Tuesday, May 17, 2016

Challenging competitor's TM as generic is protected by Mass. anti-SLAPP law

Shire City Herbals, Inc. v. Blue, 2016 WL 2757366 (D. Mass. May 12, 2016)
HT Eric Goldman.  Shire City sued Mary Blue and two other people for trademark infringement and false advertising-related claims based on their attacks on Shire City’s federally registered trademark, FIRE CIDER, for a herbal tonic. Defendants filed a special motion to dismiss the non-trademark infringement claims under Massachusetts’ anti-SLAPP law, and the court granted the motion. (Apparently even as to the Lanham Act false advertising claims? Not sure how that works.)
Shire City sells a tonic comprised of apple cider vinegar, citrus, honey, and spices; it registered FIRE CIDER in 2012. After “obtaining” (registering?) the mark, Shire City began objecting to similar uses of “fire cider” on commercial websites. Defendants compete with Shire City in the market for similar tonics. They claimed that “fire cider” is a generic term used by herbalists for decades for this type of tonic, and that the registration is therefore invalid.
Blue saw a blog post about the Shire City registration in January 2014, and immediately created a petition at change.org to support cancellation of the mark. The petition had over 2,000 signatures within 24 hours and currently has over 11,000 signatures. Shire City posted online that it had obtained the trademark to protect itself from larger companies and would discuss the matter with its lawyer. Another defendant, Telkes, then sent an email to Shire City asking it to give up the mark/registration, stating that “Fire Cider is an exciting and popular remedy that many of my students and friends have wanted me to either mass market or they themselves have been pushed in this direction,” and also stated, “I really don’t want to see you completely lose all of your business after all of the hard work you have done.” Defendants then began organizing a boycott of Shire City’s product. They created a website, www.freefirecider.com, and various Facebook pages, including the “Traditions not Trademarks” page.
Shire City alleged that defendants wrongly claimed that Shire City had sued other herbal companies; that Shire City claimed to have originated the recipe sold under the Fire Cider mark; that Shire City claimed other herbalists would be legally barred from selling similar recipes; that Shire City was forcing other herbalists to stop making and selling similar tonics; and that Shire City was asking retailers to remove other herbalists’ tonics from their shelves. Shire City announced that the only way to make “fire cider” generic would be a decision from the TTAB (which isn’t technically true, though the TTAB would have to cancel the registration to get it off the books early). Subsequently, Blue filed a pro se cancellation petition with the TTAB, and then Shire City sued defendants, bringing the cancellation issue before the court instead.
The defendants allegedly used their own websites and Facebook pages, which also promote their own products, to link to the pages supporting the boycott. Blue uploaded sample letters to www.freefirecider.com for people to send to Shire City’s retail accounts, allegedly demanding that they remove Shire City’s product from the shelves and replace it with similar products made by defendant and others: a sample letter asked Stores “to consider stocking a locally made Fire Cider in your store and removing Fire Cider made by [Plaintiff] from your shelves until they revoke the trademark.” The current sample letter on www.freefirecider.com only requests that Shire City’s product be removed and does not mention replacing it with other products. Defendants allegedly incited other people to contact Shire City’s retail accounts in other ways too, such as via phone calls and personal visits. Defendants also reached out on their own: for example, Telkes saw Shire City’s product sold in a store, and suggested that the store “do their research” on Shire City. Defendants, and other herbalists, also donated products for an Etsy shop to raise money for legal costs.
Shire City alleged that it lost existing and prospective retail accounts due to this conduct, and that some stores carry defendants’ products instead. Defendant Langelier’s website is linked in the “alternative producers of fire cider” section of www.freefirecider.com, though that section of the website was created after the filing of this lawsuit.
Massachusetts’ anti-SLAPP law allows a party to bring a special motion to dismiss claims that “are based on said party’s exercise of its right of petition under the constitution of the United States or of the commonwealth.” The moving party must “make a threshold showing through the pleadings and affidavits that the claims against it are ‘based on’ the petitioning activities alone and have no substantial basis other than or in addition to the petitioning activities.” The law defines the relevant acts as
[1] any written or oral statement made before or submitted to a legislative, executive, or judicial body, or any other governmental proceeding; [2] any written or oral statement made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other governmental proceeding; [3] any statement reasonably likely to encourage consideration or review of an issue by a legislative, executive, or judicial body or any other governmental proceeding; [4] any statement reasonably likely to enlist public participation in an effort to effect such consideration; or [5] any other statement falling within constitutional protection of the right to petition government.
“It is not necessary that the challenged activity be motivated by a matter of public concern.” Defendants argued that their activities were meant to effect the cancellation of Shire City’s trademark [registration], and were thus petitioning activities, while Shire City argued that they were attempting to cripple Shire City’s business for their own commercial purposes.
Considering the context, the court agreed with defendants.  Their goal “from the start was to cancel the Fire Cider mark, and their activities took place in the context of achieving that goal.”  Basically, they published statements, gathered signatures, spoke with retailers, and organized a boycott, all with the purpose of cancelling the mark [registration]. These were statements “reasonably likely to encourage consideration or review of an issue” by a government body, statements “reasonably likely to enlist public participation in an effort to effect such consideration,” etc.
It wasn’t significant that their first steps occurred before formal cancellation proceedings began.  “Petitioning includes all statements made to influence, inform, or at the very least, reach governmental bodies— either directly or indirectly,” and defendants’ statements “clearly” satisfied that standard.  Especially given defendants’ lack of experience with intellectual property, and their lack of legal representation even before the TTAB proceedings began, their activity was petitioning activity.  While “[i]ndividuals who petition the government are not necessarily free to engage in gratuitous publication of the petition elsewhere without consequence,” the court saw “no hint” of gratuitous publication here.  Although defendants might have obtained some commercial benefit in connection with their cancellation attempt, given that their products are alternatives to Shire City’s product, there was also evidence that stores that replaced Shire City’s product with one from defendants initiated contact with them and not the other way around.  Given that the listing of alternative products didn’t go up until after Shire City sued, and that the Etsy shop is raising legal funds with products from various herbalists, “it is difficult to see how these commercial benefits could be considered evidence indicating Defendants’ statements are secretly designed to promote their own products or serve as cover for the real purpose of selling them.”
Even if defendants had commercial motivations, the initial anti-SLAPP inquiry is not on the motive, but on the accused conduct itself.  “Actions can have economic or commercial motives, or even be based entirely on economic self-interest, and still qualify as petitioning activities for purposes of the anti-SLAPP law.”  Here, the challenged conduct  was “at the very most, petitioning activities with some commercial effects,” not “commercial activities in and of themselves.” As the court pointed out, “[p]ublishing statements and organizing a boycott are quintessential petitioning activities.”
At that point, the burden shifted to Shire City to show that “(1) the moving party’s exercise of its right to petition was devoid of any reasonable factual support or any arguable basis in law and (2) the moving party’s acts caused actual injury to the responding party.” This it could not do.  Given defendants’ “genuine belief that the Fire Cider Mark is invalid and the fact that the trademark dispute will continue regardless of the outcome on this special motion to dismiss, it is clear that Defendants’ actions were not devoid of any reasonable factual support or any arguable basis in law.”

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