This isn’t a difficult case, but it represents the first
move towards applying Lexmark to
§43(a) in its entirety. Only time will
tell whether this will be an eBay v.
MercExchange-like change in the way trademark litigation works, or a
diversion.
Ahmed sued Hosting, Facebook, and some John Does for
infringement of the marks “The News International,” “the Jang,” and “Geo.” (These
marks apparently are in use in Pakistan by a company known as Jang.) Hosting and Facebook moved to dismiss. Ahmed claimed an interest due to trademark
applications filed by a company called Axact, but alleged no connection between
Axact and himself. When Jang learned of
Axact’s applications, Jang sued it in Pakistan, and the High Court of Sindh at
Karachi issued an injunction ordering Axact to refrain from trying to undermine
Jang’s trademarks; Jank also filed an application in the US for “The News
International.” Axact assigned its
applications to Ahmed; the PTO refused registration.
Obviously there was no standing to sue for infringement of a
registered mark. What about §43(a)? The
First Circuit has used a “reasonable interest” test, looking for some degree of
commercial injury to the plaintiff.
Ahmed lacked standing under this test.
He claimed damages to his business and goodwill, but failed to allege “specific
facts that establish any causal link between Hosting’s use of the mark and the
alleged injury.” He didn’t identify his
type of business or his products and services, or how they were adversely
affected by defendants’ use. Nor did he
allege his own use in commerce; the rejected trademark application wasn’t
enough to establish a protectable interest.
In the notable part of the holding, the court commented that
the Supreme Court “may have supplanted the reasonable interest test” in Lexmark.
Though the court acknowledged that the Supreme Court was interpreting
§43(a), it found it “unclear” whether the holding extended to §43(a)(1)(A)
false association claims. Fortunately,
it didn’t matter, since Ahmed failed to show standing under the Lexmark test too. (This reminds me of early cases applying eBay only in the alternative.) Lexmark
requires “a two-step process: a zone of interests inquiry and a proximate
cause analysis.” The zone of interests
covers those who “allege an injury to a commercial interest in reputation or
sales.” Proximate cause requires “economic or reputational injury” that isn’t “‘too
remote’ from the defendant’s unlawful conduct.”
Here, Ahmed’s allegation of damage to his business might “hint
at” a commercial interest, but there weren’t enough facts alleged that, if
true, would substantiate his assertions. A mere legal conclusion of injury wasn’t
enough in the absence of facts establishing either a commercial interest in the
mark or a commercial injury caused by the alleged infringement. (And here is
where Lexmark might have some bite,
depending on how it’s read: other plaintiffs may also have difficulty telling
the story of how confusion harms
them, even if it occurs.)
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