Factual Background Edit
Plaintiff operated a website at "www.fallwell.com" at which he expressed his views on homosexuality and his disagreements with defendant Jerry Falwell, a well-known evangelical minister who regularly speaks out about various social and religious issues. At one point, plaintiff's website provided a link to purchase a book on the Amazon.com website.
Trial Court Proceedings Edit
Plaintiff brought this action for declaratory relief that he did not infringe, dilute, or otherwise violate any of defendant's trademark rights, and that his actions were protected by the First Amendment and principles of fair use, including nominative use and parody. Defendant counterclaimed for infringement, false designation of origin, unfair competition, and cybersquatting.
Both parties agreed that there were no genuine issues of material fact, and the case was ripe for decision on summary judgment. Regarding infringement, the court initially found that defendant possessed a protectable mark through his federal registration for the mark LISTEN AMERICA WITH JERRY FALWELL, and that the "fallwell.com" domain name was a "colorable imitation" of that mark.
The court next found that plaintiff "used" the domain name "in commerce" due to the Internet's availability throughout the country. And the court found that defendant satisfied the requirement of using the domain name in connection with the "sale, offering for sale, distribution, or advertising" of "services."
Although the majority of plaintiff's activities were not done for a profit, the court held that he "unquestionably rendered a service, i.e. the provision of information and viewpoints critical of the [defendants]." If these activities did not constitute services under the Lanham Act, the court commented that the "Lanham Act protections would essentially be rendered toothless; anyone would be entirely free to distribute publicity statements, endorsements, and position papers in the name of the [defendants] so long as they did not profit from such activities." In addition, plaintiff in the past had linked the "fallwell.com" domain to Amazon.com for the sale of a book.
Finding a likelihood of confusion, the court found that defendant's registered trademark LISTEN AMERICA WITH JERRY FALWELL and common-law marks FALWELL and JERRY FALWELL were distinctive and strong, there was evidence of actual confusion, the spelling of "fallwell.com" as compared to FALWELL was "nearly identical," and plaintiff used [[metatag]s "to facilitate . . . confusion" as to affiliation or sponsorship.
Regarding the similarity of the "fallwell.com" domain name to the mark FALWELL, the court also noted that a survey showed that 3% of mail sent to Mr. Falwell misspelled his name as "Fallwell." The court thus granted defendant's motion for summary judgment on its infringement, false designation of origin, and unfair competition claims.
The court also granted summary judgment for defendant on its cybersquatting claim because plaintiff had a bad faith intent to profit from defendant's mark. Although plaintiff neither offered to sell the disputed domain name for financial gain nor acquired multiple trademark-related domain names, he had no intellectual property rights in the name "Fallwell" or fallwell.com, he had made no bona fide offering of goods or services before registering the domain name, and his website was commercial due to the link to Amazon.com.
Furthermore, the court rejected plaintiff's fair-use defense, stating that his "only goal" was "to divert consumers from the [defendants'] website to www.fallwell.com so that he could harm the goodwill with the direct intent to tarnish or disparage the [defendants'] marks" and "to provide those diverted individuals with commentary and criticism of [defendants'] beliefs and actions."
The court rejected plaintiff's laches and statute-of-limitations defenses, stating that defendants filed the counterclaims before expiration of the applicable five-year period for injuries to property in Virginia. Finally, regarding relief, the court entered a permanent injunction and ordered transfer of the domain name. However, the court refused to award statutory damages because profit was only a "minor motive" with plaintiff's website. Rather, plaintiff used the "fallwell.com" website primarily to express his opinions that were contrary to Mr. Falwell's.
Appellate Court Proceedings Edit
On appeal, the Fourth Circuit reversed and remanded to the district court with instructions to enter judgment for plaintiff on all claims. The appeals court initially noted that the protections of the trademark laws "'against unfair competition' cannot be transformed into 'rights to control language,'" because such a transformation would raise "serious First Amendment concerns." Central to defendant's appeal was its contention that the Lanham Act covered only "commercial speech."
In this regard, the court observed that "Congress left little doubt that it did not intend for trademark laws to impinge the First Amendment rights of critics and commentators" when it recently enacted the FTDA and ACPA, which either specifically exempt noncommercial use of a mark or list it as a factor to consider in assessing liability. In contrast, the trademark infringement (Section 32) and false designation of origin (Section 43(a) provisions of the Lanham Act do not contain similar "noncommercial" language, but they do require use of a mark "in connection with the sale, offering for sale, distribution, or advertising of any goods or services."
