Originally published on February 21, 2014.
In October of 2013 I blogged here about my participation in a panel on “trademark misuse” at the annual meeting of the AIPLA, where, among other things, I got to hear from Tony Zeuli of Merchant and Gould, PC in Minneapolis, who discussed his success in turning back a lawsuit brought by “Michael Jordan against the Chicago-area Jewel / Osco food store chain based on various theories arising from that distinctly modern sin, ‘false endorsement.'” As Minnesota Litigator (name of his blog, get it? SEO is so cool!) Seth Leventhal explained it at the time:
SuperValu subsidiary, Jewel Food Store, created a graphic congratulating one of the greatest basketball players of all time, Michael Jordan. Michael Jordan is more than a mere human being and more than a Hall of Fame basketball player. His name and his image can be valuable assets — his valuable assets.
So, was this “a tribute by an established Chicago business to Chicago’s most accomplished athlete,” (that is, non-actionable “noncommercial speech” protected by the First Amendment) or was this a business trying to free-load on Jordan’s fame for commercial advantage (potentially actionable “commercial speech”)?
Jordan sued Jewel Food Store for violation of the his right of publicity, alleged false endorsement, alleged false designation of origin, alleged deceptive business practices and alleged unfair competition “to remedy the damage caused by Jewel-Osco’s unauthorized advertisement.”
Tony Zeuli and Scott Johnston of Merchant & Gould in Minneapolis represented SuperValu and won summary judgment before U.S. District Court Judge Gary Feinerman (N.D. Illinois), however.
The opinion of Judge Feinerman is detailed analysis of the distinction between commercial and non-commercial speech, ultimately finding for the defendant on First Amendment grounds.
To my discredit, I hadn’t followed this case, and was fascinated by Tony’s presentation at AIPLA, because it represented such a profound turnaround from the bad old days of Planned Parenthood v. Bucci and Jews for Jesus v. Brodsky. In those early Internet days judges bent over backward to construe the use of trademarks in an editorial or commentary setting as “commercial” as long as, if you kept clicking, you’d eventually find someone raising something for someone. Now a judge had, I thought, bent over backward the other way, finding that a a testimonial advertisement in a “tribute” publication — sponsored by and frankly bearing the name of the sponsor — wasn’t an advertisement, i.e., a commercial message, at all, because it didn’t explicitly invite a commercial transaction.
I did find this a little problematic. Why did Jewel / Osco take out the ad other than to enhance its business? Does an ad really have to indicate that peas are half price to be an ad? Isn’t it implied that Jewel / Osco wants everyone in Chicagoland to shop at its stores because they’re the stores that, like everyone else in Chicagoland, loves-loves-loves Michael?
On reflection, though, and in light of Tony’s presentation, I think I came to peace with the outcome there for two reasons. One was that it arguably stood for the proposition that businesses, like people and other organizations — including ones with economic interests in their speech, such as unions — have free speech rights, per Citizens United; and that perhaps these rights counted for something in a situation that implicated purported intellectual property rights. Can’t a local business make a public statement on a topic of civic interest just as the rest of us can do and on the same unrestricted basis?
The other reason I was not too concerned about the outcome was that I was skeptical of the underlying substantive claim, separate and apart from the question of whether the ad was commercial speech. It’s preposterous to me that there could be any right to prevent people — businesses included — of alluding to the existence of a person (or anything else) or even mentioning him (or it) explicitly when it is obvious from the context that no endorsement, connection or other diversion of goodwill is present.
So, unsurprisingly, Michael appealed to the Seventh Circuit. And perhaps also unsurprisingly, this week Michael won. Says the opinion, in part, as reported by the Chicago Sun-Times:
In reversing the lower court, the Seventh Circuit rejected the grocery store chain’s argument that its ad was noncommercial speech because it didn’t actually propose a commercial transaction.
“It’s clear that the textual focus of Jewel’s ad is a congratulatory salute to Jordan on his induction into the Hall of Fame,” [Judge Diane] Sykes wrote. “If the literal import of the words were all that mattered, this celebratory tribute would be noncommercial.”
“But,” she added, “evaluating the text requires consideration of its context, and this truism has special force when applying the commercial-speech doctrine. Modern commercial advertising is enormously varied in form and style.”
She explained that an ad promoting brand awareness and loyalty is “no less ‘commercial’” than one that “explicitly” proposes a transaction.
Jewel’s ad, the opinion states, served two goals: to congratulate Jordan and to promote the grocery store chain.
While the first goal was apparent, the panel held that “considered in context, and without the rose-colored glasses, Jewel’s ad has an unmistakable commercial function: enhancing the Jewel-Osco brad in the minds of consumers. This commercial message is implicit, but easily inferred, and is the dominant one.”
The panel also makes note of a point Jewel raised in trying to bolster its noncommercial speech argument by saying it has a longstanding, corporate practice of commending local community groups on achievements.
“There is a world of difference between an ad congratulating a local community group and an ad congratulating a famous athlete,” Sykes wrote. “Both ads will generate goodwill for the advertiser. But an ad congratulating a famous athlete can only be understood as a promotional device for the advertiser.”
She added, “Unlike a community group, the athlete needs no gratuitous promotion and his identity has commercial value. Jewel’s ad cannot be construed as a benevolent act of good corporate citizenship.”
That’s really not a bad argument. In fact, it’s probably the better argument.
But how about the overall dumbness and overreaching of Michael’s claim? It hadn’t been reached below because of the commercial speech ruling. As the opinion makes clear:
To wrap up, we hold that Jewel’s ad in the commemorative issue qualifies as commercial speech. This defeats Jewel’s constitutional defense, permitting Jordan’s case to go forward. We note that the lone federal claim in the suit—a false-endorsement claim under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)—requires proof that Jewel’s congratulatory ad caused a likelihood of confusion that Jordan was a Jewel-Osco sponsor or endorsed its products and services. See, e.g., Facenda v. NFL Films, Inc., 542 F.3d 1007, 1014–15 (3d Cir. 2008). Because the merits have not been briefed, we express no opinion on the substance of Jordan’s claims under the Lanham Act or any of the state-law theories.
I don’t like these kind of claims in theory, as I’ve said before: They go beyond brand maintenance or management to, really, just being a pig.
But that’s just me, and after all, rent seeking is the one thing that’s consistently, if not always successfully, practiced at the highest level in every aspect of the sports business. In practice, it seems hard to believe Michael Jordan can prove a LIKELIHOOD OF CONFUSION here and win his false endorsement case, but then again, in some courts you don’t really have to prove it to get it. Still, you would have thought he had the home court advantage in this case in the first instance, and that wasn’t enough the first time around. So the parties will inbound the ball again and… basketball metaphor basketball metaphor basketball metaphor.
This was an important decision, obviously. Swinging pendula can be as exciting as basketball metaphor, but the law becomes settled, mature and predictable — more just, you might say — when things settle down. This looks about where it should be, at least from… courtside.
Originally posted 2014-12-23 16:28:42. Republished by Blog Post Promoter