Protecting “The Thought That We Hate”

Author: Patrick Mulkern

The Supreme Court’s recent decision in Matal v. Tam, 582 U.S. ___ (2017) changes the trademark landscape by striking down the Lanham Act’s “disparagement clause” and rejecting the notion that trademarks are themselves “government speech.”

The Slants and Re-Appropriation of Derogatory Terms

The case stems from a trademark application filed by Simon Tam, the lead singer of the rock band “The Slants.” Although “slants” is often viewed as a derogatory term for persons of Asian descent, and despite suffering years of bullying growing up, Tam and his fellow band members (all of whom are Asian-American) sought to “reclaim” the term and turn the previously-negative stereotype into a point of pride.

Trademark registration is not required for a person or entity to use a word or phrase in commerce, but the protections afforded by the registration are often crucial in helping avoid or prevent consumer confusion regarding source or affiliation. See Matal, 582 U.S. at ___ (quoting Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 198 (1985)) (“The Lanham Act provides national protection of trademarks in order to secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers.”).

Here, The Slants ran into that exact problem when other bands started to use the same name. So, in 2010, Tam and the band sought to trademark the name but their application was rejected. The U.S. Patent and Trademark Office (“PTO”) denied the application on the basis that the registration would violate the Lanham Act’s “disparagement clause”—specifically, a concern that the trademark may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.” See 15 U.S.C. § 1052(a).

Tam appealed at the PTO, but was denied.  He then took his case to federal court, where the en banc Court of Appeals for the Federal Circuit held the disparagement clause to be unconstitutional as an impermissible violation of the First Amendment.  See In re Tam, 808 F.3d 1321 (Fed. Cir. 2015) (en banc).  The Supreme Court affirmed.

Supreme Court Decision

The Supreme Court began by rejecting Tam’s argument that the disparagement clause did not even actually apply to his application because it allegedly only concerned “persons” (that is, individuals and juristic entities) and not racial or ethnic groups. With the scope of the clause decided, the Court then addressed the Government’s claims that (a) trademarks are government speech, and not private speech; (b) trademarks are a government subsidy; and (c) the disparagement clause should be evaluated under a new “government-program” doctrine.

The distinction between “government” speech and “private” speech was the crux of the Government’s case because Supreme Court precedent clearly established that “[t]he Free Speech Clause . . . does not regulate government speech.” Matal, 582 U.S. at ___ (quoting Pleasant Grove City v. Summum, 555 U.S. 460, 467 (2009)). With that broad exception, the Court noted how the doctrine “is susceptible to danger misuse” and for that reason “must exercise great caution before extending” the scope of government speech.

To that end, the Court reasoned trademarks are not “government speech”—despite being registered by the PTO, an arm of the Federal Government—because the government “does not dream up” the content of the marks, “does not edit” the marks, and (normally) will not reject a registration based on the viewpoint it expresses. Additionally, registration “does not constitute approval” of a mark and “it is unlikely that more than a tiny fraction of the public” knows what trademark registration even means. For these reasons, the Court determined, “it is far-fetched to suggest that the content of a registered mark is government speech.”1

The remainder of the opinion resulted in limited precedent as the Court was split 4-4 in approving differing rationales for the ultimate outcome.2 Justices Alito, Roberts, Thomas, and Breyer rejected the Government’s “subsidy” argument, namely because the PTO is not providing cash or its equivalent to trademark applicants—“quite the contrary[,] an applicant for registration must pay the PTO[.]” These Justices also declined the Government’s invitation to apply a newly suggested “government-program” doctrine to save the disparagement clause, by simply merging the “government speech” line of cases with the “government subsidy” line of cases, because the rights conferred by a trademark registration were not valuable enough to warrant protection.

In any event, Justices Alito, Roberts, Thomas, and Breyer determined viewpoint discrimination has always been forbidden when the government creates a limited public forum for private speech (which trademarks were determined to be, earlier in the opinion). The Justices reminded how “[the Supreme Court has] said time and again that ‘the public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.’” Matal, 582 U.S. at ___ (quoting Street v. New York, 394 U.S. 576, 592 (1969)). Justices Kennedy, Ginsburg, Sotomayor, and Kagan expanded on the application of viewpoint discrimination to trademarks and agreed that the First Amendment’s prohibition of such discrimination was fatal to the disparagement clause.

