Petition for Writ of Certiorari — Balducci Publications v. Anheuser-Busch, Inc.

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In THEICE OF THE CLERK

Supreme Court of the United States

October Term, .994

BALDUCCI PUBLICATIONS, RICHARD BALDUCCI,

KATHLEEN BALDUCCI,

Petitioners,

VS.

ANHEUSER-BUSCH, INC.,

Respondent.

Petition for Writ of Certiorari to the United States Court of

Appeals for the Eighth Circuit

PETITION FOR WRIT OF CERTIORARI

RICHARD E. SCHWARTZ

Counsel of Record

JAMES E. PARROT

RICHARD SCHWARTZ

& ASSOCIATES, LTD.

Attorneys for Petitioners

640 Raeder Place

727 North First Street

St. Louis, Missouri 63102-2501

(314) 231-2110

5947

Le (800) 3 APPEAL « (800) 5 APPEAL « (800) BRIEF 21

A enices, inc.

on Zi

QUESTIONS PRESENTED FOR REVIEW

1. Should the content of an editorial commentary in a

magazine containing an advertising parody of 2 public-figure

corporation which publicizes and advertises itself heavily, when

that parody uses caricatures of trademarks, be subject to

regulation under state and federal trademark laws?

2. Isthe noncommercial use of caricatures of trademarks ina

magazine editorial containing an advertising parody protected

fair use under state and federal trademark laws and the First

Amendment?

3. Does the clearly erroneous or heightened level of review

in cases implicating First Amendment values apply to a district

court’s factual findings that a humorous editorial parody of a

public figure corporation using caricatures of trademarks does not

constitute a violation of federal and state trademark laws?

4. Does an injunction prohibiting future noncommercial

publication of editorials and parodies containing caricatures of

trademarks or allegedly false descriptions of commercial

products violate the First Amendment’s mandate against prior

restraints on speech?

LIST OF PARTIES TO PROCEEDING

Anheuser-Busch, Inc. filed this action against Balducci

Publications, Richard Balducci and Kathleen Balducci.

Aah mahi Se aoe

TABLE OF CONTENTS

Page

Questions Presented forReview .................... i

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Constitutional Provisions and StatutesInvolved ....... 1

ne er 1

Reasons for Granting the Writ ..................005: 6

I. The Eight Circuit opinion sharply conflicts with

decisions of other Circuits that guarantee First

Amendment protection to editorial parodies. .... 6

A. Noncommercial Parody of Trademark in

RESON re ee 6

B. Commercial Parody of Trademark in

chin cthad eke awe eee ve eeeeee 7

C. Trademark Parody in Marketing of

ee 8

Contents

Page

Il. The Eighth Circuit failed to apply the strick

scrutiny standard of review to regulations of non-

commercial speech and regulated the content of

Petitioners’ editorial message. ............... 10

III. The opinion failed to apply to the District Court’s

fact findings the clearly erroneous standard of

review or the more rigorous standard where

protected speech is regulated. ................ 13

IV. The opinion is contrary to statutory law and

Supreme Court jurisprudence which apply the

trademark laws only to commercial uses, and

thereby regulates the content of Petitioners’

editorial parody of advertising. ............... 15

V. The First Amendment prohibits as an unlawful

prior restraint on speech any injunction against

future uses of trademarks by Petitioners in ad

po errr rer: TTre rer or ree 17

CORGIIIIOE ok cv kc on bd0b6b6 4040s heh 19

TABLE OF CITATIONS

Cases Cited:

Abercrombie & Fitch Co. v. Hunting World, 537 F.2d 4 (2d

COE Se 6 ks dnbntvcctsacevstisamcbeseimcerw 16

Anheuser-Busch, Inc. v. Balducci Publications, 814 F.

