Designer Skin LLC v. S & L Vitamins, Inc., et al.
Pruning the Gripe Vine
What do Capital One Holdings Ltd., Health Net, Inc., and Allstate Insurance Company have in common? They, as well as hundreds of other companies, are routinely criticized on Web sites run by disgruntled consumers.
Gripe sites often solicit and post a litany of complaints -- accessible to anyone who goes online. Such compendiums of bile can prompt unflattering press coverage and damage a company's reputation.
These sites vary widely. Some present articulate descriptions of a single transaction gone awry, or inflammatory rhetoric from a host of anonymous sources.
Being aware of gripe sites, no matter what form they take, and knowing how to handle them are an essential part of in-house practice in the twenty-first century.
The first step in combating a gripe site is a thorough review. Focus on the site's domain name, the extent to which the site is optimized for search engines, the presence (or absence) of a legal disclaimer, the site's content, and whether or not it is a commercial venture.
The most important element is the domain name. Like the proverbial "tree falling in the woods," if gripes exist, but no one can locate them, it hardly matters. A site's domain name, or URL, has a huge effect on its visibility. Gripe sites with domain names like "yourcompanysucks.com" are much more likely to be read.
Customers are also likely to stumble upon gripe sites with domain names that are close variants of your company's name. Such sites are even at times mistaken for company-sponsored ones.
Next consider whether the site's Webmaster, or operator, has optimized the site for search engines, such as Yahoo! or Google. In order to rank their results for relevance, search engines evaluate several aspects of each Web site they have found. These are the site's title, the "meta tags" its Webmaster has embedded to describe the site's content, where the searched-for term appears on the page (higher means more relevant), the frequency of the term's use on the page, and other sites' links to the site. The more a Webmaster has tailored his site for particular terms -- such as your company's name or product -- the higher it will appear on the list of search results for that term.
In reviewing a gripe site, consider where, and how many times, your company's name or trademark appears. Check the source code to see if the company name appears in the site's title or meta tags. (Meta tags are meant to describe a site's content; they can be misused.)
Next up is the disclaimer. Does the site inform consumers that it is not affiliated with your company? A site without a disclaimer (or one that is hard to find) can confuse consumers.
Speaking of content, analyze that too. Are the site's comments defamatory or simply opinion? Are they trivial complaints, or something that needs to be addressed? Do they tarnish your company's mark by associating it with controversial views or behavior? Does the site reveal trade secrets or confidential information?
Lastly, consider whether the site offers anything for sale, seeks contributions, or contains links to other sites that do. Such commercial activities can provide additional pretexts to shut the site down.
In-house counsel can handle many gripe site remedies themselves. For starters, counsel should contact the site's operator. Attempt to mollify him as you would any other disgruntled customer. Counsel may want to offer to purchase the gripe site's domain name. Although this won't prevent the griper from posting the complaints elsewhere, it may make the complaints less accessible to others.
If the gripe site allows outsiders to contribute comments, counsel should consider posting a response to the criticisms. Your post may reassure other consumers.
Another tack is to send a cease-and-desist letter threatening legal action. A letter alone can be sufficient to persuade a Webmaster to shut down his site. And there are a number of legal rights on which such letters can be based. Be sure your letter is respectful, however, because the griper will probably post it. An undiplomatic letter will do little more than anger the griper.
In-house counsel can also attempt to have the Internet service provider (ISP) that hosts the griper's site take it down. All ISPs have terms of service that Webmasters must abide by. These agreements generally prohibit posting offensive material or content that infringes on trademarks.
If the site is not in compliance, an ISP may be persuaded to remove it. Start by urging the ISP not to aid the infringing activities of the griper. Mention your claims of contributory or vicarious trademark infringement. ISPs get very little income from hosting individual sites and thus do not have much incentive to fight.
If the ISP removes the site, however, it may be only a temporary remedy. Gripers typically take their sites to another ISP.
If the gripe site is being operated at a domain name containing your company's trademark, you can begin a Uniform Domain Name Dispute Resolution Policy (UDRP) proceeding with the Internet Corporation for Assigned Names and Numbers (ICANN). While this is likely to require retaining outside counsel, a UDRP proceeding will be resolved quickly and generally at modest cost.
