Public Citizen Blog - Ninth Circuit: No Cause of Action for Disparaging a Company's Trademark

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http://pubcit.typepad.com/clpblog/2007/09/ninth-circuit-n.html
January 5, 2008

Public Citizen Litigation Group

Thursday, September 27, 2007

Ninth Circuit: No Cause of Action for Disparaging a Company's Trademark
by Greg Beck
In Freecycle Network v. Oey, the Ninth Circuit yesterday reversed a district court’s preliminary injunction prohibiting the defendant "from making any comments that could be construed as to disparage upon [Freecycle's] possible trademark and logo" and requiring that he "remove all postings from the [I]nternet and any other public forums that he has previously made that disparage [Freecycle's] possible trademark and logo."

Freecycle is a nonprofit corporation that hosts forums where users can give and receive free stuff online. The defendant, Tim Oey, is a former Freecycle member who had posted his opinion online that the word “freecycle” is a generic term in which the company has no trademark rights. Freecycle sued Oey, claiming that his Internet posts infringed and disparaged the company’s trademark. The district court agreed and entered the preliminary injunction. The Volokh Conspiracy has the district court's order.

On appeal, the Ninth Circuit held that Oey’s Internet posts did not infringe Freecycle’s trademark because he did not use the trademark in commerce and because his use of the trademark was not likely to confuse any consumers, two required elements of a trademark infringement claim under the Lanham Act. The court further held that there is no claim for “trademark disparagement” under the Lanham Act.
Presumably because the court held that Freecycle had no cause of action, it did not reach the question of whether the district court’s injunction violated the First Amendment. However, it’s hard to imagine how a prohibition against any speech that “could be construed as to disparage” Freecycle’s trademark could survive First Amendment scrutiny, especially where, as here, the speech is totally noncommercial. Consumers have a right to truthfully give their opinions about companies and products. Just because the opinions amount to "disparagement" doesn't give a company the right to stop it.
Nevertheless, companies unhappy about online criticism often claim that consumer disparagement of their trademarks gives rise to a cause of action under the Lanham Act. See, for example, Video Professor's case against 100 anonymous critics.
Posted by Greg Beck on Thursday, September 27, 2007 at 03:43 PM

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