Thursday, July 24, 2014

Trademark exceptionalism wins another round in Maryland

Hershey Co. v. Friends of Steve Hershey, 2014 WL 3571691, No. WDQ–14–1825 (D. Md. July 17, 2014)
Thanks to prodding from Eric Goldman for me to blog about it, here’s a case where we learn that the only constraint on political speech left is intellectual property. Steve Hershey is a local Maryland politician who’s scrapped with Hershey Co. for years about his brown, Hershey-wrapper-esque signs. In 2010, they came to an agreement that Hershey would change the design of his materials. But in 2014, he campaigned for state senate using a campaign logo with a Maryland flag in dual tone brown as the background, the word HERSHEY in white Impact or Helvetica Nueue font, and STATE SENATE in smaller font below.
Hershey Co. sued for trademark infringement and dilution and breach of contract. The court granted a preliminary injunction on infringement grounds (also proving that there is no work left to be done for dilution in modern law).
“In commerce” is a jurisdictional requirement, so that’s not a barrier. The court found substantial similarity between the campaign sign and the widely known Hershey trade dress. “The Maryland flag design is subtle, and would likely be difficult to notice, especially when viewed on a lawn sign from a passing car.” Differences in the parties’ goods and services didn’t matter because confusion over sponsorship or affiliation is also actionable. “On the basis of the substantially similar campaign design, a member of the public could easily—and mistakenly—believe that Senator Hershey is in some way affiliated with Hershey.”
The court also found that Hershey provided “anecdotal” evidence of actual confusion. The problem is that this claim is a huge stretch. Even Hershey’s filing has to conflate recognition of similarity with confusion to get anywhere. From Hershey’s papers:
Online news publications, for example, have referred to Defendants’ “brown campaign signs made to look like the popular chocolate bar” and to “Steve Hershey, who features a modified version of the chocolate bar in his campaign signs.” One online blog has similarly commented on Senator Hershey’s copying of Hershey’s trade dress. And, a number of consumers have contacted Hershey and commented on the similarity of Senator Hershey’s signs to, for example, the Hershey milk chocolate bar wrapper, and/or expressed confusion as to whether Hershey endorsed Senator Hershey or authorized him to use Hershey’s trade dress.
That “and/or” is doing a huge and unwarranted amount of work. Curiosity isn’t confusion, especially since consumers readily understand that most international companies don’t endorse local politicians; confusion is confusion.
I looked at the exhibits cited in this paragraph of Hershey’s submission, which was what the court cited in claiming that there’d been actual confusion. The first is a news article which has a quote from Hershey that the signs are confusing; neither the author nor anyone else expresses confusion. The second is a follow-up article that says nothing about confusion, but states that Steve Hershey has been in negotiations with Hershey for a while. The third is an email asking if Hershey is endorsing Steve Hershey (and how Steve Hershey could have the same last name as the company’s founder, since the founder had no children). It says “One would think so [that Hershey is endorsing Steve Hershey] since the sign is an exact copy of the wrapper (lettering and color),” but it’s not clear that the writer is such a one. The fourth is an email that expresses no confusion, just wants a “footnote” to Hershey. The fifth, another email, isn’t confused, but wants Hershey’s “legal team” to know about the use. The sixth is a letter asking for clarification: “Does he have permission to do this? Is this ok with your company?” The seventh is a report from a customer service call, where the caller reported “blatant copyright infringement” (confused about the law, but not about source or sponsorship). The eighth is a news article about signs “made to look like the popular chocolate bar”; no mention of confusion.
That’s it. The only arguable evidence of actual confusion is the third email, which is from a person who apparently thinks all the other Hersheys in existence should have changed their name. (P.S. to Hershey: the filing didn’t successfully remove identifying information from the emails.)
The weight of the evidence, the court concluded, showed likely confusion.
Defendants argued that they didn’t use the mark in connection with the sale or advertising of goods or services.  But “services” has been interpreted broadly, to noncommercial and political speech. “Defendants used their design to promote a political candidate, disseminate political information, host campaign events, and solicit donations,” and that was sufficient.
The First Amendment defense also failed, because First Amendment protection “does not apply when the trademark is used to associate a political candidate with a popular consumer brand.”  (Citing Am. Family Life Ins. Co. v. Hagan, 266 F. Supp. 2d 682 (N.D. Ohio 2002), which actually doesn’t say that, but rather sides with a First Amendment defense in a similar case on the ground that contrary cases where the plaintiff won involved direct source confusion over who was speaking to the audience—which, given the court’s reliance on association/affiliation theories, actually cuts the other way here.)  Here, the court concluded, defendants weren’t using the trade dress “for parody, political commentary, or other communicative purposes.”  (What was it communicating, then?  Even if it was confusing people, it was only doing so through communicating.  The court’s not alone in misusing “communicative” to mean “expressive in an okay way,” but that doesn’t make it right.)
Irreparable harm followed almost automatically from a showing of likely success on the merits in a trademark case.  (eBay/Winter?  Never mind.)  The balance of equities also therefore favored Hershey.  The additional cost of distributing new campaign materials was a self-inflicted harm that didn’t outweigh the irreparable harm to Hershey (not further explained) of continued use.  Defendants didn’t identify any voter information they could only provide through use of the Hershey trade dress, and the general election is almost four months away, giving them enough time to distribute new materials.  Plus, the general election won’t be seriously contested, showing the minimal risk of harm to the defendants in changing campaign materials.  And the public interest favors avoiding confusion.
The defendants offered a disclaimer in addition to the existing sign, stating “Our Senator, not Big Chocolate ... we’re not confused.” But that was still substantially similar, and the disclaimer was “vague, unclear, and would do little, if anything, to reduce public confusion with respect to Hershey’s affiliation with Senator Hershey.”

1 comment:

  1. I have evidence of a valid claim, and/or I don't.