Finally, Justices Alito, Roberts, Thomas, and Breyer declined to determine whether trademarks are “commercial speech”—thus making the disparagement clause subject to the relaxed scrutiny of Central Hudson—because the disparagement clause could not withstand even that lower standard of review. The clause, these Justices determined, serves no “substantial interest” and is not “narrowly drawn.” Most specifically, the argument that the Government has an interest in preventing offensive speech is completely unavailing because “the broadest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.’” Matal, 582 U.S. at ___ (quoting United States v. Schwimmer, 279 U.S. 644, 655 (1929) (Holmes, J., dissenting)).3

Impact

This decision will likely have wide-reaching impact as individuals (i) attempt to follow in The Slants’ footsteps of reclaiming once-derogatory terms, or, conversely, (ii) attempt to capitalize on the ability to sequester certain offensive words and phrases for commercial gain through trademark registration. The effects of the disparagement clause’s demise cannot accurately be forecasted to affect any one industry and, instead, will most likely impact all commercial streams.

A notable circumstance the decision is sure to impact is the current fight between the Washington, DC NFL team (the “Washington Redskins”) and the PTO, over the “Redskins” moniker. See Pro-Football, Inc. v. Blackhorse et al., Case No. 15-1874 (4th Cir. 2015). Six of the team’s trademarks had been cancelled by the PTO after several Native Americans petitioned that they disparaged Native Americans and had been registered in violation of the Lanham Act’s disparagement clause. Given the Matal v. Tam decision and its attendant striking down of the disparagement clause, however, it is likely the Court of Appeals for the Fourth Circuit will side with the team and reinstate the trademark registrations.

In coming to that conclusion, one must question the import of how Simon Tam chose “The Slants” in an effort to “reclaim” the term whereas the NFL team can make no such claim to its selection of “Redskins.” Given the protections afforded by the First Amendment—and the prohibition on viewpoint discrimination—such a calculus is also likely obsolete.

A copy of the Court’s slip opinion can be found here.

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1 The Court made quick work to distinguish the Government’s central case, Walker v. Texas Div., Sons of Confederate Veterans, Inc., 576 U.S. __ (2015). Walker, which held Texas’ specialty license plates were government speech, was different for three reasons: (i) license plates have long been used to convey state messages; (ii) license plates are often closely identified with the State, since they are manufactured and owned by the State, designed by the state, and serve as a form of government ID; and (iii) Texas maintained direct control over the messages conveyed on its specialty plates. None of those factors are present in trademark registration.
2 Justice Neil Gorsuch was not on the Court when oral argument was heard and took no part in the consideration or decision of the case.
3 Justices Kennedy, Ginsburg, Sotomayor, and Kagan took the position that, regardless of how the private-commercial speech issue is resolved, the evident viewpoint discrimination of the disparagement clause warrants heightened scrutiny—scrutiny it cannot survive.  These Justices did go on to discuss how trademarks likely are not government speech, however, and provided examples of how trademark registration was different from other “government speech” cases. See Matal, 582 U.S. at ___ (citing Legal Services Corp. v. Valazquez, 531 U.S. 533, 540-42 (2001)) (noting viewpoint discrimination exception “where the government itself is speaking or recruiting others to communicate a message on its behalf).

National Marks: Who Owns the Trademarks to America’s Famous Landmarks

National Park Concessionaires

In September 2015, a seemingly innocuous contract dispute was filed in the United States Court of Federal Claims (“CFC”) that could lead to the United States losing the trademark rights to some of its most popular national attractions.1 Though the suit is ostensibly based on failed contract negotiations between private national park concessionaire DNC Parks & Resorts at Yosemite, Inc. (“Delaware North”) and the United States Department of Interior (“National Park Service”), the damages claimed by Delaware North directly implicate whether a private entity should—or even can—own trademark protection for national landmarks like The Ahwahnee Hotel and even Yosemite National Park itself.

