Bad definition of suggestiveness in a sad TM case about anti-hate groups

Life After Hate, Inc. v. Free Radicals Project, Inc., 2019
WL 4825072, No. 18 C 6967 (N.D. Ill Sept. 30, 2019)
“At a time when people—particularly young people—are being
radicalized online with alarming frequency, nonprofit organizations like Life
After Hate and Free Radicals Project provide critical outreach services to help
individuals disengage from violence-based extremism. Unfortunately, these two
organizations now find themselves in an ugly trademark dispute that can only
distract them from the important work they perform.”  LAH sued Christian Picciolini (formerly high
ranking at LAH) and his Free Radicals Project for infringement of the mark ExitUSA
and a related slogan.  LAH secured a
preliminary injunction limiting defendants to fair use of the mark to describe
Picciolini’s former work. 
In the process, the court demonstrates that judicial
misunderstanding of the standard for descriptiveness versus suggestiveness continues
to grow—here it is in the Seventh Circuit.  It probably wouldn’t change the outcome here
(though note the description of the parties’ services below), but it’s a bad
idea to state the standard as “a suggestive mark requires some imagination to guess
the goods/services covered.”  The correct
standard, as applied by the PTO, is that a suggestive mark requires imagination
to link with the goods/services, knowing the goods/services.  Otherwise QUICK is suggestive for food delivery,
printing services, and anything else one might want done quickly.
LAH is an Illinois nonprofit “that follows the model of ‘exit’
programs developed in Europe in the 1990’s to help individuals exit hate groups
through education, interventions, academic research, and outreach.” Picciolini
helped found LAH in 2009 and left the organization in 2017. In 2018, Picciolini
founded Free Radicals Project.
In 2011, LAH’s principals formed a nonprofit.  When one of the founders left LAH, Picciolini
informed him that “the assets of LAH and KNW [a LAH program, Kindness not
Weakness] belong to the organization,” including “the Youtube and your
arno@lifeafterhate.org email address.” Picciolini told him “[w]e’ll need the
youtube account back, as well as the KNW twitter credentials.” Picciolini said
that LAH needed the YouTube account because “the domain is the organization’s
and belongs to us,” and the former founder keeping the account for himself “will
be confusing.” He also told the departing founder to turn over access to “all
LAH and KNW associated domains” to Picciolini’s GoDaddy account.
In 2014, another principal traveled to Europe and met with a
number of “Exit”-branded groups, including Exit Sweden, Exit Germany, Exit
Norway, Exit U.K., and Exit Slovakia, that provide similar disengagement and
deradicalization services in their respective countries. He decided that LAH
should start calling itself “ExitUSA” to more accurately convey the outreach
services it was offering and improve its recognition among peer organizations
in Europe. LAH began doing business as “ExitUSA,” which became a “program” of
LAH. They developed a logo for ExitUSA, a new logo for LAH, and the tagline “No
Judgment. Just Help.” The logos were based on Picciolini’s designs. Picciolini said
he bought www.ExitUSA.org with his
personal funds and was later reimbursed by LAH. The domain was transferred to
LAH’s GoDaddy account, which lists Picciolini as the administrator. He also
created an “ExitUSA” YouTube channel.
Eventually, conflicts between the principals led to Picciolini’s
exit; first he proposed that LAH “spin off” ExitUSA to be run as a separate
nonprofit led by Picciolini, but that didn’t happen, though he did resign from
LAH’s board and just served as a director of ExitUSA for some time. He was
terminated in 2017; again LAH rejected his idea of a “spin off” to avoid
“confus[ing] people and rais[ing] questions.” LAH declined in part because
ExitUSA was such a “significant part” of LAH and was “associated with [LAH’s]
identity.”
Shortly thereafter, LAH’s members learned that they could
not control or access the ExitUSA.org domain, which began automatically
redirecting users to a different webpage— ChristianPicciolini.com/ExitUSA,
which featured ExitUSA logos and slogans, along with Picciolini’s photo and
posts about his books. LAH also learned that it could not access the Twitter
account @ExitUSATeam, which it had been previously using, or the ExitUSA
Youtube channel, which was “attached to [Picciolini’s] email.” Picciolini registered
the domain “Exit.us.”  
