Seattle Trademark Lawyer

STL’s been in Buenos Aires.

For this blog, that can only mean one thing: infringement safari. When traveling, it’s great fun to find examples of blatant trademark infringement, counterfeiting, descriptive marks, and the like. Check out the last couple safaris here and here.

I’ve got to say, BA was more of a challenge than I thought. Not the language — I knew its Italian-sounding dialect would be a little tough. But the infringement. Counterfeit-looking DVDs are pretty ubiquitous on the street. But infringement in brick-and-mortar stores appears to be relatively rare. The most outlandish example I found was this fake “Lululemon” shop:

Wonder if their yoga pants are sheer.

Second prize goes to the kindergarten that helped itself to the “Hello Kitty” name. Being a proud uncle of two nieces, I know the power of the Hello Kitty brand. What girl wouldn’t want to go to school here?

Finally, I couldn’t pass up this descriptive trademark. Like girls and Hello Kitty, what homeowner wanting to sell wouldn’t want to hire the best real estate agent? Literally. As in “Best Seller Brokers”?

(Photos by STL)

Never fear! The U.S. Patent and Trademark Office remains open during the federal government’s (ridiculous) shutdown.

Why?

It’s a cash cow. The filing fees — a/k/a taxes — gain the feds a lot more than it costs them.

So, it’s business as usual at the PTO. They’re accepting and processing trademark filings as usual. They say they’re good for the next four weeks, but if the shutdown lasts longer than that, I would be shocked if they closed their doors with the rest of Washington. They’re a profit center!

Official PTO word here.

New York reportedly is cracking down on fake online reviews.

It’s about time. Others should follow suit.

Let’s say you’re an honest business owner, but your biggest competitor is not. It writes negative reviews about your company and glowing reviews about itself. And it pays others to do the same. Now anyone who visits Yelp or Amazon or eBay thinks your business is terrible and your competitor’s is great. That puts you at a massive disadvantage.

It’s totally unfair. In fact, the law has a name for it: unfair competition. Fake reviews also constitute false advertising, another form of unfair competition. Yet, by many accounts, it is common.

Washington’s anti-SLAPP statute makes fighting back even more difficult. Our statute aimed at punishing Strategic Lawsuits Against Public Participation is supposed to protect the exercise of our First Amendment rights, such as the right to exercise one’s freedom of speech. Unfortunately, it can be applied not only against plaintiffs who sue newspapers or politicians for defamation. It threatens to stop legitimate lawsuits about unfair competition.

The statute, RCW 4.24.525, says if a defendant can show it was sued because of its “public participation and petition,” the plaintiff must show by “clear and convincing evidence” that will win its claim. If it cannot do so, the case will be dismissed, the defendant wins its attorney’s fees, and the court awards it $10k to boot as punishment for the plaintiff’s having tried to stifle the defendant’s constitutionally-protected activity. This all happens within 60 days after the plaintiff filed suit — long before any discovery has changed hands.

How much chance does this give the honest business owner who sues over fake reviews? Not much, and it’s not fair.

It doesn’t take much imagination to envision the honest business owner rightfully suing over the damage it has sustained because of a dishonest competitor’s fake reviews. The dishonest competitor says it’s all sour grapes and speculation, and the plaintiff is just trying to silence free speech. Without the benefit of any discovery, the honest business owner has a real uphill battle at the outset of its case to show not only that it will likely win — but that it can do so with “clear and convincing evidence,” a much more difficult showing than the 50.1% “preponderance of the evidence” standard. The dishonest business owner ends up being the anti-SLAPP statute’s biggest fan.

The honest business owner needs help. Either the legislature needs to carve out a large enough exception from the anti-SLAPP statute to avoid perverse results, or government regulators need to do what New York did and go after those who traffic in fake reviews. 

The consuming public and the honest business owner alike depend on reviews being legitimate. Neither can afford to let dishonest businesses continue to benefit from fake reviews.

Everett’s Absolut Hair Salon & Makeup is changing its name.

It’s doing so in response to a cease-and-desist letter it received from Absolut Company Aktiebolag, the company that owns the ABSOLUT brand in connection with vodka.

That’s a big disruption to a small business. The salon says it will cost $20k to effect the change.

There are a few lessons here. First, it’s important to search for conflicting trademarks before adopting and investing in a new brand.

Second, in clearing a trademark for possible use, businesses are right to avoid adopting a mark that would likely cause confusion with a prior use. But they shouldn’t overlook trademark dilution, which at the federal level and in some states (including Washington), protects against the use of a famous trademark in a way that would lessen the capacity of the famous mark to point back exclusively to the famous trademark owner. Here, Absolut (the vodka company) is saying that Absolut (the hair salon) is doing just that — diluting the vodka company’s brand. In other words, even if consumers probably wouldn’t think the vodka company is running a hair salon, consumers that see the hair salon’s trademark are likely to start thinking of both the hair salon and the vodka company, rather than just the vodka company. At least that’s what the vodka company is arguing. In this way, dilution statutes give famous brand owners super-trademark rights.

Third, one can see the power of being big. Even if the salon is right — and that it hasn’t done anything wrong — it may not be able to afford to litigate in court for the next year or so in order to prove its case. Or even if it could afford to fight, the cost of the litigation may outstrip the value of being able to keep its name. The big vodka company, on the other hand, can leverage its size to force a change. When not justified, this is known as trademark bullying. It’s a power dynamic smaller companies should consider.

To state the obvious, it’s far better to avoid a potential trademark dispute before adopting a mark than having to make an abrupt change after years of investment. Search first, adopt later, and avoid trademark pitfalls that can disrupt your business.

I’m giving a talk next week about protecting your brand on social networks.

The theme of my talk is that a trademark owner’s ability to stop others from saying bad things about its brand is limited.

Quite limited.

Just ask Kenneth Seaton, owner of the Grand Resort Hotel and Convention Center. He sued TripAdvisor LLC, who runs the TripAdvisor travel Web site. TripAdvisor named the Grand Resort Hotel to its “2011 Dirtiest Hotels” list. You can guess its commentary wasn’t very favorable.

Mr. Seaton asserted claims for defamation, false-light invasion of privacy, trade libel/injurious falsehood, and tortious interference with prospective business relationships.

The district court threw out the case in short order. It found Mr. Seaton could not prevail on his claim given TripAdvisor’s broad First Amendment protection.

On Aug. 28, the Sixth Circuit affirmed. It found: “Seaton failed to state a plausible claim for defamation because TripAdvisor’s placement of Grand Resort on the ‘2011 Dirtiest Hotels’ list is not capable of being understood as defamatory; it is protected, nonactionable opinion. TripAdvisor’s use of the word ‘dirtiest’ constitutes loose, hyperbolic language, and the general tenor of the ‘2011 Dirtiest Hotels’ list makes clear that placement on the list cannot reasonably be interpreted as stating actual facts about Grand Resort.”

It added that Mr. Seaton’s other claims “appear to attempt to bypass the First Amendment” and, therefore, must similarly fail.

Brand owners should take note. They can take vigorous steps to protect against damage to their brand through confusingly similar trademark use, false advertising, and other forms of unfair competition. However, they should know their rights have limits — and the First Amendment is one of them.

As the Grand Resort Hotel demonstrates, trying to silence critics or erase bad reviews by going to court is a bad idea.

Links to a good write-up and case documents available here via the Digital Media Law Project.

The case cite is Seaton v. TripAdvisor LLC, __ F.3d __, No. 12-6122 (6th Cir. Aug. 28, 2013).