The National Park Service regularly administers guest services operations within its national parks through private companies, awarding “concession contracts” to these various entities. Delaware North was selected as Yosemite National Park’s official concessionaire in 1993, and came to operate over 1,500 hotel rooms, 25 food and beverage stands, and nearly 20 retail establishments.2 During its tenure, Delaware North also registered several trademarks for places traditionally associated with Yosemite National Park, including THE AWAHNEE, CURRY VILLAGE, WAWONA, BADGER PASS, and YOSEMITE NATIONAL PARK.3

As part of the concession contract renewal process, the National Park Service agreed that any successor concessionaire would be required to pay Delaware North “fair value” for its Yosemite-related property. In the dispute, Delaware North argues this should include at least $44 million in compensation for the Yosemite trademarks. The National Park Service, however, contends the trademarks are likely invalid and, thus, “fair value” is more accurately estimated at $3.5 million. In fact, in response to this lawsuit, the National Park Service filed a Consolidated Petition for Cancellation before the United States Patent and Trademark Office’s Trademark Trial and Appeal Board (“TTAB”) in an attempt to cancel Delaware North’s various Yosemite-related trademarks.4 That TTAB proceeding was suspended, however, because of the action already pending at the CFC. Accordingly, the court will likely be forced to wrestle with whether Delaware North’s trademarks are valid as the civil action seeks to determine if Delaware North was properly compensated though the parties vehemently dispute the value of the relevant intellectual property.

Of note, another concessionaire giant, Xanterra, filed a series of similar trademark applications in October and November 2014, for landmarks related to Grand Canyon National Park—EL TOVAR, HERMITS REST, LOOKOUT STUDIO, BRIGHT ANGEL LODGE, and PHANTOM RANCH.5 These applications came during a similar contract dispute with the National Park Service, though each was expressly abandoned in March 2015 after Xanterra was awarded a temporary, one-year contract.

Arguments for Cancellation

As part of the cancellation analysis, it is important to remember a trademark is entitled to protection only where it is functions as “a source identifier.”6 Through this lens, the U.S. Government argues that Delaware North’s trademarks should be cancelled because they falsely suggest a connection to the National Park Service. Delaware North counters that some of these marks have been in use by Yosemite’s concessionaires for nearly 100 years, with The Ahwahnee Hotel, for example, having been established by Delaware North’s predecessor in 1927. The PTO Examiner agreed with the National Park Service, initially, denying Delaware North’s original application for YOSEMITE NATIONAL PARK because of its false suggestion of a connection and descriptiveness.7 That office action was traversed, however, when Delaware North submitted a heavily redacted version of its 1993 concessionaire contract, allegedly establishing the necessary connection, and a declaration of acquired distinctiveness.

Legislative Efforts

In response to this high profile case, legislatures have taken to banning the registration of trademarks related to popular outdoor destinations. At the federal level, for example, Congress recently enacted a statute intended to prevent similar disputes.8 54 U.S.C. § 302106 prevents the trademark registration of a name historically associated with “buildings and structures on or eligible for inclusion on the National Register (either individually or as part of a historic district), or designated as an individual landmark or as a contributing building in a historic district by a unit of State or local government.” This language would have precluded almost all of Delaware North’s registrations and may prohibit any future attempt to register Xanterra’s presently-abandoned applications.

At the state level, California (home to the most national parks) recently adopted a similar bill that prohibits state park concessionaires from registering or obtaining any ownership interests in “the name or names associated with a state park venue.”9

Overall, these statutory proscriptions appear to embody the notion that parks—national, state, and regional—are held in the public trust, for all people, and thus, their associated property (including trademarks) should be part of that trust, too.10

Moving Forward

The future of this dispute is unclear. In its Opposition to suspend the TTAB proceeding, the National Park Service argues that Delaware North’s CFC complaint intentionally avoids mentioning issues of trademark validity or infringement, though such issues are arguably implicated by Delaware North’s claim for damages. Thus, the Government contends, these issues may not even be addressed.

