Office Memo

TO: Professor Tetreault

FROM: Brian Pedigo

RE: Bud Coffer: Trademark Infringement

DATE: September 28, 2004

ISSUES

I. Parody - Whether Bud’s game is a parody, which is when an artist for comic effect closely imitates the style of the original and in so doing creates a new thing that makes ridiculous the style and expression of the original, where Bud did not at first intend to make ridiculous the movie, but instead thought the similarities were a funny pun, and later discovered the appreciated humor after the video game was released.

II. Consumer Confusion - Whether New Line Cinema can prove that Bud’s game infringed upon their trademark of the Lord of the Rings movies by meeting the elements of consumer confusion (similarity of trademarks, similarity of products, marketing channels, consumer care, trademark strength, actual confusion, and intent of parodist), where Bud has created a video game called “King of the Ring and Realm,” sold solely on the Internet, with characters and elements of the game similar to that of the “Lord of the Rings” movie.

SHORT ANSWER

I. Parody - No, Bud can not establish a parody defense because his game was not created with the intent to make ridiculous the Lord of the Rings, and his game contains only slight allusions to the character names in the movie with the intent to amuse.

II. Consumer Confusion - No, New Line Cinema cannot prove Bud’s game meets the requirements necessary to cause consumer confusion for the following reasons: trademark similarity is not met because the name of the movie is significantly different from the name of the game, similarity of products is not met because one is a movie and one is a video game, marketing channels are not met because the channels are distinct, actual confusion would probably not be met if this went to trial because the two products are markedly different, and intent of parodist is not met because Bud did not intend to palm off his products as those of another and upon inspection one could realize the distinction. Accordingly, Bud has not met the elements necessary to make him liable for a trademark infringement against New Line.

FACTS

Our client, Bud Coffer, developed a video game called “King of the Ring and Realm,” sold exclusively through the Internet. Bud is being sued by New Line Home Entertainment (hereafter “New Line”), alleging infringement upon the trademark of the “Lord of the Rings” (hereafter “LOTR”) movie. Additionally, New Line claims the game was released at the same time of “Return of the King”. Bud wants to know how to defend against this trademark infringement suit.

Bud made a video game which was heavily influenced by the LOTR trilogy, being somewhat “Middle Earth-like.” Some of the character names in Bud’s game are Gimby (a Dwarf), Frodogan (the hero, John Candy and Adam Sandler-like), Grandelf (a wizard), and Joedo (short guy). Bud says he thought the names were “cool” and named his characters to poke fun at the LOTR movie. Bud’s initial intention was not to develop a funny version of LOTR, rather it “just happened that way.” Bud’s game appeals to boys around 10 to 15 years of age. Bud wants to know whether his video game will make him liable for a trademark infringement. The issues are whether Bud’s game is a parody of the LOTR movie, and whether Bud’s game confuses consumers.

DISCUSSION

There are two issues in this case regarding trademark infringement, the first parody, and the second consumer confusion. A parody is “when one artist, for comic effect … closely imitates the style of another artist and in so doing creates a new art work that makes ridiculous the style and expression of the original.” Nike, Inc. v. Just Did It, Enters., 6 F.3d 1225, 1227 (7th Cir. 1993). Consumer confusion can be shown when trademarks, products or marketing channels are similar, consumer care is not adequately taken, actual confusion occurs, or the intent of the parodist is to pawn off his work as someone else’s. Id. at 1228. Parody is not met because Bud did not intend to make absurd the LOTR movie, trademark similarity is not met because the name of the movie is significantly different from the name of the game, similarity of products is not met because one is a movie and one is a video game, marketing channels are not met because each are distinct, actual confusion would not be met because the two products are markedly different, and intent of parodist is not met because Bud did not intend to palm off his products as those of another and upon inspection one could realize the distinction.

I. Parody - The first issue is whether Bud’s work is a parody. A parody is “when one artist, for comic effect … closely imitates the style of another artist and in so doing creates a new art work that makes ridiculous the style and expression of the original.” Id. In Nike, the defendant created a line of clothing that used the Nike swoosh symbol, with the word MIKE. Id. at 1226. Defendant admitted that making fun of Nike was the whole point, and that his humor deserved First Amendment protection. Id. at 1227. The court reasoned in Nike that even if something is a parody, it still must not confuse customers, and parody should be used as an additional factor in the analysis of consumer confusion. Id. at 1228. A few of Bud’s character names closely resemble those in the LOTR movie, and the title of his game has only the word “King” in common to the LOTR, “Return of the King.” Bud, as a whole, did not set out with the intention to create a game that would make absurd the work of the LOTR movie. Bud’s game would probably not meet the requirements for a parody defense, but parody is not the ultimate question in our case, just as it was not the ultimate question in Nike. Id. at 1228.

