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Ninth Circuit Dissolves Injunction Barring Defendant "from Making Any Comments That Could Be Construed as To Disparage [A Trademark]":

I've blogged before about this case, Freecycle Network, Inc. v. Oey, which Mayer Brown — the firm with which I'm affiliated part-part-part-time — is handling pro bono, and on which I helped. The Ninth Circuit just dissolved the injunction; here are some relevant excerpts (some paragraph breaks added):

[Tim] Oey initially supported TFN’s claim to the FREECYCLE mark. Experiencing a change of heart and convinced that the term should remain in the public domain, Oey later urged TFN to abandon its efforts to secure the mark, conveying his feelings in an August 8, 2005, email to fellow TFN group moderators. In the following weeks, Oey made various statements on the Internet that TFN lacked trademark rights in “freecycle” because it was a generic term, and he encouraged others to use the term in its generic sense and to write letters to the United States Patent and Trademark Office (“PTO”) opposing TFN’s pending registration....

In April 2006, TFN sued Oey, seeking an injunction and damages, alleging that Oey’s statements constituted contributory trademark infringement and trademark disparagement under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), as well as injurious falsehood, defamation, and intentional interference with a business relationship under Arizona law. The district court granted a preliminary injunction based solely on TFN’s § 1125(a) claims, apparently conflating TFN’s allegations of contributory trademark infringement and trademark disparagement....

A) Trademark Infringement

[The alleged] facts -- even if true — simply do not demonstrate that TFN has a likelihood of success on its § 1125(a) infringement claim.... Oey’s actions likely did not constitute a “use in commerce,” 15 U.S.C. § 1125(a)(1), as the record in this case does not indicate they were made to promote any competing service or reap any commercial benefit whatsoever.... []“[Trademark law’s ‘use in commerce’] refers to a use of a famous and distinctive mark to sell goods [or services] other than those produced or authorized by the mark’s owner.”[] Rather, based on his view that the term was generic, Oey simply expressed an opinion that TFN lacked trademark rights in the term “freecycle” and encouraged likeminded individuals to continue to use the term in its generic sense and to inform the PTO of their opinions.

Furthermore, even if Oey’s statements could somehow be construed to be a “use in commerce,” such use was not likely to cause confusion, mistake, or deceive anyone as to the connection of Oey’s services (or any other) with TFN.... [O]ur review of the record identifies no potential likelihood of confusion resulting from Oey’s activities. Oey simply did not use TFN’s claimed mark or a similar mark in any manner likely to confuse the relevant public: his statements neither mention any competing service or product, nor claim any affiliation with TFN.

Finally, Oey’s statements also do not satisfy the requirements for false advertising, misrepresentation, or unfair competition under § 1125(a)(1)(B). There is no evidence that Oey’s statements were made in “commercial advertising or promotion.” And, even if such evidence existed, § 1125(a)(1)(B) creates liability only for product disparagement -— i.e., misrepresentation of “the nature, characteristics, qualities, or geographic origin” of “another person’s goods, services, or commercial activities.” ...

B) Trademark Infringement

TFN’s complaint also alleged “trademark disparagement” under § 1125(a). However, no such claim exists under the Lanham Act....

[But e]ven assuming TFN’s trademark disparagement claim were somehow cognizable under the Lanham Act, ... Oey’s conduct does not satisfy TFN’s asserted elements. Oey’s statements were not “false.” At worst, Oey offered an erroneous legal opinion (by a layperson) that TFN lacked trademark rights in the term “freecycle.” “Statements of opinion are not generally actionable under the Lanham Act.”