The proceedings only consider whether the griper may continue to use the challenged domain name. The proceedings are held before a one- to three-person panel, convened by ICANN -- approved dispute resolution services such as the World Intellectual Property Association or the National Arbitration Forum. No damages are involved, and the griper retains the right to make his content available elsewhere.
If you prevail in a UDRP proceeding, however, the disputed domain name may be transferred from the griper to your company. A UDRP proceeding is typically resolved solely on the basis of written submissions. There is no discovery process, and hearings are rare.
To prevail, the complainant or mark holder must make a three-part showing: (1) the griper's domain name is identical or confusingly similar to a trade or service mark in which the mark holder has rights; (2) the griper has no rights or legitimate interests in the domain name; and (3) the griper's domain name has been registered and is being used in bad faith.
For gripe sites operated at a "your company.com" domain, these proceedings usually revolve around the question of whether the griper's right to air his grievances includes the right to do so at a domain name containing your company's mark.
While panels have not been uniform in their resolution of this question, most have held that the ability to criticize a company does not allow the griper to do so using a domain name that is confusingly similar to the company's mark.
UDRP panels have also directed that domain names be transferred in cases where the domain at issue is a variant of "yourcompanysucks.com." Again, while panel results have not been uniform, the majority have held that the inclusion of the word "sucks" in the domain name does not make it clear that the site was created by an outsider.
As explained in the 2003 case The Royal Bank of Scotland Group plc v. Personal et al.: "Internet users are not always fluent in English or at least not sufficiently fluent to perceive that the term 'sucks' is used to denigrate, criticize, and disparage, and that it is therefore a pejorative term, which should immediately disassociate the domain name to which it is appended from the complainant's trademark forming part of the domain name." A number of UDRP panels have followed this logic.
Generally, UDRP panels favor trademark holders more than courts do. And both parties have considerable input in choosing the three panelists who decide their case.
UDRP decisions are available for review on ICANN's site (www.icann.org), and you can see where panelists stand on a given issue.
Legal proceedings are the final step against the operator of a gripe site. Unlike ICANN, courts can consider the site's content and can award damages, including statutory damages for trademark infringement and, in the "exceptional case," attorneys' fees. Because of the costs of defending a court proceeding, simply commencing one may prompt the griper to take his site down.
If you actually proceed to judgment, the outcome is not guaranteed. Courts have not reacted uniformly. The more egregious the conduct, however, the more likely it is that the action will be successful.
You have several possible courses, depending on the site's content and its use of your trademark. If the site has your trademark in its domain name or includes it excessively in its meta tags or content, you may claim trademark infringement and/or dilution under the Lanham Act or state law counterparts; unfair competition under federal or state law; or that the griper's conduct violates the Anticybersquatting Consumer Protection Act (ACPA), also found in the Lanham Act.
If the content of the site is defamatory and is leveled at an individual affiliated with your company, you can pursue defamation claims. If the site attacks your company, you can pursue trade libel or product disparagement claims. Defamation claims are notoriously difficult to win, particularly if the subject is a "public figure." Trade libel and product disparagement claims typically require evidence of actual damages.
If a Webmaster merely posted third parties' complaints on his site, he may be immunized from liability claims by the Communications Decency Act (CDA).
If the site includes confidential information posted by current or former employees, other remedies arise, including breach of fiduciary duties and employment contracts. In the trademark realm, the griper is likely to assert that his use of your company's mark is a fair use protected by the Lanham Act and the First Amendment.
Another central issue is likely to be whether the site confuses consumers or causes them to believe it is associated with your company. A related issue is whether or not the site uses your company's mark in commerce. To establish a trademark infringement claim or an ACPA claim, the defendant must use your mark with the intent to profit. A number of courts have enjoined the use of a company's mark in the domain name of a gripe site. Others, however, have taken the opposite view.
The important thing to bear in mind is that the case law in this area is far from uniform. Outcomes are largely driven by the facts and circumstances of the particular site. For these reasons, thorough analysis is essential before starting a legal proceeding.