There have been lots of lawsuits over the concept of buying search ads based on a competitor's trademarked term as the keyword, and more and more courts seem to be realizing that there is nothing wrong with this, so long as the ads themselves are not designed to confuse users. It looks like a court up in Canada has agreed that there's nothing wrong with putting up ads on other's trademarked keywords, because the likelihood of confusion is minimal. In this case, the plaintiffs found someone who claimed he signed up for a class at the wrong school because of a keyword ad, but that wasn't that believable, as "the registration came after a 90-minute in-person interview and the completion of an admissions test."
The court sided with VCC, concluding that its use of competitor names in its keyword advertising strategy was unlikely to deceive potential students. The judge noted "where a student erroneously chooses to examine a VCC Inc. 'sponsored link' website instead of the website of the institution they originally wanted, I am satisfied the information readily available on the various VCC Inc. websites is more than adequate to inform the student that they are examining a VCC Inc. institution and not the one they were initially searching for."
I remember, as a kid, enjoying "Smarties" candies, which were basically hard pill-like tablets of pure sugar that were sold in rolls. It turns out that in the rest of the world, there's a totally different kind of Smarties, made by Nestlé, which appear to be something like M&Ms (honestly, I had no idea). Those Smarties have been around since 1882. The American kind of Smarties (the sugar pills) have been made by Ce De Candy since 1942. Of course, now we live in a global world, and the two types of Smarties are coming into conflict, with Amazon in the middle. Apparently, the Ce De Candy company has obsessively kept the real Smarties out of the US for years (hence my ignorance of them). In other countries, Ce De Candy has rebranded its Smarties -- such that, in Canada, they're called Rockets. However, it apparently has no interest in doing so in the US, so we're left without the Smarties the rest of the world knows and loves.
But, yes, in this global world, with lots of immigrants and travelers, plenty of people in the US would like the other kind of Smarties, and found they could get their supply via Amazon. And, for that Amazon is facing a lawsuit by Ce De Candy, claiming trademark infringement. I can't see how Amazon should be the one to be blamed here, though. It is accurately selling products. In fact, my guess is that it's not even Amazon doing the selling, but some of Amazon's merchants who are actually fulfilling the market desire for the "real" Smarties. Unfortunately, due to some legal quirks, trademark law doesn't have an automatic safe harbor, like the DMCA or Section 230 of the CDA, protecting third party service providers from lawsuits over actions of their users. But, either way, hopefully a court recognizes that this whole thing is ridiculous and tells Ce De Candy to go pound sugar...
Jamie alerts us to the news that the giant luxury department store Harrods, in London, is threatening a small roadside cafe, called Hollands (accurately named after the cafe's owners) for having a logo that's too similar. The Daily Mail article above has a number of excellent photographic comparison shots, including a nice one showing the dumpy looking cafe juxtaposed with Harrod's famous, iconic, storefront. The logos themselves both use similar script fonts, but it seems unlikely that anyone would be confused, and the whole thing comes off as the department store bullying a little cafe.
Earlier this year, we mentioned the Supreme Court was reviewing a lawsuit over whether or not the NFL had the right to have an exclusive license for its apparel. A company, American Needle, who had supplied apparel to various NFL teams, sued the NFL after it had entered into a long-term exclusive contract with Reebok to handle all team apparel. American Needle claimed that this was a clear anti-trust violation, as all of the teams had colluded to exclude everyone else from the market. The NFL argued, instead, that the entire league should be viewed as a single company. Today, the Supreme Court ruled against the NFL, saying that each team should be viewed as a separate company. The case then gets sent back down to be reconsidered:
The details of this particular case are somewhat unique, in that it really only applies to situations where there are sports leagues (Major League Baseball is the only sports league that has an official exemption from Congress for antitrust issues -- though it's not clear why the different treatment). However, the decision by retiring Justice John Paul Stevens highlights the importance of competition, and the problems of letting organizations team up, just because teaming up makes better financial sense for all of those organizations:
Directly relevant to this case, the teams compete in the market for intellectual property. To a firm making hats, the Saints and the Colts are two potentially competing suppliers of valuable trademarks. When each NFL team licenses its intellectual property, it is not pursuing the "common interests of the whole" league but is instead pursuing interests of each "corporation itself," Copperweld, 467 U. S., at 770; teams are acting as "separate economic actors pursuing separate economic interests," and each team therefore is a potential "independent cente[r] of decisionmaking," id., at 769. Decisions by NFL teams to license their separately owned trademarks collectively and to only one vendor are decisions that "depriv[e] the marketplace of independent centers of decisionmaking," ibid., and therefore of actual or potential competition.