Sage. 791 (6. D. Mle. I9FS).0 6 vs cacevccsetivandae 1,4, 11

Contents

Page

Anheuser-Busch, Inc. v. Balducci Publications, 28 F.3d

EOE ih. n64d 5 sede eneusswaconsewns 1,2,5,14

Anheuser-Busch v. Florists Association of Greater

Cleveland, 603 F. Supp. 35 (N.D. Ohio 1984) ........ 9

Anheuser-Busch, Inc. v. L & L Wings, Inc., 962 F.2d 316

(4th Cir. 1992), cert. denied, 113S.Ct.206 ......... 8,9

Amadeo v. Zant, 486 U.S.214(1988) ..............05. 13

Bose Corp. v. Consumers Union, 466 U.S. 485 (1984)

cheavira bet eee ek Cede a be kedereeedan 11,12, 13,14

Burson v. Freeman, 112 S. Ct. 1846(1992) ............ 10

Campbell v. Acuff-Rose Music, 1148. Ct. 1164(1994) ..8,12,16

Champion Spark Plug Co. v. Sanders, 331 U.S. 125 (1947) .. 15

City of Ladue v. Gilleo, 114S.Ct.2038 (1994) .......... 12, 15, 16

City of Lakewood v. Plain Dealer Pub. Co., 486 U.S. 750

SEA D5 cc heb bcdkd bade kninaceberesde40e0bbbas 17,18

Cliff’s Notes, Inc. v. Bantam Doubleday, 886 F.2d 490 (2d

PU SP dh sh pute whansheked bibheeae ceent<s Fu aeke

Cushman v. Mutton Hollow, 782 S.W. 2d 150 (Mo. App.

SE AG Eai nn CONE AEE eeK GoD Nahas 60s Ko nanae 16

Contents

Page

Eli Lilly & Co. v. Revion, Inc., 577 F. Supp. 477 (S.D. N.Y.

EDEN) csvicsuvesdsvsesnves buetanceseeeuetases 16

F-C.C. v. League of Women Voters, 468 U.S. 364 (1984) .. 11

Forsyth County v. Nationalist Movement, 112 S. Ct. 2395

CSUOEE ovseuss edcuhetenneteeeneeias 10, 11, 14, 15

Girl Scouts v. Bantam Doubleday, 808 F. Supp. 1112 (S.D.

N.Y. 1992), aff'd, 996 F.2d 1477 (2d Cir. 1993) ...... 8

Hustler Magazine v. Falwell, 485 U.S. 46 (1988) ....... 12,14

Jordache Ent. Inc. v. Hogg Wyld, Ltd., 828 F.2d 1482 (10th

CR SSG EP vc ncnesacdbbnsndeuseecessasasebueseec 7

Kunz v. New York, 340 U.S.290(1951) ...........005. 17

Lamb’s Chapel v. Center Moriches School, 113 S. Ct. 2141

CTOPGS chcnsntndesigrebandiecbiancassanne 11

L.L. Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26 (ist

Cir. 1987), cert. denied, 483 U.S.1013 ............. 6

Metromedia, Inc. v. City of San Diego, 453 U.S.490(1981) .. 16

Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241

CFP ccaccvcacsadudesuasvancsat tae 11

Mut. of Omaha Ins. Co. v. Novak, 836 F.2d 397 (8th Cir.

1987), cert. denied, 488 U.S.933 .......... cece ees 7

vii

Contents

Page

Near v. Minnesota, 283 U.S.697(1931) .............. 17

Nebraska Press Association v. Stuart, 427 U.S. 539 (1976) .. 18

New Kids on The Block v. New American Publishers, Inc.,

gh a 7

New York Times v. Sullivan, 376 U.S. 254 (1964) ....... 3, 12,14

New York Times Company v. United States, 403 U.S. 713

Te a 18

Nike, Inc. v. Just Did It Enterprises, 6 F.3d 1225 (7th Cir.

DE Sten a ore Rehedehedh waded ebaess eoesdsus 8

Prestonettes, Inc. v. Coty, 264 U.S. 359 (1923) ......... 15

R.A. V. v. St. Paul, 112 S. Ct. 2538 (1992) .............. 10

S.F. Arts & Athletics v. Olympic Committee, 483 U.S. 522

i ec 16

Simon & Schuster, Inc. v. N.Y. Crime Victims Board, 112

eS eeeawane en 10

Volkswagenwerk Aktiengesellschaft v. Rose’vear Ent.,

a ee a eas 8

Walt Disney Prod. v. Air Pirates, 581 F.2d 751 (9th Cir.

