Gold on Trademark Parody, Survey Evidence and Dilution by Tarnishment in Smith v. Wal-Mart, 537 F.Supp.2d 1302 (N.D. Ga. 2008)
In Smith v. Wal-Mart, 2008 U.S. Dist. LEXIS 22776 (N.D. Ga. 2008), plaintiff, whose websites displayed designs and slogans that parodied Wal-Mart’s trademarks, filed a declaratory judgment action against Wal-Mart, seeking to have the parodies declared legal. The district court granted plaintiff summary judgment, finding that the parodies had not violated Wal-Mart’s trademark rights. Andrew M. Gold, a partner in the Oakland firm of Bogatin, Corman & Gold, analyzes Smith and discusses the use of trademarks as parody. He writes:
For purposes of trademark analysis, “a parody is defined as a simple form of entertainment conveyed by juxtaposing the irreverent representation of the trademark with the idealized image created by the mark’s owner.” For an alleged parody to be considered successful, it must both call to mind and differentiate itself from the original, and it must “communicate some articulable element of satire, ridicule, joking or amusement.” In parody cases, the strength of the mark may actually cut against a finding of likelihood of confusion because consumers are more likely to recognize that a famous mark “is being used as part of a jest.” Moreover, the more distasteful and bizarre the parody, the less likely the public will be to mistakenly think the trademark owner has sponsored or approved it.
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In a lengthy disquisition, the court waded through Smith’s serial challenges to Wal-Mart’s survey [concerning confusion] and found numerous deficiencies. Thus, for example, the court found that the universe utilized in the survey was significantly overbroad, and that the survey protocol did not sufficiently reflect actual marketplace conditions or typical consumer shopping behavior and was thus unlikely to have elicited a shopping mindset that would have allowed the expert to accurately gauge actual consumer confusion. As a result, the court found the survey conducted for Wal-Mart was of dubious value as proof of consumer confusion both because the survey universe was over inclusive and because its design failed to approximate real-world conditions.
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Wal-Mart separately contended that Smith’s concepts, by associating Wal-Mart with the holocaust and Al-Qaeda, tarnished its marks. Dilution by tarnishment recognizes an injury when a trademark is portrayed in an unwholesome or unsavory context likely to evoke unflattering thoughts about the owner’s product. Tarnishment caused by an editorial or artistic parody is not actionable because of the free speech protections of the First Amendment. Rather, a claim of dilution by tarnishment applies only to purely commercial speech. Simply because an author has an economic motivation does not render his speech commercial. The question is whether the speaker acted substantially out of economic motivation. The court was convinced that Smith primarily intended to express himself with his concepts and that commercial success was a secondary motive at most. Thus, Smith’s work was considered noncommercial speech and not subject to Wal-Mart’s trademark dilution claims, despite the fact that Smith sold his designs and slogans to the public on t-shirts and other merchandise.
(citations omitted)