Businesses owning the rights to trademarked terms are always mindful that those rights need to be protected and policed. If a trademarked term becomes widely used in its generic sense, trademark protection may be withdrawn – a set of circumstances that has been referred to as “genericide.” In Freecycle Network, Inc. v. Oey, 2007 WL 2781902 (9th Cir. 2007), the United States Court of Appeals for the Ninth Circuit rejected a claim based on the efforts of an individual to encourage the use of a term in its generic sense in the hopes that trademark protection for that term would be denied. Companies should be mindful that under Freecycle, it may not be possible to state a claim under the Lanham Act based solely on attempts to use or to encourage the use of a trademarked term in its generic sense.
The Freecycle Network (“TFN”) is a nonprofit corporation that encourages and coordinates the reuse, recycling, and gifting of goods. On its website, http://www.freecycle.org, TFN coordinates the efforts of over more than 4,000 Freecycle groups worldwide. On these local group webpages, individuals may post information about items they no longer want. If another member wants the offered item, an exchange is arranged between the parties, avoiding the need to dispose of it in a landfill or otherwise.
The case arose out of the use of the term “freecycle” and attempts to gain trademark protection for that term. Timothy Oey, a member of TFN since 2004, suggested that TFN more actively police the use of term “freecycle” and pursue trademark protection for it. TFN then instituted a strict usage policy, drafted by Oey, preventing use of the term “freecycle” in any sense other than to refer to TFN or TFN’s services. While TFN claims to have consistently used the marks “Freecycle” and “The Freecycle Network” and its logo since May 2003 to refer to TFN, it also admitted that it first used the term “freecycle” and various derivations to refer more generally to acts involving the recycling of goods for free using the Internet. On January 17, 2006, TFN’s proposed mark was published for opposition in the Official Gazette, an opposition was filed the next day, and the mark currently remains unregistered.
Oey subsequently experienced a change of heart and came to believe that the term “freecycle” should remain in the public domain. He urged TFN to abandon its efforts to secure a trademark and conveyed these feelings in an e-mail to fellow TFN group moderators. Subsequently, Oey made various statements on the Internet asserting that TFN lacked trademark rights in “freecycle” because it was a generic term, Oey also encouraged others to use the term in its generic sense and to contact the USPTO to oppose the pending registration. TFN severed ties with Oey, and Oey continued to publish statements on the Internet challenging TFN’s rights to the term “freecycle.”
TFN filed suit against Oey in federal court in April 2006 alleging that Oey’s statements constituted contributory trademark infringement and trademark disparagement under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), as well as injurious falsehood, defamation, and intentional interference with a business relationship under Arizona law.
The district court granted TFN’s request for a preliminary injunction, entering an order preventing Oey “from making any comments that could be construed as to disparage upon [The Freecycle Network]’s possible trademark and logo” and requiring that he “remove all postings from the [I]nternet and any other public forums that he has previously made that disparage [The Freecycle Network]’s possible trademark and logo.” Oey filed an interlocutory appeal of the injunction order.
The Ninth Circuit reversed and vacated the injunction. The court rejected the contention that Oey was acting improperly by encouraging others to use the term “freecycle” in its generic sense. “Where the majority of the relevant public appropriates a trademark term as the name of a product (or service), the mark is a victim of ‘genericide’ and trademark rights generally cease.” The court noted that “genericide has spelled the end for countless formerly trademarked terms, including ‘aspirin,’ ‘escalator,’ ‘brassiere,’ and ‘cellophane’.”
But the court refused to recognize a cause of action for genericide. The court held that the Lanham Act itself does not contain any provision preventing individuals or businesses from using a trademarked term in its generic sense. According to the court, the Act also does not “prevent an individual from expressing an opinion that a mark should be considered generic or from encouraging others to use the mark in its generic sense.” Instead, a claim under the Lanham Act based on the generic use of a mark may only be pursued when that use also satisfies the elements of a cause of action specified by the Act, such as infringement, false designation of origin, false advertising, or dilution. While TFN may have disagreed with Oey’s opinion, its disagreement “and frustration with his activities cannot render Oey liable under the Lanham Act.”
The court also concluded that TFN was otherwise not entitled to an injunction because it had not stated any claim under the Lanham Act. Noting that the district court’s entry of the injunction was based solely on TFN’s Lanham Act claims of trademark infringement and trademark disparagement, the court concluded that the district court’s “likelihood of success” analysis did not properly analyze the necessary elements for trademark infringement. In particular, the district court erred by not assessing whether Oey’s actions constituted a “use in commerce” as required under 15 U.S.C. § 1125(a)(1). The court concluded that based on the record, it did not appear that Oey’s statements on the Internet “were made to promote any competing service or reap any commercial benefit whatsoever.” Instead, according to the court, based on his belief that the term “freecycle” was generic, “Oey simply expressed an opinion that TFN lacked trademark rights in the term ‘freecycle’ and encouraged likeminded individuals to continue to use the term in its generic sense and to inform the PTO of their opinions.”
The court also noted that even if Oey’s statements could be construed as 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 TFN” as required under 15 U.S.C. § 1125(a)(1)(A). The court also held that there was no cause of action for “trademark disparagement” under the Lanham Act.
In the wake of Freestyle Network, companies will not be able to use the legal system to attack generic uses of their trademarks unless they can also establish the elements of a claim that is recognized under the Lanham Act.
Full Opinion Text: