Techdirt. Stories filed under "dilution"

Bogus Trademark Threat From Twisted Sister Forcing Coffee Shop To Change Its Name

Mike Masnick — Fri, 10 May 2013 12:22:00 PDT

jupiterkansas writes in to let us know that the band Twisted Sister has had its lawyers threaten and bully a Kansas coffee shop into changing its name from "Twisted Sisters." For what it's worth, the coffee shop owner says the name has absolutely nothing to do with the band:

The origin of the two names – Twisted Sister and Twisted Sisters – are vastly different as you might guess. Russell says the name for her store is a reference to a family label given to the sisters by their late brother back in the 1960s. He also used to call Nancy the “blond tornado” so Twisted Sisters and the logo, which looks like a tornado sketch are rooted in family and our Kansas location. Twisted Sister the band, we assume, has a different origin.

In looking at the actual letter sent, it appears that the lawyer for the band is specifically objecting to the web URL the coffee shop has set up (it's odd that the reporter leaves out this point). Still, in looking over the details, it seems pretty clear that the band and its lawyer are abusing trademark law here. It is true that Twisted Sister has a trademark (1098366) issued in 1978, but that trademark only covers: "ENTERTAINMENT SERVICES RENDERED BY A VOCAL AND INSTRUMENTAL GROUP." As the band's lawyer must know, trademarks are issued in particular categories, and having a mark in a single category does not mean you have control over those words.

While the letter also points out that they have successfully convinced other businesses to change their name, that still doesn't make the claim valid. The likelihood of confusion here is nil. No one is going to this coffee shop thinking it's run by the band or has any association with the band. Furthermore, the lawyer's suggestion that this would qualify as "dilution" also seems ridiculous. We're no fans of the dilution theory of trademark law (which seems to go against the very basis of trademark law), to be sure, but even if you accept it as valid, it is difficult to see how there's a valid dilution claim here. Yes, the band's mark is famous, but how the hell would they show that a random coffee shop in Kansas "dilutes" their brand in any meaningful way?

Furthermore, even if the band has bullied other stores into changing their names, it does not mean they're the only "Twisted Sister" out there. In fact, they're not even the only Twisted Sister with trademarks. In looking through filings, I found legitimate approved trademarks for... Twisted Sister the board game (85857824), Twisted Sisters boutique clothing offering (3216315) and Twisted Sisters Our Business Is Dyeing offering colored yarns (3027439). All of those are live trademarks that appear to have nothing to do with the band.

It seems like if the owner of the coffee shop, Sandi Russell, wanted to turn around and scream back at the band "we're not gonna take it; no, we ain't gonna take it; we're not gonna take it, any more..." she might be able to find a lawyer more than willing to make that argument. Unfortunately, from the sound of the article, it appears that Russell is caving in to the bullying and looking to change the shop's name.

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Ridiculous: Court Says Mock Basketball Which Appears In Hyundia Commercial For 1 Second 'Dilutes' LV Trademark

Mike Masnick — Wed, 4 Apr 2012 10:35:00 PDT

A little over two years ago, we wrote about what we considered to be an absolutely insane lawsuit from Louis Vuitton, arguing that a mock basketball, which appeared in a Hyundai commercial for one second violated LV's trademark. You can see the commercial below:
If you missed it (entirely possible), at the 3 second mark, this image flashes briefly:

The point of the commercial is to get people to imagine what life would be like if "luxury" items were everyday items, and thus the mock basketball with symbols designed to suggest a luxury bag, like a Louis Vuitton bag. As we (and many, many trademark experts) suggested when the lawsuit was filed, the claims here are simply crazy. There is simply no harm whatsoever done to Louis Vuitton by this ad. Most people wouldn't even notice the markings and if they did, what possible "harm" would it do? The answer is none. There is no consumer confusion whatsoever. There are no LV basketballs that won't be sold because of this (in fact, the judge in this case notes that, after seeing this commercial, some people wanted one -- which would suggest a market opportunity, rather than litigation).

Of course, Louis Vuitton's complaint didn't rest on the bedrock of trademark law -- the likelihood of confusion -- but a more modern bastardization of trademark law called "dilution." The concept of dilution in trademark law is an affront to the purpose of trademark law, which is supposed to be about protecting consumers from confusion. That is, it's supposed to be about preventing someone from buying Bob's Cola, thinking that it's really Coca-Cola. But there's no such risk here. Dilution, however, flips the very concept of trademark law on its head and pretends (falsely) that trademark law is about protecting a company's trademarks from anyone doing anything at all with it that the company doesn't like.

Unfortunately, the courts don't always get things right -- which is why we get such ridiculous lawsuits in the first place -- and here, amazingly, the district court has sided with Louis Vuitton in its dilution argument, granting summary judgment on Hyundia's liability for dilution, while it rejected Hyundai's movement for summary judgment rejecting all of Louis Vuitton's claims. This is, in many ways, horrifying.

