The case, handed down this morning, is Arizona Bd. of Regents v. Doe, decided by Judges Consuelo Callahan and Lawrence VanDyke and District Judge Yvonne Gonzalez Rogers (N.D. Cal.). (For more on the facts, see this post.)
Congratulations to my UCLA First Amendment Clinic student Max Hyams, who argued the case before the Ninth Circuit as amicus in support of the decision below, and students Daniel McDonald Meteer and Eimile Nolan, who also worked on the brief. And thanks to Profs. Mark Lemley, Mark McKenna, and Rebecca Tushnet, who filed an amicus brief in support of our position; to Profs. David Babbe and Justin Bernstein, as well as Mark McKenna and Rebecca Tushnet, who helped with moot courts for Max Hyams; and, as always, to Scott & Cyan Banister, for their generous support of the Clinic.
From the Ninth Circuit opinion:
[1.] The district court did not err by dismissing ABR's complaint sua sponte without leave to amend and without providing notice because amendment would have been futile. See Wong v. Bell (9th Cir. 1981). With respect to all of ABR's claims, amendment would have been futile given the implausibility of the allegations and of a finding of likelihood of confusion. Of Doe's eighteen posts included on the Instagram page, only one post included the use of ABR's mark and trade dress. That one post contained profanity and a reasonable consumer would not think that a university would use such language when addressing the public. Reviewing the posts in their totality does not change the result, but rather reaffirms it.
Additionally, amendment would have also been futile given the non-commercial nature of Doe's activities. The Lanham Act was enacted to be applied in the commercial context, thus "infringement claims are subject to a commercial use requirement." Bosley Med. Inst., Inc. v. Kremer (9th Cir. 2005). Here, the record does not support the conclusion that Doe used ABR's marks for the sale of goods or services. Rather, the record shows that Doe used the marks to criticize and mock ABR and ABR's policies and administration.
While some of the initial posts did refer to a future party, none of those posts contained references to a particular party nor did they mention a specific date, time, cost, or any other details about any party. The mere reference that Doe was a "party planner" is only one factor for consideration. Because ABR's claims require a showing of likelihood of confusion and/or commercial use, the district court did not err in dismissing ABR's complaint sua sponte.
{ABR's appeal also implicates several First Amendment considerations worth noting. Even assuming Doe's posts were commercial in nature, this Court has recognized and adopted the Rogers test, which protects expressive uses of trademarks from Lanham Act liability. See Mattel v. MCA Records, Inc. (9th Cir. 2002). Doe's Instagram posts appear to constitute expressive work under Rogers as the posts communicated messages that mocked ABR's policies and administration. To the extent ABR's appeal attempts to improperly use trademark laws to block the expression of negative views about the university and its administration, such efforts fail.}
[2.] The district court did not err in dismissing ABR's trademark infringement, false designation of origin, and unfair competition claims after finding that there was no likelihood of confusion…. The district court conducted its likelihood of confusion analysis by looking at the full context of Doe's Instagram posts and by expressly evaluating some of the Sleekcraft factors. The court's analysis included a review of the surrounding posts, comments, and the context in which the posts were made…. We find that the district court properly applied the factors and did not abuse its discretion.
[3.] Similarly, the district court did not err by refusing to apply the initial interest confusion doctrine, which also requires a finding of likelihood of confusion. Network Automation, Inc. v. Advanced Sys. Concepts, Inc. (9th Cir. 2011)….
[4.] [T]he district court analyzed the [false advertising] claim, finding that a prudent consumer would not be confused or deceived by the posts included on Doe's Instagram. This necessarily includes the post regarding the alleged collaboration with Teva Pharmaceuticals…. Thus, we affirm the district court's order dismissing ABR's false advertising claim since the claim also requires a showing of deceit or likelihood of deceit.
[5.] The district court did not err in declining to decide ABR's Arizona state law dilution claim once the court dismissed all of the claims over which it had original jurisdiction. Contrary to ABR's contention, 28 U.S.C. § 1338(b) does not confer district courts with original jurisdiction over state law dilution claims.
Rather, the statute provides "original jurisdiction of any civil action asserting a claim of unfair competition." 28 U.S.C. § 1338(b). The statute provides supplemental jurisdiction over state law dilution claims. Accordingly, the district court properly exercised its discretion in deciding not to exercise supplemental jurisdiction over the state law dilution claim after dismissing all federal claims.
That the district court decided ABR's state law unfair competition claim but did not decide its state law dilution claim was not an abuse of discretion. As explained above, under 28 U.S.C. § 1338(b), the court had original jurisdiction over ABR's unfair competition claim and properly resolved that claim. An unfair competition claim and a state dilution claim are distinct. Given that the dilution claim required additional analysis, the district court did not err in declining to exercise supplemental jurisdiction over ABR's dilution claim.
[6.] The district court did not err in denying ABR's motion for default judgment as the complaint lacked merit as to the substantive claims and was insufficient.
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