If Something Is Advertised As A Knockoff Product... Is It No Longer Counterfeiting?

from the likelihood-of-amusing dept

People throw around a variety of terms that sometimes need to have more specific meanings. When talking about physical goods, when people talk about "knockoffs" or "counterfeits" they're usually referring to a trademark issue. And, in some sense, this is what trademark is supposed to be about. For many years we've argued that trademark should not be lumped in with patents and copyrights, as the concept, purpose, intent, and even Constitutional underpinnings are entirely different. It's extremely frustrating to see people lump in patents, copyrights, and trademarks as "intellectual property" as if they were all similar. They are not. And trademarks are especially different.

Indeed, we've always said that (unlike with the other two) trademarks are mostly a consumer protection law, so that you know who is actually making the things you're buying, and you know the origin of it. That is, we let Coke have a trademark on the Coca-Cola branding so that consumers don't get tricked into buying something that isn't Coke, while believing it is. This is why a key part of trademark law has always been the "likelihood of confusion." If there's no likelihood of confusion, than there isn't a trademark violation.

But here's an interesting question: if someone is making a counterfeit product... is it still violating trademark laws against counterfeiting if buyers know it's counterfeit? A recent 9th Circuit Court ruling suggests... perhaps not. The case is not about this issue directly, but is about two separate companies who each (independently it appears) came up with products called "Eye Dew." One, Arcona, created an eye cream that in a tall cylindrical silver bottle. Arcona registered a trademark on the name. Around the same time (or even possibly a bit earlier), a different company, Farmacy Beauty, developed its own eye cream, also named EYE DEW. The packaging of the two products looks very, very different:

The ruling in the case finds that because the Lanham Act requires there to be a likelihood of confusion, and people are unlikely to be confused between these two products, then there's no counterfeiting claim. The court notes that while it has been recognized that a pure trademark infringement claim requires a likelihood of confusion, the 9th Circuit had never ruled directly on the question of whether or not a counterfeiting claim does, even though both stem from the Lanham Act. However, noting that everyone agrees that trademark claims require it, and the plain language of the statute says so, the court confirms:

We thus hold that a counterfeit claim requires a showing of likelihood of confusion under Section 1114.

And while the case is not about this, it raises a somewhat fascinating question first posed by law professor Mark Lemley. He notes that under this ruling, brands may not be able to go after obvious knockoffs if the knockoffs don't confuse anyone:

This is interesting on a few levels. First off, we've highlighted many studies showing that the vast majority of people buying knockoff products know they're knockoffs, and they buy them aspirationally -- knowing they can't afford the real thing, but wanting to build themselves up to buying the real thing, by first buying a knockoff. We've used those studies to question the common wisdom (often used by customs and border patrol and ICE) about the "dangers" of counterfeits. If no consumers are fooled or harmed, then what's the issue? And that's especially true if they weren't going to purchase a legitimate version in the first place.

But this raises an even more interesting question to me: under this ruling, could a company not just make cheap knockoffs of a famous brand's products, but then avoid some level of liability by clearly advertising them as knockoffs? I wouldn't suggest doing that without a huge legal budget, but a strong argument can be made that if you made it abundantly clear that your fake Louis Vuitton handbag was a fake Louis Vuitton handbag, and that buyers could not buy it without understanding that fact -- then there might not be any claim. There would be no likelihood of confusion. There would be no harm.

It's such an intriguing idea, I'm now kind of hoping that someone (again, someone with fantastic trademark/counterfeiting lawyers, and a large legal war chest) tests this out. If you do, send me some sample counterfeit merchandise as a thank you.

Filed Under: 9th circuit, consumer protection, counterfeit, counterfeits, eye dew, fake goods, lanham act, likelihood of confusion, trademark
Companies: arcona, farmacy beauty

Ninth Circuit Reverses Course While Quoting Its Own Precedent Saying Otherwise; Says Section 230 Doesn't Cover Anti-Competitive Moderation

from the our-earlier-finding,-while-good,-is-now-not-good,-so... dept

The Ninth Circuit Appeals Court has resuscitated a lawsuit against Malwarebytes filed by litigious software company Enigma. Enigma Software tends to sue people who say bad things about its antivirus offerings and since there's a lot of people doing that, the company seems to spend a fair amount of time in court.

Enigma ran into the Section 230 wall in the lower court by claiming Malwarebytes' designation of its software as a threat was an unfair business practice. It said Malwarebytes scans were locating its offerings on people's computers, informing them the software was shady, and quarantining it. Enigma alleged this was anti-competitive. And if it wasn't that, it was probably some sort of trademark thing, blah blah blah Lanham Act. (This claim sneaks into a lot of lawsuits involving Section 230 protections and Enigma tried this tactic in a defamation lawsuit it filed against BleepingComputer. It's a dodge, not a cognizable legal argument.)

Malwarebytes prevailed at the district court level by citing a Ninth Circuit Appeals Court ruling finding that filtering software or services is also protected by Section 230 of the CDA. In the cited case, antivirus software company Kaspersky secured a dismissal from a lawsuit brought by an aggrieved adware purveyor. That decision said any material a provider feels is objectionable (in this case, adware) can be removed by the provider.