The National Park Service has also argued the CFC is an inappropriate venue for the trademark dispute because it does not have jurisdiction to either (a) hear Lanham Act claims, or (b) cancel trademark registrations.11 The National Park Service specifically noted cases in which the CFC, itself, proclaimed “we have no jurisdiction over claims for trademark infringement”12 and “this court does not have jurisdiction over plaintiff’s claim for [trademark] cancellation.”13 Delaware North responded to these claims by asserting the CFC has jurisdiction by virtue of its “authority to decide incidental legal issues that arise in the course of deciding a claim within its Tucker Act jurisdiction, even if those issues would be outside the Court’s jurisdiction if asserted as standalone claims.”14 Thus, the issues of trademark validity and infringement may or may not be appropriately raised before the CFC.

Alternatively, the parties may simply come to a settlement, similar to that seen in the National Park Service’s dispute with Xanterra, though the Yosemite contract-at-issue has already been awarded to a different concessionaire. We await further developments.
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1 See DNC Parks & Resorts at Yosemite, Inc. v. United States of America, No. 1:15-cv-01034-PEC (Fed. Cl. 2015).
2 Another popular concessionaire, Xanterra Parks & Resorts, controls operations at Crater Lake National Park, Death Valley National Park, Glacier National Park, Grand Canyon National Park, Rocky Mountain National Park, Yellowstone National Park, and Zion National Park.
3 See U.S. Trademark Reg. Nos. 2772512, 2685968, 2739708, 2720778, and 2715307.
4 United States Dept. of Interior v. DNC Parks & Resorts at Yosemite, Inc., Cancellation No. 92063225 (T.T.A.B. 2016).
5 See U.S. Trademark App. Serial Nos. 86446998, 86444313, 86444295, 86434643, and 86444229.
6 Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d 1, 12 (1st Cir. 2008) (citing Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769 (1992)).
7 See DNC Parks & Resorts at Yosemite, Inc., Cancellation No. 92063225, at 1 TTABVUE 12-15.
8 See 54 U.S.C. § 302106 (2016).
9 AB 2249, 2015-2016 Leg. (Cal. 2015).
10 See AB 2249 §§ 2(a), (f).
11 See DNC Parks & Resorts at Yosemite, Inc., Cancellation No. 92063225, at 9 TTABVUE 9-11.
12 Id. at 10 (quoting Lockridge v. United States, 218 Ct. Cl. 687, 690 (1978)).
13 Id. at 10-11 (quoting Boyle v. United States, 44 Fed. Cl. 60, 65 (1999)).
14 DNC Parks & Resorts at Yosemite, Inc., Cancellation No. 92063225, at 15 TTABVUE 10.

Ninth Circuit: Amazon’s Customer-Generated Search Function Could Create Trademark Infringement Liability

In a recent decision—Multi-Time Machine, Inc. v. Amazon.com, Inc., et al., D.C. No. 2:11-cv-09076-DDP-MAN—the Ninth Circuit Court of Appeals held that Amazon’s consumer-generated product search function could create trademark infringement liability absent a clear label eliminating likely confusion. The Ninth Circuit found that a consumer’s search for Multi-Time Machine, Inc.’s (“Multi-Time”) products on Amazon.com returned search results for competing products and Amazon failed to warn consumers that it did not actually sell Multi-Time products.

Multi-Time, a high-end military-style watch manufacturer, which owns the trademark “MTM Special Ops,” does not sell any of its watches on Amazon.com, and it prohibits any of its authorized distributors from doing so. When Amazon consumers search for “MTM Special Ops” on Amazon.com, the search results in several of its competitors’ watches without an explicit warning that Amazon does not sell Multi-Time watches. Unlike Amazon, similar retail websites, such as Buy.com and Overstock.com, explicitly state in the search results that none of the products match the search query if the retailer does not offer that product. Moreover, at the top of Amazon’s search results page, “MTM Special Ops” is written in the query field, directly below the search line, and again immediately after the words “Related Searches.”

A search for “MTM Special Ops” on Amazon.com results in Multi-Time’s competitors’ watches, in part, due to Amazon’s behavior-based search technology, which tracks customer searches, views, and purchases, and returns future search results based on past behavior. For example, if enough customers search for product “X” and ultimately view and purchase product “Y,” eventually searches for X will return search results for Y.

Multi-Time filed suit against Amazon in the U.S. District Court for the Central District of California, alleging trademark infringement in violation of the Lanham Act. On Amazon’s motion, the District Court granted summary judgment in favor of Amazon on the grounds that Multi-Time did not put forth sufficient evidence from which a jury could determine that there was a likelihood of confusion. Multi-Time appealed.

