Who amongst us hasn’t wanted to speak out against a particular company that has wronged us in some way? The Internet has made it much easier for a single voice to be heard among the masses. With more consumers using the Internet to express their grievances over particular companies, the companies are taking notice and using their trademark portfolio as a weapon to silence such criticism.
Last Friday, The Register ran a story (link here) about one such effort by Lowe's Companies Inc. (“Lowe’s”). Allen Harkleroad received a cease and desist letter from an attorney for Lowe’s regarding his website -- http://www.lowes-sucks.com/. Harkleroad paid Lowe’s $3,500 to install a chain-link fence; however, after the fence was installed, Harkleroad repeatedly complained to Lowe's about gaps in the chain-link fence that were so large that his dogs were able to repeatedly escape from his yard. After being unable to resolve the problem with Lowe’s, Harkleroad refused to pay the rest of the money owed for the fence and created the lowes-sucks website, which documented his ordeal, including pictures of the poorly constructed fence.
Despite no logos being used on the website and despite the obvious non-affiliation between the website and Lowe’s, the company’s attorney maintained in his letter that Harkleroad’s use of Lowe’s trademarks, including the registration of http://www.lowes-sucks.com/, infringes upon Lowes’ trademark rights, specifically, the rights of LF, LLC, a Delaware limited liability company, that apparently holds and manages Lowe’s trademarks.
Harkleroad is fortunate that he is only facing threatening legal letters at this time. One Maryland man is already facing the prospect of having to go to court to fight a similar battle.
Earlier this month, the Maryland Daily Record (subscription only link) ran a story about a man named Erik G. Levy who bought his Delaware home from Gemcraft Homes, Inc. in 2005. Apparently not satisfied with his home, Mr. Levy started up his own website named http://www.bewareofgemcraft.com/, documenting his troubles with Gemcraft and urging homeowners to be wary of buying a new home constructed by the company.
Now, Gemcraft is suing Levy for tortious interference, trademark infringement, defamation, intentional infliction of emotional distress and invasion of privacy and asking for $8 million. The complaint alleges that Levy is making defamatory statements about the company and its employees on the website, posting telephone numbers and addresses of the employees, and posting signs around Delaware and sending out mailers advertising his site.
This trend by companies to use trademark law against these so-called gripe websites has been growing for some time. See Baldas, Tresa “Trademark Lawsuits: The Price of Online Griping,” The National Law Journal (December 2, 2004) (link here). There is even a website dedicated to websites posting consumer gripes -- http://www.webgripesites.com/.
The trend has its origins in the Anticybersquatting Consumer Protection Act, which was enacted into law on November 29, 1999, and established a cause of action that trademark owners could bring against registrants of domain names that contain such owner’s trademarks. A domain name registrant is liable to a trademark owner if the registrant (i) registers, traffics in, or uses a domain name that a) is identical or confusingly similar to a distinctive mark or b) is identical or confusingly similar to or dilutive of a famous mark and (ii) has a bad faith intent to profit from that trademark, including a personal name, which is protected as a trademark under Section 43 of the Lanham Act. See 15 U.S.C. § 1125(d)(1)(A).
The problem has been with respect to the interpretation of when a registrant has a “bad faith intent to profit.” While the ACPA sets forth nine factors a court may consider in determining “bad faith intent to profit” (see 15 U.S.C. § 1125(d)(1)(B)), the Federal Circuits have taken differing approaches in deciding the issue. For a discussion of the differences among the Federal Circuit Courts, see Mazzie-Briscoe, Sarah, “Free Speech v. Trademark Rights: Has the weather changed?” DePaul University College of Law (March 19, 2006) (link here).
For most courts, the determination of “bad faith intent to profit” comes down to whether the website owner intended to extort money from the trademark owner or merely to express an opinion protected by the First Amendment, and involves an analysis of the facts and a weighing of the website owner’s right to free speech against the trademark owner’s right to protect the value and goodwill of its trademarks.
It would seem obvious that these gripe websites and their noncommercial use of a trademark would protected by the First Amendment. However, because the determination is fact specific, there is no quick and easy way of deciding such cases either way. Courts must review the facts because there may indeed be facts supporting an argument that a website owner was looking for a quick payday and established the website simply to get paid off. For a good article on the complex trademark and First Amendments issues surrounding these “forum websites,” see Barrett, Margreth, "Domain Names, Trademarks, and the First Amendment: Searching for Meaningful Boundaries," Connecticut Law Review, Vol. 39, 2007 (Available at SSRN: http://ssrn.com/abstract=928261).
Such uncertainty tends to favor the trademark owners, who can use the prospect of costly litigation to shut down website owners despite the fact that such website owners may be perfectly within their first amendment rights. In Mr. Levy’s case, the attorney for Gemcraft alleges that Levy is trying to use the Web site in an unlawful attempt to extort money from Gemcraft. The use of the phrase “attempt to extort money” is an obvious attempt to cast Gemcraft’s allegations as colorable under the ACPA. Allegations are one thing – facts are another.
It is puzzling why companies are willing to spend so much time and energy into silencing these consumer websites when, by taking such actions, they end up bringing more attention to these websites than they likely every would have received. If Mr. Harkleroad and Mr. Levy have the energy to put forth a fight, the facts seem to favor their websites as the type which expresses an opinion protected by the First Amendment. Whether they have the wherewithal to put up a fight is another matter. In a time when even a simple defense of a frivolous case can easily cost $20,000, who can blame them for settling out of court, walking away, and moving on with their lives.
[Sept. 26, 2007 update: Coincidentally, arstechnica.com also ran a story today on this very subject (link here). ]