*On Nov. 26, 2007, the U.S. District Court in Orlando dismissed this case due to lack of jurisdiction.

READ the court's decision.

May 24, 2007

Infomercial Investment Software Company Cannot Silence Criticism of Its Products on the Internet Under First Amendment, Public Citizen Says

Company Cannot Use Trademark Law to Squelch Web Reviews of Infomercial Products

WASHINGTON, D.C. – A company that markets controversial investment software products through television infomercials cannot suppress criticism of those products on the Internet, the consumer group Public Citizen told a Florida court.

Public Citizen, along with local counsel Robert W. Murphy in Florida, filed a brief late Wednesday in the U.S. District Court for the Middle District of Florida, Orlando Division. They are defending Arizona resident Justin Leonard against a lawsuit filed by affiliated companies Dynetech Corporation and GlobalTec Solutions, LLP. The Dallas-based GlobalTec and its Orlando-based parent company Dynetech claim that Leonard infringed their trademarks by featuring online reviews of their products on his consumer-oriented Web sites. Public Citizen has asked the court to dismiss the complaint because Leonard’s mention of the companies’ products on his Web sites is protected by the First Amendment, because Leonard has not violated trademark or other laws and because the court has no jurisdiction over Leonard in Florida.

Leonard is the creator and operator of the sites InfomercialRatings.com and InfomercialScams.com, where users can read and post reviews of infomercial products. His sites are widely read and have been featured in papers such as The New York Times and on influential consumer-information Web sites.

Dynetech and GlobalTec sell financial products and services through television infomercials. The companies sued Leonard on Jan. 24 seeking damages and attorneys’ fees, as well as a court order prohibiting Leonard from using the names of GlobalTec’s Wizetrade and 4X Made Easy software on his Web sites.

GlobalTec’s software is marketed for purposes of day trading on the stock market and on foreign currency exchanges. It purports to indicate, with the use of red or green lights, whether an investment is likely to increase or decrease in value over the next several minutes, days or over longer periods of time. GlobalTec’s trademarked product names are used on Leonard’s Web sites only to identify the subject matter of relevant consumer reviews, many of which are highly critical of the companies’ products. 

“Through this lawsuit, GlobalTec is attempting to use trademark and unfair competition laws to silence unwanted criticism about its controversial products,” said Deepak Gupta, an attorney with Public Citizen. “Using this logic, any company dissatisfied with a bad review of its products or services – whether in a Web site, printed newspaper or magazine – could bring an infringement action to keep it from being published.”

“Because removing GlobalTec’s trademarks from the Web sites would make it impossible for consumers to find the product reviews posted there, doing so would subvert Florida’s law, which is intended to protect consumers,” said Murphy. “Instead, the law would be turned into a tool for companies to conceal consumer complaints.”

To read the brief, click here.