That's what the court said then. What it's saying now is something different, and that appears to be only because the Ninth Circuit feels Malwarebytes and Enigma Software are actually competitors, even if Enigma has yet to earn the same amount of respect Malwarebytes has. From the decision [PDF]:

This case differs from Zango in that here the parties are competitors. In this appeal Enigma contends that the “otherwise objectionable” catchall is not broad enough to encompass a provider’s objection to a rival’s software in order to suppress competition. Enigma points to Judge Fisher’s concurrence in Zango warning against an overly expansive interpretation of the provision that could lead to anticompetitive results. We heed that warning and reverse the district court’s decision that read Zango to require such an interpretation. We hold that the phrase “otherwise objectionable” does not include software that the provider finds objectionable for anticompetitive reasons.

That's a pretty broad interpretation of a decision the Ninth Circuit says it's not going to interpret broadly. Malwarebytes has plenty of legitimate reasons to protect its users from Enigma's offerings that go beyond neutering a competitor. Enigma's reputation seems to have improved over the last couple of years, but its history is littered with rogue software designations, questionable customer service tactics, and, of course, the tendency to sue anyone who doesn't view Enigma as positively as Enigma views itself.

So, designating this competitor's software as questionable isn't necessarily about keeping a competitor off users' computers. That subtlety is lost in this reversal by the Ninth Circuit, which feels Enigma has plausibly alleged anti-competitive practices.

It also (perhaps more correctly) finds that Enigma can continue pursuing its Lanham Act claims about trademark infringement. The court (correctly) notes Section 230 does not provide immunity against intellectual property claims. Not that the false advertising claim raised here has any merit. It doesn't. But being right on this point doesn't make the decision any better. Litigants hoping to dodge Section 230 immunity tend to throw in trademark-related claims as filler, hoping this bogus deployment of their intellectual property protections will allow them to survive a motion to dismiss. It works here. So that means litigants will keep cramming these bullshit claims into their bullshit lawsuits.

Not only does this make things worse for defendants in the circuit (and there will be a lot of them considering how many tech companies are located in California) but it ignores one crucial aspect of Malwarebytes' designation of Enigma software as dangerous: Malwarebytes flagged Enigma's software in response to users' preferences.

Malwarebytes and Enigma have been direct competitors since 2008, the year of Malwarebytes’s inception. In their first eight years as competitors, neither Enigma nor Malwarebytes flagged the other’s software as threatening or unwanted. In late 2016, however, Malwarebytes revised its PUP-detection criteria to include any program that, according to Malwarebytes, users did not seem to like.

After the revision, Malwarebytes’s software immediately began flagging Enigma’s most popular programs— RegHunter and SpyHunter—as PUPs. Thereafter, anytime a user with Malwarebytes’s software tried to download those Enigma programs, the user was alerted of a security risk and, according to Enigma’s complaint, the download was prohibited, i.e. Malwarebytes “quarantined” the programs.

This move was predicated on users' preferences, which puts it about as close to user-generated content as possible, without allowing users to directly control Malwarebytes' threat database.

The end result is what matters, at least in the Appeals Court's limited analysis. Section 230 was supposed to increase competitiveness, not limit it, so…

We cannot accept Malwarebytes’s position, as it appears contrary to CDA’s history and purpose. Congress expressly provided that the CDA aims “to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services” and to “remove disincentives for the development and utilization of blocking and filtering technologies.” § 230(b)(2)–(3). Congress said it gave providers discretion to identify objectionable content in large part to protect competition, not suppress it. Id. In other words, Congress wanted to encourage the development of filtration technologies, not to enable software developers to drive each other out of business.

On the plus side, it also doesn't buy Enigma's argument that Section 230 immunity only involves the policing of material that is sexual and/or violent in nature. It covers more than that, but does not -- at least in this opinion -- protect the blocking of competitors' software offerings.

The dissent says this is the wrong decision to make. Section 230's language does cover Malwarebytes' flagging of Enigma software. If the law needs to be fixed, legislators need to fix it. The court shouldn't litter the circuit with bad precedent in lieu of Congressional action.

The majority opinion seeks to limit the statute based on the fact that the parties are competitors. See Majority Opinion, p. 4. However, nothing in the statutory provisions or our majority opinion in Zango supports such a distinction. Rather the “broad language” of the Act specifically encompasses “any action voluntarily taken [by a provider] to restrict access to . . . material that the provider . . . considers to be . . . otherwise objectionable.” 47 U.S.C. § 230(c)(2)(A) (emphasis added). Under the language of the Act, so long as the provider’s action is taken to remove “otherwise objectionable” material, the restriction of access is immunized. See id. The majority’s real complaint is not that the district court construed the statute too broadly, but that the statute is written too broadly. However, that defect, if it is a defect, is one beyond our authority to correct.

