FW: U.S. Court of Appeals Upholds Right to Criticize Nissan Motor

[Matthew T. Blackmon]

U.S. Court of Appeals Upholds Right to Criticize Nissan Motor

District Court Improperly Restricted Content of Site After Advertising Was
Removed

WASHINGTON, D.C. - In a decision issued today in Nissan Motor Co. v. Nissan
Computer Co., the U.S. Court of Appeals for the Ninth Circuit upheld the
rights of members of the public to criticize corporations without being
deemed to have engaged in "commercial speech" that can be enjoined under the
trademark laws.

The case involved Uzi Nissan, a North Carolinian who runs a computer
business using his surname. He was sued by the giant automaker for trademark
infringement and dilution because he operated a Web site with the domain
name nissan.com; he also used his Web site to criticize the auto giant for
picking on him.

The trial court issued a series of rulings holding that Nissan was guilty of
both dilution and, to a limited extent, infringement, and consequently
issued on order forbidding Nissan from using his Web site to criticize
Nissan Motor in any way, even by linking to disparaging Web sites. The trial
judge reasoned that such criticism became "commercial speech" and hence
could be limited consistent with the First Amendment because it had the
potential for injuring Nissan Motor's business.

In a unanimous opinion written by U.S. Circuit Judge Pamela Rymer, the court
of appeals flatly rejected this reasoning and overturned the injunction.
Judge Rymer explained that the injunction was an improper content-based
restriction that is barred by the First Amendment.  She also held that the
defining hallmark of commercial speech is that the speech "does no more than
propose a commercial transaction," and the potential for adverse impact on
Nissan Motor's commercial activities does not similarly make speech
commercial.

"The court of appeals ruling strikes down a prior restraint against free
speech that set a dangerous precedent," said Paul Alan Levy, the Public
Citizen attorney who prepared its amicus brief. "Citizens who want to use
the Internet to speak their minds about corporations can breathe easier
after this ruling."

The case also contains several rulings on trademark law that will be of
significant interest.  Most important, the court decided that a trademark
cannot become "famous" and thus eligible for protection under the federal
anti-dilution law if it is being used commercially in any way, even in
conjunction with another term.

Under the federal law, dilution claims cannot be brought against a
commercial use that began before the trademark became famous.  Nissan Motor
had argued, and the trial judge had agreed, that Uzi Nissan's mere use of
his surname as part of the commercial name "Nissan Computer," which began in
1991, was not enough to prevent the Nissan trademark from becoming famous,
and hence only his 1994 registration of the domain name "nissan.com," which
used the Nissan name all by itself, could interfere with the development of
the mark's famousness.  The court of appeals sent the case back for a jury
trial to decide whether the Nissan mark was famous in 1991.

In this ruling, the court of appeals agreed with the arguments made by
Public Citizen in an amicus brief that it filed in the case.  A copy of that
brief can be found on the Public Citizen Web site at
http://www.citizen.org/documents/NissanAmicusBriefOnDilutionAppeal.pdf.

The court's opinion can be found on the court's Web site, and also on the
Public Citizen Web site at
http://www.citizen.org/documents/CourtofAppealsRulingNissanMotorvNissanCompu
ter.pdf.

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Public Citizen is a national, nonprofit consumer advocacy organization based
in Washington, D.C. For more information, please visit www.citizen.org.