Parody Web Site That Criticized Critics of the LDS Church Did Not Infringe Trademarks or Constitute Cyber-Squatting

Case: Utah Lighthouse Ministry v. Discovery Computing, 10th Cir. No. 07-4095 (05/29/2008)

The One Sentence Summary: The panel affirmed summary judgment in favor of parody web site and domain names that used the mark of UTAH LIGHTHOUSE, a site criticizing the LDS Mormon church, to direct internet users to sites with opposing views.



Tenth Circuit Holdings:

• Evidence of search rankings was not sufficient evidence of secondary meaning:

  A mark acquires a secondary meaning if the words “have been used so long and so exclusively by one producer with reference to his goods or articles that, in that trade and to that branch of the purchasing public, the word or phrase [has] come to mean that the article is his product.” Educ. Dev. Corp. v. Econ. Co., 562 F.2d 26, 29–30 (10th Cir. 1977) (internal quotation marks omitted) (modification in original). The number of search engine hits, standing alone, is inadequate to demonstrate that consumers associate the mark with a particular product or producer, or perceive UTAH LIGHTHOUSE as a distinctive mark.



• Links on accused infringer's site to commercial sites via roundabout paths did not render the defendants' use of the trademark a use in commerce.
• Mere interference with sales on the plaintiff's site due to diversion in traffic was not a use in commerce under the Lanham Act.
• The court declined to hold that any use of a trademark on the internet was use “in connection with goods or services.”
• District court correctly concluded that parody web site did not create a likelihood of confusion.
• Registration of a domain name identical to trademark was not a violation of anti-cybersquatting act in absence of evidence of distinctiveness of mark or bad faith intent to profit from mark. Parody of mark was not an attempt to profit.
• Safe harbor under ACPA applied. Provision of ACPA precludes 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.” 15 U.S.C. § 1125(d)(1)(B)(ii). Defendant's belief that this was a parody precluded a finding of bad faith attempt to profit.
  
  

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Fourth Circuit Finds No Dilution in Chewy Vuiton Case

Case: Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, Case No. 06-2267, Fourth Circuit Court of Appeals (November 13, 2007)

The One Sentence Summary: The Fourt Circuit found no dilution by "Chewy Vuiton" of the famous LOUIS VUITTON mark, construing the Trademark Dilution Revision Act of 2006 (TDRA) to hold that parody may be considered in determining whether dilution by blurring has occurred.


What They Were Fighting About: Louis Vuitton Malletier (LVM) brought suit against Haute Diggity Dog (HDD), which manufactures and sells plush dog toys, including one called "Chewy Vuiton." The district court, on cross-motions for summary judgment, ruled in HDD's favor on claims of trademark infringement, trademark dilution, and copyright infringement.

Fourth Circuit Holdings:
The Court agreed with the district court that "Chewy Vuiton" neither infringed LVM's famous mark nor copyright. The Court also rejected LVM's claim for dilution by tarnishment, finding that the possibility that a dog could choke on a "Chewy Vuiton" toy to be insufficient.

The most interesting and important aspect of the Fourth Circuit's ruling, however, is its holding that HDD's use of "Chewy Vuiton" also did not result in dilution by blurring of the famous LOUIS VUITTON mark under the TDRA.

• As the Fourth Circuit observed, the plain language of the TDRA states that "parodying a famous mark is protected by the fair use defense only if the parody is not 'a designation of source for the person's own goods or services.'" (Emphasis in original, citing 15 U.S.C.A. 1125(c)(3)(A)(ii).)
  
• Here, "Chewy Vuiton" is a designation of source and thus does not qualify for protection under the fair use defense. Nonetheless, the Court held that the TDRA "does not require a court to ignore the existence of a parody that is used as a trademark, and it does not preclude a court from considering parody as part of the circumstances to be considered for determining whether the plaintiff has made out a claim for dilution by blurring."
  
• The Court found HDD's use of the mark as a parody to be relevant to the overall question of whether HDD's use is likely to impair the famous LOUIS VUITTON mark's distinctiveness.
  
• Instead of remanding the case to the district court, the Court then applied the TDRA dilution factors to the case to conclude that because HDD's "Chewy Vuiton" mark is a successful parody, it does not blur the distinctiveness of the LOUIS VUITTON mark. As the Court observed, "by making the famous mark an object of the parody, a successful parody might actually enhance the famous mark's distinctiveness by making it an icon."

It will be interesting to see if other circuits agree with the Fourth Circuit's reasoning in future dilution cases.

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The Sixth Circuit Clarifies Exceptions to the First Sale Doctrine in Both Trademark and Copyright.

Case: Brilliance Audio, Inc. v. Haights Cross Communications, Inc., No. 05-1209 (6th Cir. 1/26/2007)

The One Sentence Summary:
The Sixth Circuit holds that in trademark law, the first sale doctrine does not apply where the alleged infringer provides insufficient notice of repackaging or where the alleged infringer sells goods materially different from those of the trademark holder; in copyright law, the record rental exception to the first sale doctrine applies only to musical works, not to audiobooks.

What They Were Fighting About:
Brilliance Audio, Inc. (“Brilliance”) sued Haights Cross Communications, Inc. (“Haights”) for trademark and copyright infringement. Brilliance produces and sells audiobooks through exclusive agreements with publishers and authors. Brilliance produces two versions of its audiobooks, a retail version and a library version, which differ in packaging and marketing. It has copyrights in these works and protectable rights in the federally-registered BRILLIANCE trademark. Haights is a direct competitor of Brilliance. Brilliance claims that Haights uses the Brilliance mark on the repackaged products, constituting trademark infringement. Brilliance also alleges that Haights is repackaging and relabeling Brilliance’s retail editions as library editions, which it then distributes for commercial advantage, constituting copyright infringement.

Sixth Circuit Holdings:

• In trademark law, the Sixth Circuit joins other circuits in holding that the “first sale doctrine,” a defense to claims of trademark infringement, has two exceptions.
• The first exception occurs where the notice that the item has been repackaged is inadequate. Here, Brilliance alleges that Haights is repackaging Brilliance’s retail editions as library editions, and that the notice of repackaging is inadequate because it misrepresents that Haights has a relationship with Brilliance and that Haights has obtained permission for its activities, possibly resulting in consumer confusion.
• The second exception occurs where an alleged infringer sells trademarked goods that are materially different than those sold by the trademark owner. Here, Brilliance alleges that the retail edition is different than the library edition, and that by packaging the retail edition as a library edition, Haights is altering the product in a manner likely to cause consumer confusion.
• In copyright law, the court found that the record rental exception to copyright’s first sale doctrine, codified at 17 U.S.C. § 109(b)(1)(A), applies only to sound recordings of musical works, and not to sound records of literary works, such as audiobooks. The court found the plain language of 109(b)(1)(A) ambiguous, and based its holding on a combination of the legislative history, the context in which the statute was passed, and the policy rationales behind trademark and copyright law.
  
  

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