But that's not what happened here. Enigma will get to drag this litigation out even longer. It may not even win it. But it will serve as a warning to others tempted to flag Enigma's offerings as less-than-desirable. And that's probably the only win it really needs.

Filed Under: 9th circuit, competition, content moderation, lanham act, malware, section 230
Companies: enigma, malwarebytes

Bizarre Decision Keeps Hope Alive In Enigma Software's Defamation Suit Against BleepingComputer

from the 'viewed-in-the-light-most-favorable-to-ignoring-tons-of-precedent...' dept

Enigma Software joined the long line of aggrieved companies who feel that legal threats and questionable lawsuits are the best form of reputation management. It sued BleepingComputer over a "defamatory review" -- which was actually just a forum post by a member that detailed (with supporting links) its questionable SpyHunter software and its "rogue tactics" over the years.

In addition to the defamation claims, Enigma Software also argued that BleepingComputer only did this to steer site readers towards its own products, alleging a handful of Lanham Act violations.

Unfortunately, Enigma Software's dubious claims have survived a motion to dismiss by BleepingComputer, thanks to some similarly dubious reasoning [PDF] by the judge presiding over the case. Not only are the Lanham Act claims given far too much credence (thanks to some twisted judicial analysis that assumes that because trademark is a part of the Lanham Act, false advertising claims under the Lanham Act are also intellectual property claims, exempt from Section 230 of the CDA), but the court's decision to allow the lawsuit to process also punches a few more holes in Section 230 protections.

Because the author of the post was a third-party contributor, BleepingComputer should not have been held responsible for the content of the post. However, the court appears to be bothered that the user in question was referred to as a "staff member" by BleepingComputer, even if it was actually a volunteer administrative post and BleepingComputer did not directly control the content of the user's contributions.

Eric Goldman, in his analysis of the decision, points out that BleepingComputer could have done a better job delineating between actual site administrators and those just helping out, along with providing more comprehensive disclaimers about "superusers" and their contributions to the site.

So what did Bleeping do wrong? In retrospect, calling super-users “staff members” is probably not the best titling. At least to this judge, “staff” sounds too much like “employee.” The court also says that site disclosures saying super-users could be “trusted to give correct…answers” meant that Bleeping communicated that these super-users were authorized to post on its behalf. I don’t see that interpretation of the disclosure at all, but it’s also easy to imagine rewording Bleeping’s disclosures to downgrade the risks. For example, Bleeping could make disclosures that super-users had been selected because of their consistently reliable advice, but they remain independent and fallible.

That being said, the court's decision does more damage to Section 230 protections by holding websites responsible for the content of certain third-party posts. This determination may be only temporary and fall apart as the lawsuit proceeds, but it still gives those filing questionable lawsuits a glimmer of hope that their dubious claims might survive to fight another day. If nothing else, the assertions made by the court will keep the lawyers fed.

Still, I’m irritated by the court’s glossy handling of the Section 230 super-user precedent. I’m also frustrated by the court’s insensitivity to how this ruling undermines Section 230. It green-lights plaintiffs to allege that a user was the site’s implied agent to survive a Section 230 motion to dismiss, even if those allegations fail later in the case. Everyone loses (except the lawyers, of course) when unmeritorious cases get past a Section 230 motion to dismiss.

Other issues present themselves as well in this decision. The statute of limitations of defamation (one year) gets an extension, thanks to the court considering certain links to older posts as "republication," flying in the face of several other decisions on the same topic. (It actually doesn't say quite as much, but refuses to "resolve the issue" at this point.)

And, on the subject of linking to content to support claims made in an allegedly defamatory post, the court seems to find that something done to deter claims of defamation is actually just the creation of a defamatory echo chamber.

The court says this conclusion is reinforced by Bleeping’s and Quietman7’s self-laudatory statements about their credibility and expertise. Thus, the court distinguishes the recent trend of judges presuming that readers don’t take online comments seriously (a trend partially attributable to the NY Sandals case). Also, “[t]he manner of Quietman7’s written presentation—one using footnotes and citations—conveyed further that his advice was based on an ‘investigation’ of verifiable facts.” (Contrast the cases holding that linking to source materials can reduce defamation liability). The court disregards Quietman7’s qualifier statements “[m]y personal recommendation” and “[i]n my opinion.”

One of the most infuriating assertions made in this decision is that Enigma Software is still, somehow, a private entity that only needs to make the most minimal of damage assertions to continue pursuing this lawsuit.

The court rejects Bleeping’s argument that Enigma is a limited-purpose public figure (which would require Enigma to allege facts showing Bleeping had actual malice) because Enigma’s complaint “does not allege any facts suggesting that ESG has taken a public position on the integrity of its business practices or the quality of its products.” FFS. While focusing on the complaint’s four corners is technically permissible under the legal standards for a motion to dismiss, the judge is allowed to take judicial notice of public statements where Enigma–LIKE EVERY OTHER BUSINESS IN THE UNIVERSE SINCE THE BEGINNING OF TIME–says it does a great job.

