Seattle Trademark Lawyer

This is provocative:

“Back in 2007, we held a major academic symposium on the trademark dilution doctrine at SCU. My main goal was to see if two dozen leading trademark academics could find some justification—ANY justification—for the trademark dilution doctrine. We struck out, of course. The trademark dilution doctrine is an elegant intellectual exercise with intuitive appeal, but it has the fatal flaw that absolutely no social science supports that intuition.”

From a recent post in Eric Goldman’s Technology & Marketing Blog.

I’m not a social scientist. But from the perspective of a practitioner, prohibiting the use of a trademark that is likely to cause dilution by blurring or dilution by tarnishment makes sense. If a third-party’s use is likely to cause my brand harm — even if the use isn’t likely to cause confusion — why should such use be allowed to stand? I suppose the response is that use that isn’t likely to cause confusion for practical purposes isn’t likely to impair the distinctiveness of a famous trademark. But should a famous mark then be open for all to use as a reference point or punch line in selling their own products? That doesn’t strike me as right. Should I be able to grab the consumer’s attention when opening a car dealership by naming it MICROSOFT USED CARS, just because consumers wouldn’t likely think the software company had suddenly gotten into the business of selling used cars? I think it’s wrong to conclude, as the Fourth Circuit did, that LOUIS VUITTON is a sufficiently strong brand that its owner can take Haute Diggity Dog, LLC’s jokey use of CHEWY VUITON in connection with dog chew toys without running afoul of the anti-dilution statute. Every famous trademark by definition is sufficiently strong to take a joke. But to my mind, that doesn’t mean it should have to.

Another special motion to strike granted against a plaintiff claiming false advertising, deceptive practices, or commercial defamation. This is threatening to become a trend. (See STL’s posts here and here about similar outcomes in two other cases.)

No question about it — those who practice in the trademark or false advertising space need to pay attention to the recent expansion of Washington’s anti-SLAPP statute aimed at protecting against Strategic Lawsuits Against Public Participation, codified at RCW 4.25.525.

Last week, Western District Judge Ricardo Martinez granted the attorney rating company Avvo, Inc.’s special motion to strike false advertising and deceptive practice claims that Florida health lawyer Larry Joe Davis, Jr., brought after receiving a call from a prospective client who told him he was the “lowest rated employment lawyer” on Avvo, so she assumed he would be “desperate for employment.” Mr. Davis told the caller he was a health lawyer — not an employment lawyer — and declined to undertake the representation. After the call, Mr. Davis saw that Avvo’s Web site depicted his practice area as “100% employment/labor law.”

Mr. Davis sued Avvo in Florida state court; Avvo removed the case to the Middle District of Florida; and Avvo succeeded in getting it transferred to the Western District of Washington. After amending his complaint three times, Mr. Davis stated three causes of action under Florida law relating to the alleged misrepresentations, which the Western District construed as asserting similar claims under Washington law.

In response to Avvo’s special motion to strike that the anti-SLAPP statute authorizes, Mr. Davis specified that Avvo intentionally misrepresented his practice area to induce him to register on the Web site to correct the misrepresentation, and that Avvo induces lawyers to purchase a “Pro” membership in order to prevent competitor’s ads from appearing on their profile pages.

The court rejected his claims, finding they lacked “clear and convincing” evidence the statute required after Avvo established the claims were based on an action involving public participation or petition in an issue of public concern.

“Plaintiff has presented no evidence, let alone clear and convincing evidence, to demonstrate that there is any probability of prevailing on his [Washington Consumer Protection Act] claim,” the court found. “He points to no evidence in the record to support the conclusory allegations regarding Avvo’s advertisements. Indeed, he has provided no evidence at all; he has merely ‘verified’ the allegations set forth in his Third Amended Complaint. A complaint is not evidence. … Instead of presenting an affidavit, plaintiff asserts in his response that ‘[i]f one were to search on Avvo for a particular well-known lawyer, such as a well-known Board Certified Health Lawyer, when one is directed to that lawyer’s page, one would likely see an advertisement for a competing lawyer, as Plaintiff did in August 2010, which competing lawyer has paid Avvo to have that ad placed on the listed lawyer’s page.’ These speculations as to what ‘one would likely see,’ are not evidence. Nor has plaintiff alleged how this allegedly deceptive act of Avvo induced him to act or refrain from acting in some special manner, so as to establish causation for his loss.”

