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Disparage At Will, Just Don't Infringe - The Message From The Ninth Circuit In Freecycle

October 2 2007

By: Intellectual Property

The Ninth Circuit Court of Appeals issued an opinion last week that, while not necessarily controversial or new, serves as a good reminder for trademark litigators: There must be actual infringement to prevail in a trademark infringement lawsuit. While this would seem to be obvious, the Ninth Circuit thought it was an important enough reminder to actually publish the decision, and even more surprisingly, issued their unanimous opinion just over a month after oral argument.

The case, The Freecycle Network, Inc. v. Oey, — F.3d —, 2007 WL 2781902 (9th Cir. Sept. 26, 2007), involves the use of the terms “freecycle” and “The Freecycle Network” (“TFN”). According to its website, http://www.freecycle.org, “The Freecycle Network™ is made up of 4,129 groups with 3,906,000 members across the globe. It’s a grassroots and entirely nonprofit movement of people who are giving (& getting) stuff for free in their own towns. It’s all about reuse and keeping good stuff out of landfills. Each local group is moderated by a local volunteer.”

Initially, TFN used the term “freecycle” to refer generally to the act of free recycling goods. TFN accomplished this primarily via the Internet. In 2004, Tim Oey, a TFN member, advised TFN to trademark the term “freecycle” and the name “The Freecycle Network” and actively protect the use of the terms. Oey drafted, and TFN implemented, a policy which allowed the use of the term “freecycle” only in connection with TFN or TFN’s services. TFN filed for trademark registration of the term, but an opposition was filed and the application is still pending.

A year later, Oey had a change of heart and came out in opposition of the registration of the mark. He believed that the term “freecycle” should be left to the public domain. He sent an email to TFN group moderators (TFN group moderators run the Internet sites for the local TFN groups) and posted statements on the Internet that TFN had no right to trademark “freecycle” because it is a generic term. He also asked others to write to the US Patent and Trademark Office voicing opposition to TFN’s trademark application. TFN responded by severing ties with Oey, but Oey continued to make statements challenging the TFN’s right to trademark the term and urging others to continue to use the term generically.

In April of 2006, TFN filed suit against Oey and sought an injunction, claiming that Oey’s statements constituted contributory trademark infringement and trademark disparagement under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). The district court granted a preliminary injunction at TFN’s request based only on TFN’s Lanham Act claims. Oey was enjoined from “making any comments that could be construed as to disparage upon TFN’s possible trademark and logo” and requiring that he “remove all postings from the Internet and any other public forums that he has previously made that disparage TFN’s possible trademark and logo.”

The Ninth Circuit reversed and vacated the injunction on two grounds. First, the court pointed out that because there was no indication that Oey used the term to promote any competing service or to gain any commercial benefit, Oey did not use the term in commerce. Use of the term in commerce is a threshold requirement in a trademark infringement claim. Second, even if there were some commercial aspect to his use of the term “freecycle,” the court found that “such use was not likely to cause confusion, mistake, or deceive anyone as to the connection of Oey’s services (or any other) with TFN.” Rather, the court found, Oey simply expressed his view that TFN did not have a valid claim to the term “freecycle,” and encouraged others to voice the same view.

Finally, the court addressed TFN’s contention that Oey’s remarks disparaged TFN’s trademarks. TFN set forth the elements of its claim for trademark disparagement as making false statements with malice about TFN’s operations and the validity of its trademarks. However, as the Ninth Circuit pointed out, the Lanham Act contains no claim for trademark disparagement, and the “elements” listed by TFN cannot be found anywhere in the text of § 1125(a). Rather, these are the elements of a claim for slander of title, which is not found in the Lanham Act. The court supported its position that the Lanham Act does not contain a trademark disparagement claim by pointing to “the absolute dearth of precedent analyzing such a claim under the Act.”

The court explained that even if TFN’s invented trademark disparagement cause of action did exist, and even if it had the elements TFN claimed, it would still fail. Oey’s statements were not false! TFN’s application for trademark registration is still pending. There had been no formal determination of TFN’s rights. Thus, the court reasoned, Oey’s contention that “TFN lacked trademark rights in the term therefore cannot be considered a false statement of fact.”

Because the court found that there was no likelihood of TFN succeeding on the merits of its trademark infringement claim, and because the Lanham Act simply does not contain a cause of action for trademark disparagement, the district court abused its discretion in enjoining Oey. The Ninth Circuit vacated the injunction. In doing so, they provided a useful little reminder that to prevail on a trademark infringement claim, there must actually be infringement. And disparage the trademark at will, so long as you don’t disparage the product or infringe the mark. The Lanham Act does not prevent you from speaking your mind.