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BidZirk, LLC, et al. v Philip J. Smith

C.A. No. 6:06-109-HMH (D.S.C. October 22, 2007)

Blogger’s Use Of Trademark Protected As News Reporting

Granting defendant’s motion for summary judgment, the District Court dismisses defamation, trademark infringement, and invasion of privacy claims brought by plaintiffs against a blogger.  The claims arose out of defendant’s publication of articles on his blog, featuring plaintiff’s trademark, that were critical of plaintiffs’ eBay auction listing business.  The Court held plaintiff’s trademark dilution claims failed because defendant used the mark in connection with “news reporting and news commentary,” a non-actionable use under the Federal dilution statute.  The Court held plaintiffs’ defamation claims failed because the statements at issue – which purportedly accused plaintiff Schmidt of being a “yes man” ‘who overpromised and underdelivered’ were non-actionable statements of opinion.  Finally, the Court held plaintiffs’ invasion of privacy claims – which were premised on a link on defendant’s blog to another site which contained a picture of plaintiffs – failed.  The Court rested this holding on its determination both that South Carolina does not recognize a claim for false light invasion of privacy, and that, in any event, the link and article in question did not cast plaintiffs in a false light.  The Court also grounded its rejection of this claim on its holding that the link and corresponding use of the photo did not constitute a viable ‘wrongful appropriation of personalty’ invasion of privacy claim, given that plaintiffs had consented to the use of their photo on the internet site on which it was contained. 

Blogger Publishes Article Critical Of Plaintiff Bidzirk

Defendant Philip Smith maintains a blog at  Smith wrote a four part article titled “Special Report:  You Gotta Be Berserk to Use an eBay Listing Company! The Whole Story” that engendered this lawsuit.  The article was critical of plaintiff BidZirk LLC, an auction listing company, and contained its trademark.  The article also described the positive and negative aspects of using an auction listing company, and provided both a checklist for using such companies, and tips for selling items on eBay.

Among other things, defendant’s article described BidZirk’s president, Daniel Schmidt, as a “’yes man’ who over promised and under delivered …”.  More particularly, the article stated:

From the beginning … I could tell the owner was a yes man.  Of course, I have to be honest … eBay is; in and of itself a yes man paradise.  Many sellers over promise and under deliver.

Smith’s article also contained a link to another website which contained a photograph of Schmidt and his wife.  Accompanying this link was text which stated:

He explained to me how he had just gotten married and was planning his honeymoon in a week’s time.  Wait!  He was getting married, going on a honeymoon, and starting a (in his own words) ‘multi-location business that will be national in 5 years time?”

Upset with this article, plaintiffs commenced this suit, asserting claims of trademark infringement in violation of the Lanham Act, defamation and invasion of privacy. 

The Court granted defendant’s motion for summary judgment, and dismissed the action.  Notably, defendant was proceeding pro se.

Trademark Dilution Claim Dismissed Because Blogger Used Mark In Course Of News Reporting 

Plaintiffs asserted that defendant’s use of their mark in an article critical of plaintiff’s business tarnished their famous trademark in violation of the Federal Trademark Dilution Act (“FTDA”), 15 U.S.C. Section 1125(c).

Pursuant to Section 1125(c)(4)(C) of the FTDA, a party cannot be found guilty of diluting the mark of another if the mark is used in “news reporting or news commentary.”  The Court held defendant Smith’s use of the mark in his blog was in fact a protected use in the course of “news reporting or news commentary” and accordingly dismissed plaintiffs’ FTDA claim.  While “not all bloggers are journalists,” noted the Court, “some bloggers are without question journalists.”  The Court examined “the content of the material, not the format, to determine whether it is journalism.” 

Reviewing Smith’s article, the Court found that it was not written solely to denigrate plaintiffs.  Rather, it was written for the purpose of conveying information to the public about the use of auction listing companies, was based on the author’s personal experience, and was supported by research.  It also provided a checklist to aid consumers in selecting such companies.  These attributes “evidences [an] intent to report what [Smith] believed was a newsworthy story for consumers” and rendered the use of the mark non-actionable under the FTDA.

Defamation Claims Fail Because Allegedly Libelous Statements Are Non-Actionable Statements Of Opinion

The Court dismissed plaintiffs’ defamation claim, finding the challenged statements non-actionable statements of opinion.  Said the Court:

“Opinion statements, defamatory or otherwise, are not actionable unless they contain provably true or false connotations.” [citation omitted].  The statement that “I could tell the owner was a yes man” is an opinion statement that cannot be characterized as true or false.  The term “yes man” has different meanings to different people. … “Clearly, if the statement was not capable of being verified as false, there could be no liability for defamation.  Based on the foregoing, calling Schmidt a “yes man” cannot give rise to liability for defamation.

Invasion Of Privacy Claims Dismissed 

Finally, the Court dismissed plaintiffs’ invasion of privacy claim.  This claim was premised on a link found on Smith’s blog to a picture of plaintiffs found elsewhere on the Internet, accompanied by text that stated that plaintiff “had just gotten married … was planning his honeymoon in one week’s time … and [was] starting a … multi-location business that will be national in 5 years time.”  According to plaintiffs, the accompanying text implied that they were ‘irresponsible and overcommitted’ and impermissibly cast them in a false light.

The Court rejected this claim, finding that South Carolina does not recognize a claim for false light invasion of privacy.  Even if it did, held the Court, this claim would fail as the article did not cast plaintiffs in a false light.  Instead, the article “merely stated the fact that Schmidt and Patterson had much going on in their lives as they were getting married, going on a honeymoon, and starting a new business.  Nothing about Smith’s statements would be highly offensive to a reasonable person,” an essential prerequisite to a false light invasion of privacy claim.

Plaintiffs’ ‘wrongful appropriation of personalty’ invasion of privacy claim similarly failed.  Such a claim involves the “intentional unconsented use of the plaintiff’s name, likeness, or identity by the defendant for his own benefit.”  This claim failed for any number of reasons, held the Court – because Smith did not use a picture of plaintiffs, but instead only linked to one found on another site, because plaintiffs waived any privacy right they had in the photograph in question by consenting to its use on a non-password protected internet site, and because there was no apparent benefit to Smith by his use of the link. 

Finally, it should be noted that the Court, sua sponte, sanctioned plaintiffs’ attorney, Kevin Elwell, under Fed. R. Civ. Pro. Rule 11, for filing a lis pendens against Smith’s condominium.  The Court fined Mr. Elwell $1000, which he directed be paid to defendant Smith.

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