Posted: February 25th, 2011
By Luke MacDowall *
In one of his famous “Tip of the Hat, Wag of the Finger” segments, Stephen Colbert “tipped his hat” to the Susan G. Komen Foundation’s (“the Foundation”) recently publicized efforts to protect its trademarks. It is not the attempt to protect its marks that has drawn mounting criticism, but rather the chosen targets of its legal actions: other non-profit, charitable organizations dedicated to raising revenue to support medical research. As one of the most vocal supporters of the Foundation’s efforts to find a cure for breast cancer, Colbert’s satirical gesture made headlines. He highlighted the seemingly wasteful expense of millions of dollars in donor funds spent on protecting these trademarks each year.
Over the past fifteen years, the Foundation has reviewed eighty-three different groups who have attempted to use the phrase “for the cure” or “for a cure” and pursued legal action against half. Anne Thompson, “Trademark protection by Susan G. Komen organization.” NBC Nightly News Transcripts, Jan. 24, 2011. For example, the Foundation contacted the organization entitled “Kites for a Cure,” which is a kite-flier group dedicated to raising money to cure lung-cancer. The group refused to bow-out quickly, upset over what it believed to be a misdirection of both organizations’ efforts against one another rather than on their common goal. Eventually the two settled, with “Kites for a Cure” promising to only use the name in connection with lung-cancer activities and to refrain from using the famous pink ribbon logo. Most recently the Foundation has targeted a smaller group called the “Mush for a Cure,” whose revenue raised since its founding 5 years ago is dwarfed by the Foundation’s annual budget. In a statement on its website, the Mush for a Cure expressed its “surprise” and “sadness” that its application with United States Patent and Trademark Office to trademark their name was being opposed by the Foundation. The group noted that many organizations use the phrase “for a cure” to “present what [all these similar organizations] are trying to do—working together to find a cure.” While recognizing that the Foundation has a “brand to uphold,” the group went on to note that the “frustration lies in the fact that we all share a common end goal, and the process, rules, and stipulations…doesn’t seem to reflect this.” In the end, the opposition will end up costing the group money it “[doesn’t] have to spend.”
In response to these criticisms, the Foundation defends its action citing the need to ensure donors that when they see the “for the Cure” mark “they can be confident that they are donating to a Komen program.” It is hard to argue with the Foundation’s financial prowess and fiscal responsibility. The American Institute of Philanthropy rates it a “B+” for directing nearly seventy-four percent of its expenses to programs, spending on average $17 million in raising each $100 million. In a letter released in its defense, the Foundation notes its Four-Star Charity Navigator ranking, which vaulted it into “one of the two most trusted charities last year.” Thus, even the millions spent on defending its trademarks must be compared with the Foundation’s overall efforts; in fact, the amount spent on legal costs is a drop in the bucket compared with the $283 million spent on research and advocacy. Anne Thompson, “Trademark protection by Susan G. Komen organization.” NBC Nightly News Transcripts, Jan. 24, 2011.
Nonetheless, the problem, as Clifford M. Marks reported in the Wall Street Journal, is that the Foundation “helped make ‘for the cure’ a staple of the fund-raising vernacular.” There are hundreds of groups who use that phrase in connection with their efforts, as they attempt to mirror the successful model established by the Foundation. The real risk is not protecting the brand but overprotecting it because donors would rather see their monies spent on medical research than legal wrangling and it “could risk alienating donors.” As Colbert so eloquently framed the illogical conclusion, “if [the Foundation doesn’t] own the phrase ‘for the cure’, then people might donate money thinking it’s going to an organization dedicated to curing cancer, when instead its wasted on organizations dedicated to curing cancer.”
Although now making headlines, the issue is not new. Instead, the “fight against breast cancer is increasingly contentious and splintered.” There are over 1,000 registered nonprofit breast-cancer organizations in the United States prompting “competition…for trademarks, sponsors, alliances, and the clout to shape political and research agendas.” A couple of years ago, a charity named “HEADstrong”—after the founder’s son who died of non-Hodgkin’s Lymphoma who was nicknamed “Head”—ran into a similar situation. The similarity with the Lance Armstrong Foundation’s famous logo “LIVESTRONG” prompted a legal battle.
In connection with the issue, three questions stand out.
