-------- Original Message -------- Subject: Trademark bill threatens right to criticize companies Date: Thu, 25 Aug 2005 18:19:31 -0400 From: Paul Levy <plevy@private> To: <declan@private> 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 _______________________________________________ Politech mailing list Archived at http://www.politechbot.com/ Moderated by Declan McCullagh (http://www.mccullagh.org/)
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