In a victory for free speech on the Internet, the U.S. Court of Appeals for the Fifth Circuit today reversed a district court decision restricting the ability of a homebuilding company's customer to air his dissatisfaction on a gripe Web site.
The appeals court decision agreed with arguments made by Public Citizen, which represented the customer.
The case involves Joseph Maxwell, a Houston-area software engineer who was unhappy about his dealings with an agent of TMI Inc., a company that builds houses under the trademark TrendMaker Homes. Maxwell created a non-commercial Internet gripe site at www.trendmakerhome.com (soon to move to www.trendmakerhome.info).
He chose not to add "sucks" to the domain name because he felt that TMI was basically a good company with quality products, but he had a complaint about one aspect of its business practices - a salesperson's misleading statements about what home models were available.
TMI alleged that Maxwell's site violated the Lanham Act, which governs commercial speech, by violating its trademark and potentially confusing users who were looking for TMI's actual site - www.trendmakerhomes.com. It also alleged that he violated the Anti-cybersquatting Consumer Protection Act (ACPA) and state trademark law.
In February 2003, a Texas district court barred Maxwell from using 10 different TMI trademarks and ordered him to pay $80,000 in statutory damages and attorney fees.
The appeals court agreed with Public Citizen that Maxwell's site was entirely non-commercial and therefore the Lanham Act does not apply. Further, because Maxwell had no "bad faith" intent to profit from the site, TMI's argument regarding the ACPA was also unsupportable.
"We are gratified that this court has joined other courts across the country in recognizing the value of unfettered non-commercial speech on the Web," said Paul Alan Levy, an attorney with Public Citizen who represented Maxwell. "The rule that non-commercial gripe sites are protected speech is becoming so clear that companies run a serious risk of facing monetary penalties for suing over such Web sites' domain names."
To read the appeals court decision, go to http://www.ca5.uscourts.gov/%5Copinions%5Cpub%5C03/03-20243-CV0.wpd.pdf.
To read Public Citizen's brief, please visit http://www.citizen.org/documents/ACF1397.pdf.