Fifth Circuit upholds mandatory self-abnegating disclosure to correct competitor’s harassment

Test Masters Educational Services, Inc. v. Robin Singh
Educational Services, Inc., No. 13-20250 (5th Cir. Aug. 21, 2015)
 
The parties, test prep companies, have competing claims to
TESTMASTERS as a trademark, and have been litigating for over a decade.  Plaintiff TES operates under the name
Testmasters; it was founded in 1991, initially concentrating on engineering
licensing exams but expanding to others, including the LSAT. Until 2002, TES
offered live courses only in Texas, primarily in Houston; it has since expanded
outside Texas.  Singh started offering
test preparation courses under the name “TestMasters” in 1991. Singh initially
offered only LSAT courses in California, but has since expanded to offer
courses nationwide for a variety of exams.
 
Singh applied for registration in 1995; the PTO first denied
the application on the basis of other similar marks, but approved the
application “after determining that none of the three marks were still in use.”
At that point, Singh discovered that TES already owned the domain name
“testmasters.com” and sent TES a demand letter. 
Litigation ensued, and continued. 
In 2002, the Fifth Circuit held that TESTMASTERS was descriptive, that
TES’s rights to the mark were limited to Texas, and that Singh had failed to
prove that the mark had acquired secondary meaning.  After the second lawsuit, in 2005, Singh was
enjoined from interfering with TES’s use of the mark in Texas, and Singh was
permitted to challenge TES’s claim to the mark outside of Texas.
 
Also, TES applied for nationwide registration in 2001; Singh
opposed.  In 2011, after a lot of stuff I’m
sure everyone involved wishes they could’ve skipped too, the TTAB denied the
applications, holding that the mark was descriptive and that TES had failed to
demonstrate “substantially exclusive use” of the descriptive mark. In April
2013, the district court affirmed the TTAB’s decision, granted Singh summary
judgment on TES’s infringement claims, and dismissed Singh’s infringement
counterclaims based on collateral estoppel. 
There was also a contempt issue, of which more below.
 
On appeal, TES argued that Singh lacked standing to oppose
the registration, because he’d previously lost on the secondary meaning issue.  But he’d only been enjoined from pursuing
registration, not from claiming trademark rights, so he had standing.  TES further argued that it had presented
enough evidence of secondary meaning in “unrestricted geographic and subject
matter areas” to survive summary judgment. 
It had not.  The evidence showed
that both parties had used the mark for a while, and that Singh’s company was
larger and did significantly more business outside Texas.  Both parties advertised extensively, TES
mostly to engineering students and Singh primarily to LSAT takers.  TES’s survey was flawed because, though it
asked engineering exam-takers whether they associated “Testmasters” with one
company, it didn’t determine which one that was for the 50.7% who said
yes.  Plus, the survey was directed only
at people taking engineering exams and half of those polled were from Texas. As
for direct consumer evidence, the court of appeals agreed with the district
court that “[e]ach party’s evidence shows that, in its strongest subject matter
area, it is well-known and there may be some consumer confusion.”
 
What TES needed to show to prove its case was that the mark
had “secondary meaning on a nationwide basis for all test preparation courses.”
At most, it showed that the mark has acquired a secondary meaning for
professional engineering examinations, not any other test preparation services.
 
Singh argued that the district court erred in finding him
collaterally estopped from claiming secondary meaning.  It didn’t. 
Singh claimed that the passage of 13 years changed things enough to
justify giving him another bite at the apple: among other things, his annual
revenues increased from just over $3 million in 2001 to an average of $14
million between 2008 and 2010. But “[e]vidence of increased business success alone
is insufficient to show a significant intervening change” to justify rejecting
collateral estoppel.
 
The court of appeals vacated a contempt order against Singh’s
lawyer, Daniel Sheehan, but not against Singh. 
In 2003 and 2004, the district court enjoined Singh from registering the
mark, interfering with TES’s attempt to register the mark, and using the mark
in Texas/directing the mark at Texas; then added an order barring Singh from “threatening,
or harassing [TES], its employees, its staff, or TES’s counsel, counsel’s
employees, or counsel’s staff.” (A bar on direct communication was reversed by
the court of appeals; the threat/harassment prohibitions were upheld.)
 
According to TES, Singh continued to advertise in Texas,
instructed employees to post negative comments about TES on various websites,
and aided in the posting of defamatory videos online. One posting referenced a
state-court paternity suit involving TES’s founder, calling him a “deadbeat
dad” and mentioning the minor child involved in the suit by name.  At the contempt hearing, the court ordered
Singh’s lawyer incarcerated to get Singh to remove the postings, which Singh took
steps to do; the court also ordered Singh to remove the harassing posts. 
 
TES then requested additional contempt sanctions, which were
granted in part, and the district court ordered Singh to publish a “remedial
posting” on “ripoffreport.com” in response to the “deadbeat dad” post he had
previously made, requiring him to post: “Robin Singh and Robin Singh
Educational Services previously posted on March 25, 2010, a Complaint Review of
Dr. Haku Israni and his website testmasters.com. Singh and Dr. Israni were
involved in litigation at that time and Singh would now like to retract his
prior complaint. No credence should be paid to that complaint or any of its
contents.”
 
Singh argued that the contempt sanctions and remedial order
violated the First Amendment. The court of appeals disagreed.  Harassment isn’t protected by the First
Amendment, even when the harassment is published on the internet and not
directly communicated to the target.
 
Singh also argued that the remedial statement violated his
First Amendment right not to speak, and that he was forced to say things that were
simply untrue, because he didn’t “wish” to retract his complaint and believed
that credence should be given to his
claims.  Singh’s statements were
commercial speech.  Though the post
focused on TES’s founder’s personal life, “Singh must have made it with the
economic interest of harming TES.”  A
required disclosure related to commercial speech need only be “reasonably
related to the [government’s] interest in preventing deception of consumers.” Because
the original posting was deceptive, the district court’s order was reasonably
related to its interest in preventing consumer deception by correcting the
misleading information.  Singh’s
objection to the language indicating he’d like to retract the statements didn’t
identify a “relevant” falsehood.  “Whether
Singh enjoyed taking this medicine is an insignificant question of phrasing.”
 
[Note that under the panel opinion in the NAM v. SEC case,
this result couldn’t occur.  The Ripoff
Report complaint isn’t “advertising” even if it is commercial speech, and the
like/credence wording would seem to trigger the controversiality/not purely
factual limit as interpreted therein.]

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