Eric Goldman's summary, linked above, highlights the many problems with the ruling -- while cautioning that the details suggest this type of ruling is limited. Still, as he notes:

And then we have an opinion like this--where the court finds trademark dilution without finding infringement (not resolved yet) and in a situation where EVERYONE can immediately tell there was zero harm to the brand owner. Rulings like this make trademark academics shudder in fear that trademark dilution will swallow up all of trademark law and confer rights-in-gross to trademark owners. While I don't share those fears for reasons I'll explain in a bit, unquestionably this is a bad ruling.

Goldman goes on to highlight some of the more specific problems with the ruling, but the key point is simply that there is no harm here. None. Absolutely none. Perhaps less than none, given the reports of interest in LV basketballs. When the law doesn't care about that, then the law is, unquestionably, broken. A ruling like this automatically lessens respect for trademark law, because it makes no sense at all. It makes a mockery of the judicial system by suggesting that lawsuits like this have any merit whatsoever.

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NY Stock Exchange Claims Trademark On Any Depiction Of Trading Floor, Threatens TPM

Mike Masnick — Fri, 27 May 2011 08:13:00 PDT

For quite some time now, we've been detailing the rise of "ownership society," where misleading concepts like "intellectual property" have been so driven into the heads of some people, that they believe they can claim "ownership" of totally abstract things, and then aggressively claim that no one else can make use of them. It's a really sad statement on what we're teaching people when it comes to "intellectual property." The latest such example is that the NY Stock Exchange (NYSE) apparently was able to secure a trademark (2587615) a few years back that appears to cover any representation -- such as a drawing or photograph -- of the NYSE trading floor.

Overbroad enough for you?

Well, the NYSE's senior VP for its "Intellectual Property Group" (the NYSE has a whole IP group?!?) is now threatening the news site Talking Points Memo for writing a story that was illustrated with the following stock photo: In the view of the NYSE, apparently, posting a photo of the trading floor without its approval is trademark dilution. This is, simply speaking, an amazing stretch of the dilution concept of trademark law. Of course, the very use of "dilution" in trademark law is a stretch of the stated and written explanation of trademark law which is solely supposed to be about preventing consumer confusion from products. Yet, in this case no one is being confused into thinking that the NYSE is endorsing TPM's coverage. And TPM's use is not diluting the NYSE's mark. The NYSE might not like it, but then using trademark law to block that form of speech is completely antithetical to the law's intended purpose, and the general concepts of free speech (and, to clarify: free speech is about the government stopping speech, but that includes a private company using laws to prevent another's free speech).

Thankfully, it appears that TPM has good trademark lawyers they can call on, and they're calling the NYSE's bluff:

TPM is represented on Media and IP matters by extremely capable specialist outside counsel. And we've been advised that the NYSE's claims are baseless and ridiculous on their face. But this is yet another example of how many large corporations have given way to IP-mania, trying to bully smaller companies into submission with inane and legally specious claims of intellectual property rights.

Well, TPM's small but we have big teeth. And we don't like being pushed around. So we're again posting the same picture as an illustration for this post. But really, what's next? Mayor Bloomberg trademarks his face and the city newspapers have to get his permission to publish photos of him so not to infringe the Bloomberg face trademark? Or more likely, the Empire State building trademark's the image of the Empire State building and demands a fee or bars photographs of the New York skyline.

Not only that, but TPM has proposed a contest, asking people to predict what the NYSE will try to stop next. Should be interesting to see the NYSE's response. The proper response would be to apologize, admit that it overreached, and promise not to do so again. The more likely response is silence. The really dumb response would be to press this issue.

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Judge Says Craigslist Can't Just Dilute eBay Off Its Board, But Can Keep eBay Off The Board Otherwise [Updated]

Mike Masnick — Thu, 9 Sep 2010 17:09:54 PDT

We were pretty skeptical two plus years ago when the details came out concerning the lawsuit between eBay and Craigslist over Craigslist's decision to exclude an eBay representative from its board to unilaterally diluting eBay and ignoring a proposed new board member, while holding board meetings without him. As we said at the time, it's quite clear why Craigslist did what it did, but that doesn't make it legal. And, in fact, a judge has now ruled in eBay's favor, rescinding the poison pill anti-takeover rules that Craigslist's board passed without eBay present. The whole situation really is a bit of a mess, and while I think Craigslist was wrong to take the actions it took here, it does make you wonder if eBay should recognize that having a board member on Craigslist's board is too big a conflict of interest. Updated: The original coverage of this news was a bit vague, but now the details are coming out, and the report is mixed: the dilution was rolled back, so eBay still owns the larger percentage, but eBay has been kept off Craigslist's board for now...