Based on that finding, the court granted Avvo’s motion, dismissed Mr. Davis’ claims, imposed the statutory $10,000 penalty, and stated it would award Avvo’s reasonable attorney’s fees.

GeekWire discussion of the decision here.

The case cite is Davis v. Avvo, Inc., No. 11-1571 (W.D. Wash. March 28, 2012) (Martinez, J.).

David Donoguhe’s Chicago IP Litigation Blog features a new decision from the Northern District of Illinois.

The punch line is if you’re a corporate officer, you can’t expect to find protection behind the corporate shield if you were involved in directing your company to infringe a trademark.

That may come as a surprise, but the law’s by no means unique to the Seventh Circuit. A case out of the Central District of California last year summarizes the rule of law in these parts as well:

“An individual who personally directs a corporation in committing trademark infringement, or who personally commits those acts, is personally liable for that infringement.

“This is particularly true when a single individual is the corporation’s sole shareholder, sole officer, and sole manager, and performs the infringing acts himself; that person will be individually liable for the intellectual property infringements committed by the corporation. Such personal liability does not depend on piercing the corporate veil.”

See Partners for Health & Home, L.P. v. Seung Wee Yang, No. 09-07849, 2011 WL 5387075 (C.D. Cal. Oct. 28, 2011).

This means that regardless if you’re at the helm of a big company — or serve as both CEO and chief bottle washer at a small company — you can be personally liable if your firm is on the hook for trademark infringement.

In other words, you personal assets could be at risk. That’s not to mean the sky is falling. It’s just to say that you could have more of a personal interest in how your company’s trademark case turns out than you might have thought.

We’ve talked about what competitors can’t say about your trademark.

So what about ways competitors — and others — legally can use your trademark without your permission?

Here’s a quick list (again, not exhaustive):

• Comparative use.  Pepsi famously put its cola to the test against Coca-Cola’s in the “Pepsi Challenge.” Your competitor likewise can use your trademark in trying to sell its goods or services — as long as it’s done so in a way that’s accurate. So, your competitor can say its product is cheaper. It lasts longer. It’s more effective. It can identify your product by name. It even can identify you by name. None of that is trademark infringement or false advertising as long as the comparison doesn’t make a false statement of fact or tend to mislead consumers.
• Descriptive use. If you use SPEEDY as a trademark in connection with oil change services, you’re going to have a hard time complaining about your competitor’s use of “quick,” “fast,” or even “speedy” to tout the competing services it provides. Your trademark does not give you monopoly rights over the word. Obviously, it doesn’t remove any words from the dictionary. If your competitor isn’t using the description as a trademark — in other words, if it only uses your mark as an accurate description of its services — it’s within its rights to do so. That’s one of the down-sides to your using a descriptive trademark.
• Collateral use. You’re Brand X. You make lawn mowers. I repair lawn mowers. I’m perfectly ok advertising the fact that I repair Brand X lawn mowers. I just can’t imply that you have approved me or that we have a relationship that doesn’t exist. That usually means I can use your name but not your logo, and only so much of your name as is needed to get my message across. You have no say in the matter, unless my use suggests you have authorized me as a provider of repairs or the like.
• Nominative use. If you’re the Rolling Stones (lucky you!), there’s only so many ways someone can describe you without using your name. The “British rock group consisting of Mick Jagger, Keith Richards, Charlie Watts, and Ronnie Wood” doesn’t exactly roll off the tongue. Since it’s so much easier for me instead to refer to you as the “Rolling Stones,” I’m allowed to do so — even as part of a profit-making venture. My only limitation would be I can’t use any more of your mark (such as your logo) than is needed for me to do so. I’ll get in trouble if my use suggests an affiliation that doesn’t exist (like you approved my use). That would mean I can’t sell t-shirts with “Rolling Stones” in big letters, but I can organize and sell memberships in an unauthorized fan club.
• Parody and criticism. Your customer or former employee isn’t happy with you. If he or she wants to use your brand in a “sucks” or hater Web site saying how you’ve got a bad product or you’re a bad company, he or she can certainly do that. The information conveyed must be accurate, meaning he or she can’t say your product causes cancer if it doesn’t. But the First Amendment gives speakers broad rights to criticize. That includes making fun of your name or logo if it’s done in a way that clarifies the use doesn’t come from you and, instead, is criticizing or commenting about you.

