Challenging competitor’s TM as generic is protected by Mass. anti-SLAPP law

Shire City Herbals, Inc. v. Blue, 2016 WL 2757366 (D. Mass.
May 12, 2016)
 
HT Eric Goldman.  Shire
City sued Mary Blue and two other people for trademark infringement and false
advertising-related claims based on their attacks on Shire City’s federally
registered trademark, FIRE CIDER, for a herbal tonic. Defendants filed a
special motion to dismiss the non-trademark infringement claims under
Massachusetts’ anti-SLAPP law, and the court granted the motion. (Apparently
even as to the Lanham Act false advertising claims? Not sure how that works.)
 
Shire City sells a tonic comprised of apple cider vinegar,
citrus, honey, and spices; it registered FIRE CIDER in 2012. After “obtaining”
(registering?) the mark, Shire City began objecting to similar uses of “fire
cider” on commercial websites. Defendants compete with Shire City in the market
for similar tonics. They claimed that “fire cider” is a generic term used by
herbalists for decades for this type of tonic, and that the registration is
therefore invalid.
 
Blue saw a blog post about the Shire City registration in
January 2014, and immediately created a petition at change.org to support
cancellation of the mark. The petition had over 2,000 signatures within 24
hours and currently has over 11,000 signatures. Shire City posted online that
it had obtained the trademark to protect itself from larger companies and would
discuss the matter with its lawyer. Another defendant, Telkes, then sent an
email to Shire City asking it to give up the mark/registration, stating that “Fire
Cider is an exciting and popular remedy that many of my students and friends
have wanted me to either mass market or they themselves have been pushed in
this direction,” and also stated, “I really don’t want to see you completely
lose all of your business after all of the hard work you have done.” Defendants
then began organizing a boycott of Shire City’s product. They created a
website, http://ift.tt/1ezqNyW, and various Facebook pages, including the
“Traditions not Trademarks” page.
 
Shire City alleged that defendants wrongly claimed that
Shire City had sued other herbal companies; that Shire City claimed to have originated
the recipe sold under the Fire Cider mark; that Shire City claimed other
herbalists would be legally barred from selling similar recipes; that Shire
City was forcing other herbalists to stop making and selling similar tonics; and
that Shire City was asking retailers to remove other herbalists’ tonics from
their shelves. Shire City announced that the only way to make “fire cider”
generic would be a decision from the TTAB (which isn’t technically true, though the
TTAB would have to cancel the registration to get it off the books early). Subsequently,
Blue filed a pro se cancellation petition with the TTAB, and then Shire City
sued defendants, bringing the cancellation issue before the court instead.
 
The defendants allegedly used their own websites and
Facebook pages, which also promote their own products, to link to the pages
supporting the boycott. Blue uploaded sample letters to http://ift.tt/1ezqNyW
for people to send to Shire City’s retail accounts, allegedly demanding that
they remove Shire City’s product from the shelves and replace it with similar
products made by defendant and others: a sample letter asked Stores “to consider
stocking a locally made Fire Cider in your store and removing Fire Cider made
by [Plaintiff] from your shelves until they revoke the trademark.” The current
sample letter on http://ift.tt/1ezqNyW only requests that Shire City’s product
be removed and does not mention replacing it with other products. Defendants
allegedly incited other people to contact Shire City’s retail accounts in other
ways too, such as via phone calls and personal visits. Defendants also reached
out on their own: for example, Telkes saw Shire City’s product sold in a store,
and suggested that the store “do their research” on Shire City. Defendants, and
other herbalists, also donated products for an Etsy shop to raise money for
legal costs.
 
Shire City alleged that it lost existing and prospective
retail accounts due to this conduct, and that some stores carry defendants’
products instead. Defendant Langelier’s website is linked in the “alternative
producers of fire cider” section of http://ift.tt/1ezqNyW,
though that section of the website was created after the filing of this lawsuit.
 
Massachusetts’ anti-SLAPP law allows a party to bring a
special motion to dismiss claims that “are based on said party’s exercise of
its right of petition under the constitution of the United States or of the
commonwealth.” The moving party must “make a threshold showing through the
pleadings and affidavits that the claims against it are ‘based on’ the
petitioning activities alone and have no substantial basis other than or in addition
to the petitioning activities.” The law defines the relevant acts as
 
[1] any written or oral statement made
before or submitted to a legislative, executive, or judicial body, or any other
governmental proceeding; [2] any written or oral statement made in connection
with an issue under consideration or review by a legislative, executive, or
judicial body, or any other governmental proceeding; [3] any statement
reasonably likely to encourage consideration or review of an issue by a
legislative, executive, or judicial body or any other governmental proceeding;
[4] any statement reasonably likely to enlist public participation in an effort
to effect such consideration; or [5] any other statement falling within constitutional
protection of the right to petition government.
 
“It is not necessary that the challenged activity be
motivated by a matter of public concern.” Defendants argued that their
activities were meant to effect the cancellation of Shire City’s trademark
[registration], and were thus petitioning activities, while Shire City argued
that they were attempting to cripple Shire City’s business for their own
commercial purposes.
 
Considering the context, the court agreed with
defendants.  Their goal “from the start
was to cancel the Fire Cider mark, and their activities took place in the
context of achieving that goal.” 
Basically, they published statements, gathered signatures, spoke with
retailers, and organized a boycott, all with the purpose of cancelling the mark
[registration]. These were statements “reasonably likely to encourage
consideration or review of an issue” by a government body, statements
“reasonably likely to enlist public participation in an effort to effect such
consideration,” etc.
 
It wasn’t significant that their first steps occurred before
formal cancellation proceedings began.  “Petitioning
includes all statements made to influence, inform, or at the very least, reach
governmental bodies— either directly or indirectly,” and defendants’ statements
“clearly” satisfied that standard. 
Especially given defendants’ lack of experience with intellectual
property, and their lack of legal representation even before the TTAB
proceedings began, their activity was petitioning activity.  While “[i]ndividuals who petition the
government are not necessarily free to engage in gratuitous publication of the
petition elsewhere without consequence,” the court saw “no hint” of gratuitous
publication here.  Although defendants
might have obtained some commercial benefit in connection with their cancellation
attempt, given that their products are alternatives to Shire City’s product,
there was also evidence that stores that replaced Shire City’s product with one
from defendants initiated contact with them and not the other way around.  Given that the listing of alternative
products didn’t go up until after Shire City sued, and that the Etsy shop is
raising legal funds with products from various herbalists, “it is difficult to
see how these commercial benefits could be considered evidence indicating
Defendants’ statements are secretly designed to promote their own products or
serve as cover for the real purpose of selling them.”
 
Even if defendants had commercial motivations, the initial
anti-SLAPP inquiry is not on the motive, but on the accused conduct itself.  “Actions can have economic or commercial
motives, or even be based entirely on economic self-interest, and still qualify
as petitioning activities for purposes of the anti-SLAPP law.”  Here, the challenged conduct  was “at the very most, petitioning activities
with some commercial effects,” not “commercial activities in and of themselves.”
As the court pointed out, “[p]ublishing statements and organizing a boycott are
quintessential petitioning activities.”
 
At that point, the burden shifted to Shire City to show that
“(1) the moving party’s exercise of its right to petition was devoid of any
reasonable factual support or any arguable basis in law and (2) the moving
party’s acts caused actual injury to the responding party.” This it could not
do.  Given defendants’ “genuine belief
that the Fire Cider Mark is invalid and the fact that the trademark dispute
will continue regardless of the outcome on this special motion to dismiss, it
is clear that Defendants’ actions were not devoid of any reasonable factual support
or any arguable basis in law.”

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