Monday, June 2, 2008

Tenth Circuit affirms dismissal of trademark infringement lawsuit by LDS Church critic against parody website

The Tenth Circuit Court of Appeals affirmed a lower court decision denying claims of trademark infringement, unfair competition, and cybersquatting by an organization critical of the Church of Jesus Christ of Latter-day Saints (LDS Church). See Utah Lighthouse Ministry v. Foundation for Apologetic Information and Research et al., Appeal No. 07-4095 (10th Cir. May 29, 2008). A copy of the decision can be downloaded here.

Jerald and Sandra Tanner founded the Utah Lighthouse Ministry (UTLM) in 1982 as an organization dedicate to critiquing the LDS Church. UTLM sells books critical of the LDS Church both at its Utah bookstore and online through its website (

The Foundation for Apologetic Information and Research (FAIR) is an organization dedicated to responding to criticisms of the LDS Church. In November 2003, Allen Wyatt, the vice president and webmaster for FAIR, created a website (the “Wyatt website”) parodying the UTLM website which was similar in appearance (image of a lighthouse with black and white barbershop stripes), but with “different, though suggestively parallel, content”:

Prominent text on the Wyatt website consists of a slight modification of the language located in the same position on the UTLM website. For example, the UTLM website states: "Welcome to the Official Website of the Utah Lighthouse Ministry, founded by Jerald and Sandra Tanner." In comparison, the Wyatt website states: "Welcome to an official website about the Utah Lighthouse Ministry, which was founded by Jerald and Sandra Tanner." (emphasis added.) The Wyatt website does not have any kind of disclaimer that it is not associated with UTLM.

Slip op. at 3.

The Wyatt website did not contain any advertising or offer any goods or services for sale, and included hyperlinks to an organization at Brigham Young University, articles on FAIR’s website criticizing the Tanners, and links to FAIR’s website and the LDS Church. In addition, Wyatt, through his company Discovery Computing, Inc. (“Discovery”), registered ten domain names -- combinations of the words “Utah Lighthouse Ministry," "Sandra Tanner," "Gerald Tanner," "Jerald Tanner," and ".com" and ".org." Wyatt’s website was first publicized to FAIR members in April 2004. Presumably in response to UTLM’s complaint, Wyatt later shut down the website and began transferring the domain names to UTLM in April 2005.

UTLM’s complaint against FAIR, Wyatt, and Discovery asserted six causes of action—federal trademark infringement, federal unfair competition, federal trademark dilution, cybersquatting, federal trade dress infringement, and unfair competition under Utah state law. The parties filed cross-motions for summary judgment, and the district court denied Plaintiff's motion and granted Defendants' motion on all six counts. See Utah Lighthouse Ministry v. Foundation for Apologetic Information and Research et al., Case No. 05-CV-00380 (D. Utah). UTLM appealed the district court’s decision on all claims except dilution, but only briefed the issues of trademark infringement, unfair competition, and cybersquatting, so the court only addressed those three claims on appeal.

Trademark Infringement & Unfair Competition
Addressing the trademark infringement and unfair competition claims together, the court started its analysis by noting that UTLM, to make out a case for trademark infringement, must show that the mark is protectable, must demonstrate the Defendant’s use of the mark in connection with any goods or services, and must establish that such use is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person. See 15 U.S.C. § 1125(a).

Protectable Interest
UTLM argued that it was entitled to a presumption of protectability because the UTAH LIGHTHOUSE is a registered trademark/servicemark. However, as the district court noted, the mark was registered on July 25, 2006 – after UTLM had filed its lawsuit – and thus not entitled to the presumption of validity afforded to registered marks under 15 U.S.C. § 1115(a). [The court, in a footnote, stated “It is not clear that a mark must be registered at the time the suit is filed to benefit from the statutory presumption, but it is not necessary to decide that issue on this appeal.” Slip op. at 8, fn. 3.] The district court further found that UTLM had failed to show evidence that its mark had acquired a secondary meaning.

While UTLM argued on appeal that its mark is distinctive by virtue of it being arbitrary, and thus no showing of secondary meaning is necessary, UTLM did not raise this argument at the district court level, instead relying entirely on its federal registration. The court declined to exercise its discretion to consider UTLM’s arguments raised for the first time on appeal. The court also noted that UTLM’s evidence to the district court, which could be construed as an argument of acquired secondary meaning, consisted solely on the number of "hits" generated by searches for UTAH LIGHTHOUSE on the Yahoo and Google search engines and on the websites of other organizations associated with the LDS Church. The court found such evidence lacked any accompanying evidence showing that the relevant market of consumers had visited the websites containing these hits, and thus was insufficient to show that the mark had acquired a secondary meaning.