I. Should trademarks owned by non-profit entities be entitled to protection at all?
As one blog discussing the issue suggested, “you could argue that raising money for charity is not “use in commerce” and thus not deserving of a trademark.” However, non-profits deserve trademark protection as much as for-profit companies. To decide otherwise would be to add a for-profit requirement into the Lanham Act that simply does not exist. In fact, both of the stated Congressional purposes behind the Act—to prevent consumer confusion and to protect an owner’s investment—support non-profit protection. Richard D. Salgado, “Piracy and Chaos in the Marketplace of Ideas: Why Money Cannot Be Everything When Assessing Initial-Interest Confusion and Nonprofit Trademark Holders,” 61 Ark. L. Rev. 241, 241 (2008). As explained by Salgado, an infringement claim no longer relies on a sale of goods as it only requires proof of five elements: (1) possession of a mark; (2) an opposing party used the mark; (3) that the use of the mark occurred “in commerce;” (4) that the opposing party used the mark “in connection with the sale, offering for sale, distribution, or advertising” of goods or services; and (5) that the opposing party used the mark in a manner likely to confuse consumers. Id. (citing People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359, 364 (4th Cir. 2001)).
In addition, under the initial-interest-confusion doctrine, courts find infringement when confusion creates an “initial interest” in potential customers, even when confusion “ceases to exist prior to the sale” or the customer fails to purchase anything. Id. at 243. Courts interpret the language “in connection with a sale, offering for sale, distribution, or advertising of any goods or services” broadly enough to include activities “outside a purely commercial context.” Id. at 271. As an example, trademarks can belong to political organizations whose only “commerce” is the commerce of ideas. See, e.g., United We Stand Am., Inc. v. United We Stand, Am. N.Y., Inc., 128 F.3d 86, 92-93 (2d Cir. 1997). Therefore, the Foundation certainly has a protectable interest in its trademark even though it is not for-profit, but as we will see below, the right to a protectable interest does not automatically justify protecting that interest.
II. How has the Trademark Trial and Appeal Board (the “Board”) analyzed these disputes?
Non-profits have found success in challenging the extent of protection owed to the Foundation’s marks. In The Susan B. Komen Breast Cancer Foundation, Inc. v. The American Cancer Society, Mid-Atlantic Division, Inc., the Foundation filed an opposition to The American Cancer Society (“ACS”)’s attempt to register the mark “CARS FOR A CURE” claiming priority and likelihood of confusion under § 2(d) of the Trademark Act. 2001 TTAB LEXIS 455 (Trademark Trial & App. Bd. June 13, 2001). The “CARS FOR A CURE” program was intended to encourage the donation of used vehicles that would be sold to raise revenue to fund cancer research. ACS argued that the words “for the cure” or “for a cure” are merely descriptive or generic and in use by others. Using the traditional factors for likelihood of confusion analysis as established in E.I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973), the TTAB began with the “similarity and dissimilarity” between the marks. The Board rejected the claim that “FOR THE CURE” or “FOR A CURE” were the “dominant” portions of the marks to the “exclusion of RACE and CARS,” instead finding that the marks create “different commercial impression” one involving a race and the other cars. This weighed in ACS’s favor.
Next, it reviewed the “services” of each mark and noted that there might be people who encounter both as they share a common goal and sponsorships. The factor only “slightly favored” the Foundation. Next, although there was no distinction between the “channels of trade” as both involved direct participation from the general public, the Board found the difference in the manner of fundraising was significant and weighed in ACS’s favor.
Finally, the factor of “critical importance” was the “number and nature of similar marks in use for similar services by third parties. Particularly in the “field of charitable fundraising” it found the designations not distinctive. It concluded that “there is an inherent weakness in a mark incorporating the designation in question, and that only slight differences in marks containing similar designations may be sufficient to distinguish one from another.” After considering the factors, the Board concluded that no likelihood of confusion existed to justify refusing ACS’s mark.
Thus, the arguments advanced by these groups like Mush for a Cure were successful before the Board. The ubiquity of the Foundation’s original slogan has undermined its claim to exclusive use. Despite its loss in the ACS case, the Foundation continues to track possible infringers; although ACS was successful, lots of these smaller charitable organizations simply do not have the resources to litigate. This is likely the source of their settlements forged with the Foundation to continue using the marks in specifically agreed channels that decrease the risk of confusion.
