In 2009, Aviva, an insurer, terminated Vazirani’s
authorization to sell the life insurance and annuity products of Aviva’s
issuing affiliates. Vazirani, feeling
ill-used, registered a number of domain names such as insideaviva.com,
aviva-exposed.com, avivauncovered.com, aviva-lawsuit.com, aviva-problems.com,
aviva-litigation.com, avivacomplaints.com, avivaplcsucks.com, and avivasucksusa.com. He used an altered version of Aviva’s website
trade dress. His website had sections
such as “Anil’s Background,” “Anil’s Case Against Aviva,” detailing his
lawsuits against Aviva; “Aviva’s Class Action Settlement,” linking to a
complaint alleging that Aviva deceptively marketed to elderly people; and “Tell
us your story about Aviva.”
The court first found that Vazirani didn’t engage in the
necessary use in connection with the sale of goods or services to sustain a
trademark claim. Such noncommercial use can’t create liability under either §32
or §43(a). “The distinction between
commercial and noncommercial use is particularly important in the context of
consumer or editorial criticism and commentary.” However, when criticism and unauthorized use
occur in connection with the sale of goods or services, a successful Lanham Act
claim is at least possible.
Comment: This doctrinal dance would be a lot simpler if the
courts admitted that this scenario only makes a false advertising claim potentially successful, where there’s a
false factual claim; it remains implausible that consumers would be confused by
unauthorized use of a trademark to criticize the owner. Thus, the court cites cases in which
competitors disparaged other competitors, even anonymously or in disguise, and
are found to have engaged in commercial speech.
Those cases—which seem to me plainly correct—do create a little bit of
trouble for Vazirani in that there’s a commercial element to his vitriol, but
the trouble shouldn’t be trademark-related. The court will eventually get around to this
in its nominative fair use analysis, but probably should have started there,
because its commercial use analysis sets up a defense for concealed
disparagement by a competitor. (Or
maybe, like Citizens United, the
courts are just going to create this workaround for Lanham Act claims by
allowing anonymous/pseudonymous touting/disparagement to escape the constraints
of false advertising law—but I sure hope not.)
Anyway, the court here says that this case is like Bosley.
There was no evidence that Vazirani offered any goods or services for
sale on the website, or linked to other sites that did. Nor did defendants ever attempt to sell the
site or domain names to anyone, including Aviva, for profit. Aviva’s argument that the website attempted
to inflict commercial harm on Aviva, and was thus commercial, contradicted 9th
Circuit precedent (and good sense).
But what about the fact that the website touted Vazirani’s
financial accomplishments and credentials as a seller of products that compete
with Aviva’s affiliates? This could lead
them to do business with him (and a quick search would reveal his website). Also, his avowed purpose was to get money
from Aviva through settling his lawsuit and get his contracts with Aviva
restored. (The problem here is that
Aviva has mixed an argument that should
matter with an argument that shouldn’t—wanting to get money from Aviva isn’t a
competitive purpose.)
The court disagreed.
There was no mention of Vazirani’s business website on the anti-Aviva
website. Thus, the court didn’t find it
credible that Vazirani was trying to drive business to his other website. And his demands for settlement etc. were no
different than those in the dispute in Bosley,
which also didn’t make a critical site into a commercial site. He didn’t try to hold Aviva’s trademarks
hostage; rather, he threatened to publicize information that he said would harm
Aviva’s reputation. His belief that he’d
been injured by Aviva and deserved restitution was the same as Kremer’s belief
that he’d been injured by Bosley Medical.
As to the argument that Vazirani was a competitor and that
the website promoted competing goods or services, the court was equally
unconvinced. For purposes of summary
judgment, the court accepted that the parties competed, though it wasn’t clear
that this was so (since they appear to operate at different parts of the
insurance chain) and anyway there were no references to competing products on
the anti-Aviva website. The only part of
the website that could “even remotely be considered relevant to this argument”
was in the “Anil’s Background” section:
I’m Anil Vazirani and by any measure
I’m one of the most successful financial advisers in America. I’m a “Top of the Table” member in the
prestigious Million Dollar Round Table, I was a 2004 Hall of Fame Inductee into
the Society of Senior Market Professionals, and I have been featured and interviewed
in leading industry publications. I’ve
been a member of the National Association of Insurance and Financial Advisors
for nearly two decades.
And “Anil’s Case Against Aviva” said, “For many years
Aviva’s products were among those I used to build diversified portfolios for my
clients.” The court concluded that “[t]o
interpret these statements as advertising goods or services that compete with
Aviva is not reasonable.” None were
identified on the website; at most there was an implication that Vazirani might
currently sell competing products. There
was no contact information or any other information that would allow a visitor
to determine whether this was true or how s/he might go about purchasing such products
from him. “To describe as attenuated
this path from the Website to any potential offers by Mr. Vazirani to sell
competing products is an understatement.”
Aviva argued that Vazirani sent out links to the website in
emails sent to “an audience of hundreds of thousands of life insurance and annuity
agents in the United States,” and thus some visitors would already be familiar
with Vazirani’s offerings. But Aviva
also argued that the emails were materially misleading in that they didn’t
reveal that they came from defendants.
