I'm Not A Fan Of This Craptastic Trademark Lawsuit

from the cast-of-fans dept

We've seen some pathetic trademark lawsuits this year (SUE MOAR KALE, anyone?), but I'll nominate this long-running litigation money-sink (going over 3.5 years) as the saddest trademark case of 2011.

Fancaster registered its mark in 1989 for broadcasting services, and over the years it's been used in connection with a range of services, "including selling Fancaster branded radios, charging customers to watch closed circuit boxing matches, producing karaoke shows, transmitting sponsored news messages to wireless pagers and cell phones, and conducting live demonstrations of FANCASTER broadcast services" (cites omitted).

In 2006, it launched Fancaster.com to broadcast short sport-related video clips. It hoped to cover such must-see events "as La Tomatina in Spain, Ostrich racing in Arizona, the Westminster Kennel Club Dog Show and the annual Nathan's Hot Dog Eating Contest." Rather than advertise the website on the Internet (you know, where people who enjoy content online might already be), they were seeking out untapped Internet enthusiasts by "marketing the website at sporting events, bars, on local television channels in Sioux Falls, South Dakota and Sioux City, Iowa, on radio stations in Charleston, South Carolina, and via flyers and handbills."

Meanwhile, in 2008 Comcast rolled out a service called fancast.com "that allowed users to watch full-length premium mainstream media over the Internet." The service was a debacle, losing $80M in less that 2 years due to “the unexpectedly high cost of distributing video content on the internet.” (Even though Comcast acquired bandwidth at wholesale rather than retail costs... how much would it have cost non-carriers to launch competitive services?). In March 2011, Comcast shut down the Fancast service and rolled the domain name over to XfinityTV.

With the overlap between the Fancaster and Fancast names, one possibility is that Comcast blatantly ripped off the name of a small startup who wouldn't want to tangle with a giant, thereby creating "reverse confusion" where everyone thinks first-mover Fancaster infringes second-comer Comcast. But another story equally fits these facts: Fancaster is doing a little trademark trolling, seeking to increase Comcast's $80M of losses by grabbing some gravy for itself. (Some gravy indeed: Fancaster's damages expert thought it would take $73M of corrective advertising to fix Comcast's damage to a brand that has no market awareness outside of Sioux City.)

It's a sad commentary on our milieu when we can't tell which litigant is bullying the other. Maybe *both* parties are equally imbibing the bullying elixir. Fancaster initially unleashed the litigation hounds, but Comcast responded with a hailstorm of countermoves, including an ACPA counterclaim for a slew of "fancast" domain names Fancaster registered after learning about Comcast's upcoming launch. A lot of lawyers appear to have satisfied their billable hour goals using this case. Yay for free-spending, deep-pocketed clients!

Trademark Infringement

The court resoundingly thumped Fancaster's core argument about consumer confusion, miraculously finding a way to twist all of the factors to Comcast's favor. The judge may have cut some analytical corners, but that says the judge simply didn't accept Fancaster's narrative.

The court specifically rejected the possibility of initial interest confusion, citing 3rd Circuit precedent that basically limited IIC to competitors, because the parties didn't directly compete. The court also dismissed Fancaster's efforts to show overlaps in search engine results, saying "the confusion one encounters on an Internet search engine is a twenty-first century version of that experienced when searching the phone book." (I am going to be doing some work this quarter to show that the initial interest confusion doctrine almost never succeeds in court any more, and therefore it imposes costs on both litigants for no gain. This case is just one example of that.)

The court also scoffed at Fancaster's request for $73M for corrective advertising:

There is not a shred of evidence of any damage to the Fancaster mark caused by Comcast. The only loss to Fancaster that Mr. Krueger could testify to was that resulting from pursuing the instant litigation against Comcast.

Evidentiary Issues

Comcast had survey expert Hal Poret do two surveys. The court tossed the first one because it didn't adequately replicate market conditions by not presenting consumers with a navigable website:

use of a printout and static screenshots, instead of live websites, provide ample grounds on which to exclude the March 2009 survey. For one, it is difficult to fathom how presenting a respondent with a paper printout of the FANCAST homepage in anyway replicates how an Internet user would encounter and perceive the FANCAST website in the marketplace. Websites, particularly those that offer video content, are meant to be viewed on a computer and allow consumers to browse and interact with them via hyperlinks. The FANCAST printout offered none of these aspects. Similarly, although viewed on a computer, the static screenshots of the fancaster and control website homepages did not allow respondents to interact with them as they ordinarily would in the marketplace.

