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DETROIT—A seller of business opportunities, Career Agents Network Inc., not only lost its case against a persistent blogger who wrote unkind things about the firm, but in an unusual move the licensor was also ordered by the court to compensate the blogger $23,000 for legal fees.
Blogger and website owner Lawrence R. White says that he became upset at the personnel recruiting licensor when he lost more than $49,000 as a licensee. Then his licensor Health Career Agents sold its assets and moved management to another entity, Career Agents Network Inc. White says that all of this made him look deeper. He discovered his licensor made fraudulent misrepresentations during his due diligence efforts before purchasing the business opportunity. "The company did not disclose in their documents that their officers were sued for fraud before I bought the business," says White.
The blogger elaborates on yet another problem: "The founder and principal of Health Career Agents [the name of the company before it sold its assets to Career Agents] had served time in the Lewisberg, Pennsylvania federal penitentiary for possession with intent to distribute LSD." The firm didn't disclose this in their disclosure documents, a form regulated by the Federal Trade Commission and various States to disclose important information to potential buyers of business opportunities. White says that had he known the founder had been a convict and a drug addict he would have looked elsewhere for opportunity. "That is not the kind of person that I want to be in business with," he states.
At the top of his site, CareerAgentsNetwork.biz, is a proclamation: "WARNING! If you are considering investing in this 'business opportunity,' be aware that it is highly improbable that you will earn an adequate income. If you proceed with this company, you have been warned by those that know and have lost tens of thousands of dollars by trusting them and their 'agent approach.' "
To drive home the point, a link to another of his sites, CareerAgentsNetworkSucks.com, sits right below.
Trademark and franchise attorney Lee Plave, partner in Virginia-based Plave Koch PLC and formerly with law firm DLA Piper, explains that the problem is not what the blogger wrote. Mr. White has a right to publicly criticize, bash and rant against a company and its leaders to his heart's content.
Plave thinks from a legal standpoint that trying to remove online postings or prevent bloggers from posting content is a fruitless activity for an offended firm. "There is no point in a business trying to stop comment," he says, alluding to first amendment rights that protect the free speech of American citizens. "This is why firms do not pursue pulling content off demeaning websites."
Career Agents Network didn't like what they saw. The company sued Mr. White for cybersquatting and trademark infringement under the federal Lanham Act that regulates intellectual property rights.
Plave explains that the problem is the use of the brand name in the domain. When names are closely matched, Internet users can become confused about the brand. For example, CareerAgentsNetworkSucks.com reasonably connotes to a reader that it as an editorial response to a firm. But users may well think they are on a company site when they go to White's CareerAgentsNetwork.biz. "That uses the trademark in a confusing manner," says Plave.
In this case, that legal strategy did not work.
Judge Robert Cleland of the U.S. District Court for the Eastern District of Michigan, Southern Division, reminded the plaintiff's attorneys that the defendant was not a competitor "selling domain names at an extortionate rate" but an "unhappy consumer" of the licensor's services. The judge explained that the licensor had to show that White gained commercially from using Career Agent's trademarks in order for the Lanham Act to be of effect. "The court cannot imagine how Defendants may have intended to profit from their use of Plaintiff's alleged marks in their Domain Names," proclaimed the judge. Cleland cited the precedent of Lucas Nursery, saying that the case "held that a consumer website created, not with a bad faith intent to profit, but only to complain about allegedly poor performance does not constitute cybersquatting under 15 U.S.C. § 1125(d), even where the site's domain is the business's name verbatim." [see Lucas Nursery 359 F3d 806 [6th Cir. 2004), pdf, 5 pgs]
The judge further stated that he saw the lawsuit by Career Agents as "oppressive."
"Career Agents Network thought they could intimidate me by outspending me in this litigation," explains White about what the judge probably meant by "oppressive."
For many bloggers, the thought of a critical post running up against the deep pockets of a corporation is intimidating. They will remove content when bullied to do so, no matter what their legal rights are. That is an incentive for companies to push for trial, even when they know they do not have a case. In a war of attrition, companies can easily outspend the blogger.
Judge Cleland ruled that the licensor not only did not have a case, which under the American legal system means that each party goes their own way, paying their own legal fees, but the judge also took the extraordinary step on June 29 of ordering Career Agents Network to pay the blogger $23,000.
"They underestimated my resolve to protect my constitutional rights," declares the case's winner. White adds, "This ruling sets precedence that if you engage in litigation to oppress someone's constitutionally guaranteed freedom of speech to be critical of business practices, that company will not only have to pay their own legal fees to get there, but will also have to pay the blogger's fees when the company loses."
Ronald Coleman, who is general counsel of the Media Bloggers Association, head of the intellectual property practice at Goetz Fitzpatrick LLP, and a prolific blogger, comments, "This is a significant additional step in the direction away from the madness that reigned in the courts not more than ten years ago, when ownership of a trademark was considered all but a license to censor even a descriptive use or commentary on the Internet—whether in domain names or not."
Plave does not see a judicial trend in the ruling. "Sometimes these cases are won by the trademark owner, and sometimes they are not," he says.
But Paul Levy, the attorney who represented White, thinks such rulings are indeed a trend. "The key issues on the merits of Career Agents Network v White were decided early last decade, in court of appeals cases in 2003 and 2004. I was the lawyer who won the 2003 TaubmanSucks.com case," Levy tells Blue MauMau.
Serving as an attorney for the non-profit advocacy group Public Citizen that was founded by Ralph Nader in 1971, Levy declares, "Career Agents Network's lawyers apparently told the trademark owners that this was a case that they could win. The court not only disagreed but also held the suit to be so flagrantly wrong that White was awarded attorney fees."
New York-based Coleman asserts that this is a good ruling in protecting the rights of bloggers. "Judge Cleland is to be commended for striking the proper balance between brand protection and free expression," he declares.
White now posts words on his website to remind displeased licensors of his rights: "All sites listed above are NON-commercial entities with protections guaranteed by the First Amendment to the United States Constitution."
Public Citizen's Levy sums up the court's ruling from his point of view. "Trademark owners need candor from their lawyers. They need to be told when a lawsuit is a loser."
White says that Career Agents Network plans to appeal the ruling.
Law firm Manatt, Phelps & Phillips LLC provides an excellent summary of the Career Agents Network v White case.