Increasing trademark enforcement increases confusion and litigation – uncertainty forces intermediates over police small businesses

[Cara, 25/1/20, Patent and Trademark Office, “IN THE MATTER OF REQUEST FOR COMMENTS ON SECONDARY TRADEMARK INFRINGEMENT LIABILITY IN THE E-COMMERCE SETTING”, https://downloads.regulations.gov/PTO-T-2020-0035-0020/attachment_1.pdf, accessed 7/9/2024, LR]

EFF opposes any expansion of secondary trademark liability for e-commerce platforms, or any other class of intermediary. EFF shares many of the concerns raised in comments submitted by Engine Advocacy,1 Internet Association,2 and the Computer & Communications Industry Association,3 including those addressing risks to competition and innovation; suppression of lawful expression; and the practical problems with automated filters. The current secondary liability framework, as described in Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93 (2d Cir. 2010), strikes an appropriate balance by incentivizing intermediaries to take action if they become aware of specific infringing conduct, while keeping the burden of actively policing infringement on trademark owners—as has always been the case under U.S. law and custom, both online and offline.

If there is to be any change in the law as applied to online intermediaries, it should be to give them additional protection for keeping allegedly infringing content online based on a reasonable belief that it is non-infringing or where the alleged infringer has disputed the claim. In the copyright context, Congress has recognized the need for this balance and created a safe harbor for online service providers that restore allegedly infringing content pursuant to a valid counternotice.4 In trademark law, by contrast, intermediaries have no such statutory protection and thus often refuse to restore non-infringing uses unless the complaining party expressly withdraws its claim.

This problem is not hypothetical. Last year, for example, EFF wrote about Zach Berger, a New Yorker who sold merchandise for frustrated New York Jets fans through a website called Same Old Jets Store.5 Most of Berger’s products featured a parody version of the Jets’ logo, modified to say “SAME OLD JETS”—a phrase that’s been used for decades to criticize the team’s performance and express fans’ sense of inevitable disappointment. His other products included “MAKE THE JETS GREAT AGAIN” hats and clothing that said “SELL THE TEAM.” Despite the many reasons these products were not infringing (including that no one is likely to think the NFL produced or approved products mocking one of its teams), the NFL sent a takedown demand to Shopify, claiming that every item sold by Same Old Jets Store infringed its trademarks. The NFL did not even bother to identify which trademarks were supposedly infringed by which products—its formulaic notice just asserted trademark rights in the names and logos for the NFL and all 32 of its teams, then identified every product listing as “infringing content.” Notably, this included products that did not incorporate any NFL trademarks at all. Shopify nonetheless removed all of Berger’s listings. Even worse, when Berger contacted Shopify and explained why the NFL’s complaint was baseless, Shopify simply stated that it had forwarded Berger’s message to the NFL and would not restore the listings “until this matter is resolved between the parties.”

If platforms are required to actively seek out and block or remove potentially infringing content, the situation will only get worse. A case currently pending in federal court, Melo v. Frida Kahlo Corporation, offers a preview of what this might look like. Ms. Melo, an independent artist, alleges that Frida Kahlo Corporation (FKC) claims ownership of several Frida Kahlo-related trademarks and uses those purported marks to have Kahlo-inspired artwork removed from platforms such as Redbubble, Etsy, and Zazzle.6 Zazzle in particular has an agreement with FKC to take down “all references to Frida Kahlo in the title or search terms for any product”; Zazzle agreed to this arrangement in response to 2010 infringement allegations by FKC.7 Of course, FKC does not and cannot have a monopoly over all uses of the name Frida Kahlo—that is not how trademark law works. But when the responsibility for policing infringement is shifted to intermediaries, the predictable result is that they will prefer to bar non-infringing uses, no matter how numerous, rather than risk liability for letting an infringing use fall through the cracks.

The goal of trademark law is to protect consumers by increasing access to information and promoting fair competition. But if the proper balance is not struck in the standards for intermediary liability, the resulting suppression of lawful speech and competition will end up doing more harm than good. EFF urges the USPTO and policymakers not to pursue changes to the doctrine of secondary trademark liability that would shift the cost of policing infringement from trademark owners onto intermediaries—and ultimately consumers.