Free Speech v. Trademark Rights: Has the weather changed?
Sarah Mazzie-Briscoe, DePaul University College of Law, March 19, 2006
Abstract: When analyzing claims under the ACPA courts must decide whether preserving a domain name registrant’s right to free speech outweighs the mark owner’s trademark rights.
ACPA enacted in 1999, prohibits bad faith and abusive registrations of distinctive marks as Internet domain names with the intent to profit on the goodwill of another’s mark. But what does "bad faith intent to profit" mean? The ACPA provides nine, non-exclusive factors that serve as guideposts for determining which types of conduct constitute “bad faith intent to profit from a mark.” These factors attempt to balance the property interest of trademark owners with the legitimate interests of Internet users who seek to make lawful uses of others’ marks, including uses for comparative advertising, criticism, comment, parody, news reporting or fair use.
The U.S. Supreme Court has not issued an opinion which clearly interprets the ACPA. However, within the last few years, various Federal Circuit Courts have ruled in cases where trademark owners alleged violations of the ACPA by domain name registrants. Each ACPA case was decided on the particular facts before the Court. And each Circuit took its own approach to interpreting the “bad faith intent to profit” standard. Therefore, despite these court decisions, it remains difficult to predict what type of conduct the ACPA prohibits and what type of conduct is protected as free speech under the First Amendment. However, in order to provide some guidance to domain name users and mark owners let's examine the ways in which various Circuit Courts have interpreted the “bad faith intent to profit” factors outlined in the ACPA in light of the facts of the cases before them.
4th Circuit
Two 4th Circuit opinions demonstrate the stark difference between the conduct that can be deemed “bad faith intent to profit on the goodwill of another’s mark” and conduct that expresses protectable commentary. First, in
PETA v. Doughney , the 4th Circuit ruled in favor of the trademark owner. The defendant registered peta.org and created a website entitled “People Eating Tasty Animals.” Although the defendant arguably established the website to function as a parody of People for the Ethical Treatment of Animals (P.E.T.A.), the defendant had registered 50-60 domain names at the time P.E.T.A. brought suit and he falsely represented to his Internet service provider that the domain name did not interfere with or infringe upon rights of third party and no other business operated under the domain name, even though he knew of the existence of P.E.T.A. Furthermore, a publication revealed that the domain name registrant contacted P.E.T.A. and informed the organization that if it wanted the domain name, “it should make him an offer.” The 4th Circuit held that the defendant’s conduct indicated bad faith and demonstrated a pattern of registering domain names for the purpose of extorting money from legitimate trademark owners. Moreover, the registrant intended to divert Internet users into accessing his site, which was harmful to the goodwill represented by the P.E.T.A. mark. The Court found on these facts that there was a bad faith intent to profit, and therefore, P.E.T.A.’a rights to its trademark outweighed the defendant’s right to free speech.
In the most recent 4th Circuit case,Lamparello v. Falwell Ministries,the Court ruled in favor of the domain name owner. Jerry Falwell owned trademarks in “Jerry Falwell” and “Falwell.” His website could be found at www.falwell.com. Immediately after hearing one of Reverend Falwell’s interview, the defendant registered www.fallwell.com to respond to the “untruths about gay people.” The Court, focusing on the content of the defendant’s website, noted that the site contained criticism of Reverend Falwell, as well as a prominent disclaimer. Furthermore, the defendant’s site provided a link to Reverend Falwell’s site for Internet users who may have been seeking Falwell’s site. Although the defendant’s site provided a link to Amazon.com, which sold books that the defendant favored, the 4th Circuit declared that the Amazon.com link “does not diminish the communicative function of this site.” Unlike the defendant in PETA, the defendant in this case never registered other domain names or misled his Internet service providers. He demonstrated no intent to extract money from Jerry Falwell or gain some profit from use of the registered domain name. In sum, the indicia of bad faith that were presented in PETA were absent in Falwell; therefore, the 4th Circuit determined that the domain name registrant’s First Amendment free speech rights outweighed Jerry Falwell’s trademark rights.
5th Circuit
In 2004, the 5th Circuit decided a case brought under the ACPA where a consumer registered a domain name to inform other consumers about his unsatisfactory dealings with a company. in
TMI v. Maxwell,the defendant consumer registered www.trendmakerhome.com to air his grievances about TrendMaker Homes, a homebuilding company. The defendant placed a disclaimer at the top of the home page signaling that it was not TMI’s site. The defendant’s site contained a place for consumers to share stories and obtain information about contractors. Internet users were not charged for using the defendant’s website and no paid advertisements appeared on the site. The 5th Circuit found no evidence to support the contention that the defendant registered the domain name with a bad faith intent to profit. The defendant was not engaged in the business of selling domain names to mark owners.
6th Circuit
Similarly, in
Lucas Nursery & Landscaping v. Grosse,the 6th Circuit refused to find a violation of the ACPA where a consumer operated a website at www.lucasnursery.com to relay her story of receiving poor service from the plaintiff, Lucas Nursery & Landscaping. In this case, like in TMI, the 6th Circuit found it improper to apply the
protections of the ACPA when the defendant did not appear to be a slick Internet peddler who trades on the names and reputations of established brands.
