Smith v. Wal-Mart Stores, Inc.

537 F.Supp.2d 1302

Charles SMITH, Plaintiff, v. WAL-MART STORES, INC., Defendant.

Civil Action No. 1:06-cv-526-TCB.

United States District Court, N.D. Georgia, Atlanta Division.

March 20, 2008.

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Gerald R. Weber, Atlanta, GA, Paul Alan Levy, Public Citizen Litigation Group, Washington, DC, for Plaintiff.

Claudia T. Bogdanos, Partha P. Chattoraj, Robert L. Raskopf, Quinn, Emanuel, Urquhart, Oliver & Hedges, LLP, New York, NY, Kenneth R. Ozment, John M. Bowler, Troutman Sanders, Atlanta, GA, for Defendant.

ORDER

TIMOTHY C. BATTEN, Sr., District Judge.

This action arises from the contention of Defendant Wal-Mart Stores, Inc. that its registered `trademarks "WALMART"; "WAL-MART"; and "WAL★MART"; its registered word mark "ALWAYS LOW PRICES. ALWAYS"; and its "wellknown smiley face mark" were infringed by Plaintiff Charles Smith's anti-Wal-Mart merchandise. Smith petitions the Court to declare his activities legal so that he may resume them without fear of incurring liability for damages; Wal-Mart counterclaims for an award of ownership of Smith's Wal-Mart-related domain names, an injunction precluding Smith from making commercial use of any designation beginning with the prefix "WAL," and an award of nominal damages. Both parties pray for costs and attorneys' fees.

Pending before the Court are Smith's motion for summary judgment [76], Wal-Mart's motion for summary judgment [77], Smith's motion in limine to exclude Wal-Mart's expert witness evidence [78], and Wal-Wart's motions in limine to exclude evidence from Smith's two rebuttal expert witnesses [81, 82].

I. Background

Wal-Wart Stores, Inc., which had approximately $283 billion in gross domestic revenue in fiscal year 2008,¹ sells retail goods and services through a large chain of nearly 6500 physical stores and its Internet site, www.wal-mart.com. The company also owns mad operates additional domain names, including www. walmartstores.com and www.walmartfacts. com, that link to the www.wal-mart.com website.

The company owns and has continuously used the well-known WAL-MART trademark and service mark in the United States for retail department store services since 1962 and has longstanding registered trademark rights in the marks. WAL-MART and WALMART are used alone or in conjunction with Wal-Mart's blue five-pointed star. Wal-Mart also owns a trademark registration in the word mark "ALWAYS LOW PRICES. ALWAYS."

The registered WAL-MART marks are usually displayed in Wal-Mart's blue, block-letter font, and when the word "ALWAYS" is used at the end of the phrase "ALWAYS LOW PRICES. ALWAYS," it is displayed in a red, italicized font, placed at approximately a forty-five degree angle after the horizontal blue, block-letter phrase "ALWAYS LOW PRICES." The company also often uses a yellow "smiley face" in conjunction with its registered marks.

Wal-Mart uses its marks extensively on its buildings, advertising, community support programs, and in association with its credit card, vision care, vacation planning, pharmacy and other services.

Smith is an avid and vocal critic of Wal-Mart. He believes that Wal-Mart has a destructive effect on communities, treats workers badly, and has a damaging influence on the United States as a whole — an influence so detrimental to the United States and its communities that Smith likens it to that of the Nazi regime. With the goals of stimulating discussions about Wal-Mart and getting others of like mind to join him in expressing strongly negative views about Wal-Mart, Smith created various designs and slogans that incorporated the word "Walocaust,"² a word Smith invented by combining the first three letters of Wal-Mart's name with the last six letters of the word "holocaust."

Smith created four basic Walocaust designs.³ One design depicted a blue stylized bird modeled to resemble a Nazi eagle grasping a yellow smiley face in the same manner that a Nazi eagle is typically depicted grasping a swastika. Above the bird image, the word "WAL★OCAUST" was printed in a blue font comparable to that commonly used by Wal-Mart. Two designs were text only: one design read, "I ♥ WAL★OCAUSTH They have FAMILY VALUES and their ALCOHOL, TOBACCO and FIREARMS are 20% OFF"; and another design read, "WAL★OCAUSTH Come for the LOW prices[,] stay for the KNIFE fights." The fourth was a graphical design that depicted the word WAL★OCAUST on a Wal-Mart-like storefront that also included the Nazi eagle image, a poster advertising family values and discounted alcohol, tobacco and firearms, and other images commenting negatively on Wal-Mart.

