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Archived updates for Monday, March 31, 2008

Noncommercial Speech Not Subject to Dilution Claim

In Smith v. Wal-Mart, No. 1:06-cv-526 (March 20, 2008), the U.S. District Court for the Nothern District of Georgia held that Smith’s parodic work considered noncommercial speech and therefore not subject to Wal-Mart’s trademark dilution claims, despite the fact that Smith sold the designs to the public on t-shirts (including 15 of the 62 shirts that were sold to Walmart's counsel) and other novelty merchandise.

According to Judge Batten,

. . . the juxtaposition of the similar and dissimilar—the satirical representation and the idealized image of Wal-Mart—conveys a scathing parody. In the “smiley eagle” Walocaust concept, the reference to the Holocaust and the image of the Nazi eagle clutching a smiley face at once portrays and contradicts the benign image that Wal-Mart portrays to the community. In the “SUPPORT OUR TROOPS” Wal-Qaeda concept, Smith transforms all-American “Wal-Mart” into the terrorist group “Wal-Qaeda” and satirically urges the viewer to support Wal-Qaeda’s troops, apparently
commenting both on what Smith considers to be Wal-Mart’s ruthless business tactics and its detrimental impact on the United States. Other concepts juxtapose Wal-Mart’s reputation for low prices with a reference to poor store security and the company’s family values imagery with the fact that it offers for sale inexpensive alcohol, tobacco and firearms—products known better for destroying families.

The Court thus concludes that Smith’s concepts adequately evoke Wal-Mart while maintaining their differentiation, and they convey Smith’s satirical commentary; thus, they are successful parodies. See Louis Vuitton, 507 F.3d at 261. The finding that Smith’s concepts are parodies does not preclude the likelihood of confusion analysis, however; it merely influences the way the likelihood of confusion factors are applied. . . .

Evaluating the overall balance of the seven likelihood of confusion factors, the Court finds that Wal-Mart has failed to demonstrate a likelihood that its trademarks “WALMART,” “WAL-MART,” and “WALiMART” and its word mark “ALWAYS LOW PRICES. ALWAYS.” would be confused with Smith’s “WALOCAUST,” “WAL-QAEDA,” “FREEDOM HATER MART,” or “BENTONiVILLEBULLIES ALWAYS” concepts. In so finding, the Court concludes that factors three (similarity of the marks), five (similarity of sales methods) and six (similarity of advertising methods), weigh in Smith’s favor, with particular emphasis on how different the appearance and usage of the marks were and how vastly the parties’ advertising methods differed. The Court concludes that factors one (actual confusion), two (strength of the mark), four (similarity of product) and seven (Smith’s intent) favor neither party.

In sum, the Court is convinced that no fair-minded jury could find that a reasonable consumer is likely to be confused by the challenged marks. See Anderson, 477 U.S. at 252. As a result, the Court GRANTS summary judgment to Smith on Wal-Mart’s claims of trademark infringement, unfair business competition, cybersquatting and deceptive trade practices.

. . . A claim of dilution applies only to purely commercial speech. Mattel, 353 F.3d at 812. See also Bolger, 463 U.S. at 66-67 (finding that materials do not become “commercial speech” simply because the author had economic motivation to create them). “The question whether an economic motive existed is more than a question whether there was an economic incentive for the speaker to make the speech; the Bolger test also requires that the speaker acted substantially out of economic motivation.” Procter & Gamble Co. v. Amway Corp., 242 F.3d 539, 552-53 (5th Cir. 2001) (emphasis supplied). “Thus, for example, speech that is principally based on religious or political convictions, but which may also benefit the speaker economically, would fall short of the requirement that the speech was economically motivated” and therefore would be considered noncommercial. Id.

At least one court of appeals has specifically addressed whether a social advocate selling t-shirts that carried the group’s social message was engaging in noncommercial speech, despite the fact that the group sold the t-shirts to the public for profit. See Ayers v. City of Chicago, 125 F.3d 1010 (7th Cir. 1997). In Ayers, the court distinguished limitations on “the sale of goods that are not themselves forms of protected speech,” noting that precedent allows more restriction on sales of nonexpressive goods than it does on goods that are forms of protected speech. Id. at 1015. The court likened t-shirts carrying messages of social advocacy to “the
sandwich boards that union pickets sometimes wear.” Id. at 1014. As such,
the t-shirts were “a medium of expression prima facie protected by the free-speech clause of the First Amendment, and they do not lose their protection by being sold rather than given away.” Id. (citing Heffron v. Int’l Soc’y for Krishna Consciousness, Inc., 452 U.S. 640, 647 (1981)).

The Court is convinced that a reasonable juror could only find that Smith primarily intended to express himself with his Walocaust and Wal-Qaeda concepts and that commercial success was a secondary motive at most. Smith has strongly adverse opinions about Wal-Mart; he believes that it has a destructive effect on communities, treats workers badly and has a damaging influence on the United States as a whole. He invented the term “Walocaust” to encapsulate his feelings about Wal-Mart, and he created his Walocaust designs with the intent of calling attention to his beliefs and his cause. He never expected to have any exclusive rights to the word. He created the term “Wal-Qaeda” and designs incorporating it with similar expressive intent. The Court has found those designs to be successful parodies.

Thus, Smith’s parodic work is considered noncommercial speech and therefore not subject to Wal-Mart’s trademark dilution claims, despite the fact that Smith sold the designs to the public on t-shirts and other novelty merchandise. Consequently, Smith’s motion for summary judgment on Wal-Mart’s trademark dilution claims is hereby GRANTED.

"I read that some of the first groups that were persecuted by the Nazis were unions and liberals," Mr. Smith reportedly told Janet L. Conley of the Fulton County Daily Report. "I thought, 'Wow. Taking over the world, persecuting unions and liberals. Sounds like Wal-Mart.'" Wal-Mart spokesman John Simley reportedly would not discuss the case except to say that the company was still studying the ruling and that Smith's attempt to "commercialize the holocaust" was "unprecedented."
It seems to the IPKat that one way to gauge the ubiquity of the public's consciousness of a brand is to see whether it features in parodies, satires and humorous pieces aimed at the general public. The [Onion's feature on] Dippin' Dots feature works well for US readers, but the brand is little known outside its home markets (see the brand's biography in Wikipedia).
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Anonymous Anonymous said...

Would the outcome in the Wal-Mart case have been different if a direct competitor had been responsible for the merchandise? This would seem to change the 'commercial purpose' part of the analysis somewhat. Or would that type of behavior be a different claim altogether?

April 14, 2008 2:37 PM  
Blogger dave c said...

if a direct competitor had been responsible for the merchandise, i would think that it would change the 'commercial purpose' part of the analysis as the backlash effect on the competitor would probably be quite measurable...

May 09, 2008 3:02 PM  
Anonymous Anonymous said...



April 06, 2009 11:37 PM  

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