This makes a lot of sense. Otherwise, you could argue that any particular industry could set up an organization of which all the companies in that industry are a "member" and allow that single organization to negotiate exclusive deals, with the argument that it's "for the common interests of the whole." But, that's obviously collusion, with the intent to harm consumers. Thankfully, the Supreme Court saw through the flimsy claim that such a structure makes companies immune to antitrust law.
JohnForDummies points us to the news that the latest attempt to stretch trademark law to ridiculous levels has been sorta maybe rejected -- though it appears to still be open for abuse. The case involved Autodesk and a competitor, Dassault Systemes Solidworks Corporation, who had released some software that was compatible with Autodesk's .dwg files used in AutoCAD. Dassault had apparently reverse engineered the file type (which, by itself, is perfectly legal). Some of Dassault's products (under the Solidworks brand) used "DWG" in the name, and Autodesk, overprotective as always, sued -- claiming that the use of DWG in product names infringed. What happened then goes back and forth a bit, but ends up with a court telling Autodesk that file extension names should not be considered trademarkable:
The court found that ownership of file extension designations cannot be appropriated under the Lanham Act -- file extensions are inherently functional, and functional uses cannot be trade-marked. It stated that computer programmers and computer users should be free to designate file extensions as they see fit, without the fear of infringing trade-marks.
The motions judge further opined that the purpose of the Lanham Act is to target unauthorized use of a trade-mark "in connection with a commercial transaction in which the trade-mark is being used to confuse potential consumers." In contrast, the purpose of file extensions is to indicate to a computer the type of file that is being handled. The court noted that "a computer is not a consumer," and its recognition of a file extension is not "in connection with a commercial transaction." In other words, the computer does not concern itself with the question of who made the file format. Therefore, whether on the grounds that a file extension connotes a "functional use" or a "non-trade-mark use," the court held that a file extension per se is not protectable under US trade-mark law.
In its decision, the court did recognize that computer users may associate a particular file extension with a specific vendor or manufacturer. However, the court found this association only incidental to the primary function of file extensions, namely to identify a file or file type.
Of course, it's not all good news. The court did suggest that Autodesk could have gotten away with this by disavowing any use of the mark in functional areas, but had limited it to just product names and such. Autodesk pushed back on this a bit, which resulted in the ruling above. And, actually, the transcript from this part of the court discussion is priceless:
THE COURT: I want -- you're skating by something that's very important to me. So I want to get a clear answer. All right?
Will you disavow, from here to eternity and for the rest of the universe, that the world has a right to use .dwg as a file extension, and you're not going to try to assert, here or anywhere else, that that use as a file extension violates any law?
MR. SABRI: Your Honor, it may be the case it violates patent law. We're not addressing that today. I will state --
THE COURT: You will be in trouble if you don't give me -- listen. If you are trying to monopolize .dwg, you and your company are in big trouble.
MR. SABRI: We absolutely are not, your Honor.
THE COURT: Well, then disavow it.
MR. SABRI: Autodesk cannot --
THE COURT: You're not disavowing it?
MR. SABRI: I am disavowing it, your Honor. Autodesk cannot state claims against functional uses of .dwg, and the distinction between a word mark DWG and the functional uses I believe will be very clear by this presentation.
THE COURT: I want to hear you say we disavow it.
MR. SABRI: We disavow any claims against functional uses of the .dwg, your Honor.
THE COURT: Thank you.
But, still, all is not well. Before the case actually went to trial, Autodesk and Dassault "settled," with part of the settlement being that Dassault agreed that Autodesk had a legitimate trademark on DWG (of course, Dassault isn't the USPTO or a court, so Dassault's agreement on that point is somewhat meaningless). Also, the article notes that our neighbors up in Canada just allowed Autodesk to register a trademark on DWG. So despite the court's clear concern about Autodesk trying to monopolize DWG, don't be surprised if it keeps trying...
