9th Circuit decision vacating injunction against making disparaging comments about a trademark

The Ninth Circuit today vacated a preliminary injunction prohibiting a defendant from making disparaging comments about a trademark.

The dispute in The Freecycle Network, Inc. v. Oey, No. 06-16219 (9th Cir. Sept. 26, 2007) garnered significant interest from First Amendment law professor types. The plaintiff is a company that encourages people to coordinate recycling efforts to minimize landfill issues. The defendant was previously affiliated with Freecycle, and had initially encouraged Freecycle to protect its FREECYCLE trademark. Later, he changed his mind and decided the public should be free to use “Freecycle” as a generic term to describe the sort of coordinated recycling services that the plaintiff performed. So he began communicating via the Internet encouraging people to use the term generically and to express his opinion that FREECYCLE didn’t qualify as a proper trademark.

The district court enjoined the defendant from making any further statements disparaging Freecycle’s trademark.

On appeal, a bunch of amici screamed and yelled about the First Amendment problems with such an injunction, but the Ninth Circuit avoided the constitutional issue by ruling that: (1) the defendant hadn’t used the mark “in commerce”; (2) even if there had been a “use in commerce,” there was no likelihood of confusion; (3) there is no cause of action under the Lanham Act for “trademark disparagement”; (4) even if there were, the plaintiff hadn’t proved that the alleged elements of its alleged cause of action were satisfied; (5) there was no false statement of fact (only a lay opinion about the legal validity of the mark) and therefore no Lanham Act false advertising; and (6) the Lanham Act contains no provision preventing the generic use of a trademark.

The Ninth Circuit noted, however, that it was expressing no opinion about whether the defendant’s activities were unlawful under any state law claims.

6th Circuit decision concerning a spat between wineries over trademark use of a geographically descriptive AVA name

Just because the 6th Circuit doesn't encompass Napa Valley doesn't mean it can't mediate spats between wineries. In Leelanau Wine Cellars, Ltd. v. Black & Red, Inc., No. 06-2391 (6th Cir. Sept. 20, 2007), the 6th Circuit confronted a claim that the winery name "Chateau de Leelanau Vineyard and Winery" infringed plaintiff's registration for LEELANAU CELLARS. Michigan's Leelanau Peninsula is a governmentally-approved American Viticultural Area (AVA).

While the 6th Circuit's review of the grant of summary judgment to the plaintiff was largely fact-intensive, it did not that the common element of the two marks (Leelanau) is geographically descriptive, and therefore weak, and this weakness was highlighted by the donning of AVA status to Leelanau Peninsula. The opinion also contained some useful discussion concerning factors that affect the admissibility and probative value of confusion surveys.

11th Circuit decision concerning when a district court can overturn credibility determinations of magistrate judges on r&r's

In Amlong & Amlong, P.A. v. Denny's, Inc., No. 04-14499 (amended Sept. 17, 2007), the district judge had referred a sanctions motion to the magistrate judge to hold an evidentiary hearing. After hearing extensive testimony, the magistrate judge reported and recommended that the sanctions motion be denied, finding that the attorney in question did not act in bad faith. The district judge, conducting its "de novo determination" as required by 28 U.S.C. § 636(b), disagreed after reviewing the transcript of the hearing before the magistrate judge, and concluded that the testimony showed bad faith.

The 11th Circuit held that the district judge erred in rejecting the magistrate judge's implicit determination that the lawyer's testimony concerning the acts in question and the motives for them was credible. The appeals court held that "[r]ejecting credibility findings made by a magistrate judge without holding a new hearing is permissible only when there is an 'articulable basis for rejecting the magistrate's original resolution of credibility.' " Since there wasn't any such "articulable basis" here, the court reversed.

10th Circuit decision (unpublished) on the phrase "anything of value" in the Computer Fraud and Abuse Act

The Computer Fraud and Abuse Act (18 U.S.C. § 1030) provides a private civil cause of action against one who "knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value" (there are other required elements as well). In Triad Consultants, Inc. v. Wiggins, No. 07-1007 (10th Cir. Sept. 17, 2007) , it was alleged that fired President and COO (Wiggins), who was required by agreement to return all Triad property, unsuccessfully tried to get a third-party to restore a back-up tape of Triad computer data into a useable format.

The 10th Circuit held that Triad failed to state a claim because the "complaint set forth a sequence of facts showing that [Wiggins] never obtained any information from the tapes." Accordingly, "[b]ecause Triad alleged no facts showing that Wiggins accessed the information on the tape, it cannot establish one of the elements of a claim under § 1030(a)(4), that Wiggins obtained "anything of values." The court rejected the argument that the tapes themselves had intrinsic value, because "value is relative to one's needs and objectives," and if Wiggins couldn't use the information on the tapes, then they had no value to him.