While this is not a decision in favor of one party or another, the judge's determinations make it clear that BleepingComputer will be paying a whole lot more in legal fees before this lawsuit (hopefully) is resolved in its favor. Enigma's claims -- not including the severely-stretched "unfair competition" assertions -- were so threadbare as to be almost nonexistent. Its defamation accusations included words not actually used in the post and some complete rewriting of certain post sentences in order to shore up its bogus claims.

Goldman's very thorough assessment of the decision does find that BleepingComputer could have done a few things in a smarter way to avoid potential Section 230 entanglements, but his overall take is that a decent anti-SLAPP law would have gone a long way towards making this lawsuit disappear before dragging the defendants into expensive discovery proceedings. While he grants that motions to dismiss are viewed in the light most favorable to the non-moving party (Enigma Software), the court here has gone out of its way to keep a highly-questionable defamation lawsuit alive -- and has done damage to Section 230 protections in doing so.

Filed Under: anti-slapp, cda 230, criticism, forums, lanham act, reviews, section 230, spyhunter
Companies: bleepingcomputer, enigma software

Appeals Court Says US Government Cannot Deny Trademarks For Being 'Disparaging'

from the fans-of-that-dc-football-team-celebrate dept

While everyone's been focused on the big dispute over the name of the NFL team from Washington DC... and whether or not it's appropriate for the US Patent and Trademark Office to take back the team's trademark, observant trademark watchers knew that the case to watch on this issue involved a dispute over the trademark for the band "The Slants." The band, whose members are Asian Americans, sued after the USPTO rejected their attempt to trademark the name of the band, claiming that the name was a disparaging term for Asians. The key argument: is it a violation of the First Amendment for the Lanham Act (the law under which registered Federal trademarks exist) to allow the USPTO to reject trademarks for being disparaging. Specifically, Section 2(a) says that:

No trademark... shall be refused registration... unless it... Consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute...

And thus, the question is whether or not this is a law regulating speech based on content, which is not allowed under the First Amendment. I've struggled with this issue in the past, originally coming down on the side of saying that it's not a First Amendment violation, because not giving someone a trademark doesn't do anything to restrict speech. In fact, I originally argued, it does the opposite. Rejecting a trademark leaves speech more open for anyone to use.

Over the past twelve months, however, after discussing the issue with a bunch of lawyers (on both sides of the issue), I've changed my mind, and I see the key point: this is still a law that is based on the content of speech, and that's problematic under the First Amendment. And, now in the case involving the Slants, court of appeals for the Federal Circuit (CAFC) has agreed. The Lanham Act's prohibition on issuing trademarks if they're disparaging is unconstitutional.

The key issue: "content-based regulations are presumptively invalid." And this is a content-based regulation.

It is beyond dispute that § 2(a) discriminates on the basis of content in the sense that it “applies to particular speech because of the topic discussed.”... Section 2(a) prevents the registration of disparaging marks—it cannot reasonably be argued that this is not a content-based restriction or that it is a contentneutral regulation of speech. And the test for disparagement— whether a substantial composite of the referenced group would find the mark disparaging—makes clear that it is the nature of the message conveyed by the speech which is being regulated. If the mark is found disparaging by the referenced group, it is denied registration. “Listeners’ reaction to speech is not a content-neutral basis for regulation.”

The court rejects the claim by the government that the rejection is still "content neutral" because it would reject the same term even if it were meant to be supportive, rather than disparaging. In fact, it points out that The Slants clearly are not trying to be insulting to Asian Americans as proof of this. But the court notes that this claim is basically completely bullshit:

The government’s starting point—that it rejects marks conveying diametrically opposed viewpoints, if they contain the same offensive word—is incorrect. The PTO looks at what message the referenced group takes from the applicant’s mark in the context of the applicant’s use, and it denies registration only if the message received is a negative one. Thus, an applicant can register a mark if he shows it is perceived by the referenced group in a positive way, even if the mark contains language that would be offensive in another context. For example, the PTO registered the mark DYKES ON BIKES, U.S. Reg. No. 3,323,803, after the applicant showed the term was often enough used with pride among the relevant population. In Squaw Valley, the Board allowed the registration of the mark SQUAW VALLEY in connection with one of the appliedfor classes of goods (namely, skiing-related products), but not in connection with a different class of goods.... Section 2(a) does not treat identical marks the same. A mark that is viewed by a substantial composite of the referenced group as disparaging is rejected. It is thus the viewpoint of the message conveyed which causes the government to burden the speech. This form of regulation cannot reasonably be argued to be content neutral or viewpoint neutral.

The court goes on to note other examples of rejected trademarks, noting that it clearly involves the Trademark Office deciding the nature of expressive speech and whether or not it is appropriate.

As for my original argument that rejecting a trademark restricts no speech, the court (rightly, I now believe) rejects that argument as well, basically saying that it still serves to silence certain forms of speech by choosing to remove a benefit based on the content of that speech. And that creates a burden based on content, which is not allowed under the First Amendment.

