Trademark Law and Practice, Pages 242–248

Smith v. Wal-Mart Stores, Inc.

United States District Court for the Northern District of Georgia, 2008

Facts:

Smith was a person who thought that Wal-Mart was really bad, and made various designs that compared them to the Holocaust by incorporating the word "Walocaust." These commonly were in a blue similar to Wal-Mart's and "Walocaust" was usually stylized "WAL★OCAUST"—with a star in the middle, as Wal-Mart did. Often these featured a Nazi eagle, "family values," "low prices," and occasionally the Wal-Mart smiley.

While he does not claim an exclusive right to his creations, Smith arranged to have his designs printed on various items and paid to sell them for profit on a website. Wal-Mart sent him and his store host, CafePress, cease and desist letters, demanding he remove all Wal-Mart-related goods and transfer the walocaust.com domain. CafePress removed all his Wal-Mart-related products in compliance. Smith then filed this action, seeking a declaratory judgment of his right to sell his merchandise.

After filing suit, Smith learned that disclaimers were sometimes approved to minimize possible trademark confusion and added one to his site. He also described his legal battle and raised $1040 in donations. He also opened a new site based on the word "Wal-Qaeda". He made more designs based on Wal-Mart's but about hating freedom and again sold them on CafePress's site, although these sales did not cover the costs of selling them.

Wal-Mart then counterclaimed for trademark infringement, unfair competition, trademark dilution by tarnishment, and cybersquatting.

Issue:

Did Smith commit trademark infringement, unfair competition, trademark dilution, or cybersquatting?

Defendant's Argument:

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Smith is a merchant who misappropriated its trademarks and business reputation in pursuit of illegal profit and who disingenuously seeks to cloak those activities under the First Amendment.

Plaintiff's Argument:

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Wal-Mart is attempting to misuse trademark laws to censor his criticism of the company.

Rules:

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    "[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." To be considered successful, the alleged parody must both call to mind and differentiate itself from the original, and it must "communicate some articulable element of satire, ridicule, joking or amusement."

Reasoning:

  • To prove trademark infringement, unfair competition, or cybersquatting, Wal-Mart must show that Smith's use is likely to cause consumer confusion. However, as Smith's arguments rely on his designs being successful parodies, this must be determined even first.

    Smith calls Wal-Mart to mind by using halves of its name, mimicking its fonts and designs, referencing its starting location, and various other methods. However, what it calls to mind are no the "idealized image" of Wal-Mart's. “Walocaust,” “Wal-Qaeda” and “Freedom-Hater-Mart” are not “Wal-Mart.” The imagery on Smith’s t-shirts included both photos of Mao Zedong and a United States map with the word “DECEASED” stamped over it. Furthermore, it does juxtapose Smith's imagery such as this with Wal-Mart's imagery. Smith's says to "SUPPORT OUR TROOPS" by boycotting "Wal-Qaeda." Other had the Nazi eagle holding the Wal-Mart smiley. Yet other designs talk about "family values" and promoting guns, alcohol, and tobacco. With the requirements of a parody satisfied, Smith's works were successful parodies.

    Then actually addressing the issue of likelihood of confusion, three factors support Smith, while the other four support neither party. In light of this, it can be said that no fair-minded jury could find that a reasonable consumer would likely be confused by marks.

  • Wal-Mart claims that being associated with the Holocaust and 911 would tarnish its trademarks. Portraying a trademark in an unsavory context likely to evoke unflattering though about the owner's product comprises dilution by tarnishment, but dilution only applies to purely commercial speech. If the primary motive is not economic, it would be considered non-commercial. No reasonable jury could think that Smith created his sites for the purposes of making money off of them. He really does not like Wal-Mart and merely invented these designs for the purpose of calling attention to his beliefs and cause.

Holding:

No, Smith did not infringe upon Wal-Mart's probably rights. Smith's motion for summary judgment granted; Wal-Mart's denied.

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