel explained. "It would be unreasonable to assume that the Chicago Bulls sponsored a website of Michael Jordan's simply because his name appeared with the appellation 'former Chicago Bull.' Similarly, in this case, it would be unreasonable to assume that PEI currently sponsors or endorses someone who describes herself as a 'Playboy Playmate of the Year in 1981.'"
Playboy has trademarked the phrase "Playmate of the Year."
In 1979, Welles was a flight attendant for United Airlines who was invited to Hugh Hefner's famous mansion by a mutual friend. Hefner offered to put her on the cover of the magazine, and she accepted.
Since then, Welles claims, she's frequently referred to herself as a "Playmate" or "Playmate of the Year," with zero complaints from Hef or his lawyers -- until she opened her own subscription sex site in June 1997. It includes nude photos of herself, a fan club and a brief autobiography.
At least right now, Welles is playing it straight. At the bottom of every page is a disclaimer -- though it appeared only after the suit -- saying, "This site is neither endorsed, nor sponsored by, nor affiliated with Playboy Enterprises, Inc."
As of Tuesday, Welles was using meta-tags including "terri, welles, playmate, playboy, model, models, semi-nudity, naked, breast, breasts, tit, tits, nipple, nipples, ass, butt." Before Playboy sued her, she repeated the term "Playboy" in hopes of higher rankings.
An attorney representing Playboy said the adult publishing giant had not decided whether it would appeal the decision. Because the Ninth Circuit ruled only on a motion for summary judgment, a trial could still take place.
"Playboy has not yet determined what it will do. It is reviewing its options," said Dave Francescani, an outside attorney who represents Playboy.
"The court did not award attorneys' fees to Welles," Francescani said. "The argument that was made below was that it was a frivolous action on Playboy's part. The district court and the court of appeals decided that this was not the case at all."
When the Playboy v. Terri Welles litigation began in early 1998, trademark law on the Internet was far from settled and meta tags were more important to search engines. Since then, search engines such as Google have come to rely on other methods to rank sites, such as the number of links that point at them.
Kevin Smith, an attorney at the Washington law firm of Sughrue Mion who represents trademark holders, says he's not overjoyed with the decision. He said that the court's ruling that Welles was making legal "nominative use" of Playboy's trademarks was disturbing.
"As a trademark practitioner, I don't like this decision. It bothers me inasmuch as they're furthering the creation (of nominative use) that they've already started. They're furthering this idea of nominal use. I think trademark owners would be better served if we don't create a new exception in trademark law," Smith said.
Smith suggested a traditional "fair use" test would be fairer to trademark holders. "I think the court wanted to come out the way they did and looked for a rationale to support it."
Playboy did win a minor victory. The appeals court said that Welles' repeated use of the term PMOY in the background of her site was a trademark infringement: "We affirm the district court's grant of summary judgment as to PEI's claims for trademark infringement and trademark dilution, with the sole exception of the use of the abbreviation 'PMOY.'"
Eugene Volokh, a law professor at UCLA, applauded the Ninth Circuit's decision.
"I think it's quite good. It reinforces one important point, which is that it's certainly OK to use someone else's trademark if you're accurately relating your relationship with that entity," Volokh said. "If you're a body shop that repairs Volkswagen cars, you can say so."
Volokh said: "In context, nobody is going to be confused. Nobody's going to think the Welles site is endorsed by Playboy. They're going to think it's just run by a former Playmate of the Year."