I have to admit that I followed the entire 48 HR Magazine event last weekend with lots of interest, just from a "fun/funky idea for publishing a magazine" standpoint -- and not once did I think about the CBS TV magazine show 48 Hours. The 48 HR magazine was an idea put together by some of San Francisco's usual crew of creative hipsters, with a plan to create an entire (physical) magazine in, yes, 48 hours. They announced a topic (for the first issue, it was "hustle"), and people submitted a ton of stuff in the first 24 hours, which was reviewed, edited, etc. Then in the next 24 hours, the magazine itself was put together. Kind of a neat experiment. It wasn't a company or a business. Just an experiment.
It turns out that the folks involved in the (physical) magazine weren't even aware that the TV show was still on TV (I didn't realize that either)... but CBS's lawyers decided it was time to step in and fill in the details in the form of a legal nastygram. The two are targeted at entirely different people, but this is one case where (even if I never made the connection myself), I can actually see CBS's reasoning. There is a clear overlap and there certainly could be a likelihood of confusion. Chances are, when the next issue comes out, it's going to have a different name.
But, the whole thing does speak to the difficulty of just doing a fun experiment these days without involving lawyers. It's not so easy:
"To be honest, none of us even knew that there was still a program called '48 Hours,' so it never crossed our mind," said Mr. Honan. "When we were finished, we all felt like we had accomplished something significant, that there was a magazine there. It is the thingness of it, the physical evidence of the weekend that is so great. But the unfortunate truth I guess is that unlike what we said in the editor's letter, you can't do anything really large scale in contemporary society without have a legal team and a corporation."
Also, to be fair, despite the initial letter being full of legalese and sounding threatening, CBS's lawyers seem at least willing to talk:
"We are missing a gigantic step here," he said. "They need to respond to our letter, which they have not done, about what they can do and are willing to do. We would like to work something out, but they'd have to be in touch for that to happen. Then we can begin talking and negotiating."
Hopefully something reasonable does get worked out, and perhaps 48 HR's (or whatever it's going to be called) next issue can be on something like the "likelihood of confusion."
Late last year, we wrote about the latest in an unfortunately long line of overreaching trademark lawsuits filed by Intel. Intel tends to act as if no one else can use the word Intel at all, leading it to get involved in legal disputes with companies in industries about as far away from Intel's business as can be -- including a travel agency and a maker of jeans. The dispute last year, was focused on the small producer of a newsletter about Latin America, which used the domain name LatinIntel.com. There was no way anyone would be confused by this site or think that it was somehow associated with Intel, even using my favorite "moron in a hurry" test.
So, we were happy, earlier this year, to get a report that Intel had dropped the lawsuit. Except... that turned out to not be exactly true. Intel got in touch quickly to insist that they had only dropped it because they planned to refile the lawsuit with much more detail to make their case. What Intel left out was the pretty serious skepticism the judge had expressed concerning their original filing:
The key lines here being:
It really is lacking in enough specificity which
would demonstrate that there was confusion or that you're even
addressing the same markets. I mean, my understanding is that
there may be no customer overlap at all in connection with
this.
Intel, of course, shot back with the claim that this has nothing to do with likelihood of confusion, but it was really about dilution. Dilution is a more recent element of trademark law, which was not considered applicable for quite some time, but today has become more widely accepted, and keeps expanding in dangerous ways. It simply goes against the basic concept of trademark law -- which is supposed to be about protecting consumers from buying a product that is falsely labeled. That's why trademark law is limited to the areas where your trademark is actually being used in commerce. The judge's point that there is no customer overlap should be all that matters here. At that point there is no trademark issue. At all.
But Intel has, in fact, now refiled the lawsuit, and tries to get around this claim by pointing out that both Intel and this newsletter have customers that are Fortune 500 companies. Seriously. And then it still claims there is customer confusion, despite the judge making it pretty clear that he didn't believe there was any customer confusion at all:
I asked the spokesperson from Intel who had contacted us about the last post if he could offer an explanation of why it made sense for Intel to continue to pursue this lawsuit, and I got back the basic explanation for why dilution is considered trademark infringement -- which didn't answer the question I was asking. But it appears that Intel's definition of dilution goes way beyond even the current (already troubling) concept of dilution in trademark law. The way Intel sets it up, no one can use the word "intel" even if it's already a widely generic term in a totally different industry (as is the case with the newsletter). That makes no sense.