SEIS REARS Se a ae oe 8

viii

Contents

Page

West Virginia State Board of Education v. Barnett, 319

SOC ISG) no ck vevescadaneeansivcvcntasens 14

Whitney v. California, 274 U.S.357 (1927) ............ 10, 11

Yankee Publishing v. News America Publishing, 809 F.

Seige. 207 GE.1D. N.Y. TSFE) occ ccscncesscsasesvece 7

Statutes Cited:

EPUB AAT vccascedsceaunrdeeantgeeabesseaes 1,3

BUDA DERI | vccdvescdisteeseisesediventens 15

TSUBA. BUI occ caentisdactenssvsventacne 1,16

ES UBA. ESSE cs seb ccaversisaudscesssenbncesves Soa

FSU BA BUTE) woes vccccnvecsaencovecseaswnes 15

SFULBAW BESS? 2 ckcccvesctccacenevvacvensseebeas 15

17 US.C.§107 PeTTTeT TT TCT Te ee 16

FRUGAL. GUTS oc ccccccnccecensenecevetedestsses 1

PRUGE GIS oc ceive csricewevivwsetesie censuses 5

SEU BAA SIGS cccscccntececccyicccbsvinsteeeina 3

28 U.S.C. § 2101 2.1... cece cece eee n eee e eee eens 1

Contents

United States Constitution Cited:

IE, Sokcneeecdanceeseveeccevanesenaess

Rules Cited:

RMU ED sda wean tceesavepvedetvessas

PE INTIS ka cedcesvcteccvocescseecess

UG UR TEOED hen cesaviccciecsesseucveses

Federal Rule of Appellate Procedure3 ...............

Federal Rule of Appellate Procedure4 ...............

Federal Rule of Civil Procedure, Rule 52(a) ...........

Other Authorities Cited:

Denicolar, “Trademarks as Speech: Constitutional

Implications of the Emerging Rationales for the

Protection of Trade Symbols,” 1982 Wis. L. Rev. 158

ee ence dates chewed ee ssn ee eeeneeneees

Dorsen, “Satiric Appropriation and the Law of Libel,

Trademark, and Copyright: Remedies Without

Wrongs,” 65 B.U.L. Rev. 923(1985) ..............

2 J. McCarthy, Trademarks and Unfair Competition § 31:38

REE OU, BOGE nas ck cane sed edcaterccvens

Page

Contents

Note, “Trademark Parody: A Fair Use and First

Amendment Analysis,” 72 Va. L. Rev. 1079 (1986) ...

G. Trudeau, “Drawing Dangerously,” The New York Times,

oe Es |. errr rer TT Tr rrrerT ye

APPENDIX

Appendix I—Opinion of the United States Court of

Appeals for the Eighth Circuit Filed June 30,1994 ...

Appendix II—Memorandum and Order of the United

States District Court for the Eastern District of

Missouri, Eastern Division Filed February 22,1993 ..

Appendix I1I—Order of the United States Court of Appeals

for the Eighth Circuit Dated August 24, 1994 ........

Appendix IV—Constitutional and Statutory Provisions

PONOEE 6 oo ccctndcnctesedevatinesesseseyeanel

Page

2la

40a

OPINIONS BELOW

The District Court’s decision in favor of petitioners against

Respondent’s trademark law claims is reported as Anheuser-

Busch, Inc. v. Balducci Publications, 814 F. Supp. 791 (E.D. Mo.

1993). The appellate court reversal is reported as Anheuser-

Busch, Inc. v. Balducci Publications, 28 F.3d 769 (8th Cir. 1994).

STATEMENT OF JURISDICTION

The Eighth Circuit entered judgment reversing the District

Court on June 30, 1994. Rehearing was denied by the Eighth

Circuit on August 24, 1994. This Court has jurisdiction to

consider the petition for writ of certiorari pursuant to 28 U.S.C.

