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CPC International, Inc. v. Skippy Incorporated and Joan Crosby Tibbetts

214 F.3d 456, No.99-2318 (4th Cir., June 2, 2000)

The Fourth Circuit vacated an injunction issued by the District Court which directed defendants to remove content from their web site critical of the plaintiff on the grounds that the injunction failed to properly specify the reasons for its issuance as required by Fed. R. Civ. P. 65(a) and raised serious First Amendment concerns. The case was remanded to the District Court for further consideration.

In the 1920s, Percy Crosby created a cartoon character Skippy, which was marketed in cartoon books, magazine articles and novels. Crosby obtained a federal trademark for Skippy for use in cartoons depicting cartoon characters. This mark was subsequently transferred to Defendant Skippy Inc. Defendant Joan Crosby Tibbetts is Percy Crosby's daughter and the President of Skippy.

Plaintiff CPC International Inc. ("CPC") owns the federal trademark in the mark Skippy for use in connection with the sale of peanut butter, which mark it has owned since 1933.

In 1986, CPC obtained an injunction (the "1986 Injunction") enjoining Skippy Inc. from licensing the Skippy mark in connection with the sale of food products, and from claiming either that Skippy had the right to issue such a license, or that CPC did not have the right to use the Skippy mark in connection with food products. Such conduct was found by the court to infringe plaintiff's rights in the Skippy mark, and constitute unfair competition.

Thereafter, in 1997, defendant Skippy acquired the domain name Skippy.com, on which it posted a web site which contained a number of statements critical of CPC and the manner in which it obtained its rights to the Skippy mark. Among other things, the web site accused CPC of engaging in wrongful acts to obtain its rights to the mark. Sections of the site were titled "CPC's Malicious Prosecution" and "CPC's Fraud on the Courts." The web site did not offer to license the Skippy mark for use in connection with the sale of food products. It did inform those interested in licensing the Skippy mark to contact Ms. Tibbetts, and offered several pieces of Skippy memorabilia for sale.

Plaintiff CPC responded by commencing the instant action, alleging that defendants' conduct violated the 1986 Injunction, and seeking to hold defendants in contempt therefor. The District Court issued an injunction, in which it directed defendants to remove significant content from their site that was critical of CPC.

Defendant had also placed on its site statements discussing the contempt lawsuit brought by CPC, soliciting aid for the defense of this lawsuit, and informing users that portions of the CPC "story" had been removed from the site by direction of the court. The District Court directed that these statements also be removed from the site.

On appeal the Fourth Circuit vacated the District Court's injunction, and remanded the case for further consideration. The court held that such reversal was warranted because of the District Court's failure to comply with Fed. R. Civ. P. Rule 65(a). This rule provides that "Every order granting an injunction ... shall set forth the reasons for its issuance ...". The Fourth Circuit found that while the order issued by the District Court clearly set forth that conduct defendant was prohibited from engaging in, it failed to state the reason(s) behind its issuance of the injunction, or the justification therefor as required by Rule 65(a). The court's failure to explain how the prohibited content ran afoul of the 1986 Injunction mandated vacating the injunction.

The court further noted that the District Court's injunction "implicates serious First Amendment concerns." A court's power to issue injunctive relief restricting speech is not unlimited. Rather, "an injunction must 'burden no more speech than necessary to serve a significant government interest.'" The Fourth Circuit stated that "it is hard to see what 'significant government interest' is served [by the injunction issued] here." This is particularly true given the fact that CPC's trademark was not used for any commercial gain, or in a manner that confuses the public -- to wit, Skippy was not using the mark in connection with its sale of food or other products, nor was it soliciting offers to license the mark to third parties for such purpose. Instead, Skippy was using the mark in recounting its views of what it believes is the improper conduct undertaken by CPC to obtain the Skippy mark. Said the court:

First Amendment interests are at stake here because Ms. Tibbetts tells her side of the story on the Skippy web site -- how a big corporation worked to steal her father's cartoon trademark and then used the trademark to make a fortune. This is an admittedly partisan account and one that vexes CPC. Yet just because speech is critical of a corporation and its business practices is not a sufficient reason to enjoin the speech. As the First Circuit stated, if a trademark owner could 'enjoin the use of his mark in a noncommercial context found to be negative or offensive, then a corporation could shield itself from criticism by forbidding the use of its name in commentaries critical of its conduct. It is important that trademarks not be "transformed from rights against unfair competition to rights to control language." Such a transformation would diminish our ability to discuss the products or criticize the conduct of companies that may be of widespread public concern and importance. By redacting purely editorial and historical comments, the injunction is not narrowly tailored. The Constitution will not tolerate such a wholesale suppression of speech.
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