Trademark injury, irreparable harm, and statutory standing: what is going on?

Trial Lawyers College v. Gerry Spence Trial Lawyers College at Thunderhead Ranch, 23 F.4th 1262 (10^th Cir. 2022)

Mostly a TM case, with some interesting stuff going on. There are either two dueling boards or two separate entities at issue; the district court granted a preliminary injunction to some board members against co-members. The court of appeals held, among other things, that the district court was within its discretion to find irreparable injury and to enjoin certain representations, but abused its discretion as to ordering removal of certain sculptures (incorporating the claimed mark) from the contested facility where co-members conducted lawyer-training programs.

The Trial Lawyers College trains trial lawyers; its board splintered into two factions, known as the “Spence Group” and the “Sloan Group.” The Sloan Group is the plaintiff, alleging trademark infringement and related claims.

At the time of decision, pre-TMA, there was no presumption of irreparable injury. But the district court properly found a significant risk of harm that couldn’t “be compensated after the fact.” The logic of the presumption of injury reflects the difficulties of showing irreparable harm in trademark infringement cases; the district court could reasonably find irreparable harm from the Sloan Group’s evidence of efforts to “differentiate the College from competitors,” including “registration of trademarks, investment in branded merchandise, and restrictions on use of the College’s name when alumni give presentations,” plus evidence of likely confusion from the Spence Group’s ads referring to its own program as the “Trial Lawyers College,” displaying the College’s trademarks, sending mass emails to the “GerrySpenceTrialLawyersCollege@Thunderhead Ranch” listserv, identifying members of the Spence Group as the “Directors” of the College, and using a misleading signature that incorporates the College’s name.

This was enough to find a risk to the College’s reputation and goodwill. Though this harm could at least partially come from “the loss of valuable board members and the suspension of in-person programming because of a global pandemic,” that just made it difficult for the Sloan Group to quantify its harm, which is consistent with a finding of irreparable injury. Likewise, while a 10% drop in donations was quantifiable in money, it could also serve as evidence of irreparable harm—that “the Spence Group’s confusing statements and advertisements have undermined the distinctiveness of the College’s trademarks.” Likewise, although inquiries from alumni weren’t necessarily evidence of actual confusion, they could show likely confusion and support an irreparable harm finding.

However, the district court “went too far by requiring the Spence Group to remove two sculptures. The sculptures appeared at a ranch, owned by a member of the Spence Group, which the College had previously used for programs. The sculptures included a logo registered as (1) the cattle brand for the ranch and (2) the trademark of the College.” This was a mandatory injunction and not justified by the situation, given that training programs at the ranch were already suspended due to the pandemic; a prohibitory injunction “disallowing training programs at the ranch as long as the sculptures remained visible to attendees” would have been ok.

The district court also enjoined the Spence Group from purporting “definitively to be [the College]’s true Board unless and until such time as the state court makes a ruling to that effect” and using “linguistic plays on words or various terms associated with The Trial Lawyers College to create or cause confusion as to whether [the Spence Group] [is] acting as The Trial Lawyers College.”

This didn’t go beyond the Lanham Act’s scope, since it imposed “restrictions to prevent confusion over the entity owning the trademarks.”

One subsequent ruling: 

Trial Lawyers College v. Gerry Spence’s Trial Lawyers College at Thunderhead Ranch, 2022 WL 2718075, No. 1:20-cv-80-JMC (D. Wyo. Mar. 29, 2022)

Dealing with some counterclaims, notable for assumptions made about harm in the context of statutory standing that at least are in tension with claims in the irreparable harm context like those in the court of appeals opinion.

Two individual defendants, including Spence, counterclaimed against plaintiff and its board members. The counterclaims allege among other things that the counterclaim defendants tried to benefit from Defendant Spence’s name and likeness to promote “their ‘version’ of TLC,” including by using videos of him on a Facebook page seeking donations. They also allegedly solicited monetary donations purporting to preserve Spence’s “dream” and made false statements about his wishes, e.g., “Would Gerry Spence have let this happen?” [I note that strong evidence suggests that the answer is “yes.”] They alleged violations of the Lanham Act (false endorsement and false advertising) and misappropriation of name/likeness under state law.

