The Entertainment Software Association recently sent a demand letter to website Kotaku.com, asking the owners of the site to take down their posting regarding a guy who's selling a t-shirt containing the words 'Your mom–rated E for Everyone"?. The shirt contains these words in a rectangular box with a big letter 'E"? (mimicking the ESA's 'E"? rating logo for games that are suitable for everyone).
The ESA says that Kotaku's posting is an advertisement for the shirt, which tarnishes and dilutes the ESA's logo. Kotaku says its posting is editorial content–not an ad–and that Kotaku has every right to post it.
The Canadian version of 'tarnishment"? and 'dilution"? is called 'depreciation of goodwill"?. The concepts are different, but there are some similarities.
The Supreme Court of Canada considered these concepts in June of this year in a case where luxury champagne maker Veuve Clicquot tried to stop a mid-priced women's wear chain from calling its shops 'Boutique Cliquot"?.
The champagne-maker argued that consumers would be confused into thinking that the clothing and the champagne came from the same source. It also argued that even if there was no confusion, the value of the champagne mark would be depreciated by allowing 'Cliquot"? to be used in association with mid-level clothing. These arguments didn't fly.
The courts ruled that there was no likelihood of confusion between the marks. The courts were also not convinced that the clothing stores' use of the mark would depreciate the goodwill associated with the champagne mark.
So turning to the t-shirts, does the 'rated E"? t-shirt lower the value of the ESA's mark? Maybe. Gamers will certainly make a connection between the shirt and the ESA logo, but is it a bad connection? This will depend on the evidence that the ESA is able to provide to a court.
That said, there's one other important element under Canadian law to depreciate the goodwill of a trade-mark, you actually have to 'use"? the trade-mark (which means slapping it on a product and selling it, or using the mark to advertise a service). It doesn't appear that Kotaku has done this, so the ESA will have a challenge arguing that Kotaku's postings depreciate the goodwill in their Canadian marks.
The ESA could also sue Kotaku for 'infringing"? the ESA's mark, but to win the ESA would have to prove that the t-shirt mark is confusing with the ESA's mark. This is probably do-able, but it won't be easy.
The ESA might have an easier time under US law. We understand there are a series of cases in the US (particularly in the porn industry) under which US courts have found tarnishment of US trade-marks. A particularly relevant case isAnheuser-Busch, Inc. v. Andy's Sportswear, Inc.where the court issued an injunction to stop the defendant from selling 'Buttwiser"? t-shirts. This case should help the ESA with the t-shirt seller, but will it help the ESA with Kotaku? We'll leave this question for our US colleagues to answer.
Kotaku coverage here http://www.shorl.com/bymihabrigrivy