[IP] Paul Levy: Trademark bill threatens right to criticize companies [fs]
Begin forwarded message:
From: Declan McCullagh <declan@xxxxxxxx>
Date: August 25, 2005 9:10:46 PM EDT
To: politech@xxxxxxxxxxxxxxx
Subject: [Politech] Paul Levy: Trademark bill threatens right to
criticize companies [fs]
-------- Original Message --------
Subject: Trademark bill threatens right to criticize companies
Date: Thu, 25 Aug 2005 18:19:31 -0400
From: Paul Levy <plevy@xxxxxxxxxxx>
To: <declan@xxxxxxxx>
An insidious attack on free speech is making its way through
Congress, in the form of a series of technical amendments to the
trademark laws. One version has already passed the House, and a
related version is, I am told, under very active consideration in the
Senate.
Our concern is about the anti-speech implications of HR 683, the
Trademark Dilution Revision Act, which passed the House last spring.
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?
dbname=109_cong_bills&docid=f:h683rfs.txt.pdf
The original, stated objective of HR 683 was to overrule the Supreme
Court's 2003 decision in the Victoria Secrets case. The Supreme
Court decided that, in order to establish a claim for "dilution" of a
famous trademark, the plaintiff must show not just that dilution is
"likely," but that it has already begun to occur. Owners of famous
trademarks have expressed concern both because it has been hard to
meet that standard of proof, and because, with the purpose of anti-
dilution law being to protect against dilution, the case cannot even
be brought until the mark owner has suffered the very loss against
which the law was intended to protect. Or, at least, that is what
they say.
Along with that revision, HR 683 makes some other reasonable changes
to the Lanham Act's rules on dilution (such as limiting its
application to truly famous marks) and some changes that may be less
desirable (such as expressly covering tarnishment, eliminating doubts
raised by the Victoria Secret decision that federal dilution law
might be limited to blurring). One might also wonder whether,
overall, the technical changes made to the dilution laws are ones
that tend to favor major corporations and to harm small businesses.
Under the new definition of famousness * which is limited to marks
whose fame "is widely recognized by the general consuming public of
the United States" * it is largely the very major national companies
that are most likely to be the plaintiffs, while adversely affecting
smaller businesses which, after all, are most likely to be the
defendants rather than plaintiffs in most dilution cases. In the
circumstances, I find it mystifying that the small business community
is not up in arms about this bill.
But it is the bill's revisions to the "exclusions" section, which are
paragraph (4) of the existing statute, and are now paragraph (3) of
the bill, as well as its impact outside the area of dilution, that
are of most concern to me. It is not at all clear to me that anybody
has focused on the implications of some of the more technical changes
that the bill makes to the current anti-dilution statute. Checking
the written remarks of the four witnesses who testified before the IP
subcommittee of the House Judiciary Committee, NOBODY took note of
this change, which makes me wonder whether this issue has just been
under the radar.
Under current law, section 43(c)(4) of the Lanham Act contains three
exceptions which, under the language of the statute, apply to "this
section": fair use, noncommercial use, and news reporting and
commentary. We have had some success in arguing that the language
"this section" means that subsection (a) (common law infringement and
comparative advertising) are also subject to these provisos. But
under the bill, the exceptions would expressly be limited to dilution
by blurring and dilution by tarnishment "under this subsection."
Thus, the protections for fair use and non-commercial use would no
longer extend to suits for infringement of unregistered trademarks.
In this regard, it should be noted that although the Lanham Act has a
separate subsection that allows a defense of fair use, section 33(b)
(4), that section is expressly limited to defenses against claimed
infringement of REGISTERED trademarks (which can be pursued under
section 32 of the Act). Courts have generally assumed that the fair
use defense applies to both registered and unregistered marks, but
given the increasing emphasis on literal reading of statutes, I see
some danger that this could change if the fair use exception in 43(c)
(4) no longer applies to "this section."
It is hard to figure out why fair use and news reporting and truly
noncommercial use ought NOT be excluded from the trademark laws, and
especially for trademarks that the owners have never bothered to
register. When the trademark laws were amended in 1988 and 1996,
Congress was acutely aware of the constitutional problems (under the
First Amendment) that would arise if the Lanham Act were extended to
noncommercial speech. And in our litigation in defense of consumers
who criticize companies online, the non-commercial use exception has
provided an inexpensive and clear way out of what otherwise might be
a lengthy and expensive trademark proceeding.