After getting rid of individual counterclaim defendants on personal jurisdiction grounds, the court rejected the Lanham Act counterclaims on standing grounds.

Article III injury must be (1) a concrete and particularized injury-in-fact that is (2) fairly traceable to the challenged action and (3) likely to be redressed by a favorable decision. The false association/false advertising claims based on Spence’s name sufficiently alleged Article III injury for standing purposes by alleging the existence of confusion and reputational harm, even without further facts alleged “explaining how his reputation has suffered or detailing expenses they have supposedly incurred to dispel any myths.” This also sufficed to put the counterclaimants within the Lanham Act’s zone of interest.

Was this commercial speech? This is a mischaracterization—the real question is, was this “commercial advertising or promotion”? The court (understandably considering itself bound by bad Tenth Circuit precedent) confused the analysis by using the outdated-after-Lexmark version of the test that asks whether the parties were in commercial competition with each other, but that didn’t end up mattering either, since they plausibly were, given that “Defendants’ use of Plaintiff’s Mark for a different entity after all sparked this entire civil action.”

Arguments applicable to all Lanham Act claims: (1) Does the Lanham Act protect all uses of Spence’s name? Even without a registration, Spence’s name is protectable if it serves as a source identifier, which it plausibly does, given his alleged reputation for trial lawyer services.  ETW v. Jireh is not to the contrary—it didn’t refuse to protect Tiger Woods’ name. Also, that situation, where Woods asserted rights against a painter who depicted one of his victories, was “very much unlike the business dispute we have here, where two groups are essentially fighting over control of a business. Defendant Spence seemingly has more interest in protecting his name from competitors who offer the same type of services (lawyering skills) than a random artist who painted a portrait of him in the courtroom.” [An example of the practical merger of protectability and scope: this is part of the analysis that concludes that Spence alleged a protectable interest.]

Likely confusion: The court identified four sources of alleged confusion: (1) Plaintiff posted videos of Spence on its Facebook page; (2) it advertised with the cattle brand and falsely claimed a continued connection to Thunderhead Ranch; (3) its executive director listed her employer as “Gerry Spence Trial Lawyer’s College”; and (4) that it sent fundraising emails seeking monetary donations, expressing a desire to “preserv[e] Gerry Spence’s dream” and stating, “Would Gerry Spence have let this happen?”

Plaintiff argued that its uses weren’t false or misleading because of Spence’s long-time association with Plaintiff. “The Court agrees that Plaintiff’s continued use of the videos on Facebook neither misleads nor likely confuses consumers.” Spence founded Plaintiff and taught trial skills for Plaintiff, and the videos were created during that relationship. “No facts alleged show that Plaintiff’s use of Defendant Spence’s image in that context misleads or confuses the public or is likely to do so. Instead, the facts alleged show that the video identifies Defendant Spence’s actual association with Plaintiff as a past instructor.”

The other uses didn’t suffice because “Defendants have nowhere alleged how Defendant Spence, or his new trial university, has suffered from Plaintiff’s use of his name based on his past affiliation with Plaintiff.” Without such injury, there was no statutory standing (the court mistakenly characterizes this as part of the zone of interests inquiry, not the separate proximate cause inquiry). The counterclaimants didn’t allege facts showing that they suffered injury. Merely conclusorily alleging “actual damages and irreparable harm and damages” to “reputation” or expenses incurred to “dispel the myths [Plaintiff has] dispersed” were insufficient. “At bottom, Defendants plead such vague allegations regarding damages that we cannot infer a cause of action under the Lanham Act from their complaint.” Serious question: how does this standing reasoning match up with the presumption of irreparable harm from likely confusion under the TMA?

Likewise, the state-law claims for appropriation of name or likeness failed for want of sufficient allegations of injury. “The Restatement and other states who have recognized this tort … require the plaintiff prove damages he or she has suffered to state a claim upon which relief can be granted.”