CAT claim is Mickey Mouse, rules court
In Caterpillar Inc v The Walt Disney Company, the US District Court for the Central District of Illinois has denied Caterpillar's motion for a temporary restraining order against Disney's release on video of a film depicting Caterpillar bulldozers in an allegedly unflattering light.
After the commercial success of the film George of the Jungle, Disney produced George of the Jungle 2. In the second instalment, the hero's enemy uses Caterpillar bulldozers to destroy the jungle, while a narrator describes the machines as maniacal and deleterious, among other things. Before the film was released (directly on to video), Caterpillar filed a motion for a temporary restraining order, alleging trademark infringement and dilution under both federal and state law.
In analyzing the likelihood of success on the merits, the court found that there was little likelihood of confusion. It felt uncomfortable with applying traditional likelihood of confusion tests because (i) there were no competing trademarks at issue, and (ii) there was no dispute that the bulldozers were genuine Caterpillar bulldozers bearing the authentic CATERPILLAR trademark.
However, the court made a full analysis and found that there was no showing of any actual consumer confusion (which was understandable as Disney had not yet released the work to the public). The court also noted that (i) there was no indication that Disney used the CATERPILLAR trademark to drive sales of its videos, and (ii) it is common in today's world to see various trademarked products used in films. Because there was at most slightly more than a negligible likelihood of success on this count, the court was reluctant at this early stage of the proceedings to grant even temporary injunctive relief.
Turning to the dilution issue, the court agreed that Caterpillar's mark is famous but also noted that the cartoon was a satire. Addressing the first type of dilution, the court ruled that Caterpillar's mark was not blurred, finding that its use in the cartoon would not raise the possibility that the mark would lose its ability as a unique identifier of Caterpillar's products.
Addressing the second type of dilution - tarnishment - the court accepted the Supreme Court's ruling in the Victoria's Secret Case (see Federal Trademark Dilution Act requires proof of actual harm) that Section 43(c) of the Lanham Act requires a showing of actual dilution. However, the district court was unclear as to what type of a showing Caterpillar must make. While acknowledging that neither actual loss of sales or profit, nor direct evidence of dilution via consumer surveys is essential evidence, the court found that there was nothing in the record to suggest that Caterpillar had actually lost sales or profits, nor was there any consumer survey showing actual dilution (largely because the product had not yet been released to the public). The court concluded that to take a position one way or the other would be an exercise in pure speculation.
This decision shows the difficulty in obtaining a temporary restraining order or even a preliminary injunction in any situation where a product has not yet been introduced to the public and the only viable argument the plaintiff has is a tarnishment claim. Proof of actual dilution in such circumstances seems near impossible. The court rightly concluded that Caterpillar's argument that Disney's video cast its products in an unwholesome or unsavoury light was merely unpersuasive. The court acknowledged that it is a well-established principle that there is a presumption that injuries arising from Lanham Act violations are irreparable, even (i) absent a showing of business loss, and (ii) where it is not possible to adequately measure the degree of harm caused. However, the court best summed up its feeling about this case with the following comment:
"It is incredible for this court to imagine a consumer's decision to purchase Caterpillar's primary product line of heavy machinery and equipment, costing substantial sums of money, being affected after watching this film."
An underlying message of this case is that the requirement for proof of actual dilution may render preliminary remedies, based on a dilution theory, remote. Is it time to amend Section 43(c) yet?
Robert Lyon, Holland & Knight LLP, Los Angeles
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