III. Even if the Foundation has appropriate basis for litigating these matters, is continued litigation “abusive”?
In a case study of entertainment-related intellectual property, K.J. Greene demonstrates that trademark law is increasingly used in an “abusive manner.” K.J. Greene, “Abusive Trademark Litigation and the Incredible Shrinking Confusion Doctrine—Trademark Abuse in the Context of Entertainment Media and Cyberspace,” 27 Harv. J.L. & Pub. Pol’y 609 (2004). As he defines it, “[t]he potential of anti-social trademark litigation exists wherever a trademark owner’s rights to exclusive use of a trademark are in conflict with societal interest in a broad and diverse public domain.” Id. at 631. Most people would probably agree that a for-profit company who sues a charity would be abusing its trademark protection if there was no actual harm to the company by the charity’s use of the mark. As an example, the Mattel Corporation sued a charity for using the phrase “Barbie Grants a Wish” for critically ill-children. See Id. at 631. There is something disconcerting about that decision to “protect” a mark because it begs the question of what one is “protecting” against. Certainly, without any risk that the charity’s use of the mark will create the confusion which may harm the company’s mark then it should not be pursuing its legal rights. Companies must recognize the difference between a “right” to protect a trademark and a “responsibility” to refrain from enforcing that right when the societal interest weighs against its enforcement.
The source of this conclusion stems from a founding tenet of intellectual property law: intellectual property rights represent a “trade-off between the grant of limited monopolies and some public benefit.” Id. at 625. The rationale is that granting these limited monopolies will serve some interest, whether that be the protection of one’s labor investment into the intellectual property or to prevent consumers from being confused by similar trademarks. As argued by Greene, the increasing protection for trademarks by Congress with the enactment of cybersquatting legislation, for example, is undermining the common law foundation for trademark protection that was intimately tied to consumer confusion. Id. at 626-28 Instead, newer causes of action arise from cybersquatting legislation and anti-dilution statutes that increasingly treat intellectual property like real property. Id. He goes on to argue that the more trademark law begins to function like “property” law the more room for abusive litigation. Although that debate is beyond the scope of this post, suffice it to say that Colbert’s reference in his satirical jest that the Foundation needs to “own the phrase [For a Cure]” to protect its interest is exactly what has opened this space for abusive litigation. As Mary Ann Tighe of the Kites for a Cure group stated: “It is startling to us that [the Foundation] thinks they own [the color] pink.” (emphasis added).
In addition, there are three types of trademark causes of action, none of which have a strong enough justification to warrant the Foundation’s current approach: consumer confusion, unfair competition, and dilution theory. Under confusion doctrine, the Lanham Act § 32(a) prohibits the use of similar trademarks that may cause consumers to confuse the two products. As demonstrated by the Board’s decision above, even small differences in the marks used by these organizations prevents true consumer confusion, so this is probably not an effective argument for the Foundation. Id. at 621.
Under unfair competition doctrine, § 43(a) of the Lanham Act requires “’that a representation of a product, although technically true, creates a false impression of the product’s origin,’ and that the representation harms plaintiff’s reputation’.” Id. at 622. Here too, the Foundation’s argument is weak. Aside from the lack of confusion about “product origin” which is closely related to general consumer confusion under infringement theory, the harm to the Foundation’s reputation is effectively nil. People who donate to these organizations are not tracking their donations. In fact, Barbara Ehrenreich of the San Francisco-based Breast Cancer Action group called for better funding coordination because charities lack oversight to their spending habits. Ironically, in response, Nancy Brinker, founder of the Foundation dismissed these allegations saying: “she has no time for activists’ ‘whining and kvetching’.” Ms. Brinker’s response reveals just how irrelevant her need to protect these trademarks really is. If no oversight exists to make sure these charities are efficiently spending donations then there is no risk that donors will be worried that they are donating to a particular organization. Unlike traditional goods or services, where people expect to see the outcome and judge the outcome against the provider, donors simply cannot make those judgments about these charities. Thus, there cannot be any measurable harm to the Foundation’s reputation.
Finally, under dilution theory, “famous” marks are protected from competing uses to prevent the blurring or tarnishing of its fame through unwarranted use. K.J. Greene, “Abusive Trademark Litigation and the Incredible Shrinking Confusion Doctrine—Trademark Abuse in the Context of Entertainment Media and Cyberspace,” 27 Harv. J.L. & Pub. Pol’y 609, 622-23 (2004). No showing of “likelihood of confusion” is required; in fact, according to Professor McCarthy, the public must connect the identifying mark with both the junior and senior user, meaning that the public understands there are two recognized sources for the same mark. The only impact is a dulling of the “uniqueness” of the mark’s use by the senior user as there is more than one recognized source for the same mark. 4 McCarthy on Trademarks and Unfair Competition § 24:72 (4th ed.). Because dilution theory does not rest on consumer mistake or confusion—the founding policy underlying traditional trademark infringement claims, “antidilution law more closely resembles an absolute property right in a trademark.” Id. In this way, the potential for abusive trademark litigation by those who treat trademarks as absolute property highlighted above is most opportune in the context of dilution claims. As Professor McCarthy explains, “antidilution law is a potent legal tool, which must be carefully used as a scalpel, not a battle axe…[as] [t]he antidulution remedy was intended to apply only in unusual and extraordinary cases.” 4 McCarthy on Trademarks and Unfair Competition § 24:67 (4th ed.). Thus, it should only apply to the “truly renowned marks” and proven by a “solid evidentiary base.”
