InsideCounsel » February 2008
Critical Response
Corporations turn to trademark law to silence online critics.
Disgruntled customers are a fact of life, even for the best-run businesses. And Philip Smith was definitely disgruntled.
Smith ran a small business in Greenville, S.C., supplying parts and service for a variety of Apple products. He hired a local company, Bidzirk, to sell a lot of computer inventory on eBay and deliver some items he had already sold.
However, Smith wasn’t happy with Bidzirk’s performance and in late 2005 posted a four-part article on his Web site titled “Special Report: You Gotta Be Berserk to Use an eBay Listing Company! The Whole Story.” The article detailed his problems with Bidzirk, as illustrative of the shortcomings of eBay listing companies.
According to Smith’s article, Bidzirk listed items on eBay “slowly, not at all, or with really overdone descriptions that focused too much on technical detail and pictorial content and not enough value to the buyer and what the bidder could actually do with the items.”
The company supposedly failed to watermark its online pictures of Smith’s merchandise, and so “some people were selling identical [merchandise] with the pictures Bidzirk was taking.” Bidzirk supposedly sold the merchandise at prices that were “far lower than average eBay auctions,” thus generating far less revenue than Smith had expected. And after the merchandise was sold, Bidzirk was “slow” to pay Smith his share, the article stated.
Bidzirk was unhappy with the article and took legal action. Because Smith’s online article used Bidzirk’s name and logo without authorization, the company sued Smith in January 2006 for, among other things, trademark infringement.
According to Eric Goldman, who teaches IP law at Santa Clara University School of Law, using trademark law to suppress online criticism is not always successful because courts are becoming less friendly to such lawsuits.
In addition, attempts to suppress online criticism can actually backfire
by calling unwanted attention to the critic’s site. When dealing with online gripes, “businesses have to tread very carefully,” warns Steven Wadyka Jr., a trademark litigator in the Washington, D.C., office of Greenberg Traurig.
Selling It
When a company sues an online critic for trademark infringement, it must prove that the Web site the defendant is using is somehow connected with the sale of goods or services. Under federal law, infringement occurs only if a defendant uses the mark in
commerce. “The traditional test is whether a defendant is trying to do some commercial business on the Web site, but some courts have been more aggressive in finding a use in commerce,” says Robert Zelnick, an IP attorney in the Washington, D.C., office of McDermott Will & Emery.
Just linking to a commercial Web site may suffice. A plaintiff also must prove that the defendant used the mark in a way that is likely to confuse at least a small percentage of the plaintiff’s potential consumers into wondering, for example, whether or not the plaintiff has endorsed or sponsored the comments on the defendant’s Web site.