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Intel Refiles Questionable Trademark Lawsuit Against Newsletter About Latin America

Mike Masnick — Mon, 17 May 2010 18:46:54 PDT

Late last year, we wrote about the latest in an unfortunately long line of overreaching trademark lawsuits filed by Intel. Intel tends to act as if no one else can use the word Intel at all, leading it to get involved in legal disputes with companies in industries about as far away from Intel's business as can be -- including a travel agency and a maker of jeans. The dispute last year, was focused on the small producer of a newsletter about Latin America, which used the domain name LatinIntel.com. There was no way anyone would be confused by this site or think that it was somehow associated with Intel, even using my favorite "moron in a hurry" test.

So, we were happy, earlier this year, to get a report that Intel had dropped the lawsuit. Except... that turned out to not be exactly true. Intel got in touch quickly to insist that they had only dropped it because they planned to refile the lawsuit with much more detail to make their case. What Intel left out was the pretty serious skepticism the judge had expressed concerning their original filing: The key lines here being:

It really is lacking in enough specificity which would demonstrate that there was confusion or that you're even addressing the same markets. I mean, my understanding is that there may be no customer overlap at all in connection with this.

Intel, of course, shot back with the claim that this has nothing to do with likelihood of confusion, but it was really about dilution. Dilution is a more recent element of trademark law, which was not considered applicable for quite some time, but today has become more widely accepted, and keeps expanding in dangerous ways. It simply goes against the basic concept of trademark law -- which is supposed to be about protecting consumers from buying a product that is falsely labeled. That's why trademark law is limited to the areas where your trademark is actually being used in commerce. The judge's point that there is no customer overlap should be all that matters here. At that point there is no trademark issue. At all.

But Intel has, in fact, now refiled the lawsuit, and tries to get around this claim by pointing out that both Intel and this newsletter have customers that are Fortune 500 companies. Seriously. And then it still claims there is customer confusion, despite the judge making it pretty clear that he didn't believe there was any customer confusion at all:

I asked the spokesperson from Intel who had contacted us about the last post if he could offer an explanation of why it made sense for Intel to continue to pursue this lawsuit, and I got back the basic explanation for why dilution is considered trademark infringement -- which didn't answer the question I was asking. But it appears that Intel's definition of dilution goes way beyond even the current (already troubling) concept of dilution in trademark law. The way Intel sets it up, no one can use the word "intel" even if it's already a widely generic term in a totally different industry (as is the case with the newsletter). That makes no sense.

While I'm sure Intel's lawyers would claim that they have to defend their trademark to avoid it being declared generic, that's also a misrepresentation of trademark law. You do have to defend, but only in cases where there's actual confusion or actual risk of dilution. Someone doing business with a term that is generic in that industry, which is about as far away from Intel's industry as is possible, is not doing any harm, whatsoever, to Intel's mark. Intel should have just dropped the case and left it alone.

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Fixing Trademark Law

Mike Masnick — Thu, 1 Oct 2009 09:31:00 PDT

Over at the Citizen Media Law Project, Kimberley Isbell, is discussing an article she recently wrote on how to fix trademark law, which is a worthwhile read. The article mainly focuses on "ambiguities" found in trademark law, with the idea of settling some of the issues and making the guidelines more complete. Specifically, she hopes for a more clear delineation of what "fair use" means in trademark law, a better understanding of what defines "use in commerce," and adding a "safe harbor" to cover trademark, since it's the loophole that's left out from the current DMCA and CDA safe harbors that protect third parties from liability online in other issues (such as copyright and defamation).

On the whole, I think it's a good discussion, but I'm not sure I agree entirely. While initially codifying fair use within trademark law sounds like a good idea, my recent conversation with William Patry may have changed my mind on that topic. He pointed out that codifying fair use in copyright law ended up doing more to narrowly limit how fair use was applied, rather than allow judges to make a more expansive and reasonable view of what constitutes fair use. He pointed to the writings of Pierre Leval on fair use, which should be required reading for anyone looking to understand fair use. Given an attempt to codify fair use in trademark law, we might end up with the same set of limitations. While having more clearly defined lines may seem like a good idea, it also provides less flexibility, and more of an opportunity to fence in fair use, rather than letting it adapt as necessary.

On the second suggestion, concerning "use in commerce," we agree that current definitions are all over the map, but again, I wonder if trying to codify it via Congress leads to more problems than solutions. Any attempt will almost certainly screw up unique cases, leading to trouble down the road. Finally, I do absolutely agree on a safe harbor need in trademark, especially as those looking to bring copyright and defamation lawsuits have recently been bending over backwards to sneak in a trademark claim as well to try to avoid the other safe harbors.