Commercial Use
The court next addressed UTLM attempts to prove the second factor – Defendant’s use of the mark in connection with any goods or services, specifically, that Wyatt’s website was “commercial” and thus his use of UTLM’s mark was “in connection with any goods or services." 15 U.S.C. § 1125(a)(1)).

UTLM first argued that Wyatt’s website was commercial because it hyperlinked to the FAIR website, which contains an online bookstore. While the issue of when hyperlinking renders an otherwise noncommercial website subject to the Lanham Act was one of first impression for the Tenth Circuit, the court cited favorably to the Ninth Circuit’s decision in Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 677 (9th Cir. 2005) (defendant’s gripe website was not in connection with the sale of goods or services where the “roundabout and attenuated” commercial use connection was that the defendant’s website contained a link to a second website by the defendant, which linked to a newsgroup which in turn contained advertisements for plaintiff’s competitors). The court further noted that Wyatt’s use of UTLM’s mark was not in connection with a sale of goods or services, but rather in connection with the expression of an opinion about UTLM’s goods and services. The court also noted that none of Wyatt’s hyperlinks linked directly to the FAIR bookstore, but rather to specific articles on the FAIR website and to the FAIR homepage, which the court stated was “overwhelmingly noncommercial in nature.” As such, the court found the district court’s decision that the Wyatt website was not a commercial use because it "provided no goods or services, earned no revenue, and had no direct links to any commercial sites” consistent with the Bosley case as the court found the connection to commercial use to be “roundabout” and “too attenuated,” and thus

UTLM’s second argument was that the Wyatt website and use of the UTLM mark was commercial because it prevented consumers from accessing UTLM's own goods and services – the so-called “interference” theory of commercial use where a party’s use of a trademark is in such a way that it frustrate users and prevents them from reaching the goods and services of the trademark owner. The court commented that such a theory of commercial use (i.e., use in connection with the trademark owner's sale of goods or services is commercial use) eliminates the requirement of an economic competitor and thus is inconsistent with Lanham Act’s purpose of protecting the ability of consumers to distinguish among competitors. The court also stated that this theory was criticized by the Ninth Circuit in the Bosley case on the basis that it would subject otherwise protected critical consumer commentary to the provisions of the Lanham Act.

UTLM’s final argument was that Wyatt’s use of the trademark on the Internet itself constituted commercial use. However, the court rejected UTLM’s argument that any use of a trademark on the Internet is a use "in connection with goods or services." The court, responding to UTLM’s arguments, clarified that while use of a trademark on the Internet may be sufficient use in interstate commerce to satisfy a jurisdictional requirement, such use does not automatically satisfy the “commercial use” necessary for liability under the Lanham Act.

In the end, the court found that Wyatt’s use of UTLM's UTAH LIGHTHOUSE mark was not in connection with any goods or services, and thus such use could not be the basis for UTLM's trademark infringement and unfair competition claims.

Likelihood of Confusion
In order to cover all its bases, the court went on to conduct a likelihood of confusion analysis “even if” Wyatt’s use were determined to be commercial and UTLM were found to have a protectable interest. The court first cited Sally Beauty Co., Inc. v. Beautyco, Inc., 304 F.3d 964 (10th Cir. 2002) for the six factors used by the Tenth Circuit to determine likelihood of confusion, but also noted that parody is an additional factor (and not an affirmative defense that must be asserted) to consider – one which “casts several of the above-cited six factors in a different light.”

The district court had found no likelihood of confusion based on its analysis of the six factors and its determination that the Wyatt website was a parody of the UTLM website. The court, in balancing the six Sally Beauty Co. factors, found the factors weighed in favor of a finding of no likelihood of confusion.

There was no dispute regarding similarity of the marks, which favored UTLM. As for the intent on Wyatt’s part in choosing the UTLM’s mark, no inference of confusion could be drawn from Wyatt’s intentional use of UTLM’s mark since his use was that of a parody and the benefit derived by Wyatt in using UTLM’s mark was the benefit from the “humorous association, not from public confusion as to the source of the marks. . . .” Slip op. at 19. The court agreed that there was no credible evidence of actual confusion.

Regarding similarity of goods/services offered and of marketing channels, the court noted some similarity between the goods sold by UTLM and FAIR, but that “any potential for confusion created by the similarity in goods and manner of marketing is mitigated by the lengthy path a consumer must take to reach the goods offered for sale. The FAIR bookstore does not use UTLM's trademark, and a searcher must click through a website that does not resemble the UTLM website in order to reach FAIR's bookstore.” Slip op. at 20.