§§ 1254 and 2101, and Supreme Court Rules 10, 12 and 13.

CONSTITUTIONAL PROVISIONS

AND STATUTES INVOLVED

U.S. Const. Amend. 1 (freedoms of speech and press); 15

U.S.C. § 1115(b)(4) (“fair use” defense to trademark law

claims); 15 U.S.C. §§ 1114 and 1125, and R.S. Mo. §§ 417.056

and 417.061 (basis for Respondent’s claims). These provisions

are set out verbatim in Appendix IV.

STATEMENT OF THE CASE

Petitioners publish the self-styled “humor magazine of St.

Louis”, Snicker, a tabloid-sized magazine. On the back page of

their issue No. 5 1/2, appeared an “ad parody” as found by the

District Court to be in an “editorial context.” Anheuser-Busch,

Inc. v. Balducci Publications, 814 F. Supp. 791, 793, 797 (E.D.

Mo. 1993). This editorial parody of advertising contained visual

images of a fictional “product” called “Michelob Oily” in a

sixpack of bottles; a mug of “Michelob Oily” covered in an

artist’s rendition of oil; an “A and Eagle” symbol used by

Respondent atop Shell Oil’s logo (instead of Respondent’s five-

pointed star) covered in oil with the eagle exclaiming “Yuck!”;

and a crumpled “Michelob Dry” can with the label partially

obscured and a protruding oil spigot from which pours an artist’s

rendition of an oily fish. Thus Petitioners used numerous

caricatures of respondent Anheuser-Busch’s trademarks.

The ad parody editorial also contained text distinguishing

its true source and environmental-comment purpose: “Snicker

Magazine Editorial by Rich Balducci. Art by Eugene Ruble.

Thank goodness someone still cares about quality (of life).” It

also proclaimed: “One Taste and You’ll Drink it Oily” and “At

the rate it’s being dumped into our oceans, lakes and rivers,

you’! drink it oily sooner or later, anyway.” That Snicker issue

was distributed in the Spring of 1989. A reduced copy of the

entire back page and a full size copy of the editorial disclaimer

are reproduced at 28 F.3d 780-81. See also, Appendix I, at 19a-

20a. The remainder of the Snicker issue was devoted to other

editorials on matters of public concern, also presented in a

humorous format, and straight humor pieces. The front page and

inside cover clearly identified the publishers of the magazine to

be Balducci Publications. Nowhere was Anheuser-Busch

mentioned.

The historical context of the Snicker ad parody editorial is

important. Around Christmas 1988 a Shell Oil Company

pipeline burst and spilled environmentally destructive quantities

of oil into the Gasconade River in central Missouri. The

Gascondade River flows into the Missouri River which

eventually ends at the Mississippi River just north of St. Louis.

Respondent Anheuser-Busch takes water from a Mississippi

River filtration plant for its St. Louis brewery at its world

corporate headquarters.

In response to the oil spill, Anheuser-Busch publicly

announced that it was temporarily closing the St. Louis brewery

for a few days to avoid the possibility of oil in its beer, in

Respondent’s words. At the time of the oil spill, Anheuser-Busch

had recently introduced and heavily marketed a “new” beer

called “Michelob Dry.” Respondent owns and operates

breweries throughout the United States, owns the St. Louis

Cardinals baseball club, and advertises extensively on

television, radio and in the print media. It dominates the political

life of St. Louis, if not all Missouri, with its overwhelming

industrial, financial and mass communications presence.

Following the oil spill and Anheuser-Busch’s closing of its

brewery, Petitioners published their sixth issue, with the ad

parody editorial on the back page. After trying to force

Petitioners to withdraw the Snicker issue from distribution (most

Snicker copies were free of charge at that time), Anheuser-Busch

filed suit in the United States District Court for the Eastern

District of Missouri. Against the Snicker editorial parody

Anheuser-Busch pleaded claims of trademark infringement

under the Lanham Act, 15 U.S.C. §§ 1114 and 1125, and dilution

under Missouri Law, R.S. Mo. §§ 417.056 and 417.061, invoking

supplemental jurisdiction, 28 U.S.C. § 1367.

