using an ITU to get non-Amazon platforms to take down competitors

Jones v. Hollywood Unlocked, Inc., No.: 2:21-cv-07929-MEMF(PVCx), 2022 WL 18674459 (C.D. Cal. Nov. 22, 2022)

This is a super messy case with a lot going on; I’m going to blog about it mainly to highlight a new thing you can apparently do with a trademark application, which is use it on non-Amazon platforms to gain advantages.

Jones is “a social media influencer, media personality, and celebrity gossip blogger.” Defendant Johnson is “a media personality and the founder, editor-in-chief, and CEO of the celebrity gossip website Hollywood Unlocked.” The Bigo defendants operate a social network and video platform, Bigo Live. There’s also a law firm involved (the Pilson defendants).

Jones, performing under the name “Tae the Mahne Tea,” allegedly rose to popularity through his celebrity gossip broadcast, The Mahne Tea, which is streamed on Bigo Live. He alleged that he had nearly two million followers becoming “one of [Bigo Live’s] most popular artists,” and he monetized this status.

The Hollywood Unlocked Defendants allegedly made various defamatory statements about Jones and filed an application with the PTO for the “Mahne Tea” mark. The court says the PTO “granted” the application on June 14, 2021, but that’s the filing date—the ITU application was published for opposition in April 2022, allowed June 2022, and an extension of time to file a statement of use has been granted as of this writing.

Using the pending trademark application, in June 2021, Johnson submitted a complaint to Twitter alleging that Jones violated the platform’s trademark policy by using The Mahne Tea on his Twitter page, and Twitter suspended Jones’s account. The Hollywood Unlocked Defendants allegedly informed Jones that they would surrender the Mark and drop the Twitter complaint in exchange for $100,000. Jones refused and the account remains suspended. Similar shenanigans allegedly occurred on Bigo, and Jones was allegedly subsequently suspended from Bigo Live for three days.

Skipping a bunch of stuff, the big picture is that the US just doesn’t have a good system for abuse of IP rights.

Tortious interference: Jones did allege the existence of a business relationship between the plaintiff and a third-party, with the prospect of a future economic benefit to the plaintiff. He also alleged that the Hollywood Unlocked defendants had knowledge of his relationship with Bigo. And he alleged that those defendants’ intentional acts disrupted Jones’s relationship with his Bigo Live followers. But he failed to sufficiently allege economic harm—he needed to allege whether he planned to or ordinarily would have held a Bigo Live broadcast on those three days, or otherwise generated revenue.

Presumably he could fix this with more pleading, but he also didn’t plead an independently wrongful act, as required for tortious interference. The complaint linked the following allegations to the tortious interference: (1) trademark infringement and related extortion, and (2) defamation per se and trade libel/business disparagement.

But (see below) Jones didn’t plead trademark infringement [would fraud on the PTO have worked? I kind of think it ought to have done so]. And the court couldn’t at present determine whether (2) was wrongful given disputes that required discovery, so they couldn’t serve as the wrongful acts. [I don’t get this—procedurally, doesn’t that mean the court should wait to resolve this as well?]

Fraud [not, apparently, pled as fraud on the PTO but argued that way]: “Fraud in procuring a mark occurs when an applicant knowingly makes false, material representations of fact in connection with an application.” “[T]he burden of proving that a party fraudulently procured a trademark registration is heavy.” [Though of course that’s for an issued registration; nonetheless this really would be suited for a petition to cancel—the problem Jones faces is that while we’re waiting for the statement of use, if it ever comes, there doesn’t seem to be anything he can do at the PTO.]

The court notes that there’s no presumption of validity, recognizing that there is in fact no registration, but then quotes the standard for filing use-based registrations, highlighting courts’ general lack of knowledge about registration. The court held that Jones didn’t plead a false representation regarding a material fact. He alleged that defendants “falsely claimed [Hollywood Unlocked] owned and used the [Mark]” and that this representation was “made in writing and communicated over the internet to the USPTO.”

But the complaint contains no allegations indicating that the Hollywood Unlocked Defendants did not use the Mark. Thus, a statement in the trademark application disclosing that the Hollywood Unlocked Defendants did use the Mark is not necessarily false. Indeed, if anything, the Hollywood Unlocked Defendants are simply junior users of the Mark.

This is … bad. It was an ITU! There was no such statement! The problem is not about defendants’ use, which was not required—the problem is the separate required statement saying that, to the best of their knowledge, nobody else has a superior right. (“[T]o the best of the verifier’s knowledge and belief, no other person has the right to use such mark in commerce either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods of such other person, to cause confusion, or to cause mistake, or to deceive ….”) That’s what was allegedly false, especially when they immediately used the filed application to target him on Twitter and Bigo, clearly contemplating that the marks couldn’t coexist without confusion.

Anyway, the trademark infringement claim wasn’t plausibly pleaded, because Jones didn’t have statutory standing (an argument the court raised on its own motion, which I’m not sure is right for non-Article III standing but ok).

Although Jones was within the zone of interests of the Lanham Act by virtue of his alleged ownership of an unregistered mark, he didn’t allege proximate cause. And this gets weird: “While Jones may have alleged that he is personally engaged in interstate commerce, the Complaint fails to show that the Hollywood Unlocked Defendants, in registering the Mark, were similarly engaged in interstate commerce.” “Use in commerce” “requires that the defendant ‘use ... a famous or distinctive mark to sell goods [or services] other than those produced or authorized by the mark’s owner.’” Alleging that the Hollywood Unlocked defendants, “citing their pending trademark application,” had Jones suspended from Twitter and Bigo Live was insufficient to allege use of the mark in the course of selling any goods or services.

[According to this dismissal, Jones didn't plead that defendants used the mark--so no infringement--but he also didn't plead that they didn't use the mark--so no fraud.]

Even without standing, Jones failed to state a claim for false association or false advertising. He failed to allege a “valid, protectable trademark.” He didn’t allege where his putative mark fell on the Abercrombie spectrum, merely alleging that it “was distinctive and used to identify [Jones] to his followers.” “Such conclusory allegations are insufficient to survive a motion to dismiss.” [OK, but isn’t inherent distinctiveness a question of law? Also, the complaint actually contains a lot more about his use to identify himself to his followers, which I haven’t discussed and which is ordinarily accepted as trademark use—I think this opinion is good evidence that trademark law has a lot of concepts that aren’t transparent to non-TM lawyers.]

He also didn’t state a claim for false advertising, because he didn’t allege any “false statements about any product owned or produced by Jones.” [This at least could have been maybe plausible under a Dastar/Sybersound analysis.]