The general principle is clear: “Lawmakers may no more silence unwanted speech by burdening its utterance than by censoring its content.” ... “[T]he government’s ability to impose content-based burdens on speech raises the specter that the government may effectively drive certain ideas or viewpoints from the marketplace.” ... A law may burden speech even when it does so indirectly. In Sorrell, the challenged statute did not directly ban speech, but rather forbade certain pharmaceutical marketing executives from obtaining and using information that could help them market their products more effectively.... The Court found that the state “ha[d] burdened a form of protected expression,” while leaving “unburdened those speakers whose messages are in accord with its own views.” ...

Here, too, § 2(a) burdens some speakers and benefits others. And while it is true that a trademark owner may use its mark in commerce even without federal registration, it has been widely recognized that federal trademark registration bestows truly significant and financially valuable benefits upon markholders....

Denial of these benefits creates a serious disincentive to adopt a mark which the government may deem offensive or disparaging.

It further notes that the vagueness in what may or may not be granted a trademark also leads to uncertainty, and "such uncertainty of speech-affecting standards has long been recognized as a First Amendment problem" that may contribute "significantly to the chilling effect on speech."

The court also rejects the argument that because granting a trademark is simply a form of government speech, there's no First Amendment issue here either. The court basically says "uh, no," and points out that under this theory, anything covered by copyright would become "government speech" immune from the First Amendment.

This argument is meritless. Trademark registration is a regulatory activity. These manifestations of government registration do not convert the underlying speech to government speech. And if they do, then copyright registration would likewise amount to government speech. Copyright registration has identical accoutrements—the registrant can attach the © symbol to its work, registered copyrights are listed in a government database, and the copyright owner receives a certificate of registration. The logical extension of the government’s argument is that these indicia of registration convert the underlying speech into government speech unprotected by the First Amendment. Thus, the government would be free, under this logic, to prohibit the copyright registration of any work deemed immoral, scandalous, or disparaging to others. This sort of censorship is not consistent with the First Amendment or government speech jurisprudence.

Various attempts to say that trademarks are just "commercial speech" and thus get less scrutiny are rejected throughout the ruling, noting that it's the expressive speech of users that would be hindered by keeping trademark law as is. And then even if it is commercial speech, the court still says this part of the Lanham Act is no good:

First, we ask whether the regulated activity is lawful and not misleading.... Unlike many other provisions of § 2, the disparagement provision does not address misleading, deceptive, or unlawful marks. There is nothing illegal or misleading about a disparaging trademark like Mr. Tam’s mark.

Next, for speech that is lawful and not misleading, a substantial government interest must justify the regulation.... But § 2(a) immediately fails at this step. The entire interest of the government in § 2(a) depends on disapproval of the message. That is an insufficient interest to pass the test of intermediate scrutiny, as the Supreme Court made clear in Sorrell... (law must not “seek to suppress a disfavored message”);

What about not spending taxpayer money approving racist messages? Well, the court points out, trademark registration is funded by applicants, not taxpayers, so that one fails too.

And, yes, the court admits, racist and disparaging speech may be troubling and we may not like it, but that doesn't mean the government should be in the business of deciding what is and what is not appropriate.

Moreover, at the level of generality at which the government invokes “racial tolerance,” it is hard to see how one could find that § 2(a) “directly and materially advanc[es]” this interest and is narrowly tailored to achieve that objective.... Disparaging speech abounds on the Internet and in books and songs bearing government registered copyrights. And the PTO has granted trademark registrations of many marks with a racially charged character.

The court concludes by noting that it's not endorsing disparaging speech -- even the name of the band in this case. It's not endorsing a trademark on "The Slants." It's just noting that §2(a) appears to be unconstitutional for violating the First Amendment.

Although we find the disparagement provision of § 2(a) unconstitutional, nothing we say should be viewed as an endorsement of the mark at issue. We recognize that invalidating this provision may lead to the wider registration of marks that offend vulnerable communities. Even Mr. Tam, who seeks to reappropriate the term “slants,” may offend members of his community with his use of the mark.... But much the same can be (and has been) said of many decisions upholding First Amendment protection of speech that is hurtful or worse. Whatever our personal feelings about the mark at issue here, or other disparaging marks, the First Amendment forbids government regulators to deny registration because they find the speech likely to offend others. Even when speech “inflict[s] great pain,” our Constitution protects it “to ensure that we do not stifle public debate.”... The First Amendment protects Mr. Tam’s speech, and the speech of other trademark applicants.

There is also a concurring opinion that says that beyond the fact that Section 2(a) is a violation of the First Amendment it's also a violation of the Fifth Amendment for being "unconstitutionally vague," specifically arguing that the term "may disparage" leaves things wide open in a way that is unconstitutional. There's another concurrence that includes a partial dissent, arguing that the commercial speech argument is not correct, and noting that the Trademark Office is not rejecting speech that offends the government, but rather which offends "a substantial composite of the referenced group." Finally, there are two more dissents. The first is on the First Amendment issue, saying that the USPTO's rejection of a trademark doesn't harm anyone's free expression rights. The second one argues that the government has a "substantial interest" in refusing to allow such trademarks. Feel free to read the arguments on that below.

