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Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Taylor Building Corporation of America v. Eric Benfield

Case No. 1:04cv510 (S.D. Ohio June 15, 2007)

Libel Claims Against Gripe Site Operator Proceed

Court allows plaintiff Taylor Building Corporation of America (“Taylor Building”) to proceed with libel claims arising out of the publication of a gripe site critical of plaintiff’s work by a relative of a disgruntled customer.  The Court denies so much of defendant’s motion for summary judgment which sought to dismiss these claims holding, inter alia, that issues of fact as to whether publication of the statements on this website were sufficiently limited to ‘proper parties’ so that their publication was protected by the qualified privilege applicable to statements made to protect the public interest precluded such an award.

The Court did grant so much of defendant’s motion for summary judgment which sought to dismiss “initial interest confusion” Lanham Act claims plaintiff asserted arising out of defendant’s use on his gripe site of a service mark and trade dress allegedly similar to those of the plaintiff.  The Court held such claims failed because consumers were not likely to be confused as to the source of defendant’s site, or attribute it to the plaintiff, as the site was critical of plaintiff, was found at the domain Taylor Homes – Ripoff.com, and bore a “header” that stated “Taylor Homes Ripoff.  Badly Fingering Your Dreams.  Taylor Sold Us A Quality Home and Gave Us Garbage.”

Finally, the Court dismissed plaintiff’s tortuous interference with contractual and business relations claims.  The Court held that plaintiff had failed to demonstrate that defendant had sufficient knowledge of the actual contracts or relationships allegedly interfered with by the operation of his gripe site to sustain such claims.

Gripe Site Critical Of Taylor Building Posted To Web

Plaintiff Taylor Building Corporation of America contracted to build a residence in Ohio for the parents of defendant Eric Benfield (“Benfield”).  Dissatisfied with Taylor Building’s performance, Benfield posted a gripe site at domain Taylor Homes – Ripoff.com critical of Taylor Building’s work.  Benfield’s view of plaintiff’s work was summarized in a “header” found on the site that stated “Taylor Homes Ripoff.  Badly Fingering Your Dreams.  Taylor Sold Us A Quality Home and Gave Us Garbage.” 

The site contained photographs of brick work done at the subject residence, which were followed by Benfield’s statement “a few pictures of the brick work on the house.  We are not satisfied with this work, but were given no means fro correcting the issue.”

The site also contained pictures of mold found in the structure’s crawl space.  These pictures were followed by the statement “the house was left in a condition that was conducive to mold growth.  The house has been inspected and currently isn’t safe for human habitation.”

Unhappy with the site, plaintiff Taylor Building commenced this suit, asserting claims of defamation and tortuous interference with contractual and business relations.  Plaintiff also charged defendant with violating the Lanham Act by using both a service mark confusingly similar to plaintiff’s own, as well as by giving his gripe site a look and feel similar to plaintiff’s web site.  This use of confusingly similar marks allegedly gave rise to actionable ‘initial interest confusion.’
 Defendant Benfield moved for summary judgment dismissing the complaint.  The Court granted in part, and denied in part, defendant’s motion.

Gripe Site Contains False And Misleading Statements

The Court denied that portion of the motion which sought to dismiss the defamation claims arising out of the statements quoted above.  “In Ohio, libel is defined as ‘a false written publication, made with some degree of fault, reflecting injuriously on a person’s reputation, or exposing a person to public hatred, contempt, ridicule, shame or disgrace, or affecting a person adversely in his or her trade, business or profession.’”

The Court found the challenged statements noted above to be actionable statements of fact, and not opinion.  The Court further found that the statements were false and misleading.

Benfield’s claim that they “were given no means of correcting” the brick work with which they were “not satisfied” was found to be false.  The contract offered several methods for correcting this problem – via mediation, arbitration or thru a buy-back option – which the Court held “the Benfields declined to do.”

