Internet Trademark Case Summaries

Highfields Capital Management L.P. v. John Doe

385 F. Supp. 2d 969 (N.D. Cal. 2005)

Plaintiff, an investment fund management firm and the largest shareholder of Silicon Graphics, Inc. (“SGI”), sued an unknown poster on the Yahoo! message board for SGI, one of thousands of message boards provided by Yahoo!.  The SGI message board contains a “reminder” disclaiming any connection with SGI and stating that the opinions posted are those of the users.  Using the screen name “highfieldscapital,” defendant posted three comments on the SGI message board that plaintiff found unflattering.  Defendant posted comments with obvious sarcasm about dissatisfaction with SGI’s stock performance and the quality of plaintiff’s high-priced investment advice.  Many of the thousands of postings on the SGI message board were “crude, indecent, or transparently laughable and many appear[ed] to have nothing whatsoever to do with SGI,” many purported to predict the future price of SGI stock, and many implied access to inside information.  Moreover, many of the screen names used on the SGI message board suggested some connection to SGI.  Plaintiff filed suit against defendant for trademark infringement, defamation, and commercial disparagement.  Plaintiff obtained a subpoena requiring Yahoo! to disclose defendant’s identity, which defendant moved to quash.  The magistrate judge issued a report recommending that the district court grant defendant’s motion to quash, and plaintiff objected to the recommendation.  The district court judge held that the magistrate did not err by requiring plaintiff to show with respect to its claims that “there is a real evidentiary basis for believing that the defendant has engaged in wrongful conduct that has caused real harm to the interests of the plaintiff,” in order to discover defendant’s identity.  The magistrate judge recommended that the district court should find plaintiff did not meet the evidentiary requirements for trademark infringement, defamation, or commercial disparagement.  In the alternative, the magistrate judge recommended that the district court should find the harm of violating defendant’s First Amendment and privacy rights clearly outweighed plaintiff’s right to recover and prevent harm from defendant’s actions.  Regarding plaintiff’s trademark claims, plaintiff had to show that (1) defendant’s conduct and the harm suffered by plaintiff was “commercial” in nature and (2) defendant’s messages were likely to cause an actionable degree of confusion regarding the origin or sponsorship of the defendant’s messages.  The magistrate judge found that plaintiff failed to provide sufficient evidence for either element.  The postings on the message board were not “commercial” in character or driven by some “competitive” purpose; they did not offer to sell, advertise, or promote any goods or services; they did not contain links to other websites; and nothing in the postings helped viewers in determining defendant’s identity and defendant’s receptiveness to business overtures.  The magistrate judge also found that plaintiff failed to provide evidence that the postings would cause a likelihood of confusion.  Viewing defendant’s comments on the history of SGI’s stock performance, the magistrate judge found it unlikely that individuals would think the screen name “highfieldscapital” was used by plaintiff or one of its employees.  Although defendant’s screen name was similar to plaintiff’s HIGHFIELDS CAPITAL mark, the magistrate judge believed the context in which defendant used the screen name substantially undercut the risk of likelihood of confusion—the content of the message in comparison with SGI stock performance; users understood a sophisticated, federally regulated investor like plaintiff would not use the message board to provide free and possible illegal investment advice; and garbage messages including many obviously bogus impersonations riddled the message board.  In fact, defendant’s use of plaintiff’s mark in its screen name “was necessary to effect the parody” and “made it so obvious that the messages were sardonic and not real.”  The magistrate judge also recommended quashing the subpoena because the balance of harms clearly favored defendant.  According to the court, “[a]nonymity liberates” and allowing users to post with screen names similar to registered trademarks “that have some message-related resonance or cachet contributes to the First Amendment ends of enriching the substance of the speech and of getting the message to a wider audience.”  The magistrate judge stated that allowing the subpoena would chill such commentary by causing public exposure as well as financial and legal liability for defendant.  If these costs existed for such speech, the magistrate judge believed it would disappear.  The district court judge upheld the magistrate judge’s findings and granted defendant’s motion to quash the subpoena.