To offset some of this potential for abuse, a dilution claim under the Trademark Dilution Revision Act of 2006 (“TDRA”) protects only a “famous mark” which is defined as one “widely recognized by the general consuming public of the United States.” 15 U.S.C. § 1125(c)(4)(B). Further, the mark must have acquired its fame prior to the defendant’s use. 15 U.S.C. § 1125(c)(1). Once fame is established, the dilution test itself has two prongs: (1) a causal connection between the blurring mark and the blurred mark and (2) this causal connection must “impair the distinctiveness” of the famed mark. 15 U.S.C. § 1125(c)(2)(B).
Although it has yet to allege trademark dilution under the TDRA, past cases cast significant doubt on the Foundation’s ability to qualify for protection under the statute. On a motion for reconsideration of the Board’s decision in the ACS case above, the Board concluded that the Foundation is not entitled to heightened protection under dilution theory because it did not have “sufficient evidence to substantiate a claim of extensive public recognition and renown of the mark.” 2001 TTAB LEXIS 814 (Trademark Trial & App. Bd. Nov. 14, 2001). This finding is consistent with Professor McCarthy’s note that only the most famed marks deserve dilution protection. The Foundation probably has an even less likely chance of prevailing under the TDRA because it set a “higher bar” for achieving the famed status necessary to create the claim. Jennifer Files Beerline, “Anti-Dilution Law, New and Improved: The Trademark Dilution Revision Act of 2006,” 23 Berkeley Tech. L.J. 511, 524 (2008).
Moreover, dilution principles do not support the Foundation’s position. Because dilution is not based on consumer confusion, and the Foundation’s only legitimate claim for excluding others from using its mark is donor’s confusion about who they are donating to, then it cannot justify a dilution claim. If donors truly understand that there are two different sources as is required for a dilution claim (i.e. a donor recognizes both a “for the cure” charity organized by the Foundation and a separate “for the cure” charity organized by a different party), then there is zero risk that a donor will “mistakenly” write a check to the wrong foundation. Independent of this “mistake” argument, the Foundation has provided no compelling argument for the need to protect the “uniqueness” of its mark. Rather, the opposite is true; if people recognize the various sources and correctly choose which source to donate to, then it can only be a good thing that various charities are using the mark to support such important causes. Thus, the Foundation cannot justify its efforts under dilution theory either.
In conclusion, just as K.J. Greene notes “the types of abusive trademark litigation prevalent in cyberspace and entertainment media…rarely involve the types of products for which trademarks do point to quality of goods,” we can add charitable organization litigation to that list as well. There simply is not a risk of meaningful confusion since all of these organizations are dedicated to similar causes. The best argument that could be levied against this proposition would be that the Foundation is simply more efficient and reliable in translating donations into research. But proof of that is certainly limited. Even if the Foundation was indeed more efficient, it is hard to find that it would be so much more efficient to justify the monies spent in protecting the mark.
IV. The Foundation’s New Approach
Ultimately, the Foundation has decided to change its approach. It has dedicated itself to a 30-60 day timeline to find “workable solutions that balance the interests of those who wish to use ‘for the Cure’ to raise funds, while minimizing confusion.” Whether that solution turns out to be a licensing policy to these types of charitable organizations or something entirely different remains to be seen, but the important point is that the Foundation has recognized the risk it is running in the court of public perception by attempting to “protect” its interests in courts of law. This case presents the perfect example of a situation where one probably has a responsibility not to enforce one’s rights.
*Luke MacDowall is a third-year law student at Wake Forest University School of Law. He holds a Bachelor of Arts in Philosophy and History from Trinity University in San Antonio, Texas. While at Wake Law, Mr. MacDowall led the National Trial Team as team-captain and participated on the National Moot Court team. In addition, Mr. MacDowall worked in the intellectual property litigation department at Womble Carlyle Sandridge & Rice, PLLC. Upon graduation in May 2011, Mr. MacDowall intends to practice general business litigation with special emphasis on employment and labor law.