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by on November 21, 2011 6 Comments

But they’re using my trademark in the domain!

 

Story of Mark Trader

Mark Trader makes the investment to protect his company name and logo.  He retains an attorney in his local area, he spends a few bucks and soon becomes the owner the mark: “EZ BREEZY.”  EZ Breezy is a company he started that specializes in selling unique outdoor gear for men.  They sell camping gear, hunting and fishing equipment and all things manly outside.  It’s sort of like a Man Cave meets Pampered Chef concept.  He launches his business and within two months, one of his distributors calls, seemingly out of breath, and says, “There’s a site that says we’re a SCAM!  When our prospects google ‘EZ BREEZY’ after our presentations, the number one result is EZBREEZYSCAM.com and the owner of the site is trashing us!  What are we going to do!?”

Mark Trader reassures his distributor and says, “Let your trusted leader handle this!  I’m going to push a button and make that site disappear!”  Mark calls his lawyer, Larry, and says, “Larry, I want the EZBREEZYSCAM site down. They’re infringing on our trademark and it’s killing my business!  That’s my name in the domain!”

Gripe Sites

This is a very common fact pattern that’s circulating throughout the internet, especially with network marketing companies.  Consumers take their frustrations to the internet, sometimes on an anonymous basis, and voice their concerns while casting a warning to prospective customers.   The EZBREEZYSCAM.com site is commonly referred to as a “Gripe Site.”  So in Mark Trader’s case, the question is whether the scam site constitutes trademark infringement. It depends…

If the gripe site truly serves no commercial purpose, it’ll likely be protected as Free Speech.  However, if the gripe site is designed to criticize a business WHILE recruiting people for something else, it’ll lead to an entirely different outcome.  If someone creates a gripe site and you want it down, consider the following questions:

Is there a commercial purpose?

If the purpose of the site is strictly to warn consumers, it’ll likely be protected as free speech, regardless if your trademarked name is in the URL.  This is commonly referred to as “Nominative Use.”  If there’s a “bad faith” intent on profiting from the mark, it’s another story.

Is there a likelihood of confusion?

If there’s no commercial purpose for the site, the “likelihood of confusion” standard is moot and disregarded.  But, assuming there’s a commercial purpose, the Lanham Act prohibits anyone from using a mark that “is likely to cause confusion . . . or to deceive as to the affiliation . . . or approval of his or her . . . commercial activities by another person.”  In other words, if there’s an appearance that the mark owner ENDORSES the site, there’s a likelihood of confusion.  The Lanham Act seeks to prevent consumer confusion that enables a seller to pass “off his goods as the goods of another.”  By inserting the word “scam” in the URL, it would certainly provide a strong argument that it’s not an endorsed site. Also, if there’s a disclaimer from the author somewhere on the site that explains a lack of affiliation between the site and the trademark owner, this element is nearly impossible to prove. In summary, this is a hard one to win.

Is the content actionable?

Technically, a site can be “non-commercial” and still contain actionable content that’s not protected as Free Speech.  False and slanderous statements are never protected as free speech.  I wrote a brief summary on “Blogging and the First Amendment” two years ago.  If the author crosses the line and publishes actionable content, there are other options to get the site taken down.  But be careful…Truth is an absolute defense to a defamation case.  If the author is writing truthfully, the litigation gun can kick harder than it shoots.

If you’re interested in reading a more thorough analysis of this issue, check out a court decision that was published in February of 2010 (Career Agents Network v. CareerAgentsNetwork.biz). It has facts similar to the Mark Trader hypothetical above; however, the legal analysis is very thorough.

What are your thoughts on Gripe Sites?  Should there be more protections for Trademark owners?

 

Filed Under: mlm legal, MLM startup Tagged With: , , ,
  • scottj942

    No. There should be more protection for people telling the truth.

    • http://www.themlmattorney.com/about Kevin Thompson

      Scott, First Amendment protections are pretty strong.  But the problem is that it’s so easy for anyone to CLAIM to have been damaged and file a lawsuit.  So how can we avoid frivolous defamation lawsuits?  Think about this: what if there was a law that said the plaintiff pays for the cost of litigation in a first amendment case if they lose.  Good idea?  It might prevent some of the abuse.

      • scottj942

        That’s essentially what we have in Texas (anti-SLAPP law), it should be a national law.

  • http://www.themlmattorney.com/about Kevin Thompson

    Scott, 

    First Amendment protections are pretty strong.  But the problem is that it’s so easy for anyone to CLAIM to have been damaged and file a lawsuit.  So how can we avoid frivolous defamation lawsuits?  Think about this: what if there was a law that said the plaintiff pays for the cost of litigation in a first amendment case if they lose.  Good idea?  It might prevent some of the abuse.    

  • http://www.facebook.com/JasonBrandonDavis Jason Davis

    Hi Kevin, It’s been awhile. I dropped in to see how the blog is progressing and what you’re up to these days. To be honest your name keep flashing on Skype (there it is again) so i just had to come over.

    I’ve dealt with gripe sites first hand and indirectly. My experience has brought a much deeper understanding of the subject and I felt a need to share. 

    I’ve filed a few marks over the last 3 years and I take branding very seriously. 10 years ago Amazon was a Rain Forest and Google it used to be “look it up in the dictionary” so regardless of the name all companies, CEO’s, and their reps should be very proactive with branding. 

    Here are some steps to avoid the pitfalls of gripe sites clogging up the SERP’s for your brand.

    1. Always buy – yourbrandReview(s).com/net/org/info Always buy yourbrandScam(s).com/net/org/info. It’s a $200 a year investment that can save $100,000′s if not more.

    *side note Google loves a well blogged out review site. Sometimes they rank better then the original source. Remember this, Build your own and have reps/users post their reviews. 

    2. Make sure when you brand a name that you can acquire all social media accounts – Twitter/yourrband youtube/yourbrand etc.. I have a wonderful website that does this for you instantly (ask and I’ll give it away).

    3. Put SEO as a #1 priority when first starting out – even if your business isn’t yet developed – do it because SEO takes time. When the time is burned the Google love is earned.

    4. Every MLM business that comes along will have haters. It’s never going away so you must admit this to yourself no matter how life changing and wonderful your product may be. Be Proactive and start building your defense and marketing strategies around them. 

    5. Feed the search engines. Google is greedy and not for money (arguable). The bots want information and fresh information at that. Keep feeding the search engines content. Don’t put up a replicated website or member portal and leave the front end stale – a post a day can keep most scam spam at bay. 

    6. Feed the social media. Keep your social media accounts engaging. The more your fans followers share the better your authority and that means great rank. 

    I didn’t intend to post about SEO but the truth is if you want to combat gripe sites you must start with SEO. I think gripe sites make valid points when not done maliciously and if the product business is a scam your SEO won’t be able to compete. A lot of great companies have been damaged or reps damaged by gripe sites. They could have avoided this with proper marketing or foresight. If you’re going to MLM, face the fact someone is going to gripe (right or wrong).

    Thanks Kevin

    Jason Davis

    • http://www.themlmattorney.com/about Kevin Thompson

      Jason, 

      These are fantastic tips!  I miss you, man.  SEO is so very important.  I learn something new everyday.  For those of you that don’t know Jason, this man is an SEO / programming machine!  Serial entrepreneur.