Pity poor Jeff Aronson, who built his company, Cash4Gold, into a highly successful venture -- only to see his fortune raided by a competing operator with the same business idea, using the same marketing methods, and very similar trade names. Names like Money4Gold and Dollars4Gold. Aronson's competitor wasn't very scrupulous in his respect for Aronson's trademark. The competitor used banner ads and logos similar to Aronson's on Web sites and in Google paid search advertising, all of which triggered clicks to the competitor's Web site.
Aronson's bid for a preliminary injunction against Money4Gold/Dollars4Gold started off strong. Whereas I probably couldn't have resisted commenting that Cash4Gold built its business by skillfully exploiting human misfortune, the trial court remarked that Cash4Gold's success "is the product of good timing, hard work, and effective advertising." Better yet, the court found that the defendant, Money4Gold, advertised with marks both identical and similar to Cash4Gold. The court further remarked that there was evidence in the record to support a finding that Money4Gold intended to cause consumer confusion.
But Aronson's case foundered on his choice of name for his business: Cash4Gold, a descriptive word mark that is not entitled to protection under Section 43(a) of the Lanham Act unless it has secondary meaning. ("Secondary meaning" means that the mark in question is so strongly associated with the mark's owner in the mind of the public that it is no longer a generic, descriptive term.) A case for secondary meaning is typically created by evidence of advertising campaigns and the extent to which these advertising campaigns are successful at creating link between the mark and the services provided by the mark owner. In this case, despite evidence that Cash4Gold had spent "tens of millions" of dollars in advertising (including TV spots featuring the late Ed McMahon, radio spots by Howard Stern, and sponsorship of a NASCAR driver), Cash4Gold's evidence failed to demonstrate secondary meaning existed at the time the defendant began encroaching on the Cash4Gold mark, sometime in September 2008. Cash4Gold's claim to secondary meaning was also undermined by Aronson's candid admission that the phrase has been around for a long time:
[T]there simply was not enough evidence for the Court to find as a factual matter that Plaintiff’s mark satisfied the Conagra factors and thereby obtained that quantum of recognition known as secondary meaning before September of 2008.
Moreover, Plaintiff’s CEO Jeff Aronson testified that the phrase "cash for gold” has been used “since the days of mining.” He said this while being questioned about the fact that Plaintiff does not presently hold a registration in the Patent and Trademark Office for its mark “Cash4Gold,” while another company, Napala Gold, does own one. When exactly “the days of mining” were is unclear, but his manner indicated that it was a long time in the past. While said only in passing, the fact that Plaintiff’s biggest cheerleader believes that the phrase has been used presumably since the California Gold Rush era seriously undermines its claim to the distinctiveness and exclusiveness of its mark “Cash4Gold” for a precious metal refining business.
Although the court denied Cash4Gold's request for a preliminary injunction, it left the door open for reconsideration if Cash4Gold could put together a better case for secondary meaning. Cash4Gold didn't offer much evidence regarding secondary meaning as of September 2008, and the court here wasn't willing to assume that the mark was as well-known then as it is now.
Cash4Gold also lost its copyright infringement claim against Money4Gold, a claim that was based on Money4Gold's copying of a small portion of the Cash4Gold Web site. The court remarked that, despite the evident copying that occurred here, the Money4Gold and Dollars4Gold Web sites "have a strikingly different look to them from the Plaintiff's site and would not strike a lay observer as having appropriated the protected elements of Plaintiff's website."
Cash4Gold submitted to the court 43 pages of material printed from its Web site. The copycat Web sites created by the defendant were just 1-3 pages in length. On this disparity of size alone, the court said, the defendant's Web sites cannot be deemed to be substantially similar to -- and thereby infringing -- the Cash4Gold Web site.
This case is further evidence that copyright law is a poor means to prevent free-riding of the sort that occurred here. It's also further evidence of the "generous" of copyright law: money-making ideas like Aronson's are free for the taking; only their expression is protected, and loosely so in the case of marketing content.
The case is Green Bullion Financial Services v. Money4Gold Holdings Inc., No. 09-60027 (S.D. Fla., June 22, 2009).
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Posted by: Twittxicano | August 21, 2009 at 05:26 PM