Writing on a clean slate: 7th Circuit affirms dismissal of claims against Dark Knight film

Fortres  Grand  Corp. v. Warner  Bros. Entertainment Inc., No. 13-2337 (7th Cir. Aug. 14, 2014)

I previously discussed here the lower court opinion dismissing the infringement claim by plaintiff, a software company, against WB for imagining a similarly named software product in the most recent Batman movie.  There’s a debate in US trademark scholarship over the relative desirability of “internal” limits on trademark law (those we deem inherent in the nature of what trademark should protect) versus “external” limits (especially the First Amendment).  Internal limits too often give way when courts perceive the defendant as a miscreant; but external limits too often are avoided by declaring trademark to be about protecting against confusion, and thus undeserving of First Amendment scrutiny.  This opinion, affirming a dismissal that used First Amendment reasoning as part of its belt-and-suspenders treatment of the infringement claim at issue, avoids the constitutional path in favor of internal limits.  (Side note: technically WB asserted a Rogers v. Grimaldi barrier to liability, which can be conceived of as an internal limit, but the theory behind it relies on the idea that the First Amendment poses a barrier to infinite trademark liability, so WB's/the Seventh Circuit's shorthand makes sense.)

Recap (incidentally, this might be the first court opinion to use the term “spoiler alert”): Fortres Grand sells a desktop management program called “Clean Slate” and has a federal registration for the term for “[c]omputer software used to protect public access computers by scouring the computer drive back to its original configuration upon reboot.”  It can be used in places accessible to many people, like schools and libraries, to keep public computers working and free of private data.  The Dark Knight Rises used “the clean slate” to describe a hacking program that could eliminate all records of a person.  Fortres Grand sued, blaming WB for a precipitous drop in sales of its software and alleging forward and reverse confusion.

The “clean slate” program is an important plot point in the movie, forming Selina Kyle’s motivation, and apparently used by her in the end to achieve her happy ending with Bruce Wayne.  Also, as part of the marketing for the movie, two websites—that is, two Tumblrs—were created purporting to be affiliated with the fictional Rykin Data Corporation, which made “the clean slate.”  WB stated that it didn’t actually create those sites, but instead they were created by fans of the movie.  But for failure to state a claim purposes, the court of appeals assumed that the allegation that WB created the sites was true.

Comment: Hey, you know how copyright owners wrongly say it’s really easy to detect infringement, if something is obviously popular material?  This dispute—litigated all the way to the Seventh Circuit—is really good evidence, above and beyond the usual YouTube examples, that it often isn’t easy to tell whether content on a UGC site is unauthorized, even setting aside fair use.  Also, given the apparent disappearance of a post about the fictional Gotham Better Business Bureau, I have my own suspicions about what WB meant by “fans.”

The Tumblrs contained descriptions of the clean slate hacking tool and an image of a fictional patent. “Nothing was available for purchase or download from the websites—they were purely an informational extension of the fictional Gotham City universe.” 

Fortres Grand suffered a significant decline in sales after the release of the movie.  It alleged that this decline was due to potential customers mistakenly believing that its Clean Slate software is illicit or phony because of WB’s use of the name “the clean slate” in the film—a particular harm to Fortres Grand, whose product promise relies on trustworthiness.

The court of appeals began its review by noting that “[a]llegations of consumer confusion in a trademark suit, just like any other allegations in any other suit, cannot save a claim if they are implausible.”  (Not all courts believe this!)  Fortres Grand’s state and federal claims depended on plausibly alleging that WB’s use of “clean slate” was likely to cause confusion.  “But general confusion ‘in the air’ is not actionable. Rather, only confusion about ‘origin, sponsorship, or approval of … goods’ supports a trademark claim.”

Fortres Grand abandoned its forward confusion arguments on appeal, and argued only reverse confusion.  This required plausible allegations that WB’s use of “clean slate” to describe a hacking program in its movie caused a likelihood that consumers would be confused into thinking that Fortres Grand’s Clean Slate software “emanates from, is connected to, or is sponsored by [Warner Bros.].”

The court applied its seven-factor test for likely confusion, except for the alleged infringer’s intent to palm off its goods as those of another, since that was “irrelevant” in a reverse confusion case where the junior user isn’t trying to profit from the senior user’s brand.  What remained: (1) similarity of the marks; (2) similarity of the products; (3) area and manner of concurrent use; (4) degree of care likely to be used by consumers; (5) strength of plaintiff’s mark; and (6) actual confusion.

The district court relied heavily on the dissimilarity between Fortres Grand’s software and WB’s movie.  Fortres Grand argued that one factor shouldn’t have been so important, and that the proper comparator was the fictional software of the fictional Rykin Data.  The few cases to deal with this issue have considered “the likelihood of confusion between the senior user’s product and the junior user’s creative work—not any fictional product therein.” That generally makes sense under Dastar, which focuses on confusion about the origin, sponsorship, or approval of “the tangible product sold in the marketplace.”  But, in forward confusion cases, the movie is the junior user’s only tangible product sold in the marketplace; that isn’t true in reverse confusion cases.  (In an aside that I can only assume will cause trouble later, the court commented that “We think, in general, the relevant question of source in the context of a download is which entity is responsible for the file hosted on the server which is downloaded by the consumer.”  Responsible for the file being hosted on that particular server?  Or responsible for the contents of the file?  Consider the effects on trademark infringement claims based on hosting of unauthorized copies of movies.)

