Facts
Digital owns a 'search-engine' service known as AltaVista. Digital purchased ATI's rights in its trademark 'AltaVista' and then licensed back to ATI the right to use 'AltaVista,' in certain defined ways, as part of both ATI's corporate name and its Uniform Resource Locator (www.altavista.com) . The license precludes ATI from using AltaVista as 'the name of a product or service offering.' Digital is seeking a preliminary injunction, claiming that ATI's Web-site breaches its licensing agreement and infringes its trademark rights in 'AltaVista.' ATI opposes Digital's motion on the merits and moves to dismiss for lack of personal jurisdiction. The scope and meaning of the license agreement is hotly contested by the parties. ATI contends that its agreement with Digital was formed with the specific intention of allowing it to benefit from the popularity of Digital's AltaVista, and the strong brand identity the 'AltaVista' search service had created. In contrast, Digital maintains that ATI's licensing agreement strictly limited ATI's ability to use 'Altavista' -- as part of its corporate name and its url -- and not as 'the name of a product or service offering.' ATI dramatically changed the appearance of its Website, such that ATI's Website looked like, and could effectively function as Digital's AltaVista search service. When these changes were implemented, Digital's trademark counsel sent ATI's president a letter claiming that the appearance of ATI's Website constituted a breach of Clause 1.1 of their license agreement. ATI was also put on notice of the possible termination of their license agreement pursuant to Clause 3.1. By October 28, 1996, ATI's Website was designed to look, feel, and function very much like Digital's AltaVista Website. At the same time, ATI derived revenues from the site and its ties to Digital's Altavista. It displayed banner ads and solicited other advertisers, who could get information about how they, too, could reach millions of users every day by advertising on ATI's Website. Digital expressly eschewed providing advertising space to others for its Web-site at that time. Digital claims that ATI thus breaches the license agreement by attaching the word 'AltaVista' to both of the search and advertising services. Digital further contends that ATI's Website infringes Digital's trademark rights in AltaVista and that the ATI site constitutes unfair competition both under the Lanham Act § 43(a) and at common law. ATI argues its usage of AltaVista is permitted by its license with Digital. It also contends this Court lacks personal jurisdiction over it.
