Judge Won't Discount First Amendment In Wal-Mart Trademark Case

by Wendy Davis, Mar 26, 2008, 7:01 AM

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A federal judge has rejected Wal-Mart's attempt to shut down an online critic, Charles Smith, who uses the Web to sell T-shirts, bumper stickers and other merchandise that ridicules the retailer.

Wal-Mart had argued that Smith violated the company's trademark with his Web sites "walocaust.com" and "walqaeda.com" and T-shirts printed with those terms as well as phrases like "Freedom Hater Mart." The retail giant asked the court to issue an injunction banning Smith, a resident of Georgia, from continuing to sell the merchandise and to give it ownership of the Web sites.

But federal district court judge Timothy Batten Sr. in Atlanta ruled that Wal-Mart had no legitimate grounds to shut down Smith. Batten held that Smith's merchandise and Web sites were "successful parodies" and that his main goal wasn't to profit financially but to criticize the company.

"A reasonable juror could only find that Smith primarily intended to express himself with his Walocaust and Wal-Qaeda concepts and that commercial success was a secondary motive at most," Batten wrote late last week in a ruling dismissing Wal-Mart's claims.

Batten also held that consumers weren't likely to think that Bentonville, Ark.-based Wal-Mart was behind Smith's sites or merchandise, including mugs, underwear and teddy bears. "Wal-Mart has failed to demonstrate likelihood that its trademarks 'WALMART,' 'WAL-MART,' and 'WAL*MART' and its word mark "ALWAYS LOW PRICES. ALWAYS.' would be confused with Smith's 'WALOCAUST,' 'WAL-QAEDA,' 'FREEDOM HATER MART,' or 'BENTONVILLE*BULLIES ALWAYS' concepts.

Wal-Mart in December of 2005 threatened to sue Smith and demanded that he stop selling the products and transfer the domain name walocaust.com to the company. Smith went to the civil rights groups ACLU and Public Citizen and those organizations filed a pre-emptive lawsuit asking the court to declare that Smith's activities are protected by First Amendment free speech principles. Wal-Mart counterclaimed, alleging trademark infringement.

Paul Alan Levy, an attorney with Public Citizen, said Wal-Mart isn't alone in attempting to use trademark law to stifle online criticism. "That's why we've been taking these trademark cases," Levy said. "We've represented a number of people who have Web sites where they use a trademark denoting the subject of commentary."

Public Citizen also is representing the site InfomercialScams.com, which was recently sued by plastic surgery company LifestyleLift.com for trademark infringement. LifestyleLift alleges that InfomercialScams.com -- which hosts users' complaints about LifestyleLift -- uses the phrase Lifestyle Lift in a URL (http://www.infomercialscams.com/scams/lifestyle_lift_complaints) and buys the keywords "lifestyle lift" on search engines. The company argues that the result is that users looking for Lifestyle Lift will instead by directed to InfomercialScams.com.

Lifestyle Lift additionally has sued another Web site, RealSelf.com, for trademark infringement. RealSelf.com also hosts critical reviews of Lifestyle Lift, but Lifestyle Lift said that suit wasn't triggered by the negative consumer reviews, but by ads on the site for doctors. Those ads allegedly wrongly indicate that the doctors are affiliated with the company.

As for the Wal-Mart case, Public Citizen's Levy said court costs came to at least $10,000 for depositions alone. He said Smith intends to file an anti-SLAPP (strategic litigation against public policy) suit against Wal-Mart, on the theory that the retailer pursued a lawsuit aimed at intimidating him from criticizing the company.

Wal-Mart did not respond to a request for comment about the case.

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