court refuses to dismiss TM claims against NRA's former PR agency

National Rifle Ass’n v. Ackerman McQueen, Inc., 2020 WL 5526548, No. 19-CV-2074-G (N.D. Tex. Sept. 14, 2020)

The NRA sued AMc, an advertising and PR agency, for various claims arising from the parties’ now-terminated relationship and Ackerman’s statements about the relationship; the court granted in part and denied in part a motion to dismiss. The temptation is to say "Go it, husband! Go it, bear!" but the NRA's expansive claims are pretty worrisome from a "people are allowed to truthfully describe their own activities" perspective, so.

The NRA used AMc’s services from “at least the 1980s” until 2019, when the last of their agreements ended. AMc’s services included “public relations and strategic marketing; planning and placement of media; management of digital media and websites; and the management of NRATV, a digital-media platform frequently perceived by the public as the ‘voice’ of the NRA.”

Despite the termination of the services agreement, AMc’s website allegedly continues to “prominently feature[ ] unauthorized and unlicensed NRA-owned photos and reference[ ]...the NRA with greater frequency than any other AMc client.” The NRA alleged: (1) false association under the Lanham Act (2) copyright infringement.; (3) conversion; (4) fraud; (5) breach of fiduciary duties; (6) conspiracy to commit fraud and extortion; (7) breach of the fiduciary duty of loyalty; and (8) breach of contract.

Defendants counterclaimed and moved to dismiss (though not on the claim for breach of contract).

Consistent with the lack of weight that many courts give to historical facts in trademark contexts, the court denied the motion as to the false association claim.  “The crux of the NRA’s false association claim is that AMc’s continued display of the name NRA and the NRA’s ‘intellectual property on AMc’s website provides a strong inference that wrongly suggests to the public—and creates consumer and customer confusion—that the NRA presently endorses the services that AMc provides and that the NRA is currently AMc[’s] client.’”

Rather than explicitly arguing Dastar and First Amendment/nominative fair use, defendants argued that the NRA hadn’t alleged Lexmark standing or identified any false or misleading content on AMc’s website. The NRA properly alleged that it was within the Lanham Act’s zone of interests: its alleged injuries fell within two of the Lanham Act’s enumerated purposes: the purpose to “mak[e] actionable the deceptive and misleading use of marks in” commerce within the control of Congress, and the purpose “to prevent fraud and deception...by the use of reproductions...or colorable imitations of registered marks.”

The complaint “provides a laundry list of instances in which AMc’s website references or lists the marks NRA and NRATV, including a total of fifteen references to the NRA and NRATV under headings entitled ‘Gallery’ and ‘Clients.’” This allegedly confused the the public about whether the NRA remains an AMc client and endorses the services provided by AMc.”

Likewise, the NRA properly alleged proximate cause. “This perceived association between the NRA and AMc, the NRA argues, is harmful to the NRA’s reputation, diminishes the value of the NRA’s trademarks, and causes the NRA to lose out on royalties.” That was enough on a motion to dismiss.

And the NRA sufficiently pleaded misleadingness. It alleged that “AMc continues to depict numerous photographs on AMc’s website that contain the words ‘National Rifle Association’ written across the bottom.” AMc, after suit was filed, altered the legends on these photographs such that they now read “National Rifle Association (Legacy).” That might ultimately suffice, but the NRA properly pled that the references to the NRA were misleading, since misleadingness is a fact-specific inquiry “best left for decision after discovery.”

Copyright infringement: The NRA failed to register the photos before suing, so the claim was dismissed without leave to amend.

Conversion: This claim was based on defendants’ continued use of and failure to remove various “creative works and intellectual property” from AMc’s website, apparently meaning the same photos. Texas conversion law covers only physical property, and even if Virginia law applied (as the NRA argued because its HQ is in Virginia) its claim was preempted by the Copyright Act.

Fraud/conspiracy: the allegations here aren’t IP-related; the claims were dismissed for failure to plead with particularity. Breach of fiduciary duty claims also weren’t sufficiently pled against the individual defendants.