In 2018, Picciolini started an Illinois nonprofit called
Free Radicals Project that used the phrases “No Judgment. Just Help.” and “Free
Radicals: There is life after hate.” Four videos created primarily by
Picciolini as part of a grant LAH received, which had been posted on the
ExitUSA YouTube channel were also posted on the Free Radicals Project site. At
some point, ExitUSA.org began automatically redirecting users to a website for
Free Radicals Project. The description of the @ExitUSATeam Twitter handle was
changed to “ExitUSA (now @FreeRadicalsOrg),” inviting users to visit the
@FreeRadicalsOrg Twitter page.
Various people in the industry asked “what was happening
with Life After Hate,” “what was happening with…[Exit]USA,” etc. A journalist
asked if LAH controlled ExitUSA or if Picciolini did, or if LAH and Picciolini
controlled it as partners. [Note that some courts would interpret similar evidence
as consumer understanding that there’s uncertainty, rather than consumer
confusion.]
LAH retained a lawyer and applied to register “EXITUSA” and
“LIFE AFTER HATE,” which were registered in 2018 with a 2017 priority date. It
sent a C&D demanding that Picciolini stop using the “ExitUSA” and “Life
After Hate” marks; Picciolini then filed a trademark application for “EXITUSA,”
which was eventually abandoned. LAH’s officers also tried to reclaim the
ExitUSA.org domain through GoDaddy and Google. After the registration, LAH
applied to an organization that connects non-profit groups with law firms
providing pro bono legal assistance, but after five or six weeks, it learned
that it wasn’t selected for services. LAH couldn’t afford the fees of the first
lawyer it used. It finally retained counsel in September 2018, and filed suit October
17, 2018.
Around November 2018, the ExitUSA.org domain stopped
redirecting to Picciolini’s website; in January 2019, Picciolini stopped using
the @ExitUSATeam Twitter account; and in February 2019, the ExitUSA YouTube
channel was disabled. Picciolini and Free Radicals Project still allegedly used
the “No Judgment. Just Help.” and “Life After Hate” phrases on the Free
Radicals Project website and posted links to the four videos LAH produced.
Defendants tried to rebut the presumption of validity for the
registered marks, arguing that “Life After Hate” merely describes LAH’s
services: namely, helping people with their life after leaving a hate group. The
court disagreed, first because of infrequent use of the term by similar
organizations in the US. Second, and here’s the wrong part, “[u]nderstanding
exactly what services ‘Life After Hate’ provides requires a leap of
imagination.” It wasn’t readily apparent that it helped people after they left
hate groups, and anyway LAH provided other services (another wrong turn: QWIK
PRINT is descriptive for a print store that also sales copy paper and other
office supplies, because the term describes one service it provides). Since “a
consumer would need to use their imagination to determine the nature of
services provided by an organization called Life After Hate,” it was
suggestive.  
The same test also deemed ExitUSA suggestive, though a
closer call. Defendants noted the existence of other geographic “Exit” groups
and argued that “USA” was merely a geographic designation and “exit” merely a
type of group. But the record didn’t show that the use of “exit” was so
widespread in the US as to make it descriptive or generic.  Likewise, “ExitUSA” didn’t immediately convey “disengagement
and deradicalization services.” It “literally sounds like a group that helps
people exit the United States—not a group that helps people in the United
States exit extremist hate groups. It takes a degree of thought and imagination
to make that leap.” 
Finally, “No Judgment. Just Help.” was similarly suggestive
because it didn’t immediately convey any ideas, characteristics, or qualities
about LAH’s services. (That’s just not true, though—it immediately conveys that
the providers won’t judge you—it just doesn’t say what they won’t judge
you for, which is the QUICK issue.) And anyway only two parties used it,
indicating that the phrase was suggestive.