The Court held that the other challenged statement was “misleading.”  The Court held that the statement that Taylor Building left the house “in a condition that was conducive to mold growth” was true, as evidenced by an inspection report commissioned by the Benfields evidencing mold growth in the crawl space.  However, the statement that immediately followed, which stated that “the house has been inspected and currently isn’t safe for human habitation” was “substantially misleading.”  While the house had been inspected, the inspector had not found that the house was uninhabitable because of the mold growth in the crawl space.

Issues Of Fact As To Fault And Qualified Privilege Preclude Summary Judgment

The Court held that issues of fact as to whether Benfield acted with the requisite degree of fault precluded a resolution of plaintiff’s libel claim at this time.  Finding that Taylor Building was a ‘private figure’ for the purpose of this claim, the Court held that it merely had to show that Benfield published the false statements found on his gripe site negligently to prevail.  “To make such a showing, the plaintiff must prove that the defendant die not act reasonably in attempting to discover the truth or falsity of the publication.”

The Court held that issues of fact precluded a determination as to whether Benfield was negligent in publishing his statement.  In reaching this result, the Court relied on the fact that the report of the inspector who examined the mold condition in the crawl space did not conclude that it rendered the residence uninhabitable, as well as the fact that the Benfields did not permit Taylor Building to remediate the mold condition.

The Court accordingly allowed Taylor Building to pursue its defamation claims against Benfield.  In reaching this result, the Court held that issues of fact existed as to whether defendant’s publication of the statements at issue were protected by a “qualified privilege.”  Benfield claimed he was so protected because he had posted his gripe site as a public service to provide information to others considering engaging Taylor Building to build a home for them.

The Court held that in Ohio, “to qualify for the public interest privilege, a communication must be made ‘to those who may be expected to take official action of some kind for the protection of some interest of the public.’”

As with all qualified privileges, the protections can only be attained if the communication is made “to proper parties.”  Because issues of fact existed as to whether defendant’s communication – via an internet gripe site – was properly limited to the ‘proper parties’ – who typically for the purpose of the public interest privilege are limited to governmental officials – the Court declined at this time to rule on the applicability of this “qualified privilege.”

The Court had little problem disposing of the balance of plaintiff’s claims.  To state a claim in Ohio either for tortuous interference with contractual or business relations, the plaintiff must allege both that the wrongdoer knew of the specific contractual or business relationship in question, and intentionally acted to interfere with it.  Plaintiff failed to meet this burden, as it failed to allege that Benfield was aware of the particular contract his gripe site allegedly interfered with.  The Court accordingly granted so much of defendant’s summary judgment motion that sought dismissal of these claims.

Absence of Likelihood Of Consumer Confusion Mandates Dismissal Of Lanham Act Claims

Finally, the Court dismissed plaintiff’s Lanham Act claims.  First, it found that the mark used on defendant’s gripe site – Taylor Homes – was not confusingly similar to plaintiff’s own mark.  In any event, following the decisions of the Sixth Circuit in Taubman Co. v. Webfeats, 319 F.3d 770 (6th Cir. 2003) and the Fourth Circuit in Lamparello v. Falwell, 420 F.3d 309 (4th Cir. 2005), the Court held that consumers were not likely to be confused as to the source of defendant’s gripe site.  The site, found at the domain Taylor Homes – Ripoff.com – was highly critical of plaintiff and its work, containing such statements as “Taylor Homes Ripoff.  Badly Fingering Your Dreams.  Taylor Sold Us A Quality Home and Gave Us Garbage.”  The absence of consumer confusion mandated the dismissal of plaintiff’s Lanham Act claims.  Said the Court:

Benfield clearly hoped to drive customers away from Taylor by posting his complaints about the home builder.  Thus, it is arguable that he intended to cause Taylor economic harm.  However, in keeping with the logic of Taubman and Lamparello, the Court concludes that, even if Benfield’s use of the website was commercial, his website was a forum for criticizing the builder.  Accordingly, there is no likelihood of confusion, and thus no Lanham Act violation.  See, e.g. Taubman, 310 F.3d at 777-8.

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