II. Consumer Confusion – The next, and most important, issue is whether Bud’s game confuses consumers. The elements of consumer confusion are similarity of trademarks, similarity of products, marketing channels, consumer care, trademark strength, actual confusion, and the intent of the parodist. Id.

A. Similarity of Trademarks – The first issue is whether the trademarks are significantly similar. In the assessment of similarity of trademarks, the court will consider the degree of similarity in appearance (or sound) and suggestion of the marks. Id. at 1229. The Nike court realized that NIKE and MIKE are identical but for one letter. However, the confusion from afar was not the primary concern in Nike, rather consumer confusion at the point of purchase. Id. at 1229. The court held that a consumer may not be confused at the point of sale. Id. at 1230. Bud’s product is more distinct than the distinction seen in Nike. In Bud’s game, the characters’ names are one letter off, or more, from the names in the LOTR. It is unlikely that Bud’s video game would be confused at the point of sale as a product that New Line was promoting. Because “King of the Ring and Realm” is a title markedly different from “Lord of the Rings,” and consumers at the point of sale would probably not confuse the two, this element is not met.

B. Similarity of Products – The second issue is whether the products are significantly similar. In assessing this, the court will assess if the goods are in close competition and used for similar purposes in order to find an infringement. Id. at 1230. Nike said that the parties were selling the same product to be used for similar purposes, therefore this element was met. Id. Contrast Bud’s case where one is a video game is and one is a movie. Bud’s product is a video game with a purpose to be played, while New Line’s product is a movie with the purpose to be watched. The products are not similar in purpose as in Nike. This element is not met.

C. Marketing Channels – The third issue is whether the parties used similar marketing channels. The court will assess if the parties have distinct, similar, or overlapping marketing channels, as well as the intended target markets. Id. Nike found that there were different marketing channels, and defendant’s target market was not in direct competition with Nike, therefore the element was not met. Id. In Bud’s case, his target market is 10 to 15 year old boys, with a Internet-only marketing channel, while New Line has an alleged target market of the general public, age 17 and over (R-rated restriction), and markets using TV commercials, movie theaters previews, in addition to other methods. Because the marketing channels and target markets are significantly different, this element is not met.

D. Consumer Care – The fourth issue is whether consumers exercise a sufficient degree of care when purchasing the product. It is assumed that the lower the price of a product, the less care a consumer will exercise at the point of purchase, increasing the chance of confusion, but price alone is not enough. Id. at 1230. Nike held that a customer may take care when purchasing. Id. A consumer would need to take the care when ordering from Bud. This element is met.

E. Trademark Strength – The fifth issue is the strength of New Line’s trademark. The stronger the trademark the greater protection it will receive. Id. at 1231. Nike held that Nike had a widely recognized trademark deserving protection. Id. It is generally known and accepted that LOTR is widely-recognizable and deserves protection. This element is met.

F. Actual Confusion – The sixth issue is whether consumers might be actually confused. Survey showing 15% of customers confused evidences a likelihood of consumer confusion. Id. Like Nike, we have no evidence of anyone actually confused; therefore this element is not currently met and is likely that it would not be met in the future.

CONCLUSION AND RECOMMENDATION

The facts show that parody is not met because Bud did not intend to make absurd the LOTR movie, trademark similarity is not met because the name of the movie is significantly different from the name of the game, similarity of products is not met because one is a movie and one is a video game, marketing channels are not met because each are distinct, actual confusion would probably not be met if this went to trial because the two products are markedly different, and intent of parodist is not met because Bud did not intend to palm off his products as those of another and upon inspection one could realize the distinction. Accordingly, Bud has not met the elements necessary to make him liable for a trademark infringement against New Line. In order to prevent the slight chance of confusion, Bud should disclaim any affiliation with New Line on his web site. Bud should be safe to continue in the sale of his game as he has.