What will be interesting is if the government seeks to appeal this to the Supreme Court (and whether or not the Supreme Court takes the case). It's possible that any Supreme Court decision may wait and depend on a ruling in the case about the Redskins trademark (which is in the 4th Circuit). If that court rules differently then it's much more likely that the Supreme Court will take on this issue to clear up the circuit split. If the 4th Circuit sides with the Redskins, then there will be two such rulings on the books in different circuits. But, for Redskins fans who don't want that name to go away, today's court ruling is a big win in your favor. And while I'll admit I'm no fan of the Redskins name, I'm now pretty firmly in the camp that agrees with the First Amendment argument that it's not the government's place to decide whether the speech is disparaging or not.

Filed Under: disparaging, first amendment, free speech, lanham act, redskins, slants, trademark, uspto

Court Hands Loss To Doctor Who Sued Over Blog Posts Criticizing His Questionable Alzheimer's Treatments

from the woefully-inept-trademark-thuggery dept

Another bullshit lawsuit seeking to suppress critical speech has resulted in a loss for the plaintiff.

Last year, Dr. Edward Tobinick sued Yale physician Steven Novella over a blog post Novella had written that questioned and criticized Tobinick's off-label use of immune-suppressing drugs to treat… Alzheimer's patients. Here's a short quote from the post at the center of the lawsuit:

The claims of Tobinick, however, are not in the gray area—they are leaps and bounds ahead of the evidence. Further, the conditions he claims to treat are not clearly immune-mediated diseases. It’s one thing to use an immune-suppressing drug to treat a disease that is known to be caused by immune activity, and probably the kind of immune activity suppressed by the drug.

Tobinick, however, is claiming that a wide range of neurological conditions not known to be immune mediated are treated by a specific immunosuppressant.

Tobinick first demanded Novella take the post down. When Novella refused, Tobinick sued him and Yale University. Tobinick didn't allege defamation, as one would expect. (At least, not originally, allegations of libel were added to an amended complaint.) Instead, Tobinick claimed Novella's post was "false advertising" and actionable under trademark law.

There are very few cases where plaintiffs have been successful misusing intellectual property laws to shut down critics. This one is no exception. Back in June, the court granted Novella's anti-SLAPP motion, striking Tobinick's motions for unfair competition, trade libel and libel per se. All that was left unaddressed was Tobinick's Lanham Act claim.

Now, the court has handed a victory to Novella, granting his motion for summary judgment and ordering the case closed. The court finds no merit to Tobinick's argument that Novella's critical blog posts were "commercial speech" and therefore actionable under the Lanham Act.

[T]he Court finds that the speech at issue here—that is, the First and Second Articles, published on www.sciencebasedmedicine.org —is not commercial speech. The Articles proposed no commercial transaction, and consequently do not fall within the “core notion” of protected speech. See Bolger, 463 U.S. at 66. Furthermore, the Articles do not fall within the scope of the definition expounded in Central Hudson, “expression related solely to the economic interests of the speaker and its audience.” 447 U.S. at 561. Both articles clearly state their intent to raise public awareness about issues pertaining to Plaintiffs’ treatments.

Thus, the First and Second Articles can only potentially qualify as commercial speech under Bolger. Yet the Articles differ from the pamphlets at issue in Bolger in a number of ways. First, the Articles are not conceded to be advertisements. Second, the only products referenced in the First Article are Plaintiffs’ treatments. To the extent that the Second Article mentions Defendant Novella’s practice, it is in direct response to the instant litigation as opposed to an independent plug for that practice.

The main thrust of Tobinick's Lanham Act argument was that because Novella made money indirectly from the website, it was commercial speech. The court doesn't care for this argument either, and points out that even certain commercial speech is still protected under the First Amendment and not subject to Lanham Act claims.

The third and final factor from Bolger, whether there was an “economic motivation” for the speech, is the primary basis for Plaintiffs’ opposition to summary judgment. Essentially, Plaintiffs contend that the Articles are commercial speech because SGU Productions, a for-profit company controlled by Defendant Novella, earns money by selling advertisements on its website (skepticsguide.net), advertisements in a podcast, memberships, and goods such as t-shirts…

Thus, even if Defendant Novella directly earns money from an organization sponsoring or producing the speech, this alone would not make the speech commercial. Furthermore, the specific evidence elicited in this case regarding SGU does not point to a strong economic motivation for the speech. Although Plaintiffs argue that “[t]he flow of money to Novella . . . is significant, as [Jay] Novella testified to over $200,000 last year,” Jay Novella also testified that, despite this profit, SGU “made no profit after expenses” because “we reinvest the vast majority of the money back into the company when we have a positive cash flow.”

The Court therefore finds that Defendant Novella’s speech in the First and Second Articles does not qualify as commercial speech, such that the Articles can form the basis of a Lanham Act claim.