Nonetheless, because the infringing act is the junior user’s use of the mark “in connection with any goods,” the court concluded that “goods” meant the same thing throughout, and thus that the movie was the correct comparator product even in reverse confusion cases.  Also, the Rykin Data Tumblrs were ads for the goods, that is, the movie.

But dissimilarity of products isn’t dispositive of confusion.  The question is whether the products were of the kind the public attributed to a single source. Previously, the Seventh Circuit held that there was a fact question on that where the evidence showed that the senior user made electrical fuses bearing the “TRON” mark and that Disney (the allegedly infringing junior user) made videogames, toys, and licensed telephones bearing the “TRON” mark.  The court held that “utilitarian electrical products” could be confused as originating from the same source as “entertainment-based” products powered by electricity when both are labeled “TRON.” The court now commented: “It is also plausible that entertainment-based products could be confused as being affiliated with (by means of licensing) the same source as a movie.” 

Still, that didn’t help Fortres Grand, which alleged confusion “regarding the source of a utilitarian desktop management software based solely on the use of a mark in a movie and two advertising websites.” WB, unlike Disney, wasn’t selling any movie merchandise bearing the allegedly infringing mark that was similar to Fortres Grand’s software.  WB does sell video games, and that might be similar enough to desktop management software to make confusion plausible [ed. note: really?], but Fortres Grand didn’t allege that the video games bore the “clean slate” mark. Nor did it allege that desktop management software was a commonly merchandised movie tie-in (as a video game might be).  Thus, the only products available to compare—the software and the movie—were “quite dissimilar, even considering common merchandising practice.”  No alleged facts made it plausible that consumers would think that a single producer was likely to put out both.

True, courts shouldn’t rely on the weakness of a single factor to dispose of an infringement claim.  (Never?  Well, hardly ever.)   But Fortres Grand’s allegation was just as implausible considering the other factors.  Both parties’ products are available on “the internet,” but the movie started in theaters and Fortres Grand sells only from its website, not in other places.  (Was this alleged?)  “And anyone who arrives at Fortres Grand’s website is very unlikely to imagine it is sponsored by Warner Bros. (assuming, safely, that Fortres Grand is not using Catwoman as a spokesperson for its program’s efficacy).” The movie websites (I think this means the Tumblrs) are also on the internet, but they “sell no products and are clearly tied to the fictional universe of Batman.”  Moreover, WB’s use was “not a traditional use in the marketplace, but in the dialogue of its movie and in extensions of its fictional universe, so the ‘the area and manner of concurrent use’ also makes confusion unlikely.”

In addition, Fortres Grand alleged that consumers of security software were discerning and “skeptical,” indicating a higher degree of care. Plus, “clean slate” is a common phrase often used to describe fresh starts or beginnings.  (Here the court cites several internet sources that I doubt were alleged or judicially noticed under the usual procedure; that doesn’t bother me for the definitions, but why single out Cleanslate Chicago?)  The descriptive use of “clean slate” in the movie’s dialogue “to describe a program that cleans a criminal’s slate” was unlikely to cause confusion, and this is particularly relevant in a reverse confusion case where the strength of the mark in relation to the junior user’s goods is important.

Fortres Grand also alleged actual confusion based on “internet chatter” and “web pages, tweets, and blog posts in which potential consumers question whether the CLEAN SLATE program, as it exists in The Dark Knight Rises, is real and could potentially work.”  But that wasn’t an allegation of actual confusion. Instead, consumers were speculating that there really could be a hacking tool of this caliber.  “At best Fortres Grand’s argument is that consumers are mistakenly thinking that its software may be such a hacking tool (or an attempt at such a hacking tool), and not buying it. But this is not reverse confusion about origin. Whoever these unusually gullible hypothetical consumers are, Fortres Grand has not and could not plausibly allege that consumers are confused into thinking Fortres Grand is selling such a diabolical hacking tool licensed by Warner Bros.”

Nor was Fortres Grand’s alleged drop of sales enough to make confusion plausible.  Fortres Grand alleged that the movie turned online searches for “clean slate” into hundreds of results relating to the program from the movie, and that it had to spend money on corrective advertising.  But that just means that, logically, Fortres Grand sold less when its website showed up lower in search results. “And proof that internet searchers are more interested in exploring the feasability of a fictional hacking tool than in Fortres Grand’s desktop management software is not proof that they are confused about the source of Fortres Grand’s software.”

Fortres Grand was really sad that WB’s use of “clean slate” tarnished its mark by associating it with illicit software.  But that’s a dilution claim, and it wouldn’t be appropriate for a “contorted and broadened combination of the ‘reverse confusion’ and ‘related products’ doctrines to extend dilution protection to non-famous marks which are explicitly excluded from such protection by statute.”

The only factor that favored Fortres Grand was the similarity of the marks.  (And we’ve just given up on “mark” having any meaning at all applied to defendant’s use.  For the record: WB’s use wasn’t a “mark.”  It was the name of a fictional product that WB did not sell.)  Given the weakness of all the other factors, similarity wasn’t enough. Trademark protects source identification, not words themselves.  Fortres Grand’s reverse confusion claim was “too implausible to support costly litigation.”

Thus, there was no need to reach WB’s First Amendment defense.