Although I am most familiar with the issue as it arises in the
context of Internet trademark litigation, it would similarly come up
in the context of an ordinary political leaflet or campaign, where
the plaintiff threatens a consumer or a citizen's group with
expensive trademark litigation on the ground that merely using the
plaintiff's name or logo on leaflets about the company violates its
trademark. Some suggestive cases are: Tax Cap Committee v. Save Our
Everglades, 933 F. Supp. 1077 (S.D. Fla. 1996); Brach Van Houten
Holding v. Save Brach's Coalition for Chicago, 856 F. Supp. 472 (N.D.
Ill. 1994); and MGM-Pathe Communications v Pink Panther Patrol, 774
F. Supp 869 (S.D.N.Y. 1991).
I am also quite concerned that, in the course of House Committee
hearings, the old exception for "non-commercial use" was been
eliminated altogether and replaced by a second "fair use"
requirement, which, although written with free speech considerations
in mind, is actually WORSE from the perspective of any ordinary
citizen who must face the realities of litigation. We have had a
fair amount of success in getting critics of trademark holders out of
litigation quickly, and cheaply, by raising the non-commercial use
defense. Fair use, by contrast, tends to require application of a
multi-factor test that is heavily dependent on context. Making the
defense rest on a complicated fair use analysis may make dismissal
harder to obtain at the motion to dismiss or summary judgment stage.
Citizen and consumer critics at least as likely to be worn down by
the expense of litigation as they are by actual losses in court --
and trademark cases are notoriously expensive. Critics are much less
likely to be able to afford to defend themselves under this new
language (not to speak of the years of litigation that it will take
to define it -- the courts had finally settled in on a construction
of the old exceptions). And thinking of the cases that are
attractive to lawyers who might consider taking cases pro bono, if
the case looks to be fact-intensive and might swallow up substantial
out-of-pocket expenses as well as time, the cases become a much less
attractive proposition.
Now, there is other language in various sections of the Lanham Act on
which critics can rely to support something of an exception for non-
commercial speech * the definition of "use in commerce" and the
requirement that use be "in connection with the sale, distribution or
advertising of goods and services" (worded differently in different
sections) * but those statutory arguments are more complicated.
Moreover, trademark owners are certianly going to argue that the
decision to strip section 43 of the "non-commercial use" exception
implies that Congress intended to expand the trademark laws to limit
non-commercial speech.
Finally, the re-written fair use defense would require that the
allegedly diluted mark have been used to comment on the holder of the
famous trademark. Many trademark parodies, however, do not
necessarily comment on the trademark holder, and so would not be
protected. For example, in the famous "Mutant of Omaha" case, Mutual
of Omaha Ins. Co. v. Novak, 836 F.2d 397 (8th Cir. 1987), although
admittedly not decided as a dilution case, it is not clear that the
defendant intended to criticize the insurance company Mutual of
Omaha, but was using a play on their name to talk about the dangers
of nuclear war. Similarly, and in the more recent "Taft-quack" case,
the defendant was not intending to say anything about AFLAC but was
using their famous duck quack to make fun of Bob Taft. American
Family Life Ins. Co. v. Hagan, 266 F. Supp.2d 682 (N. D. Ohio 2002).
Or, in the suit by MasterCard against Ralph Nader for his television
commercial describing "finding out the truth" as being "priceless,"
the Nader campaign did not invoke the famous "Priceless" campaign
theme to comment on MasterCard so much as to comment on other
politicians. MasterCard Int'l v. Nader 2000 Primary Committee, 70
U.S.P.Q.2d 1046 (S.D.N.Y. 2004). But the bill would eliminate the
protection that the current federal dilution law, as commonly
construed, would provide to these defendants.
Indeed, Walter Mondale's put-down of Gary Hart during the 1984
primaries, using the Wendy's slogan "Where's the Beef", would be
actionable as dilution under the bill as passed by the House. It is
quite likely that the slogan would be a famous trademark even under
the new definition of famousness; a strong case could be made for
likelihood of blurring; and although the use is non-commercial, that
alone would not be a protection from the dilution cause of action.
The phrase was used to comment, to be sure, but not to comment on
Wendy's; Mondale just borrowed the phrase to comment on Hart. Thus,
it would not be protected by revised exception (B).
So, whatever Congress does with the remainder of section 43(c) of the
Lanham Act, it ought to leave the text of section 43(c)(4) alone,
leaving it applicable to "this section" and leaving the existing
protection for "non-commercial use" intact.
Paul Alan Levy
Public Citizen Litigation Group
1600 - 20th Street, N.W.
Washington, D.C. 20009
(202) 588-1000
http://www.citizen.org/litigation
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