As for degree of consumer sophistication, the court held that one could infer that potential customers of the UTLM bookstore are discerning and sophisticated about where they purchase books on controversial religious subjects. While the district court found the factor irrelevant, the court found the factor to favor FAIR because, much like with the fourth factor, “the absence of the UTLM trademark on the FAIR website or the FAIR bookstore lessens the chance that a consumer would be mislead into believing that she is visiting the UTLM online bookstore. Therefore, this factor does not weigh in favor of a finding of likelihood of confusion.” Slip op. at 21.

Finally, with respect to the strength of the mark, UTLM had not submitted any evidence to the district court regarding the strength of the mark and the district court determined that UTLM's evidence of search engine hits did not demonstrate that the mark had significant recognition in the marketplace. The court found the evidence to support a finding that the commercial strength of the mark weighed against a finding of confusion. The court noted that even if it were to consider UTLM’s arguments of strength made for the first time on appeal, this alone would not suffice to find a likelihood of confusion.

The court added that while it concluded no likelihood of confusion based on the conventional balancing of the factors, the fact that Wyatt’s website was a parody website provided “an even more convincing explanation of why consumers are unlikely to be confused.” Slip op. at 22. The court found no error on the district court’s part in finding that the Wyatt website was a parody because it would be immediately apparent to anyone visiting the Wyatt website that it was not the UTLM website due to the differences in content. The court noted that there were sufficient differences between the content and style of the two websites to avoid the possibility of confusion.

In the end, the court found that UTLM had failed to produce sufficient evidence to support a finding that its UTAH LIGHTHOUSE mark is protectable, that Defendants' use of the mark was in connection with any goods or services, and that Defendants' use of the mark was likely to cause confusion among consumers as to the source of the goods sold on the FAIR online bookstore.

In analyzing UTLM’s claim under the Anti-Cybersquatting Protection Act (ACPA), 15 U.S.C. § 1125(d), the court first cited the three elements that UTLM must establish to prevail on its cybersquatting claim:

1) that its trademark, UTAH LIGHTHOUSE, was distinctive at the time of registration of the domain name, (2) that the domain names registered by Wyatt, including and, are identical or confusingly similar to the trademark, and (3) that Wyatt used or registered the domain names with a bad faith intent to profit.

Slip op. at *24.

The second element had been established because Wyatt admittedly registered and, which are confusingly similar to the UTAH LIGHTHOUSE mark. However, based on the court’s determination above that the UTAH LIGHTHOUSE was not distinctive, the court found that UTLM had not established the first element.

In addition, UTLM failed to demonstrate the third element – a bad faith intent to profit. The court, looking at the nine nonexclusive factors set forth in the ACPA (see 15 U.S.C. § 1125(d)(1)(B)(i)), found several of factors which the court stated readily defeated an inference that the Wyatt intended to profit by using domain names similar to UTLM's trademark.

The first such factor was the domain name registrant’s “bona fide noncommercial or fair use of the mark in a site accessible under the domain name.” See 15 U.S.C. §1125(d)(1)(B)(i)(IV). The court agreed with the district court’s determination that Wyatt’s use was both entirely noncommercial and a fair use parody, and thus was not use of the mark in bad faith. Wyatt’s website was a parody that offered an indirect critique and lacked an overt commercial purpose.

The second factor critical to the court’s determination was the defendant’s intent to divert consumers to a website that “could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site.” See 15 U.S.C. § 1125(d)(1)(B)(i)(V). The court agreed with the district court’s conclusion that Wyatt’s website created no likelihood of confusion as to its source, or whether it was affiliated with or endorsed by UTLM, and thus did not evidence any intent on the part of the Defendants to divert consumers and to take advantage of or harm the goodwill of UTLM’s mark.

The court concluded that Wyatt lacked a bad faith intent to profit from the use of UTLM's trademark in several domain names linked to the Wyatt website. The court added that Wyatt’s website, as a parody, fits within the "safe harbor" provision of the ACPA (see 15 U.S.C. § 1125(d)(1)(B)(ii): precluding a finding of bad faith intent if “the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.”). Because Wyatt’s website was deemed a parody, Wyatt could have reasonably believed that use of the domain names incorporating UTLM’s trademark was legal, and thus the safe harbor provision applied to Wyatt’s use.

As such, the court concluded that the district court properly granted summary judgment on UTLM's cybersquatting claim

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