The Ninth Circuit reversed the District Court’s grant of summary judgment, holding that Multi-Time presented sufficient evidence for a jury to determine that Amazon’s search function causes a likelihood of confusion under the “initial interest confusion” test.

First, the Ninth Circuit pointed out that the “confusion” at issue in this case does not necessarily fall within the category of confusion at the point-of-sale; but instead, also includes “initial interest confusion.” This occurs when a consumer is not necessarily confused at the time of purchase, but something earlier in the shopping process creates an initial interest in a competitor’s products and thereby “impermissibly capitalizes on the goodwill associated with a mark and is therefore actionable trademark infringement.” The Court held that a jury could infer that the search results page, coupled with Amazon’s failure to warn the customer that it does not carry Multi-Time products, gives rise to an initial interest confusion. For example, the Court pointed out that a jury could infer that customers might believe that a competitor has acquired Multi-Time or is somehow affiliated with Multi-Time.

Second, the Court analyzed the relevant Sleetkraft factors, most of which weighed in favor of Multi-Time. The Court determined that Multi-Time’s trademark, “MTM Special Ops,” is suggestive and conceptually strong because it does not merely describe its military-style watches, but is potentially suggestive of them. Additionally, the Court determined that the “similarity of the goods” factor weighs in favor of infringement because Amazon sells military-style watches and even displays them in response to a search for Multi-Time’s trademark.

The Court also determined that the “defendant’s intent” factor weighed in favor of infringement because Amazon received complaints from vendors and customers regarding similar search result problems. Amazon did nothing to address the complaints and did not disclose how the behavior-based search operated—therefore, the Court held that a jury could infer that Amazon intended to confuse its customers. Finally, the Court entertained Multi-Time’s evidence of actual confusion in the form of several instances in which customers searched for “MTM Special Ops” and thereafter purchased a competitor’s watch on the same day.

Therefore, because there was sufficient evidence to demonstrate likelihood of confusion, the Court reversed the District Court’s grant of summary judgment and remanded the case for a jury trial.

Circuit Judge Barry G. Silverman dissented from the majority because he believed the majority applied the wrong test to determine likelihood of confusion. Judge Silverman, citing to Ninth Circuit precedent, pointed out that the Court should have applied the test specifically developed for trademark infringement claims based on keyword advertising, which boils down to two factors: “(1) who is the relevant reasonable consumer?; and (2) what would he reasonably believe based on what he saw on the screen?” Judge Silverman determined that the relevant consumer in this context is a person accustomed to shopping online, and the consumer would not be confused by the search results because each product result is clearly identified by the product manufacturer. Therefore, it is unnecessary for Amazon to explicitly state that it does not sell Multi-Time watches.

This Ninth Circuit opinion clarifies that an online retailer’s consumer-generated product search function can create trademark liability if it does not adequately dispel any potential confusing inferences that might be derived from it.

Parties Seeking Injunctive Relief Under Lanham Act

On August 26, 2014, the U.S. Court of Appeals for the Third Circuit held in Ferring Pharmaceuticals, Inc. v. Watson Pharmaceuticals, Inc. that parties seeking injunctive relief under the Lanham Act will not be afforded a presumption of irreparable harm and must demonstrate that irreparable harm is likely. In affirming the lower court’s decision to deny the plaintiff’s request for an injunction, the Court of Appeals based its ruling on precedent set by two recent U.S. Supreme Court cases, eBay Inc. v. MercExchange, L.L.C. and Winter v. Natural Resources Defense Council, Inc.

Ferring is yet another precedential decision, among several other recent cases, that demonstrates a continuing trend in rejecting a presumption of irreparable harm for parties seeking injunctions in actions involving claims under the Lanham Act. The Second and Ninth Circuits also have applied this rationale to copyright actions. An even greater number of courts across the nation have recognized that the eBay analysis is applicable in lawsuits filed pursuant to the Lanham Act and concurred that it casts doubt on the application of the presumption of irreparable harm, but have nevertheless declined to rule on the matter.