(I don’t see how this matters to commerciality, as noted.) Anyway, it wasn’t clear whether such
recipients would be relevant consumers, since they compete with Vazirani. But, because the emails didn’t contain any
reference to or promotion of defendants’ products, the connection to
commerciality was at least as “roundabout” as that in Bosley.
Aviva argued that gripe sites run by competitors satisfy the
commercial use requirement. But in the
cited cases, HER, Inc. v. Re/Max First Choice, LLC, 468 F. Supp. 2d 964 (S.D. Ohio
2007) and Sunlight Saunas v. Sundance Saunas, 427 F. Supp. 2d 1032 (D. Kan.
2006), there was more evidence of self-promotion. In HER,
defendants directed consumers to their own website via email and rerouted
allegedly infringing domain names to their own site. In Sunlight
Saunas, which I have
criticized on
similar grounds, the court found that the defendants “had no apparent reason
to disparage [the plaintiff’s] products except to promote their own.” The court
also noted that the gripe site temporarily included direct links to competitors
and said that “other companies offer the same products without the fraudulent
claims.” By contrast, Vazirani’s website
didn’t link to sites offering competing products or promote any such
products. Nor did the domain names
reroute to other competing sites. All
the domain names went to the anti-Aviva site.
Quoting Bosley,
the court concluded, “Any harm to [Aviva] arises not from a competitor’s sale
of a similar product under [Aviva’s] mark, but from [Defendants’] criticism of
[Aviva].” Which is why this isn’t a
trademark case!
Though the court granted summary judgment on the
infringement claims based on this analysis, it went on to evaluate likely
confusion/nominative fair use, a slam dunk.
The only interesting part here is the trade dress bit. The court concluded that Vazirani’s use of
the trademark and the trade dress “was undoubtedly a nominative use—that is,
the mark was used to refer to Aviva and its products and services rather than
Defendants and their products and services.” Instead of being used to describe
Vazirani’s goods/services, Aviva’s marks were used to identify the target of
criticism. “[T]here is no clear way for
Defendants to convey their criticism for a specific entity, Aviva, without
naming that specific entity.” The third
factor was also easily satisfied, using an abbreviated likely confusion
analysis. “[T]he entire website is
concerned with criticizing Aviva and its business practices. Therefore, it is not reasonable to conclude
that Defendants have taken any actions that would suggest that Aviva supports
or endorses the Website or the associated domain names in any way.” (Of course, a better substitute for the confusion test, as the nominative fair use test
purports to be in the 9th Circuit, wouldn’t incorporate a likely confusion analysis, but here the quick look
makes the answer easy—and the other two elements of the test irrelevant—in the
same way that a true “does nothing else to suggest endorsement” defense would.)
The second factor was merely “a closer question,” even
though Vazirani imitated the Aviva website trade dress of a stylized blue font
on a yellow background with rays of light in the background:
In certain cases, such distinctive
stylizations might be considered more than is permitted under the Ninth
Circuit’s nominative fair use test. See
New Kids on the Block, 971 F.2d at 308 n.7 (“Thus, a soft drink competitor
would be entitled to compare its product to Coca-Cola or Coke, but would not be
entitled to use Coca-Cola’s distinctive lettering.”). Here, however, the
stylized logo and distinctive coloring were not used in a commercial or
competitive manner, but rather were used solely to identify Aviva as the object
of the Website’s criticism. Further,
Defendants embedded their own critical commentary within the logo, such that it
read “Aviva Uncovered The Sad Truth About Aviva’s Business Practices.”
Given that the purpose of nominative fair use is to address
the true likelihood of confusion caused by a certain type of use, and that Tabari specifically identified the
second factor as indirectly addressing the risk of confusion (“Consumers may
reasonably infer sponsorship or endorsement if a company uses . . . ‘more’ of a
mark than necessary.”), here the amount of the trade dress used was
reasonable. “In other words, Defendants’
use of the more distinctive colors and font, in light of the very obvious
negative commentary directed toward Aviva that is included in the logo, could
not reasonably lead to such confusion.”
So, nominative fair use.
On the one hand, obviously!
On the other, does nominative fair use advance the ball beyond (1) a
robust defense for expressive uses such as in Rogers and (2) strong protection for comparative advertising/criticism? Bill McGeveran has suggested that it doesn’t,
and (I am paraphrasing, and he might well not endorse this description) that
the weird role of quick-look confusion analysis in the practical application of
the test shows its incoherence. I see
what he’s saying, but I’m not sure there are less incoherent alternatives out there.
At some point we simply have to say: we are not interested
in making the defendant spend $100,000 on developing a summary judgment record;
on its face this is not the kind of activity likely to be found confusing, nor
should we encourage plaintiffs to roll the dice and hope they can suppress
critical speech on trademark grounds. As
in Wal-Mart, the error costs of
case-by-case analysis are greater than the error costs of a blanket rule. Speech that criticizes the trademark owner is
not actionable on trademark grounds; relief if any must be found in the law of
false advertising or, where that doesn’t apply, defamation/disparagement. Properly applied, nominative fair use can do
that work across many types of referential uses, and that’s at least a point in
its favor compared to having to figure out what to do with something like this,
which isn’t really comparative advertising but is kind of competitive.
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