Non-Commercial Web Site Criticizing Homebuilder Does Not Violate Trademark

Aug. 1, 2003

Non-Commercial Web Site Criticizing Homebuilder Does Not Violate Trademark

 

Appeals Court Should Reverse Prior Judgment on First Amendment Grounds, Reconsider Excessive Monetary Awards, Public Citizen Argues

WASHINGTON, D.C. – A decision by a Texas district court that bars an Internet user from naming a homebuilding company in the domain name of his Web site and requires him to pay $80,000 in statutory damages and attorney fees should be reversed, Public Citizen argued in a brief filed today in the United States Court of Appeals for the Fifth Circuit. Use of the company’s trademark is protected by the First Amendment because the site was wholly non-commercial.

The case involves Joseph Maxwell, a Houston-area software engineer who was unhappy about his dealings with an agent of TMI Inc., a company that builds houses under the trademark TrendMaker Homes. Maxwell created a non-commercial Internet gripe site at www.trendmakerhome.com. He chose not to add “sucks” onto the domain name because he felt that TMI was basically a good company with quality products, but had a complaint about one aspect of its business practices.

In February 2002, shortly after Maxwell’s one-year registration of the domain name had expired and he had taken the site down, TMI sent him a letter demanding that he give up the domain name and shut down his Web site. Because he felt the company’s demand and lawsuit were unsupportable, Maxwell registered a second domain name, www.trendmakerhome.info, which he intends to use for his Web site if he wins the case.

TMI alleged that Maxwell’s site violated the Lanham Act, which governs commercial speech, by violating its trademark and potentially confusing users who were looking for TMI’s actual site – www.trendmakerhomes.com. It also alleged he violated the Anti-cybersquatting Consumer Protection Act and state trademark law. In February 2003, the district court barred Maxwell from using 10 different TMI trademarks and ordered him to pay $80,000 in statutory damages and attorney fees.

The lower court erred in granting the company’s request because the statutes it relied on do not apply to non-commercial uses such as Maxwell’s. Maxwell had no intention to profit from the site, it contained no advertisements, and a banner on the site notified users that it was not TMI’s site. Further, under “fair use” principles, a speaker can use a trademark in the process of praising or criticizing the trademark holder. Courts also have held that a domain name – like the title of a book – can be used to describe the content or subject of a site, not just the source.

Even without considering the First Amendment issue, the appeals court should overturn the monetary awards, Public Citizen said in the brief. Maxwell was not given the opportunity to respond to TMI’s motion seeking attorney fees and statutory damages, which is a violation of due process. TMI did not demonstrate why attorney fees are justified, and the statutory damages were excessive, Public Citizen said.

“The district court took the side of a corporation against the free speech rights of an individual,” said Paul Alan Levy, an attorney with the Public Citizen Litigation Group, who represents Maxwell. “We’re involved in this case because we recognize the importance of the First Amendment and right to speak on the Internet. The appeals court should do the same.”

To view a copy of the brief, click here.

 

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