In contrast, one year prior to Lucas Nursery, the 6th Circuit decided
Ford Motor Co. v. Catalanotee, in favor of the trademark owner. This case, muck like PETA, offers an examples of an apparent bad faith intent on the part of the defendant to hold a domain name hostage. The defendant was a Ford employee since 1979 and he was aware that Ford put out a newspaper for employees titled Ford World. The defendant registered FORDWORLD.COM in 1997. He never operated a website under the domain name to criticize or comment about Ford. Instead, the defendant sent an email to Ford officers stating that the domain name will be available for a short period of time and that he had been receiving offers from various competing sources. In reality, the defendant had not received any offers. Also, the defendant had registered and sold two other domain names to organizations. To the 6th Circuit, it was clear that by placing a price tag on FORDWORLD.COM, the defendant intended to extort money from Ford in exchange for the domain name.
8th Circuit
In the most recent 8th Circuit decision,
Coca-Cola v. Purdy, 382 F.3d 774 (8th Cir. 2004), the defendant registered a domain name with the apparent aim of expressing protest and comment relating to Coca-Cola Co. However, the facts in this case suggested an underlying intent to gain a commercial benefit from registration of the domain name.
The defendant registered several domain names incorporating distinctive, famous and protected marks such as Coke, Pepsi, McDonald’s and the Washington Post for the asserted purpose of spreading an anti-abortion message. At first, the domain names linked internet users to other anti-abortion sites. Eventually, the defendant linked the domain names to his own site, which referred to the trademark owners’ abortion views. Although the defendant sold no products on his sites, he linked the domain names to other sites that sold anti-abortion merchandise and solicited donations. Furthermore, the defendant placed a fictitious Washington Post headline on his website, which stated “The Washington Post proclaims “Abortion is Murder.’” Next, the defendant contacted the Washington Post and offered to cease hosting the website if he were permitted to write an op-ed piece. When the Post refused the defendant’s request, the defendant registered another site with a new fictitious Post headline.
The 8th Circuit, taking an expansive view of what constitutes a “profit,” ruled for the plaintiffs and found that the defendant’s conduct, when viewed in its entirety, painted a picture of a bad faith registrant blackmailing legitimate trademark owners. Instead of extorting money from the Post in exchange for the domain name, the defendant extorted valuable newspaper space. In addition, the registrant intended to divert internet users to sites that would tarnish and disparage the plaintiffs’ marks. The court also considered the defendant’s conduct during the District Court proceedings. Immediately after complying with the District Court’s Preliminary Injunction order and transferring nine domain names to the legitimate mark owners, the defendant registered a new set of domain names incorporating the plaintiffs’ trademarks. The defendant differentiated the old domain names from the new domain names by merely adding a letter or a hyphen.
9th Circuit
In Bosley Medical Institute, Inc. v. Kremer,the 9th Circuit recently affirmed the ruling of the District Court for the Southern District of California inasmuch as said ruling awarded summary judgment in favor of the Defendant Kremer with respect to Lanham Act infringement and dilution claims. However, the Court remanded the case for a determination of Bosley’s claim under the ACPA that Kremer’s use of www.BosleyMedical.com as a forum to criticize Bosley’s hair replacement services constituted a bad faith intent to profit from the Bosley’s registered mark, “Bosley Medical.” The site contained no advertisements and offered no goods for sale. On the other hand, the site linked to newsgroup chat rooms that in turn linked to plaintiff’s competitors. In its opinion, the 9th Circuit specifically rejected the 4th Circuit’s holding in PETA that the registrant’s intent to divert internet users from the website of the trademark owner constitutes “commercial use” indicating that this analysis was overreaching and would place all consumer commentary sites under the reach of the Lanham Act. The 9th Circuit further noted that the ACPA does not contain a commercial use requirement, unlike the infringement provisions of the Lanham Act. The appellate court stressed that the use of a domain name in connection with a site that makes a noncommercial use or fair use of a mark does not necessarily mean that the registrant lacked bad faith. Therefore, the court remanded the case to the district court for further proceedings to consider whether Kremer’s use of Bosley’s mark constituted a bona fide noncommercial or fair use or whether Kremer had a bad faith intent to profit from the mark and was therefore in violation of the ACPA.
What is the Current Climate?
It appears that in most courts a determination of “bad faith intent to profit” boils down to the following inquiry: whether the registrant intended to extort money from the trademark owner or merely to express commentary that is protected by the First Amendment. Although many Circuits (including the 4th, 6th and 8th) take an expansive view of the “commercial use” and “profit” standards under the ACPA by considering whether the registrant intended to divert internet users from the trademark owner’s goodwill, recent decisions potentially signal a warming-up trend for the protection of free speech. In Falwell, although the defendant’s site incorporated an element of commercial use, albeit small, the 4th Circuit sided with the defendant. The 4th Circuit went further to note that the “use of a domain name to engage in criticism or commentary ‘even where done for profit’ does not alone evidence bad faith intent to profit.” Then again, the 9th Circuit’s language in Bosley, upon remand to the District Court, signals that a domain name registrant’s noncommercial use of a registered mark could potentially be deemed a bad faith intent to profit. The facts of Bosely Medical and Falwell are similar. Therefore, if the Bosley District Court makes a determination that the domain name registrant did not possess a bad faith intent to profit, the warming-up trend in favor of free speech signaled by Falwell would continue. Of course, if the case settles without a ruling, the weather will continue to be foggy in the 9th Circuit.
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