Bad definition of suggestiveness in a sad TM case about anti-hate groups

Life After Hate, Inc. v. Free Radicals Project, Inc., 2019 WL 4825072, No. 18 C 6967 (N.D. Ill Sept. 30, 2019)

“At a time when people—particularly young people—are being radicalized online with alarming frequency, nonprofit organizations like Life After Hate and Free Radicals Project provide critical outreach services to help individuals disengage from violence-based extremism. Unfortunately, these two organizations now find themselves in an ugly trademark dispute that can only distract them from the important work they perform.”  LAH sued Christian Picciolini (formerly high ranking at LAH) and his Free Radicals Project for infringement of the mark ExitUSA and a related slogan.  LAH secured a preliminary injunction limiting defendants to fair use of the mark to describe Picciolini’s former work. 

In the process, the court demonstrates that judicial misunderstanding of the standard for descriptiveness versus suggestiveness continues to grow—here it is in the Seventh Circuit.  It probably wouldn’t change the outcome here (though note the description of the parties’ services below), but it’s a bad idea to state the standard as “a suggestive mark requires some imagination to guess the goods/services covered.”  The correct standard, as applied by the PTO, is that a suggestive mark requires imagination to link with the goods/services, knowing the goods/services.  Otherwise QUICK is suggestive for food delivery, printing services, and anything else one might want done quickly.

LAH is an Illinois nonprofit “that follows the model of ‘exit’ programs developed in Europe in the 1990’s to help individuals exit hate groups through education, interventions, academic research, and outreach.” Picciolini helped found LAH in 2009 and left the organization in 2017. In 2018, Picciolini founded Free Radicals Project.

In 2011, LAH’s principals formed a nonprofit.  When one of the founders left LAH, Picciolini informed him that “the assets of LAH and KNW [a LAH program, Kindness not Weakness] belong to the organization,” including “the Youtube and your arno@lifeafterhate.org email address.” Picciolini told him “[w]e’ll need the youtube account back, as well as the KNW twitter credentials.” Picciolini said that LAH needed the YouTube account because “the domain is the organization’s and belongs to us,” and the former founder keeping the account for himself “will be confusing.” He also told the departing founder to turn over access to “all LAH and KNW associated domains” to Picciolini’s GoDaddy account.

In 2014, another principal traveled to Europe and met with a number of “Exit”-branded groups, including Exit Sweden, Exit Germany, Exit Norway, Exit U.K., and Exit Slovakia, that provide similar disengagement and deradicalization services in their respective countries. He decided that LAH should start calling itself “ExitUSA” to more accurately convey the outreach services it was offering and improve its recognition among peer organizations in Europe. LAH began doing business as “ExitUSA,” which became a “program” of LAH. They developed a logo for ExitUSA, a new logo for LAH, and the tagline “No Judgment. Just Help.” The logos were based on Picciolini’s designs. Picciolini said he bought www.ExitUSA.org with his personal funds and was later reimbursed by LAH. The domain was transferred to LAH’s GoDaddy account, which lists Picciolini as the administrator. He also created an “ExitUSA” YouTube channel.

Eventually, conflicts between the principals led to Picciolini’s exit; first he proposed that LAH “spin off” ExitUSA to be run as a separate nonprofit led by Picciolini, but that didn’t happen, though he did resign from LAH’s board and just served as a director of ExitUSA for some time. He was terminated in 2017; again LAH rejected his idea of a “spin off” to avoid “confus[ing] people and rais[ing] questions.” LAH declined in part because ExitUSA was such a “significant part” of LAH and was “associated with [LAH’s] identity.”

Shortly thereafter, LAH’s members learned that they could not control or access the ExitUSA.org domain, which began automatically redirecting users to a different webpage— ChristianPicciolini.com/ExitUSA, which featured ExitUSA logos and slogans, along with Picciolini’s photo and posts about his books. LAH also learned that it could not access the Twitter account @ExitUSATeam, which it had been previously using, or the ExitUSA Youtube channel, which was “attached to [Picciolini’s] email.” Picciolini registered the domain “Exit.us.”  

In 2018, Picciolini started an Illinois nonprofit called Free Radicals Project that used the phrases “No Judgment. Just Help.” and “Free Radicals: There is life after hate.” Four videos created primarily by Picciolini as part of a grant LAH received, which had been posted on the ExitUSA YouTube channel were also posted on the Free Radicals Project site. At some point, ExitUSA.org began automatically redirecting users to a website for Free Radicals Project. The description of the @ExitUSATeam Twitter handle was changed to “ExitUSA (now @FreeRadicalsOrg),” inviting users to visit the @FreeRadicalsOrg Twitter page.

Various people in the industry asked “what was happening with Life After Hate,” “what was happening with...[Exit]USA,” etc. A journalist asked if LAH controlled ExitUSA or if Picciolini did, or if LAH and Picciolini controlled it as partners. [Note that some courts would interpret similar evidence as consumer understanding that there’s uncertainty, rather than consumer confusion.]

LAH retained a lawyer and applied to register “EXITUSA” and “LIFE AFTER HATE,” which were registered in 2018 with a 2017 priority date. It sent a C&D demanding that Picciolini stop using the “ExitUSA” and “Life After Hate” marks; Picciolini then filed a trademark application for “EXITUSA,” which was eventually abandoned. LAH’s officers also tried to reclaim the ExitUSA.org domain through GoDaddy and Google. After the registration, LAH applied to an organization that connects non-profit groups with law firms providing pro bono legal assistance, but after five or six weeks, it learned that it wasn’t selected for services. LAH couldn’t afford the fees of the first lawyer it used. It finally retained counsel in September 2018, and filed suit October 17, 2018.