The Ferring litigation arose from a dispute among two New Jersey-based pharmaceutical companies that market competing products designed to assist women undergoing in vitrofertilization to become and remain pregnant. In the complaint, filed on September 17, 2012, plaintiff Ferring alleged that defendant Watson coordinated two programs, during which Watson conveyed false and misleading information about Ferring’s competing product in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), the New Jersey Consumer Fraud Act, and New Jersey common law.

Ferring moved for a preliminary injunction on November 9, 2012, seeking to obtain corrective advertising and enjoin Watson from making any additional false statements. In denying Ferring’s motion, the district court found that Ferring was not entitled to a presumption of irreparable harm and had failed to demonstrate a likelihood of irreparable harm.

On appeal, Ferring argued that a presumption of irreparable harm should be applied in Lanham Act comparative false advertising cases and, accordingly, the district court erred in declining to permit Ferring to benefit from this presumption for the purposes of obtaining a preliminary injunction. Watson, in turn, argued that the Third Circuit has never recognized this presumption; the U.S. Supreme Court’s rulings in eBay and Winter do not support the application of this presumption; and, without the presumption, Ferring is unable to demonstrate a likelihood of irreparable harm.

Where a party in a comparative false advertising case, like Ferring, seeks a preliminary injunction, courts in various jurisdictions have historically permitted the application of the presumption of irreparable harm after a likelihood of success on the merits has been demonstrated. The Third Circuit pointed out, however, that this rationale preceded eBay and Winter, which set the precedent that broad categorical rules are inappropriate when determining whether to award injunctive relief, a determination that should be made within the court’s discretion and in accordance with the traditional principles of equity. The Court of Appeals alsocited a 2013 Ninth Circuitdecision as concurring analysis, which held that “the likelihood of irreparable injury may no longer be presumed from a showing of likelihood of success on the merits.”

The reasoning employed in Ferring provides a clear interpretation and explanation of precedent set by the Supreme Court with regard to issuing injunctions in actions not only involving claims under the Lanham Act, but in various types of cases governed by similar standards, and certainly reinforces the growing trend to reject the application of the presumption of irreparable harm for parties seeking injunctions in the future.

Please see the following citations for further reading on this topic:

eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006)

Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008)

Ferring Pharms. v. Watson Pharms., 2014 U.S. App. LEXIS 16426 (3d Cir. 2014)

Does Your Business Need a Trademark Audit?

A trademark audit evaluates and reports on the status of your business’ trademarks and related name rights.  An audit outlines considerations relevant to your ability to secure, protect and enforce your rights and, if desired, provides an appraisal of the dollar value of these rights.

To know if you need a trademark audit, consider:

  • Does your business use a brand name for your goods or services, has this brand name been registered and can you locate these registrations?
  • Does your business use different names for its goods and services, have these names been registered and can you locate these registrations?
  • Does your business use its brand name as your domain name and do you have confirmation of your domain name registration?
  • Does your business use a domain name and has that domain name been registered?
  • Does your business do business out of the United States and are your names registered in the countries where you do business?
  •  Does your business use the names of others and do you have copies of the authorizations to use those names?

Your answers to these questions will indicate if it is time to contact an IP audit specialist to ask about a trademark audit.

Webinar Addresses Trademark Issues Important to Businesses

Today the Gordon & Rees Intellectual Property Practice Group presented a webinar titled “What You Need to Know About Trademarks” that discussed areas of critical importance to businesses regarding trademarks. Topics included the establishment of trademark rights through use; the differences between common law and registered marks; the value in a federal trademark registration; trademark searching before adopting a mark; the proper use of trademark marking; foreign trademark registrations; infringement actions in federal and state court; and appeals, oppositions and cancellation proceedings before the Trademark Trial and Appeal Board. To listen to the webinar, click here.

We will be holding webinars throughout the year on various intellectual property subjects including copyrights and patents. To join us, click here.

Whose Name Is It Anyway?

Rapper William Leonard Roberts II, professionally known as Rick Ross, was recently the victor in a legal dispute with former drug trafficker Ricky D. Ross over the use of Roberts’ stage name.