To this day, there has been no formal determination that TFN has trademark rights in the term “freecycle.” The mark is not yet registered and both an opposition to registration and action seeking a declaration that TFN lacks trademark rights in the term are currently pending. Oey’s statement that TFN lacked trademark rights in the term therefore cannot be considered a false statement of fact. []“Absent a clear and unambiguous ruling from a court or agency of competent jurisdiction, statements by laypersons that purport to interpret the meaning of a statute or regulation are opinion statements, and not statements of fact.”[]

TFN and the district court emphasize Oey’s prior support of TFN’s efforts to trademark the term, but these prior efforts do not render his subsequent statements “false.” Oey is entitled to change his mind. Until it is definitively established that TFN holds a trademark in the term “freecycle,” it cannot be false to contend that it does not....

C) Genericide

the crux of TFN’s complaint is that Oey should be prevented from using (or encouraging the use of) TFN’s claimed mark FREECYCLE in its generic sense. However, TFN’s asserted mark —- like all marks — is always at risk of becoming generic and thereby losing its ability to identify the trademark holder’s goods or services. Where the majority of the relevant public appropriates a trademark term as the name of a product (or service), the mark is a victim of “genericide” and trademark rights generally cease.... Genericide has spelled the end for countless formerly trademarked terms, including “aspirin,” “escalator,” “brassiere,” and “cellophane.” ...

Of course, trademark owners are free (and perhaps wise) to take action to prevent their marks from becoming generic and entering the public domain — e.g., through a public relations campaign or active policing of the mark’s use. The Lanham Act itself, however, contains no provision preventing the use of a trademarked term in its generic sense.

Nor does the Act prevent an individual from expressing an opinion that a mark should be considered generic or from encouraging others to use the mark in its generic sense. Rather, the use of a mark in its generic sense is actionable under the Lanham Act only when such use also satisfies the elements of a specified cause of action — e.g., infringement, false designation of origin, false advertising, or dilution. TFN’s mere disagreement with Oey’s opinion and frustration with his activities cannot render Oey liable under the Lanham Act.

Because of these holdings, the court didn't have to reach the question whether the injunction violated the First Amendment.

Congratulations to my colleagues Don Falk, Dennis Corgill, and Ian Feinberg, and my former student Pete Patterson, who worked on the brief. Congratulations and thanks also to the amici — Jamie Boyle, Lauren Gelman, Larry Lessig, Declan McCullagh, David Post, Glenn Reynolds, Martin Schwimmer, Jimmy Wales, and Jon Zittrain (represented by David and by my friend Bruce Adelstein), as well as the 38 Intellectual Property Law Professors and the EFF (represented by Mark Lemley).

Bored Lawyer:
The District Court's injunction is embarassing. Had that not issued, I would encourage the defendant to seek Rule 11 sanctions. On this history, you cannot do that without (implicitly) calling the district judge a moron.
9.26.2007 2:54pm
Crunchy Frog:

On this history, you cannot do that without (implicitly) calling the district judge a moron.

As eminintly satisfying, and usually well-deserved, such an action is, in the grand scheme of things it's probably best avoided in the long run. Federal judges tend to have memories as long as their egos are large.
9.26.2007 3:39pm
Lugo:
I am sure the court took into account the important ruling from a foreign court that "disparaging the boot is a bootable offense".
9.26.2007 4:51pm
Eli Rabett (www):
Ah yes, everything the Ninth Circuit does is crap, or have I been reading the wrong blog?
9.26.2007 5:12pm
Siona Sthrunch (mail):
The oral argument in this case did not go very well for Freecycle. I don't have the link.
9.26.2007 6:02pm
David M. Nieporent (www):
Siona, the direct link to the audio file is here. It went very badly for Freecycle; it was one of those cases where they basically told the appellant not to bother arguing*, and they spent the entire time picking on Freecycle's attorney.


* Important skill in oral arguments: know when you've won. When you have, Shut Up.
9.26.2007 7:42pm
fasdf (mail):
Ninth Circuit Dissolves Injunction Barring Defendant "from Making Any Comments That Could Be Construed as To Disparage [A Trademark]":
Injunction Barring Defendant "From Making Any Comments That Could Be Construed As To Disparage [a Trademark]": 中国呼吸网 肿瘤网
9.30.2007 4:39am