Wal-Queda Defeats Wal-Mart

A new decision from a federal district court in Atlanta illustrates perfectly what I have been saying is right and wrong with trademark fair use doctrine.

The case involves Charles Smith, a rather offbeat critic who created two portmanteaus to describe the megalithic retailer Wal-Mart somewhat, um, unfavorably: WAL-OCAUST and WAL-QUEDA. He set up web sites and also sold t-shirts and other novelty items at CafePress bearing slogans using the terms — and imitating the store’s blue font — such as “WAL-OCAUST: Come for the LOW prices/Stay for the KNIFE fights.” (If you are thinking “huh?” please remember that parody need not be the most incisive form of art.)

The good news first:

Wal-Mart lost. On the way to this decision, the court also:

  • Found that Wal-Mart had not provided enough evidence to establish it had rights to the yellow “smiley face,” possibly a good precedent for ongoing parallel litigation involving the store’s controversial claim of trademark ownership in this icon (although, contrary to some commentary, a ruling that Wal-Mart didn’t prove ownership isn’t the same as a blanket legal ruling that it doesn’t have such ownership). 🙂
  • Held, even though Smith sold stuff, that his speech was “noncommercial” and shielded from liability under federal dilution law. The court followed others that have imported the already-established constitutional definition of noncommercial speech as any that “does more than propose a commercial transaction.” This is a very broad definition that covers just about any expressive use of a trademark and drastically limits the impact of dilution law on speech.
  • Applied the broad concept of parody from last year’s Chewy Vuitton decision (and also the Ninth Circuit’s earlier “Barbie Girl” opinion), even though these cases are from other circuits and are not binding on this court — further suggesting that these good precedents are going to have lasting influence.
  • Now the bad news:

    The opinion was 87 pages long and focused on likelihood of confusion. Some 45 (!) of those pages were devoted to an exhaustive analysis of Wal-Mart’s survey evidence of confusion and objections to its methodology by two experts hired by Smith. (By the way, Wal-Mart’s survey was designed by Jacob Jacoby, among the most ubiquitous of paid experts on trademark surveys who has testified in 150 cases.) In this case, Smith was represented by Paul Allen Levy of the advocacy group Public Citizen. But a costly battle of the survey experts simply is not an option for most corporate critics who receive cease-and-desist letters. If such an obvious parody requires that much expensive discovery, it may not matter if the few intrepid defendants who litigate the cases can win.

    So, celebrate Wal-Mart’s inability to silence this critic. But we should also ask ourselves if a legal structure that requires extensive expert discovery and an 87-page summary judgment opinion is doing its job to protect speech.

    One Response to “Wal-Queda Defeats Wal-Mart”

    1. Yes, Bill, this sounds like exhibit A for your paper. I’ll have to read the opinion, but this seems to me precisely why we need defenses that are not bound up in likelihood of confusion.