Around November 2018, the ExitUSA.org domain stopped redirecting to Picciolini’s website; in January 2019, Picciolini stopped using the @ExitUSATeam Twitter account; and in February 2019, the ExitUSA YouTube channel was disabled. Picciolini and Free Radicals Project still allegedly used the “No Judgment. Just Help.” and “Life After Hate” phrases on the Free Radicals Project website and posted links to the four videos LAH produced.

Defendants tried to rebut the presumption of validity for the registered marks, arguing that “Life After Hate” merely describes LAH’s services: namely, helping people with their life after leaving a hate group. The court disagreed, first because of infrequent use of the term by similar organizations in the US. Second, and here’s the wrong part, “[u]nderstanding exactly what services ‘Life After Hate’ provides requires a leap of imagination.” It wasn’t readily apparent that it helped people after they left hate groups, and anyway LAH provided other services (another wrong turn: QWIK PRINT is descriptive for a print store that also sales copy paper and other office supplies, because the term describes one service it provides). Since “a consumer would need to use their imagination to determine the nature of services provided by an organization called Life After Hate,” it was suggestive.  

The same test also deemed ExitUSA suggestive, though a closer call. Defendants noted the existence of other geographic “Exit” groups and argued that “USA” was merely a geographic designation and “exit” merely a type of group. But the record didn’t show that the use of “exit” was so widespread in the US as to make it descriptive or generic.  Likewise, “ExitUSA” didn’t immediately convey “disengagement and deradicalization services.” It “literally sounds like a group that helps people exit the United States—not a group that helps people in the United States exit extremist hate groups. It takes a degree of thought and imagination to make that leap.” 

Finally, “No Judgment. Just Help.” was similarly suggestive because it didn’t immediately convey any ideas, characteristics, or qualities about LAH’s services. (That’s just not true, though—it immediately conveys that the providers won’t judge you—it just doesn’t say what they won’t judge you for, which is the QUICK issue.) And anyway only two parties used it, indicating that the phrase was suggestive.

Sadly, all of this could easily have been done with “descriptive plus secondary meaning,” which the court later says exists.

After that, ownership and likely confusion were mostly not particularly interesting analyses.  One point of note is consumer care:

[I]n this context, the price (or lack thereof) of the services is much less important than the nature of the services. As LAH’s own witness testified, “providing private and confidential services is really the basis of the trust we’re establishing with the people we serve...The people we’re trying to help are already very paranoid and afraid and skittish. They’re trying to hide the idea that they’re trying to change.” … LAH’s services are sensitive, private, and required LAH to establish trust with its clients. This testimony makes clear that consumers of these services are likely to exercise a high degree of care when choosing a service provider. This factor weighs in Defendants’ favor.

The court also deemed three instances of industry people asking what was up to weigh “heavily” against defendants as instances of actual confusion.

In a fairly weird description of the standard for a preliminary injunction, the court found that LAH had a “greater than negligible chance” of showing that it owned valid marks and of showing a likelihood of confusion, resulting in a “good chance” of succeeding on the merits.  Of course, the preliminary injunction standard isn’t math, but “greater than negligible” is really not the standard for likely success on the merits. Clearly that’s just underselling the evidence in this case (the court then says “[i]ndeed, [given the factors,] LAH has a strong likelihood of succeeding”), but it’s still weird.

The court then presumed irreparable injury, despite eBay. Delay can rebut the presumption. Here, LAH learned in August 2017 that ExitUSA.org was automatically redirecting users to ChristianPicciolini.com/ExitUSA, which featured ExitUSA logos and slogans, but it didn’t sue for 14 months. This was again a close call, but here the delay wasn’t too long given LAH’s explanations for the delay. It quickly hired an attorney to help it submit applications to the USPTO, hired another attorney who sent Picciolini a C&D, and attempted to regain control of the ExitUSA.org domain. “More time passed while LAH waited on the results of its USPTO applications and found a third set of attorneys to assist it in bringing its claims, but once it secured new counsel, it promptly brought this suit. Though 14 months is certainly pushing the limit, LAH demonstrated that it was making good faith efforts during that time to investigate and prosecute its trademark rights.” Given the C&D, defendants couldn’t have been lulled into a false sense of security.  (This seems to conflate laches and delay that rebuts a presumption of irreparable harm for purposes of preliminary relief, but it is taken directly from prior cases.)

Defendants argued that an injunction would damage Picciolini’s goodwill and reputation in the anti-extremism community, but that was speculative.

The injunction prohibited use of “LIFE AFTER HATE,” and/or “EXITUSA,” or “No Judgment. Just Help.” (or any variation thereof) “in connection with any goods or services online or offline.” For exitusa.org, defendants could do nothing with it but create a landing page that states: “For those seeking Life After Hate, Inc., please go to www.lifeafterhate.org/exitusa” (though it’s not clear they have to do so); they also couldn’t use the Twitter handle/account or YouTube channels. They couldn’t use LAH videos without a disclaimer conspicuously stating “This video is owned by and is used with the permission of Life After Hate, Inc. Free Radicals Project, Inc. is not in any way affiliated with Life After Hate, Inc.” 

Despite the language of total prohibition that leads off the injunction, they couldn’t use or permit the relevant phrases “on any website or social media account, except for in the limited, fair use manner that sufficiently limits and/or dispels any likelihood of confusion (e.g., Defendants may state in Picciolini’s biography that he co-founded Life After Hate, Inc., but he must also explicitly state that he 'no longer works for and is no longer affiliated with "Life After Hate, Inc." or "ExitUSA."’).” Can he say these things offline under the terms of the injunction? I think he has a First Amendment right to do so. The last part of the injunction suggests that he can by saying that, if defendants mention “Life After Hate” or “ExitUSA,” “they shall explicitly communicate that Defendants are no longer associated with or affiliated with Life After Hate, Inc. or ExitUSA.”