As for the improving trademark law in other ways, I would think that the best way to do so, would be to ditch the (relatively) recent concept of "dilution" as trademark infringement, and focus on the real purpose of trademark law: to prevent consumer confusion and "passing off" of one good as made by someone else. As such, I've long been a big proponent of the "moron in a hurry" test that actually has been used in some cases (i.e., "would a moron in a hurry confuse this product and believe it was made by or endorsed by the trademark holder"). Focusing on just that test as a determination of trademark infringement would likely solve many of the common problems with trademark law -- including, most likely, removing the need for either a codified fair use of "use in commerce" clause. Instead, you just apply the moron in a hurry test and toss those lawsuits that wouldn't confuse said morons.

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Craigslist's Response To eBay: We Had To Do It!

Mike Masnick — Mon, 19 May 2008 02:56:46 PDT

After eBay sued Craigslist, Craigslist's initial responses were rather weak. eBay made a pretty strong case arguing that Craigslist's board had unilaterally diluted eBay's shares -- which seems pretty questionable. Craigslist initially shot back by accusing eBay of doing the same things eBay was accusing Craigslist of doing -- but that was somewhat misleading. eBay wasn't complaining about the specific actions Craigslist was taking -- but the fact that they had done so unilaterally, despite eBay's ownership stake and board position. Then, Craigslist countersued eBay with a laundry list of charges that effectively amounted to "we don't like them being on our board." Both of these responses were a bit disappointing. While I like Craigslist, and respect Craig and Jim, they still hadn't explained why it was legal for them to unilaterally dilute eBay's shares.

The company has now, finally, filed a response to the lawsuit, which effectively seems to say "we had no choice, since eBay being on our board was such a problem." Basically, the argument is that, as board members, they needed to do what was in the best interests of the company -- and that meant getting eBay off the board through any means possible. Unfortunately, that's still just not convincing. It's an "ends justify the means" argument, which seems very un-Craigslist-like. As much as it may be true that eBay being on the board was a problem, that still doesn't allow existing shareholders to unilaterally change the ownership structure of the company. Maybe there's more to this, but so far, it's hard to see how Craigslist wins this in court.

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Craigslist Countersues eBay... But Still Doesn't Answer Questions About Diluting eBay

Mike Masnick — Tue, 13 May 2008 15:01:13 PDT

I'm generally a fan of Craigslist, and think that people all too often blame the company for things it didn't do. However, I'm still having trouble understanding Craigslist's position in the legal battle it's now having with eBay. After getting sued by eBay for unilaterally changing eBay's ownership percentage, Craigslist has now countersued eBay for a laundry list of things, including: "unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, free-riding, trademark infringement, trademark dilution, and breaches of fiduciary duty." That's quite a list, but it doesn't respond to the key point of eBay's lawsuit: did Craigslist break the law in changing eBay's ownership percentage? As Rob Hyndman points out, it really appears that Craigslist is now trying to "accomplish by litigation what it failed to accomplish by business planning and sensible precautions among co-founders when it first issued shares, and by negotiation with eBay when it acquired its interest."

As for the specific charges filed by Craigslist, it claims that eBay tried to put Kijiji execs on its board (which contradicts what eBay has said). Also, it claims that eBay has bought keyword advertising on sites like Google that were misleading, appearing to look like they came from Craigslist, when they really pointed to eBay or Kijiji. That certainly could be a trademark violation, if true, but hardly excuses the behavior of Craigslist's board in diluting eBay's shares. You can certainly see where Craigslist is coming from, and why it's quite uncomfortable with the relationship with eBay -- but the company now seems to be throwing the kitchen sink at eBay, dredging up any kind of complaint it can, without dealing with that core issue of how it diluted eBay's shares. That only lends more credence to the idea that Craigslist knows what it did was wrong, and is now throwing out all sorts of other complaints to distract from that. It's like a kid caught with his hand in the cookie jar, who responds by pointing out that his mother who caught him ran a red light when driving home. It may be true, but it's totally unrelated and doesn't excuse grabbing the cookie.

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eBay Sues Craigslist, As Craig And Jim Dilute eBay's Share

Mike Masnick — Tue, 22 Apr 2008 14:43:45 PDT

You may recall that eBay was able to buy approximately one quarter of Craigslist back in 2004. The details of what happened were never made entirely clear (and there are some conflicting stories about those details), but it appeared that the two companies co-existed somewhat peacefully for a while, despite eBay's decision to basically create a Craigslist competitor in Kijiji. However, now things are getting more interesting. Apparently, back in January, Craigslist did something to dilute eBay's share, which eBay now feels was illegal. The company has now sued Craigslist over the matter, though most of the details are hidden, as the lawsuit was filed under seal. Given that Kijiji finally expanded into the US last year (just as Craigslist continued to expand internationally), it's no surprise that Craigslist would seek to decrease eBay's stake in the company. Either way, the perhaps already awkward linkage between Craigslist and eBay seems to be getting even more uncomfortable.

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