Sadly, all of this could easily have been done with “descriptive
plus secondary meaning,” which the court later says exists.
After that, ownership and likely confusion were mostly not particularly
interesting analyses.  One point of note
is consumer care:
[I]n this context, the price (or
lack thereof) of the services is much less important than the nature of the
services. As LAH’s own witness testified, “providing private and confidential
services is really the basis of the trust we’re establishing with the people we
serve…The people we’re trying to help are already very paranoid and afraid
and skittish. They’re trying to hide the idea that they’re trying to change.” …
LAH’s services are sensitive, private, and required LAH to establish trust with
its clients. This testimony makes clear that consumers of these services are
likely to exercise a high degree of care when choosing a service provider. This
factor weighs in Defendants’ favor.
The court also deemed three instances of industry people asking what was up to weigh “heavily” against
defendants as instances of actual confusion.
In a fairly weird description of the standard for a
preliminary injunction, the court found that LAH had a “greater than negligible
chance” of showing that it owned valid marks and of showing a likelihood of
confusion, resulting in a “good chance” of succeeding on the merits.  Of course, the preliminary injunction
standard isn’t math, but “greater than negligible” is really not the standard
for likely success on the merits. Clearly that’s just underselling the
evidence in this case (the court then says “[i]ndeed, [given the factors,] LAH
has a strong likelihood of succeeding”), but it’s still weird.
The court then presumed irreparable injury, despite eBay.
Delay can rebut the presumption. Here, LAH learned in August 2017 that ExitUSA.org
was automatically redirecting users to ChristianPicciolini.com/ExitUSA, which
featured ExitUSA logos and slogans, but it didn’t sue for 14 months. This was
again a close call, but here the delay wasn’t too long given LAH’s explanations
for the delay. It quickly hired an attorney to help it submit applications to
the USPTO, hired another attorney who sent Picciolini a C&D, and attempted
to regain control of the ExitUSA.org domain. “More time passed while LAH waited
on the results of its USPTO applications and found a third set of attorneys to
assist it in bringing its claims, but once it secured new counsel, it promptly
brought this suit. Though 14 months is certainly pushing the limit, LAH
demonstrated that it was making good faith efforts during that time to
investigate and prosecute its trademark rights.” Given the C&D, defendants
couldn’t have been lulled into a false sense of security.  (This seems to conflate laches and delay that rebuts a presumption of irreparable harm for purposes of preliminary relief, but it is taken directly from prior cases.)
Defendants argued that an injunction would damage
Picciolini’s goodwill and reputation in the anti-extremism community, but that
was speculative.
The injunction prohibited use of “LIFE AFTER HATE,” and/or
“EXITUSA,” or “No Judgment. Just Help.” (or any variation thereof) “in
connection with any goods or services online or offline.” For exitusa.org, defendants
could do nothing with it but create a landing page that states: “For those
seeking Life After Hate, Inc., please go to www.lifeafterhate.org/exitusa
(though it’s not clear they have to do so); they also couldn’t use the
Twitter handle/account or YouTube channels. They couldn’t use LAH videos
without a disclaimer conspicuously stating “This video is owned by and is used
with the permission of Life After Hate, Inc. Free Radicals Project, Inc. is not
in any way affiliated with Life After Hate, Inc.” 
Despite the language of total prohibition that leads off the
injunction, they couldn’t use or permit the relevant phrases “on any website or
social media account, except for in the limited, fair use manner that
sufficiently limits and/or dispels any likelihood of confusion (e.g.,
Defendants may state in Picciolini’s biography that he co-founded Life After
Hate, Inc., but he must also explicitly state that he ‘no longer works for and
is no longer affiliated with “Life After Hate, Inc.” or “ExitUSA.”’).” Can he
say these things offline under the terms of the injunction? I think he has a
First Amendment right to do so. The last part of the injunction suggests that
he can by saying that, if defendants mention “Life After Hate” or “ExitUSA,” “they
shall explicitly communicate that Defendants are no longer associated with or
affiliated with Life After Hate, Inc. or ExitUSA.”

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