High Court Dodges Commercial Issues in Declining Falwell Case

The U.S. Supreme Court has declined to hear the appeal of a lawsuit filed by Reverend Jerry Falwell that touched upon issues key to business concerns, such as commercial versus noncommercial speech, and addressed a concept described as “initial interest confusion.”

At least, those topics are indicative of Falwell v. Lamparello’s significance to the legal community. The case also — as is typical when the reverend winds up before the Supreme Court — became a touchstone in the ongoing cultural war between American conservatives and liberals.

Circuit Court Begs, Supreme Court Shrugs

In the initial case, Falwell sued the owner, Christopher Lamparello, a gay man who is using the site to criticize Falwell’s opinions on homosexuality.

Falwell sued on the grounds of trademark infringement. A district court agreed that because Lamparello’s domain name closely resembled “Falwell,” it was a trademark violation. That decision was reversed last year by a three-judge panel on the U.S. Court of Appeals for the Fourth Circuit on the grounds that no one visiting would mistake it for Rev. Falwell’s Web site.

Since the Supreme Court is not hearing the case, that decision stands.

Freedom of speech and gay rights advocates are no doubt pleased with the end result. However, it would have been helpful to have obtained clarification on some key unresolved commercial issues in the case, says Joe Berghammer, a partner with Banner & Witcoff and an adjunct professor at Northwestern University.

The 4th Circuit Court discussed some of those issues — such as commercial versus noncommercial speech — but ultimately sidestepped them by deciding the case strictly on its facts, he told the E-Commerce Times.

If it had heard the case, the Supreme Court could have settled another issue — the so-called “initial interest confusion” concept — that has split the circuit courts, Berghammer added.

“The 4th Circuit Court was practically begging the Supreme Court to decide this issue,” he said.

Confused but Still Interested

“Initial interest confusion” refers to a situation in which a consumer is initially attracted or interested in a company because its trademark is very similar to that of another company.

An example would be a person who sees a sign that looks remarkably similar to Blockbuster’s trademark sign and goes in to rent a video. Once inside, it becomes apparent that the store is really a mom and pop operation and not part of the chain. The customer rents the video anyway.

This sort of thing happens all the time on the Web, Berghammer said, when someone buys a domain name that is just slightly different from that of a heavily trafficked Web site.

It is difficult to prove initial interest confusion in states covered by the 4th Circuit, where Falwell’s suit was originally filed, he noted. The 9th Circuit Court, by contrast, has made it relatively easy to prove.

Commercial vs. Noncommercial

A Supreme Court decision would have settled the matter, Berghammer said. It also would have settled confusing issues still surrounding the issue of noncommercial speech versus commercial speech. Indeed, in its decision, the 4th Circuit discussed this topic for several pages, although it came to no conclusion.

These two seemingly different activities do overlap sometimes — and when they do, it is unclear to what degree the First Amendment may apply.

To give a hypothetical example, a Burger King employee could stand on a street corner wearing a BK uniform and talking to people about the dangers of processed flour. Because the employee is in uniform, people may be unsure whether the speech represents the restaurant’s viewpoint or merely the individual’s, Berghammer explained.

Even though he adopted a similar domain name, Lamparello made it clear on his Web site that he was not speaking on behalf of Falwell and even provided a link to the reverend’s site. Not all advocacy Web sites make that effort.

‘Falwellsucks’ Okay?

In practical terms, the Supreme Court’s refusal to hear the case means it is business as usual for companies that wish to control how their names or trademarks are used when consumers are complaining about their companies, says Christopher Schulte, a partner with Merchant & Gould.

“It is still incredibly hard to use trademark law to stop gripe sites,” Schulte told the E-Commerce Times, which is how the 4th Circuit Court classified Lamparello’s Web site. “We tell our clients that they just have to buy all the ‘suck’ sites associated with their names, or learn to live with it.”

The refusal by the Supreme Court does not open the door for companies or individuals to leverage the goodwill of another company’s trademark, Schulte also noted.

“You can still set up, for example, a ‘Nikesucks’ Web site to complain about its employee practices. What you can’t do is link to other shoe sites from that Web site.”

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