According to the California Court of Appeal’s Dec. 23, 2013, opinion in Ross v. Roberts, et al., plaintiff Ricky D. Ross, also known as “Freeway Rick Ross,” rose to infamy in the 1980s as he ruled the West Coast while overseeing a multimillion-dollar cocaine trafficking enterprise and became a street legend.  Ross’ network packaged and transported cocaine directly into at least six states and indirectly into many others.  He was the subject of the Black Entertainment Television true-crime documentary series “American Gangster,” which profiled the rise and fall of certain criminals.

Defendant Roberts admittedly lived a different life.  He is a successful recording artist who is professionally known as Rick Ross.  Although Roberts, through his lyrics and music, has created a fictional image of a cocaine-trafficking gangster, he in fact attended college on a football scholarship and was once a correctional officer.  He later signed a record deal with Island Def Jam, a major record label known for breaking hip-hop superstars such as Kanye West and Jeezy.

While in jail, Ross read a magazine article about up-and-coming rappers and learned of Roberts’ use of the stage name Rick Ross.  In 2010, Ross sued Roberts, his record label and several other parties in California state court for allegedly misappropriating his name and likeness to further Roberts’ rap music career.  Ruling that the First Amendment protected Roberts’ creative expression, the state court judge granted summary judgment in his favor.

California, like most jurisdictions, recognizes that “the right of publicity protects an individual’s right to profit from the commercial value of his her identity.”  Gionfriddo v. Major League Baseball (2001) 94 Cal.App. 4th 400, 4009.  California also recognizes a statutory right of publicity. Comedy III Productions, Inc. v. Gary Saderup, Inc. (2001) 25 Cal.4th 387, 391 (Comedy III).  California Civil Code § 3344(a) provides, in pertinent part, that “[a]ny person who knowingly uses another’s name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods or services, without such person’s prior consent . . . shall be liable for any damages sustained by the person or persons injured as a result thereof.”

The appellate court in Ross, citing the California Supreme Court’s analysis in Comedy III, applied the transformative test and chose to “ ‘balance’ the right of a celebrity to control the commercial exploitation of his or her likeness . . .  against another individual’s right to free expression under the First Amendment.”  The application of the transformative test seeks to determine “whether the new work merely ‘supersede[s] the objects’ of the original creation . . . or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning or message.”  It looks at “whether a product containing a celebrity’s likeness is so transformed that it has become primarily the defendant’s own expression rather than the celebrity’s likeness.

Comedy III involved a visual artist who sold lithographs and T-shirts bearing the faces of the Three Stooges.  The transformative test became whether the use of celebrity likeness “is one of the ‘raw materials’ from which an original work is synthesized, or whether the depiction or imitation of the celebrity is the very sum and substance of the work in question.”  Relying on Comedy III, the Ross court also noted that First Amendment protection extends not only to visual expressions but to all forms of expression, including written and spoken words and music.

In Ross, the court acknowledged that Roberts’ “work — his music and persona as a rap musician—relies to some extent on plaintiff’s name and persona.  Roberts chose to use the name ‘Rick Ross.’  He raps about trafficking in cocaine and brags about his wealth. These were ‘raw materials’ from which Roberts’ music career was synthesized. But these are not the ‘very sum and substance’ of Roberts’ work.”

Further, “Roberts created a celebrity identity, using the name Rick Ross, of a cocaine kingpin turned rapper.  He was not simply an imposter seeking to profit solely off the name and reputation of Rick Ross. Rather, he made music out of fictional tales of dealing drugs and other exploits— some of which related to plaintiff.  Using the name and certain details of an infamous criminal’s life as basic elements, he created original artistic works.”

Simply, Roberts’ fictional entertainment persona was found to be transformative.  So the answer to the question of whose name is it anyway is both Ross and Roberts.

But For Trademark Parody – Jovial Jabs or Bad for the Brand?

In the somewhat murky world of trademark parody disputes, various courts often are torn as to how to best reach the appropriate decision. Such uncertainty, among other PR and business considerations, often leads some plaintiffs to ponder whether they might have been better off having a good chuckle and ignoring tongue-in-cheek brands in their space rather than marching into court.

However, since lawyers typically aren’t paid for public relations consultations, judge for yourself how these parties faired as we look at some common themes of interesting trademark parody cases decided over the past few years worth some light-hearted discussion.  If you don’t crack a smile reading about these cases, and the creative minds behind them, definitely stick to reading legal treatises.

