Opinion

The ruling in a trademark case in Kentucky could have a worldwide impact on creative industries

A seemingly innocuous trademark revision, now before the US Senate, could pose a serious handicap to the creative industries. The bill, numbered HR 683, but also known as the Trademark Dilution Revision Bill of 2005, would permit the owners of ‘famous marks’ to obtain an injunction against anyone who uses a name or mark in commerce that is likely to cause “dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury”.

As US markets are key to the worldwide creative industries, and since the US dominates the World Trade Organisation, this cannot be dismissed as simply a matter of US domestic law.

The bill is intended to reverse the impact of the Supreme Court decision in Moseley v Victoria’s Secret Catalogue (1998). In this case, the lingerie brand tried (unsuccessfully) to prevent a small adult novelties store in Kentucky using the name ‘Victor’s Little Secret’, despite being unable to point to any actual harm to the brand. However, the implications of the bill as drafted are much wider than this.

Exclusions that might prevent brand owners using the new right to stifle critical comment are narrowly drawn. The bill protects “fair use of a famous mark by another person, other than as a designation of source for the person’s goods or services, including for purposes of identifying and parodying, criticising, or commenting upon the famous mark owner or the goods or services of the famous mark owner”.

Parody, criticism or comment are, however, the very circumstances where the issue of fair use will be most hotly contested. Smaller independent filmmakers may simply opt to play it safe rather than risk creating a remake of ‘McLibel’, this time as a trademark infringement case.

Copyright law has already intruded into the field of fine art. Volkswagen recently demanded that artist Don Stewart cease distributing his images of the iconic VW Beetle which, when looked at closely, are comprised of insect drawings. If HR 683 becomes law, a 21st-century Andy Warhol might find the equivalent of the Campbells Soup paintings enjoined from production.

It should be noted that the ‘dilution’ and ‘tarnishment’ concepts within the bill go far beyond the decision of the English Court of Appeal in Arsenal v Reed (2003). In that case Matthew Reed argued that his use of the Arsenal badges in relation to “unofficial” Arsenal scarves and the like he sold from a stall near the Highbury ground did not infringe the club’s rights, since the marks were only used to indicate loyalty to Arsenal. The court found against only on the basis that Reed’s actions undermined the guarantee of origin of the goods, which it said was the key role of registered trademarks. In fact, the original draft of HR 683 came closer to Arsenal v Reed, since it required that the infringing act had to consist of “use of a mark or trade name in commerce as a designation of source of the person’s goods or services”. The deletion of this reference to source in the current draft has substantially widened the bill’s scope.

Brand owners with deep pockets will be given a powerful new weapon if HR 683 becomes law. Films such as Super Size Me, which was critical of major corporations, will face even more legal hurdles, and prior clearance of brands used in films, television and so forth will assume massive importance, imposing significant extra burdens on the creative sector. The legislative impetus may have started from a two-person adult novelty goods store in Kentucky, but its implications are on a worldwide scale.