New Trademark Ruling For Internet Gripe Sites
by John M. Tanner

A new ruling by the Ninth Circuit Court of Appeals protects use of another's trademark in the domain name of an internet "gripe site." Bosley Medical Institute, Inc. v. Kremer, ___ F.3d ___, 2005 WL 725337 (9th Cir. 2005). The opinion squarely conflicts with the prior opinion of the Fourth Circuit Court of Appeals in People for Ethical Treatment of Animals v. Doughney, 263 F.3d 359 (4th Cir. 2001) ("PETA"). Unless and until the United States Supreme Court resolves this dispute, it means both trademark holders and their critics will have significant support for their positions.

In Bosley Medical, Mr. Kremer was a dissatisfied user of Bosley Medical Institute's hair restoration services. He obtained the domain name bosleymedical.com, even though "Bosley Medical" was a registered trademark of Bosley Medical Institute. After obtaining the domain name, Mr. Kremer contacted Bosley Medical Institute about his dissatisfaction. He made vague references to "telling the truth" about Bosley Medical if it did not satisfy him, but neither mentioned the web site nor offered to sell it. When the matter was not resolved, he posted negative information about Bosley Medical on the BosleyMedical.com site. The web site had a link on it to a chat room, and the chat room site had commercial advertisements on it. Bosley Medical brought suit for trademark infringement (including trademark dilution), but the United States District Court for the Southern District of California granted summary judgment for Mr. Kremer. The Pacific-coast based Ninth Circuit affirmed, holding that because Mr. Kremer's use was not commercial, it did not violate the Lanham Act.

Bosley Medical argued that the site was commercial in three ways. First, it argued that the site contained links to other sites, which has previously been held to constitute commercial use. The Ninth Circuit determined the links to the chat room (and the public interest law group that represented Mr. Kremer, which was added after suit commenced) were too attenuated to constitute commercial use.

The second supposed commercial use was the alleged offer to sell the domain name itself. The Ninth Circuit ruled that the letter sent by Mr. Kremer, although it threatened to take numerous actions, never mentioned selling of the webpage address itself, and thus the letter did not constitute commercial use.

Finally, the Ninth Circuit held that Mr. Kremer's attempt to dissuade viewers of his site from using Bosley Medical's services did not constitute a use in commerce. This is where the Ninth Circuit diverges from prior Fourth Circuit authority: in PETA, the Fourth Circuit had held that the parody site People Eating Tasty Animals "prevented users from obtaining or using [People for Ethical Treatment of Animal's] goods or services," and therefore acted commercially. Based in part on this, the Fourth Circuit had found the parody site contained Lanham Act violations. (Some District Courts have distinguished PETA, but the only Circuit Court of Appeal to consider it, the Eighth Circuit, cited it with favor. Coca-Cola Co. v. Purdy, 382 F.3d 774 (8th Cir. 2004)).

The Ninth Circuit was cognizant that it was acting contrary to the Richmond, Virginia-based Fourth Circuit (where INTERNIC is headquartered) and was careful to explain why it believed the Fourth Circuit Opinion in PETA was incorrect. First, it noted that in PETA, the defendant site provided links to more than 30 commercial operations offering goods and services. More fundamentally, however, the Ninth Circuit disagreed with the analysis of what it took to "act in commerce" for purposes of the Lanham Act. The Ninth Circuit states:

The PETA Court's reading of the Lanham Act would encompass almost all uses of a registered trademark, even when the mark is merely being used to identify the object of consumer criticism. This broad view of the Lanham Act is supported by neither the text of the statute nor the history of trademark laws in this country.

"The trademark laws are intended to protect" consumers from purchasing the products of an infringer "under the mistaken assumption that they are buying a product produced or sponsored [by the trademark holder]." Limiting the Lanham Act to cases where a defendant is trying to profit from a plaintiff's trademark is consistent with the Supreme Court's view that "[a trademark's] function is simply to designate the goods as the product of a particular trader and to protect its good will against the sale of another's product as his." [Citations omitted.]

This split in the Circuits may result in the Supreme Court reviewing Bosley Medical and giving guidance to trademark holders and their critics alike. (It is unlikely to happen immediately, however, as the Ninth Circuit reversed the summary judgment in favor of Mr. Kremer on an Anti-Cybersquatting Act claim and remanded for further proceedings. As a result, a petition for certiorari to the United States Supreme Court is unlikely for several years.) In the meantime, the split of authority will remain, which will enable parties on both sides of this question to argue forcefully and with authority that theirs is the correct view.

Copyright © 2005, Fairfield and Woods, P.C.,
ALL RIGHTS RESERVED.

Comments or inquiries may be directed to:
John M. Tanner