At the outset, it is important to distinguish between what is parody and what is not.  Although sometimes confused with sarcasm and/or satire, both of which lean toward derision, parody is different and often looked upon more favorably in our culture, likely due to its joviality.  Where trademark law often becomes intertwined, is that for parody to work it necessarily relies upon an interrelationship to a prior known object or text giving meaning and the basis for the presumed humor.  However, those prior known text/object owners often choose not to laugh off the jovial jab, instead bringing trademark infringement suits claiming likelihood of consumer confusion.

To begin our analysis of this unique brand of cases, we need look no further than the recent final appeal decision that concluded a 12-year dispute between Starbucks and Black Bear Micro Roastery’s “Charbucks” blend.  Impressively, the defendant weathered the bitter battle and prevailed, with the 2nd U.S. Circuit Court of Appeals determining there was no sufficient finding of likelihood of consumer confusion through blurring of Starbucks brand.  See Starbucks Corp., et al. v. Wolfe’s Borough Coffee, Inc. d/b/a Black Bear Micro Roastery (2nd Cir. 2013).  In the final analysis, a survey of 600 people became a key piece of evidence showing that less than 5 percent of consumers thought they could actually buy “Charbucks” blend at Starbucks stores.

One case worth noting that slid past most people — although it is admittedly somewhat juvenile and without rulings on the merits — illustrates what may come of similar disputes between parties with significant market disparity.  Not long ago, a teenage boy had a great idea.  What if he mocked some really popular clothing brand, and then sold it to those amused by the obviously humorous contrast?  Brilliant!  Sort of.  As evidenced in The North Face Apparel Corp. v. The South Butt, initiated in 2009, a teenager did just that and started a clothing brand by flipping the iconic half-dome curves of the North Face logo upside down.  The North Face was not amused.

After several cease-and-desist letters did not garner the desired effect, nor did their success in an opposition to prevent The South Butt from gaining trademark registration, The North Face sued The South Butt in the U.S. District Court for the Eastern District of Missouri alleging trademark infringement in addition to drawing sizable amounts of public awareness.  In The South Butt’s answer to the complaint, the teenager’s lawyers somewhat accurately quipped “[b]ut for the actions of North Face, the South Butt saga might have been relegated to local Friday fish-fry banter.”

The case did not get to the merits before a confidential settlement was worked out in 2010 and The North Face made it go away.  However, one wonders if The North Face would have been better off laughing this one off after a quiet victory at the trademark office, particularly once articles about the lawsuit made national news and the company ended up filing another suit a few years later to enforce the settlement because The South Butt’s product apparently was still in demand.

A more recent battle, where the humorist ultimately won the war, is the Facebook-Lamebook dispute.  Graphic designers in Austin, Texas, established Lamebook to out all those who end up oversharing (i.e., TMI) on Facebook.  The idea behind the launch of the site was to showcase the funniest and lamest of Facebook and get public feedback, arguably as a means for social commentary of modern society.  As with The South Butt dispute, Facebook went after Lamebook by alleging trademark infringement and dilution and requesting that Lamebook cease and desist.  However, Lamebook took the offensive in the U.S. District Court for the Western District of Texas and filed a declaratory judgment that it did not violate Facebook’s rights. Lamebook claimed it was protected as a parody under the First Amendment.  Ultimately, the two came to an agreement in 2011 allowing the Lamebook site to continue its mission and provide revenues to its founders, albeit without its own federal registrations and with a disclaimer on its homepage.

What can we glean from these and other similar cases?  Parody is not really an affirmative defense to trademark infringement, although it may be a means to show lack of likelihood of confusion. Rather, parody is an assertion of First Amendment rights concerning noncommercial speech for the most part.   Thus, one should pay careful attention to the reasons and target chosen to be mocked.

Trademark infringement issues surrounding confusion are more likely to be excused where there is an artistic or social message behind the parody and not mere commercial interests.  Further, the allegedly infringed mark itself ideally should be the interrelated element for the parody defense under the First Amendment.  Despite the above, it would appear the courts do not take themselves too seriously on the matter with various circuits taking slightly different approaches to get to the most amicable results.