Trademarks Used in Blogs May Be “News Reporting” Exempt From Dilution Liability
An eBay “listing company” is an entity that is paid a fee to sell goods on consignment through the eBay auction Web site. Philip Smith had no use for eBay listing companies, especially one using the trademark BidZirk.
Smith was so unhappy with his BidZirk experience that he authored a critical four-part article on his blog titled “Special Report: You Gotta Be Berserk to Use an eBay Listing Company! The Whole Story.” Needless to say, BidZirk was not amused and sued Smith in South Carolina for trademark dilution, defamation and invasion of privacy. BidZirk moved for a preliminary injunction based upon its trademark dilution count to stop Smith’s continued publication of the critical blog articles.
Federal trademark dilution law is available only to owners of famous marks that are inherently distinctive (like EXXON or KODAK). An act of dilution is one that lessens the “distinctive quality of the mark.” There are three specific exemptions to dilution protection: (1) fair comparative commercial advertising or promotion; (2) “noncommercial use of a mark”; and (3) “all forms of news reporting and news commentary.”
A federal magistrate denied BidZirk’s motion for immediate injunctive relief on its trademark dilution claim based upon the exemption from liability for “all forms of news reporting and news commentary,” quoting from 15 U.S.C. § 1125(c). The magistrate’s ruling was appealed to a federal district judge, who confirmed the decision to deny immediate injunctive relief to BidZirk. BidZirk, LLC v. Smith, C.A. No. 6:06-00109-HMH-WMC, D.S.C., April 10, 2006.
In reaching its conclusion, the district court applied a “functional analysis” test that reviewed the content of the material posted by Smith rather than the format used to convey the message (a blog). After reviewing Smith’s article, the court was convinced that he had used the BidZirk trademark in the context of news reporting or news commentary because he was “conveying information” that relied upon his direct experience with BidZirk, dealt with both the positive and negative aspects of eBay listing companies, offered a checklist for using an eBay listing company and provided tips for selling items on eBay. The court noted that, “the fact that Smith reports negatively about his experience with BidZirk does not dictate that the article’s function was not news reporting or news commentary.”
The district court’s decision may have less impact on trademark dilution law than on First Amendment jurisprudence. Because bloggers and creators of similar non-traditional sources of information qualify as providers of news reporting or news commentary under the BidZirk “functional analysis” test, then it could be argued that those same sources of information and commentary are entitled to full First Amendment protection.
The court in BidZirk did not reach another factor that might have bolstered the denial of immediate injunctive relief: the Supreme Court has cast great doubt on whether the dilution statute addresses tarnishment or disparagement of the trademark of another. Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003). In BidZirk, Smith was not using a trademark to unfairly compete with BidZirk; instead, he was using the BidZirk trademark to report on his negative experience with the company. Therefore, if the federal dilution law does not reach tarnishment or disparagement, as strongly suggested by the Supreme Court in Moseley, then BidZirk’s federal dilution claim was subject to rejection on that basis as well.
Since the last chapter in BidZirk may not yet have been written (the matter could be appealed to a federal circuit court), we may not know if the BidZirk decision will withstand the test of time. But for the moment, non-traditional sources of news and information can take heart that they may qualify for both trademark dilution immunity and First Amendment protection.