The theme here is that fair use must be “fair.” If the use suggests an affiliation with the trademark owner, or that the owner has approved the message, that use isn’t fair (and is deceptive and illegal) if no such relationship actually exists. This is the intersection of trademark law and our constitutionally-protected right to free speech.

Yesterday’s post was about false advertising, which got me thinking…. What are things a competitor can’t do in competing with you to make a sale?

Here’s a quick rundown:

• It can’t create a likelihood of confusion with you, if you came first. This is the essence of trademark infringement. A later-adopter can’t come into your market with a name or brand that is likely, i.e., probable, to confuse consumers into thinking that its goods or services come from you, are approved by you, or are affiliated with you. It doesn’t matter if your trademark is registered, since trademark rights automatically arise from use. It doesn’t even matter if your competitor was innocent in creating the likelihood of confusion. If its brand, company name, product name, or other marketing tool tends to mislead customers into thinking your competitor’s goods or services come from you, you may be able to put a stop to it. Caveats exist, but this is where the inquiry starts.
• It can’t misrepresent its product or your product. The right to free speech isn’t unlimited. Just like you can’t yell “fire” in a crowded theater, your competitor can’t lie about the qualities of its product or make a false comparison to your products. That means Honda can say Toyota’s cars are wimpy (in its humble opinion), but it can’t say its cars get twice the gas mileage Toyotas get when that’s not true (since it’s a statement of fact that’s provably false). 
• It can’t use your trademark in its domain name. This is cybersquatting. It means no one — regardless of whether they’re a competitor — can register your trademark (or a confusingly similar variation) as part of its domain name in the hopes of either ransoming the domain name to you or profiting from Web traffic that was meant for your site. The Lanham Act provides for statutory damages that begin at $1,000 and go up to $100,000 per infringing domain name, as well as an award of attorney’s fees. Again, there are caveats, but the Anticybersquatting Consumer Protection Act gives trademark owners a big stick to use against bad actors that hope to take wrongful advantage of your brand in their domain names.
• It can’t use your brand as a search engine keyword. Maybe. This is still up in the air. But the Central District of California last year slapped one law firm from buying its competitor’s trademark as a search engine keyword, finding its doing so constituted willful trademark infringement. The court doubled the trademark owner’s lost profits to $292k and awarded it attorney’s fees. See Binder v. Disability Group, Inc., 772 F. Supp. 2d 1172 (C.D. Cal. 2011). It’s still a gray area, but Binder might get traction. It’s certainly gotten some courts’ attention.
• Other things your competitor can’t do. If your brand is a household name, no one (competitor or not) can use it in a way that would tend to lessen the impact your brand has on consumers. That’s trademark dilution. If you manufacture goods, no one can put your trademark on goods that aren’t made by you. That’s counterfeiting. A competitor can’t say its goods — most commonly agricultural products — come from your special part of the world if they don’t. (This means a shellfish company can’t say its oysters come from pristine Penn Cove when they were grown in less favorable waters.) That’s a false designation of origin. 

This list isn’t exhaustive, and there are a lot of gray areas. But hopefully this will help you put a label on your competitor’s bad acts when you know in your gut what they’re doing isn’t fair.

Next time: You mean they can get away with that? Things competitors can say about your products and you in the course of honest competition.