Ninth Circuit rejects “disparagement of trademark” claim

The Freecycle Network, Inc. v. Oey, — F.3d —-, 2007 WL 2781902 (9th Cir. September 26, 2007)

“Freecycling” is a collaborative online effort of people working to share and trade items they no longer want. The Freecycle Network is at the forefront of these efforts, providing a website that facilitates the exchange of information and the subsequent exchange of stuff. Read more about the organization in the group’s Wikipedia entry.

Tim Oey was one of the early forces of the Freecycle Network. At first he encouraged the group to take seriously what rights it may have in the word “freecycle.” Some time later he changed his mind, and began advocating online, through message boards and other fora, that the term should be left to the public domain. The Freecyle Network disagreed with this approach, and ultimately sued Oey for infringement and “defamation of trademark” under Section 43(a) of the Lanham Act.

The district court entered a preliminary injunction against Oey. But Oey sought review with the Ninth Circuit, which reversed.

The court provided three reasons why the Freecycling Network’s claim for trademark infringement failed. First, Oey’s conduct did not constitute a “use” of the mark in commerce, as the record in the case did not indicate they were made to promote any competing service or reap any commercial benefit whatsoever. Rather, Oey simply expressed an opinion that the plaintiff lacked trademark rights in the term “freecycle” and encouraged like-minded individuals to continue to use the term in its generic sense and to inform the USPTO of their opinions.

Second, even if Oey’s statements could somehow have been construed to be a “use in commerce,” that use was not likely to cause confusion, mistake, or deceive anyone as to the connection of Oey’s services (or any other) with those of the plaintiff.

Finally, Oey’s statements did not satisfy the requirements for false advertising, misrepresentation, or unfair competition under § 1125(a)(1)(B). There was no evidence that Oey’s statements were made in “commercial advertising or promotion.” And, even if such evidence existed, § 43(a) creates liability only for product disparagement — i.e., misrepresentation of “the nature, characteristics, qualities, or geographic origin” of “another person’s goods, services, or commercial activities.” In this case, the plaintiff did not allege or show that Oey made any statements disparaging its goods or services. Instead, he merely talked about the nature of the mark itself. Indeed, many of his remarks were aimed at ensuring the ongoing success of the plaintiff’s organization and its services.

As for the claim of “trademark disparagement,” the court held that no such cause of action existed under the Lanham Act. It further held that even if trademark disparagement were a viable claim under the law, Oey’s conduct did not satisfy the elements of such a tort that the Freecycling Network asserted. The statements were not “false.” At worst, Oey offered an erroneous legal opinion (by a layperson) that the Freecycle Network lacked trademark rights in the term “Freecycle.” But under the Lanham Act, statements of opinion are not generally actionable.

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