New trademark law might restrict free speech

Another salvo in the Republican war on free speech, courtesy of Rep. Lamar Smith (R-TX).

Embedded deep in H.R. 683—“The Trademark Dilution Revision Act,” which awaits what may well be a last look in the U.S. House of Representatives before being signed into law by President Bush—is language that would remove key free-speech protections that have been part of U.S. trademark law since 1996.

With only the most minimal notice in the mainstream press, the bill as it currently stands would remove three exceptions from part of the present trademark law:

--News reporting and commentary.
--Fair use.
--Non-commercial use.

Elimination of the news reporting and commentary protections would overnight put newspapers at much greater risk of trademark infringement actions being brought against them, for everything from a columnist’s or editorial writer’s ill-received reference to a company’s trademark, to, say, a news photograph of a homeless person’s shopping cart parked in front of a row of gleaming, readily identifiable new-model cars at the dealership of a well-known automaker. [Editor & Publisher]

Public Knowledge has an excellent precis and backgrounder The Trademark Dilution Revision Act of 2005 (H.R. 683). See also Ted Franks's post at Overlawyered. Tom points to another excellent post on The Trademark Dilution Revision Act at Legislating IP.

Comments

[Jason Heilpern]

Is there anything that can be done or is being done to stop this bill from going through?

[Joel H]

Ahh... Now Grover Norquist's attempt to acquire a trademark on "K Street Project" makes a lot more sense.

[Eli]

I almost want them to try it, just to see if we can get official confirmation of what's already been in dicta - that fair use exemption is required by the first amendment.

[Eli]

After looking more closely, I'm more unclear what you mean by eliminating the fair use exception. It would retain exclusions for comparative advertising, news reports, and parody. Is the issue the removal of some specific language re: fair use? That could be significant, I guess, as it'd somewhat eliminate an avenue for judicial control, but the particular aspects of fair use that we'd consider most important to free speech seem to be retained.

[Eli]

Yeah, unless I'm missing something, E&P is just wrong. Am I misreading?

[Patrick]

I think E&P is wrong.

Use of trademark in news and reporting isn't a violation. Its not some special exception. Its genuinely not a violation at all. To violate someone's trademark, you have to market a good or service using that mark, or a confusingly similar mark. If you're not marketting a good or service using that mark, you're fine.

So, a newspaper with the headlines, "McDonalds is Selling Ratburgers" is not in violation. A newspaper that changes its name to "The Ronald McDonald House Gazette" might be in trouble.

[angrytourist]

Dusting off the media law books ... though alarmist, E&P isn't completely off their rocker. One does not have to use a mark in commerce to violate a trademark. Dilution is the nebulous concept at play here.

If these provisions were to become law, the rules for what qualifies as improper dilution wouldn't change -- however the mediums subject to those laws would. Meaning, all the case law regarding dilution and tarnishment would now apply to actions brought against the free media.

So, in theory, the law would allow the maker of those readily identifiable new-model cars to sue the newspaper for damages to their trademark, since showing a homeless guy next to the cars is an unflattering representation of their brand.

[Eli]

It looks like this language was agreed upon by the senate:

(C) For purposes of paragraph (1), `dilution by tarnishment' is association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.

`(3) EXCLUSIONS- The following shall not be actionable as dilution by blurring or dilution by tarnishment under this subsection:

`(A) Any fair use, including a nominative or descriptive fair use, or facilitation of such fair use, of a famous mark by another person other than as a designation of source for the person's own goods or services, including use in connection with--

`(i) advertising or promotion that permits consumers to compare goods or services; or

`(ii) identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner.

`(B) All forms of news reporting and news commentary.

`(C) Any noncommercial use of a mark.

Seems like E&P is wrong.

[Patrick]

I still think that specifically exempting news commentary is unnecessary.

I am familiar with the concept of dilution. Dilution does not include commenting on a brand.

Normal trademark violations only occur when someone uses your mark in such a way that it is confusing to a customer. So, for a normal trademark, lets say, "Murphy's Discount Auto," a company named "Murphy's Fine Diamonds" might not be a problem, because Murphy's is not a famous mark and does not have dilution protection, and it is unlikely that a consumer would think that the same Murphy owns a discount auto store and a fine diamond jeweler (so no normal trademark violation).