While I'm sure Intel's lawyers would claim that they have to defend their trademark to avoid it being declared generic, that's also a misrepresentation of trademark law. You do have to defend, but only in cases where there's actual confusion or actual risk of dilution. Someone doing business with a term that is generic in that industry, which is about as far away from Intel's industry as is possible, is not doing any harm, whatsoever, to Intel's mark. Intel should have just dropped the case and left it alone.
Another day, another ridiculous trademark claim. Ubiquitous sandwich shop Subway threatened a hot dog provider in Coney Island who had been selling "footlong" hotdogs for decades, claiming that it had applied for a trademark on "footlong." The cease and desist demanded that the company cease using the designation for their hotdogs (and on their website, which is GoFootlongs.com).
There are all sorts of problems with this. First, the trademark is only applied for, so Subway doesn't even know if it's going to get the trademark. Demanding a cease & desist is a bit premature. Also, it's hard to see the USPTO approving this (one hopes), seeing as "footlong" is purely descriptive, and you're not allowed (in theory) to get trademarks on something that is purely descriptive.
Even so, when the folks at Planet Money (who have a sudden, if amusingly odd, interest in trademark law), called Subway, the company claimed that the cease & desist was a mistake. A "clerical error," a spokesperson claimed. I'm confused how a clerical error leads to a legal threat, but such is life these days. The error was apparently that Subway only intends to bully those selling "footlong" sandwiches, rather than "footlong" other things, such as hot dogs.
A whole bunch of folks have sent in variations on this story of how some guy, who started selling various products (DVDs and such) marketed around the phrase "power hour," (based on the well-known drinking game called "power hour") was able to get himself a trademark on the term. He's been using this trademark to bully others who have used the very, very generic phrase "power hour" in various projects, including musician Ali Spagnola, who created 60 one-minute "power hour" songs to go along with the drinking game, and the website PowerHourHQ, which is devoted to the drinking game. Apparently, the guy with the trademark, Steve Roose, has been sending around cease & desist letters, demanding the removal of all content that mentions "power hour." Anyway, seems like there should be a decent drinking game around these types of stories on Techdirt since we get so many these days...
So many companies (and individuals) get up in arms over a bit of criticism, assuming that anything they don't like must be illegal. On top of that, they regularly blame the owners of the websites where that criticism occurs, rather than whoever actually created the criticism. Usually the courts see through this stuff, but sometimes companies are able to get around all of that with some quick lawyering. In a particularly egregious example, the investment bank Houlihan Smith got upset at the websites 800notes.com and Whocallsme.com, both run by Julia Forte as forums where people can discuss telemarketing practices (we've pointed out how Forte has been fighting other misguided legal attacks in the past as well). As with many companies that find people criticizing themselves on Forte's website, Houlihan Smith demanded that she remove comments. She responded by pointing out that company representatives are free to respond to the complaints in the comments.
Instead, it appears that Houlihan Smith went straight to court... and got a temporary restraining order against Forte that prohibits people from posting comments -- even if they're factual -- about Houlihan Smith to Forte's websites. So how did they get such a temporary restraining order when pretty much all case law notes that Forte is protected by Section 230? Well, it looks like they're claiming that the critical comments (and there were lots of them) weren't just defamatory (the usual claim) but were trademark infringement -- which, by way of judicial accident is not covered by Section 230. But people posting their opinions or factual information about a company cannot be trademark infringement. The company also claims a violation of the "right of publicity," because some employees are named. Of course, "right of publicity" is supposed to be used to prevent you from using someone's name or likeness in an advertising context. Someone accurately claiming that "so-and-so called me" is not a violation of anyone's right of publicity. Furthermore, the company apparently only gave Forte 90 minutes of notice via email that it was going to court (800 miles from where she lives) to get the restraining order.
Totally blocking a website from allowing people to express their opinions and criticisms of a company's telemarketing practices seems like a blatant violation of the First Amendment.
Either way, it seems like Houlihan Smith and its lawyers haven't realized a basic fact about the internet: if you try to stifle free speech that you don't like, it only draws a hell of a lot more attention to that speech. Perhaps Houlihan Smith would have been better off responding to the criticism, rather than using questionable legal claims to try to silence an entire forum.