I haven't researched this issue, but this ruling may tell us something important about the requirements for consumer surveys when websites are involved.

Conclusion

This ruling eviscerated Fancaster's case, making it a strong win for Comcast, but it left a few residual legal issues open. Yet, the legal battle has been mooted by the passage of time. Comcast already stopped using Fancast as a brand, and Fancaster still hasn't shown a lot of movement towards developing a real business or even a revenue model. Are the parties really going to spend more money on a pointless lawsuit? We all know what the answer should be; let's see how they actually answer.

For more on the case, see Rebecca Tushnet's 43(B)log .



Reader Comments (rss)

(Flattened / Threaded)

  1.  
    icon
    A Guy (profile), Jan 17th, 2012 @ 12:12am

    let them both lose

    Meh, let the snakes eat each other. Maybe when all the dust settles, a couple of litigious asses will learn some valuable business lessons, and of course a few lawyers will be much richer.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Anonymous Coward, Jan 17th, 2012 @ 2:12am

    It still shows bath faith on the part of Comcast. Back then, a simple "fascast" search to see if anything similar would come up would have clearly resulted in fancaster being there, alive and well. They still decided to launch regardless. Fancaster would have had a point if they would have had a decent legal strategy and a decent judge... but that's life. Another win for the bullies.

     

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  3.  
    identicon
    Anonymous Coward, Jan 17th, 2012 @ 4:38am

    Seems to me that your legal analysis is wasted on this pirate blog, Prof. Goldman.

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    Anonymous Coward, Jan 17th, 2012 @ 4:56am

    Re:

    Seems to me that air is wasted on you, Unprof Troll.

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, Jan 17th, 2012 @ 5:34am

    Re: Re:

    Hey, it's his reputation, not mine. Personally, ever since I heard him claim on This Week In Law that the "red flags of infringement" (who calls it that?) didn't really exist in the DMCA, I can't help but suspect that anything he says about IP law will have a pro-tech, pro-piracy bias. Obviously "red flag" knowledge is provided for in the DMCA (as Evan Brown so smartly pointed out to Herr Professor). The fact that he's now posting on Pirate Mike's blog only solidifies my suspicions. I'm sure other people--Mike's Pirate Gang especially--will think even more highly of him now that he's posting here. I simply disagree.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    New Mexico Mark, Jan 17th, 2012 @ 6:30am

    Re: Re: Re:

    (Read as Han Solo...)

    Pirate gang? Pirate gang? I like the sound of that.
    .
    .
    .
    You like us because we're a pirate gang. There aren't enough pirate gangs in your life.

     

    reply to this | link to this | view in thread ]

  7.  
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    ChrisB (profile), Jan 17th, 2012 @ 6:47am

    Re: Re: Re:

    > pro-piracy bias

    Saying that murder exists, and the death penalty doesn't really lower the murder rate as much as other methods, does not make me pro-murder.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Anonymous Coward, Jan 17th, 2012 @ 8:35am

    Sioux City?

    I currently live in Sioux City. If they were advertising here, they are doing one hell of a poor job. Never heard of "Fancaster.com"

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    JaDe, Jan 17th, 2012 @ 10:34am

    Re: Sioux City?

    I live in Sioux Falls and that was my first thought as well. "Huh, never heard of these guys. Oh well."

     

    reply to this | link to this | view in thread ]

  10.  
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    nasch (profile), Jan 17th, 2012 @ 11:29am

    Cutting corners

    The judge may have cut some analytical corners, but that says the judge simply didn't accept Fancaster's narrative.

    You're not saying it's OK for a judge to cut corners as long as he arrives at the correct conclusion, are you?

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    Kenneth Michaels, Jan 18th, 2012 @ 8:47am

    Definition of "Search Engine"

    One thing missing from most analysis is that the definition of "search engine" ensnares just about any site, including Wikipedia and Reddit. When search results are censored on Google, these censored links will appear on Reddit, for example, as well as other sites. The Attorney General will be insulted, and he will order Reddit to remove those links as well (given Reddit is a search engine). Then, when censored, Reddit users will revolt and post the censored links all over the place on the site (just like what happened to Digg with the Blueray 09f9 key). Reddit will find it very difficult and expensive to keep up with the censorship.

     

    reply to this | link to this | view in thread ]


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