Smith does not claim any exclusive right to his Wal-Mart-related creations; in fact, he says that he would like to see the general public use the terms freely. He hoped that the word "Walocaust" would become such a commonly used term to describe Wal-Mart that it might eventually appear in the dictionary.

In late July 2005, to help draw attention to his Walocaust concept and his views about Wal-Mart in general, Smith arranged for some of his designs to be printed on t-shirts and other items like mugs, underwear, camisoles, teddy bears, bumper stickers and bibs that could be purchased through www.CafePress.com.⁴ He also placed text on his CafePress account home page that included harsh statements about Wal-Mart, such as "Walocaust: The World is Our Labor Camp. Walmart Sucks" and

Say hello to the Walocaust, say hello to low prices, say hello to child labor, say hello to unpaid overtime, say hello to 60 hour work weeks, say hello to low pay, say hello to poverty[.] Say hello to the Walocaust, say goodbye to health insurance, say goodbye to weekends, say goodbye to vacation, say goodbye to retirement, say goodbye to living indoors[.] The Walocaust: coming soon to your occupation. A real web site is coming soon. Contact: Walocaust@ yahoo.com[.]

Although CafePress offered the option to open a "basic shop" at no charge, which would have allowed Smith to sell his items at cost, Smith instead chose to pay $6.95 per month for a "premium account," which offered several automated functions that allowed him to set up a website without knowing HTML code. This enabled Smith to display on his CafePress website his products, his other designs, and content more fully expressing his views about Wal-Mart. It also enabled him to have his www.walocaust.com domain name bring viewers to the home page of his CafePress account. In hopes that profit from his CafePress site would cover the costs of his premium fees and domain name, Smith retained CafePress's default "medium" mark-up setting, which set his items' sale price at approximately thirty percent above cost.

The only actions that Smith undertook to promote his CafePress Walocaust account and the designs he had available on it were to tell family and friends about it, to send word to discussion groups whose participants he thought would be sympathetic, to start a Walocaust discussion group, and to accept an unsolicited offer of a link from a website where dissatisfied Wal-Mart employees would go to vent their frustrations with the company. When his Walocaust website became active, Smith also included a link from it to his CafePress account.

On December 28, 2005, and again on February 1, 2006, Wal-Mart wrote to Smith and to CafePress, asserting that Smith's Walocaust CafePress webpage was violating Wal-Mart's trademark rights, and demanding that they cease selling all products imprinted with his various anti-Wal-Mart designs. Wal-Mart also objected to Smith's registration and use of the domain name www.walocaust.com, demanding that Smith cease using the domain name and transfer ownership of it to Wal-Mart.

In response, CafePress removed all of Smith's Wal-Mart-related merchandise from his online store so that only non-Wal-Mart-related merchandise remained available at www.cafepress.com/walocaust.⁵

On March 6, 2006, Smith filed this action, seeking a declaratory judgment of his right to sell his Walocaust merchandise and demanding costs and attorneys' fees.

Smith also posted additional content on www.walocaust.com explaining his Walocaust theme and how he came up with the word "Walocaust." He added links to other anti-Wal-Mart websites and discussion groups and provided a link to a new page that allowed viewers to download printable copies of the censored Walocaust graphics for free so that they could print their own t-shirts or bumper stickers.

After learning that some courts of appeals had approved disclaimers as a technique for minimizing possible trademark confusion, Smith added one to the top of his Walocaust webpage, stating that the site is unaffiliated with Wal-Mart and containing, the URL for Wal-Mart's official website to help redirect any visitors who may have intended to visit www.wal-mart. com but instead accessed the Walocaust site by mistake. He also updated the site to denounce Wal-Mart's role in forcing this litigation and filing counterclaims, and he posted A link to an entity called "Public Citizen" through which visitors have donated $1040.01 in support of his legal activities.

On or about March 8, 2006, after filing his declaratory judgment complaint, Smith also registered the domain names www. wal-qaeda.com and www.walqaeda.com.⁶ "Wal-Qaeda" was another portmanteau word Smith coined, this time combining the name "Wal-Mart" with "Al-Qaeda."⁷ Smith intended the word "Wal-Qaeda" as a comment on what he considered to be Wal-Mart's terrorist-like attack on his free speech through threats of litigation.

On a new site that was accessible via both www.wal-qaeda.com and www. walqaeda.com, Smith displayed various graphics incorporating his new word. He also posted other anti-Wal-Mart slogans such as "FREEDOM-HATER-MART STOP Stomping on our free speech!" and "Freedom-Haters ALWAYS," intended to call to mind Wal-Mart's trademark ...