Once again, we see a plaintiff learning the hard (and expensive) way that speech that may harm your commercial interests isn't automatically a.) defamatory or b.) a violation of intellectual property laws. Of course, many litigants already know this. They're apparently just hoping the courts don't.

With the granting of the anti-SLAPP motion, it looks like Tobinick will be paying the costs of defending against his bogus lawsuit. But it's not as though people looking to censor critics will be any less willing to engage in Hail Mary-esque lawsuits. Many defendants simply aren't willing to put themselves through the financial and mental pain and suffering that accompanies litigation. Because of this, this string of IP law-abusing legal failures won't prevent similarly bogus attempts from being made in the future.

Filed Under: alzheimer's, anti-slapp, commercial speech, criticism, edward tobinick, free speech, lanham act, slapp, steven novella

Macy's Trying To Keep Others From Using The Brands It Bought And Then Abandoned

from the mine! dept

In the interest of full disclosure, I hope there is a special place in Hell reserved for the Macy's people. A decade ago, the department store giant waltzed into my hometown of Chicago and gobbled up the State Street institution known as Marshall Field's, forever changing how Christmas is experienced by young people in this city of mine. Now, making matters worse, it appears that Macy's is attempting to retain some kind of ownership over the brands its buy-ups dissolved, contrary to the rules about trademark abandonment.

When Macy’s Inc. swallowed up a slew of department stores across the land — from Marshall Field’s to Filene’s, Abraham & Straus to Jordan Marsh — it rebranded many of them, turning the formerly regional chains into Macy’s stores. But in a new lawsuit brought by the company that echoes a suit from 2011 that was slated to come to trial soon, Macy’s says the California company behind the resurrection of Hydrox and Astro Pops is infringing on trademarks it held for many of those recognizable brand names.

Macy’s alleges that Strategic Marks infringed on its trademarks once again when it began selling T-shirts and candy under those 12 additional brands last month. In 2010, Strategic Marks had applied to register for trademarks for some of those names to be on clothing sold online and potentially in pop-up stores in the future, “using typestyles which are intentionally identical to those used by Macy’s,” the suit says.

Strategic Marks vehemently disagrees in a countersuit, pointing out that after Macy's bought up all those brands, it then rebranded them as Macy's stores and abandoned the use of the original names. Under the Lanham Act, the failure to use a trademark for at least three years constitutes abandonment, leaving others free to use them as they see fit. Which is exactly what Strategic Marks did in selling nostalgic apparel using the brand-names. Ellia Kassoff, founder of Strategic Marks, is once again asserting abandonment, as he did when Macy's first filed against him in 2011.

“They weren’t using these trademarks,” he told Consumerist back then, claiming, “We have proof they weren’t using these trademarks… Macy’s went to the Trademark Office and said, ‘No, no! These are ours! These are ours! We started it! This has our heritage! It’s our heritage!’ And the Trademark Office said, ‘Sorry, but you’re not using it. You haven’t used it in years.’”

Should that prove to be true, the Macy's suit is meritless and smacks of a company seeking to dissolve brands through buyouts and then attempting to control the use of those dissolved brands after they've been buried in the graveyard. Large companies buying out local corporations is an unfortunate but legal reality, but detaining those beloved brands even after they've been put to death isn't just silly, it's cruelly authoritarian. On top of that, given that Macy's went to some length specifically to re-brand the old names into the Macy's fold, it's difficult to understand where customer confusion over nostalgic apparel is going to come in.

The trial date for both suits is set for March, where hopefully the dead brands will be set free.

Filed Under: abandonment, abraham & strauss, filene's, jordan marsh, lanham act, marshall field's, trademark
Companies: macy's, strategic marks

DOJ Steps Into Redskins Trademark Lawsuit, Saying It Doesn't Violate First Amendment To Deny 'Disparaging' Trademark

from the constitutional-fights dept

No matter what you think of the various fights over whether or not the Washington NFL professional football team should be named the Redskins, the legal side of the fight is raising a fairly interesting First Amendment question. As we've discussed in the past, trademark law (notably 15 USC 1052(a)) says that the Trademark Office has the right to deny a registered trademark on "matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute." The US Patent and Trademark Office used that tidbit to cancel the registration on the Redskins a few months back (a few months after rejecting a mark on "Washington Redskin Potatoes" using similar logic). Dan Snyder's football team is going to court over this and raising a few arguments, though the one that is most interesting to me is whether or not that clause in the Lanham Act violates the First Amendment. As the complaint argues:

The terms "disparage," "may disparage,""contempt," "disrepute," and "may bring... into contempt or disrepute"—which the TTAB acknowledges are not defined in the statute or in its legislative history—are unconstitutionally vague. The statutory language of Section 2(a) fails to provide people of ordinary intelligence a reasonable opportunity to understand what conduct it prohibits, and therefore conveys no ascertainable standards for trademark owners to follow. The statutory language of Section 2(a) thereby encourages and authorizes arbitrary and discriminatory enforcement by leaving the Board with virtually unfettered discretion to deny registration or to cancel registrations, even in situations such as the one presented here, where for over eighty years Pro-Football has worked to establish valuable rights in its marks, and has owned its initial registration in the series of marks, for over forty years. Section 2(a) thus effectively chills First Amendment free speech rights.