But, with dilution, for famous marks violations can occur if the newcomer weakens the assocation in the mind of consumers between the mark and the trademarked good/service. So, "Volkswagon" could probably sue a hypothetical "Volkswagon Books," because their mark is probably famous, and the newcomer would lesson the assocation between "Volkswagon" and the Volkswagon autos.

So... news commentary does none of these things. I can't even think of a way news commentary could be identifying the good or service of the person or business selling the commentary.

Even looking at the new(?) definition of dilution by tarnishment, writing an article about a company and using that company's trademark to denote the company itself is not dilution.

I suppose if having a specific clause makes people happier, then, whatever.

[Eli]

It's hardly a new practice to include a probably-unnecessary exception just to make sure judges don't surprise you.

Mark, have you read Coca-Cola Co. v. Gemini Rising? That particular iteration of tarnishment seems awfully close to just commenting on a brand to me. Certainy, it's a good deal outside of the interests protected by preventing Volkswagen Ice Cream.

[Eli]

I just typo'd you as "Mark" because we were discussing marks.

I'm really, really stupid.

[Patrick]

Its worth noting that the case you posted was one where the issue was a motion for a preliminary injunction. To receive one, you only need show that there is a "reasonable" chance of prevailing on the merits. Nothing more. This is done before evidence is actually reviewed, and the injunction lasts only for as long as the trial.

Coca Cola claimed that consumers were confused as to the origins of the poster. They provided affidavits showing that they had been contacted by consumers who complained about the poster. That's brand confusion, or at the least, enough to get you a preliminary injunction. That is the same interest involved in preventing Volkswagon Ice Cream, except perhaps more so, because people like ice cream, whereas cocaine has a negative public image.

Also notable, Coca Cola was required to post a $25,000 security to insure the defendant against any harm by the injunction during the trial if Coca Cola turned out to not prevail. That doesn't really go to the law involved, but it does demonstrate how a preliminary injunction is different from a firm ruling.

As for considering it as consumer commentary, the court didn't think the "Cocaine" posters constituted commentary. I'm not so sure they were wrong. Its worth noting that in cases which cite "Coca Cola v. Gemini Rising," its usually as an example of a case which does not involve consumer commentary.

To quote "Bally Total Fitness Corp v. Faber,"

"There are, however, two flaws with Bally's argument. First, none of the cases that Bally cites involve consumer commentary. In Coca-Cola, the court enjoined the defendant's publication of a poster stating "Enjoy Cocaine" in the same script as Coca-Cola's trademark. See Coca-Cola, 346 F.Supp. at 1192. Likewise, in Mutual of Omaha, the court prohibited the use of the words "Mutual of Omaha," with a picture of an emaciated human head resembling the Mutual of Omaha's logo on a variety of products as a means of protesting the arms race. See Mutual of Omaha, 836 F.2d at 398. Here, however, Faber is using Bally's mark in the context of a consumer commentary to say that Bally engages in business practices which Faber finds distasteful or unsatisfactory. This is speech protected by the First Amendment. See L.L. Bean, 811 F.2d at 29; McCarthy, § 24:105 at 24-191. As such, Faber can use Bally's mark to identify the source of the goods or services of which he is complaining. This use is necessary to maintain broad opportunities for expression. See Restatement (Third) of Unfair Competition § 25(2), cmt. i (1995) (stating "extension of the antidilution statutes to protect against damaging nontrademark uses raises substantial free speech issues and duplicates other potential *1168 remedies better suited to balance the relevant interests")."

[Eli]

EFF clarified from the E&P article: Just to clarify, the language of H.R. 683 currently includes exceptions for noncommercial activities, news reporting and fair use. But under the proposed language the exceptions would only apply to dilution claims. Under the existing law, the exceptions apply to all claims under "this section." So the bill doesn't eliminate these exceptions, but narrows the kinds of claims to which the defenses apply.