However, courts have interpreted this language broadly to cover a wide variety of noncommercial public and civic benefits as well as use of a domain name for a website not selling any goods or services but with links to commercial websites. In any event, the court found it unnecessary to address plaintiff's argument whether Sections 32 and 43(a) applied only to commercial speech and, if so, what constitutes commercial speech, because defendant was unable to prove a likelihood of confusion.
Although the strength of defendant's mark and the similarity of plaintiff's "fallwell.com" domain name to defendant's mark favored defendant, the other relevant likelihood-of-confusion factors favored plaintiff. Specifically, plaintiff's website "looked nothing like" defendant's site; defendant conceded that plaintiff's website did not constitute advertising or a "facility for business"; plaintiff created his website "intending only to provide a forum to criticize ideas, not to steal customers"; the parties did not offer similar goods or services but rather "offered opposing ideas and commentary"; and defendant's "anecdotal evidence" of individuals contacting defendant's ministry to inform them that plaintiff's website was contrary to defendant's views did not prove actual confusion but instead reinforced the point that no one who looked at plaintiff's website even briefly could think that defendant authorized the website. According to the Fourth Circuit, "[a]fter even a quick glance at the content of the website at www.fallwell.com, no one seeking Reverend Falwell's guidance would be misled by the domain name—www.fallwell.com—into believing Reverend Falwell authorized the content of that website. No one would believe that Reverend Falwell sponsored a site criticizing himself, his positions, and his interpretations of the Bible."
Defendant conceded this point in oral argument but argued he should prevail under the initial-interest confusion doctrine. Defendant argued that the court needed only to compare defendant's mark with plaintiff's domain name without considering the content of plaintiff's website. The Fourth Circuit initially noted that it has never adopted the initial-interest confusion theory, and that it instead has followed an analysis requiring courts to look at the allegedly infringing use "in the context in which it is seen by the ordinary consumer."
Defendant argued that the Fourth Circuit abandoned this "contextual" approach in the PETA v. Doughney case. The court disagreed explaining that PETA focused only on whether the disputed domain name "peta.org" constituted a successful-enough parody to avoid a likelihood of confusion and did not diminish the need of "examining context when determining whether a likelihood of confusion exists." Accordingly, in the context of domain names, the Fourth Circuit held that "a court must evaluate an allegedly infringing domain name in conjunction with the content of the website identified by the domain name."
Moreover, even if the court adopted the initial-interest confusion theory, defendant would still lose because the few appellate courts that have imposed liability for initial-interest confusion have all involved cases where the alleged infringer used another's mark to financially capitalize on the confusion. In contrast, "this critical element—use of another firm's mark to capture the markholder's customers and profits—simply does not exist when the alleged infringer establishes a gripe site that criticizes the markholder." If the initial-interest confusion theory was applied to gripe sites like plaintiff's, the court commented that trademark owners could "insulate [themselves] from criticism — or at least to minimize access to it."
Defendant did not fare any better on his cybersquatting claim. The court first noted that the ACPA was not intended to restrain noncommercial uses of a mark such as for comment and criticism. Moreover, after examining the statutory bad faith factors, the court held that plaintiff did not have a bad-faith intent to profit using the "fallwell.com" domain name because: (a) plaintiff used his website only to criticize defendant's views, (b) plaintiff's website did not create a likelihood of confusion, (c) plaintiff did not offer to sell the domain name to defendant or anyone else for a profit, and (d) plaintiff did not register multiple trademark-related domain names. The link on plaintiff's website to an Amazon.com web page selling a book he liked did "not diminish the communicative function of his website." Moreover, plaintiff did not profit from sales of the book by Amazon.com.
Accordingly, this case was distinguishable from PETA and Coca-Cola v. Purdy where the courts found bad faith based on each defendant's registration of 50-70 domain names coupled with an offer to transfer the disputed name(s) to the trademark owner for financial gain. Instead, the Fourth Circuit agreed with the Fifth and Sixth Circuits in TMI v. Maxwell and Lucas Nursery v. Grosse that the use of a mark in a domain name for a gripe site criticizing the trademark owner, without more, does not constitute cybersquatting.
The Fourth Circuit thus reversed the district court's judgment on all claims and remanded the case for entry of judgment for plaintiff.
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