Fifth Circuit Upholds Dismissal of HIV Denialist's Trademark Claim – But Will Fees Be Awarded?

by Paul Alan Levy

In a two-page per curiam ruling, the Fifth Circuit has affirmed the decision of Judge Sam Cummings of the Northern District of Texas to dismiss, on the face of the complaint, Lanham Act claims brought by Clark Baker and his “Office of Scientific and Medical Justice” against a blogger who created a critical web site about the plaintiffs' "HIV Innocence Project" using the domain names “hivinnocencegrouptruth.com” and “hivinnocenceprojecttruth.com.”  Although the appellate decision itself is not very illuminating, the fact that the court indicated that its reasoning was the same as that of the trial judge helps illuminate the ruling as well as reinforcing the important precedent that it set — that when a defamation plaintiff throws in a trademark claim to justify suing in federal court, as well as hoping to make the whole proceedings more intimidating to the defendant, it really is possible to get the case thrown out at the pleading stage.  

This possibility should give heart to bloggers and their hosts who want to use, indeed, need to use trademarked names. Because trademark litigation tends to be very expensive, being able to get out based on motion to dismiss is vital, especially if the lawyers are not working pro bono.

As I pointed out when I first blogged about this case, there are a variety of different grounds on which the trial judge could have dismissed the lawsuit without delving into to “likelihood of confusion” factors, including the First Amendment, fair use, noncommercial use and the like.   But there are so many court of appeals decisions that berate trial judges for not “discussing the factors” (despite a persuasive article by Barton Beebe arguing that courts use the factors in a highly results-oriented fashion, not to actually make their decisions), that Judge Cummings took the safe course by discussing the likelihood of confusion factors but plugging many of our other arguments into the analysis of one or another factor.

In that respect, his opinion is regrettable.  But because the Fifth Circuit’s opinion, albeit non-precedential, suggests that the Court approves Judge Cummings’ ruling, the order’s discussion of initial interest confusion and other issues contains many nuggets that lawyers in similar cases will want to mine.

Will the Unsuccessful Trademark Defendant Have to Pay the Blogger’s Attorney Fees?

Another part of the case remains to be decided on appeal, and it is the main reason why I took this case.  To be sure, this was a patent example of trademark bullying.  But the precedents protecting non-commercial critics who use trademark in the domain names of their critical web sites is so well-established, in the Fifth Circuit (in one of our own cases, indeed) as well as in other circuits (for example, here, here, and here), that the case did not seem likely to set an important new precedent on the merits of such trademark claims.  But I have been concerned about the fact that some circuits, the Fifth Circuit among them, set a standard for awarding attorney fees for winning trademark defendants -- demanding a showing of bad faith by clear and convincing evidence.  There is wide-ranging agreement among the various circuits about just what standard should govern trademark attorney fees awards.  Our long-standing argument has been that, when a trademark theory is used to try to shut down an expressive use, groundlessness of the claim should alone be sufficient to treat the claim as "exceptional."

My main reason for signing onto the team defending the blogger, apart from its mention in a Popehat Signal, was that it would be a good test case in the Fifth Circuit, and indeed the Supreme Court if need be, to establish the right standard for awarding attorney fees for successful trademark defendants. 

That task became easier while the case was pending in the trial court because the Supreme Court decided in Octane Fitness v. Icon Health and Fitness that the Court of Appeals for the Federal Circuit has wrongfully applied a ‘bad faith shown by clear and convincing evidence” standard to decide whether a defendant who succeeded in defeating a patent claim could be awarded attorney fees.   The Supreme Court indicated that the groundlessness of a lawsuit can be sufficient, all by itself, to warrant an award of attorney fees on the ground that the patent suit was an "exceptional case."

In our brief to the Fifth Circuit on the fees issue, we argue that because the Lanham Act and Patent Act both allow awards of fees in “exceptional” cases, and because a variety of other aids to statutory construction suggest that the standards for fees under the Lanham Act should follow patent-law precedent, the court ought to take Octane Fitness as its new governing standard for trademark cases.  We also argue that the fact that the complaint could have been dismissed on several different grounds supports a conclusion that the lawsuit was sufficiently lacking in merit to warrant an award of attorney fees without considering the evidence that plaintiffs were using the litigation to pursue the improper purpose of intimidating a critic and using discovery to pursue some pretty wild conspiracy theories.

Comments

[Ade Bayo]

Well said!