Is There a "Clean Slate" to Use Trademarks of Others with Fictional Products in Movies?

Do trademark owners have the ability to obtain relief against the unauthorized use of their trademarks in connection with fictional products in movies? The answer to this interesting question remains murky, leaving some trademark owners in a quandary about how to obtain relief where classic likelihood of confusion analysis for trademark infringement analysis may not apply. The most recent attempt to obtain relief, based on a claim of trademark infringement in this scenario, was made by Fortres Grand Corporation, whose Petition for Certiorari was denied by the U.S. Supreme Court on Monday.

In 2000, Fortres Grand Corporation released a computer security program by the name of CLEAN SLATE, which can be used to restore computer file systems, discard user changes, remove malware, and remove new files. One month prior to the August 2012 release of the most recent Batman movie "The Dark Knight Rises", Warner Brothers launched a website for the seemingly real (but fictitious) company Rykin Data Corporation, purportedly offering a software product (used for the malicious purpose of erasing criminal histories from databases) called CLEAN SLATE in a creative and clever attempt to lend real-world veracity and intrigue to its movie where this software is featured. Fortes Grand Corporation claimed this fictitious use of the same name for the malicious software product resulted in consumer confusion that damaged its reputation and goodwill and led to a 50% decrease in sales of its CLEAN SLATE software. Fortres brought suit based on a claim of trademark infringement and the District Court denied relief, finding there was no likelihood of consumer confusion because Warner Brothers' use was not tied to an actual software product on the market and that this use was protected by the First Amendment. On appeal, the Seventh Circuit affirmed the denial of relief, agreeing that confusion was unlikely because Warner Brothers was not selling an actual CLEAN SLATE software product, stating that "confusion was too implausible to support costly litigation." (The Seventh Circuit did not address the First Amendment grounds in its decision.) The Petition for Certiorari to the U.S. Supreme Court, which references both examples from "Monty Python and The Holy Grail" and quotes from Learned Hand to support its case, was denied.

While it stands to reason that there can be no confusion about the purchase of a product if the allegedly infringing product is not actually for sale, are there other causes of action that might have provided a stronger claim for relief? An interesting question is whether this claim failed because it was based on a trademark infringement claim rather than a dilution or disparagement claim or whether there can never be relief under the Lanham Act because Defendant's use was for a fictional software product. Dilution or disparagement claims were not pled in this case and so the decision was based on the claim of trademark infringement using the classic likelihood of confusion analysis using the Seventh Circuit likelihood of confusion factors, which looks to whether the alleged infringer attempted to palm off its products as those of another. This case is a great example of how the blurry line between entertainment and reality may leave trademark owners scratching their heads when the classic trademark infringement analysis provides no relief against the use of confusingly similar marks in connection with fictitious products in the entertainment industry. It will be interesting to see how the law in this area evolves in the coming years, including in connection with virtual reality context.

The case is Fortres Grand Corporation v. Warner Brothers Entertainment, case number 13-2337, United States Court of Appeals for the Seventh Circuit.