The terms "disparage," "may disparage," "contempt,""disrepute,"and "may bring... into contempt or disrepute" are unconstitutionally overbroad and sweep under their rubrics speech that is not capable of being legitimately regulated by the government. There is no core of easily identifiable and constitutionally proscribable conduct prohibited by Section 2(a). Rather, to the extent there are any legitimate applications of Section 2(a), they are few in comparison to the substantial unconstitutional applications of the law that impermissibly restrict protected speech. Section 2(a) thus chills protected speech that falls within its overbroad language.

The team makes a further argument that the name is a form of protected speech and removing the trademark stifles that speech, but that's a slightly different issue (and one that I don't think is as strong).

The DOJ has now stepped in specifically to defend the constitutionality of that section of the Lanham Act:

The United States will defend the constitutionality of the federal statute.

“The Department of Justice is dedicated to defending the constitutionality of the important statute ensuring that trademark issues involving disparaging and derogatory language are dealt with fairly,” said Acting

Assistant Attorney General Joyce R. Branda for the Civil Division. “I believe strongly in the rights of all Americans to celebrate and maintain their unique cultural heritage. Going forward, we will strive to maintain the ability of the United States Patent and Trademark Office to make its own judgment on these matters, based on clear authorities established by law.”

From a pure legal wonkery position, this whole thing is fascinating. I have to admit that specifically putting into law that the USPTO can deny trademarks based on "matter which may disparage" or which might bring "persons, living or dead, institutions, beliefs, or national symbols... into contempt, or disrepute" bothers me on a basic First Amendment level. Asking bureaucrats to determine whether or not content is disparaging or might bring someone into disrepute certainly seems to raise some First Amendment issues. It certainly doesn't seem to fall into the very limited categories of "content-based restrictions" that the Supreme Court has allowed.

That, however, is only half of the equation. The more important half is the question of whether denying a trademark registration is a content-based "restriction on speech." And that doesn't seem even close to reasonable. There are tons of trademarks that are denied all the time, and it seems perfectly reasonable to say that the USPTO can deny a trademark. If it's somehow argued that denying (or cancelling) a trademark registration can be seen as a First Amendment violation, then would the USPTO be able to reject any trademarks? Or would it always face a First Amendment challenge?

And that brings us to the final point. Cancelling a trademark registration doesn't actually block any form of speech. The team can still use the name (and could even still claim a common law trademark, allowing it to block most others' attempts to use the mark anyway -- it basically just limits the ability to get monetary damages). In fact, the trademark lawyer for the Redskins, Bob Raskopf, more or less made this point himself in response to the USPTO cancelling the registration, noting (among other things) that:

This ruling – which of course we will appeal – simply addresses the team’s federal trademark registrations, and the team will continue to own and be able to protect its marks without the registrations.

He's right, but it also undermines the First Amendment question raised in the appeal, and more or less makes the DOJ's case for it on this particular point. If no speech is hindered or stopped by the cancelling of the registration (or a denial of a registration) based on 1052(a) then where is the First Amendment problem? It may be a "content-based" regulation, but it's not clear that it's a content-based restriction on speech.

Either way, as a First Amendment issue, it's an interesting one to watch. Should the Redskins prevail, and the DOJ fail, on this particular point, there could be some other interesting challenges to rejections of trademarks -- or even potentially patents or copyrights as well. Saying that rejecting a registered form of intellectual property is a violation of the First Amendment could open the door on a series of troubling legal questions. Still, this isn't the only case exploring this issue. A case in front of CAFC currently, involving the USPTO rejecting a trademark for the band "The Slants" via this same part of the Lanham Act has opened the door to it being called unconstitutional. At least one judge seems to agree with the Redskins' take on this:

At the Federal Circuit, Tam and attorney Ronald Coleman are swimming against 34 years of precedents. But it sounded from Friday's argument as if at least one judge wants to reconsider them. Judge Kimberly Moore described the seminal decision upholding Section 2(a) of the Lanham Act as outdated, cursory and a candidate for en banc review in light of "an immense evolution of Supreme Court jurisprudence on this point."

In that case, one of the judges pointed out, as we have, that rejecting the trademark doesn't limit speech, but in fact expands it by not restricting it via the trademark. After some coaxing from Judge Moore, the lawyer for The Slants' Simon Tam disagreed with that point. However, again, the others on the panel seem to feel as we do that it's not clear what speech is being stifled here. According to Judge Kathleen O'Malley:

"Isn't there a difference, though, between prohibiting speech on the one hand, which very much would be censorship, and refusing to give one a monopoly on a particular mechanism for that speech?"

Indeed, there is. And it seems likely that the Redskins are going to lose on this point as well.

Filed Under: disparaging, doj, first amendment, free speech, lanham act, redskins, slants, trademark
Companies: washington redskins