A district court in Georgia has found that a political activist’s use of the term “WAL-OCAUST” coupled with Wal-Mart’s familiar smiley face and recognizable letter and typeface style is fair use.

Defendant sells t-shirts, buttons and other merchandise containing the WAL-OCAST trademark to protest what he believes to be Wal-Mart’s massive contribution to unemployment and U.S. destabilization by shipping jobs overseas where labor is cheaper. The campaign also used terms like WAL-QAEDA. Wal-Mart alleged trademark infringement and dilution by tarnishment. Defendant claimed fair use.

Wal-Mart submitted survey evidence of actual confusion to bolster its position that the activist’s use of the mark confused consumers. The court rejected Wal-Mart’s survey evidence of actual confusion as unpersuasive and of “dubious value” because, among other things, the sample size was not significant, and the conditions that were used to get the results did not reflect actual marketplace conditions. The court found that while Wal-Mart did have recognizable trademark rights in WAL-MART, and the blue stylized lettering, it has failed to show consumers would be confused as to the origin of the products.

Regarding Wal-Mart’s tarnishment claim, the court found that if there was tarnishment, it was the result of satire. A tarnishment claim based upon satire is not actionable under the anti-dilution statute because the speech is protected under the 1st Amendment.

Practice Note: The court early on recognized the campaign as parody, but correctly noted that parody is not an absolute defense to trademark infringement; in a defense against trademark infringement where parody is an element, a party must still prove no likelihood of confusion.

A U.S. District Court in Nevada granted Plaintiff Paradise Canyon’s motion for preliminary injunction against Defendant Integra Investments for Integra’s advertising of its resort properties. The court found Defendant attempted to lure consumers into buying homes by creating a false impression of association with Plaintiff’s famous Wolf Creek Golf Club.

Paradise Canyon owns and operates the famous Wolf Creek Resort and Golf Club in Mesquite, Nevada. The club is renown for its golfing and has been featured as one of the “50 Toughest Courses” in the world. Plaintiff holds four trademark registrations in various classes that include the words WOLF CREEK. Defendant owns a 33 acre parcel of land adjacent to the golf club, which it had earlier attempted to name “Wolf Creek Estates,” but was enjoined from doing so by a court order. Defendant now calls its community Hidden Wolf, and has created advertising to entice buyers to the new development. One such advertisement begins, “WORLD CLASS GOLFING” and goes on to suggest that residents of Hidden Wolf can “play this amazing [Wolf Creek] course every day – just by stepping outside your door.” Various other ads reference the Wolf Creek Golf course by name and then suggest that Hidden Wolf provides access privileges to the famous club.

The court found that while the statements in the ads were not literally false (Defendant never stated it was part of Wolf Creek), the ads had a tendency to deceive potential buyers into thinking a Hidden Wolf home purchase came with golf privileges.

Practice Note: Clients should look critically at their use of third party trademarks in advertising. There are many ways in which defendant might have fairly used the WOLF CREEK. For instance, making an association with the town of Mesquite, which is home to the Wolf Creek Resort, and noting Hidden Wolf’s proximity to the resort, would likely have achieved the same marketing effect without raising the ire of Plaintiff.

Reuters is reporting that the well-known rock band Smashing Pumpkins has filed suit against Virgin Records, claiming that the record company sullied its image by associating it with a Pepsi/Amazon promotion.

According to the law suit, filed in Los Angeles Superior Court on Monday, March 24, 2008, the band claims Virgin used the band’s name, music and images in its “Pepsi Stuff” Promotion, which allows Pepsi drinkers to purchase selected merchandise. In the law suit, the Smashing Pumpkins claim that by using the Band’s image and music as part of the promotion, Virgin has falsely given consumers the impression that Smashing Pumpkins endorsed and was affiliated with the Pepsi Stuff campaign.

Practice Note: Promotions Sponsors must not advertise their promotion in such a way that they create a false sense of Sponsorship with a third party. For instance, while a Sponsor may list the brand name of the prize to be awarded, it may not be able to display a third party trademark or call special attention to that brand in its advertising.