Petitioners responded to Anheuser-Busch’s trademark law

claims by asserting that their editorial was absolutely protected

speech under the First Amendment, and that Anheuser-Busch

was, in reality, artfully pleading a defamation claim which it

could not make under the New York Times v. Sullivan, 376 U.S.

254 (1964), standard.

Petitioner Richard Balducci, the chief creator of the piece,

testified at trial that the purposes of the Snicker ad parody

editorial were to make (a) an editorial commentary on the effects

of environmental pollution, including a specific reference to the

then-recent Shell Oil spill into the Gasconade and Mississippi

River system; (b) an editorial commentary on the public stance

taken by Anheuser-Busch in response to the oil spill, namely

closing its St. Louis, Missouri brewery as soon as its tasters

detected oil; and (c) an editorial commentary on and parody of

the proliferation of Anheuser-Busch beer brands and

Respondent’s slickly-produced advertisements for those beers

(T. 344-45, 360- 62, 406, 509-10) (references to the trial

transcript). Petitioners have never advertised or marketed any

product for sale bearing the term “Michelob Oily” or making any

other reference to this ad parody.

Respondent’s Michelob beer group brand director admitted

that he had not received evidence that even one consumer

believed there was oil in Anheuser-Busch’s beers or was less

likely to purchase its beers because of the ad parody editorial

(Appellant’s App. 624, 634) (reference to the appendix in the

appeals court). No product has been withdrawn by respondent

and it has not changed its marketing strategy because of the

Snicker piece (id. at 629-31). Anheuser-Busch’s Michelob group

brand director even admitted the supposed damage to plaintiff

from the Snicker piece could be “nothing” (id. at 628-29). One of

Respondent’s own attorneys stipulated in the District Court that

his client had suffered “basically no damage” (Appellees’

Appendix at p. 11) (reference to the appendix in the appeals

court). The principal evidence produced at trial by Anheuser-

Busch was a “consumer survey” it commissioned to be conducted

at St. Louis area shopping malls. Two hundred beer drinkers were

selected by Respondent’s “experts” and questioned about the

Snicker piece. Many ambiguous prose responses to questions

were interpreted by Anheuser-Busch’s market research expert

allegedly to show possible consumer confusion on the source of

the Snicker piece. After a three-day bench trial the District Court

ruled that, in light of First Amendment protections, Anheuser-

Busch’s trademark law claims were unsupported by the evidence.

814 F, Supp. at 796-99.

Anheuser-Busch appealed to the Eighth Circuit pursuant to

28 U.S.C. § 1291 and Fed. R. App. Proc. 3 and 4. The reviewing

Panel reversed the District Court’s decision. Anheuser-Busch,

Inc. v. Balducci Publications, 28 F.3d 769 (1994). Despite

obvious First Amendment issues, the opinion did not apply the

strict scrutiny standard to this attempted regulation of

Petitioners’ non-commercial speech, but rather ruled that it

would apply “an expansive interpretation of [the] likelihood of

confusion” test under trademark laws. Jd. at 774.

This ruling conflicts with the approach of other Circuits. The

Eighth Circuit did not apply the clearly erroneous standard of

review to the District Court’s factual finding of no likelihood of

confusion under the state and federal trademark laws. Moreover,

it did not apply to the District Court’s factual findings the

heightened standard of review designed to insulate from

regulation protected speech.

The Eighth Circuit’s decision regulates the content of

Petitioners’ editorial message and authorizes the District Court to

grant Anheuser-Busch’s request for injunctive relief against

Petitioners’ publication, an unconstitutional prior restraint on

speech. This opinion, in sum, makes beer-drinker participants in

a shopping mall survey the arbiters of the First Amendment rights

of editorial cartoonists who employ trademark parody as a

vehicle to express commentary on public figures or on issues of

concern to citizens.

Finally, the Eighth Circuit’s ruling conflicts with this

Court’s First Amendment jurisprudence. It stands alone in

conflict with the decisions of other circuits which have rejected

claims of trademark infringement in light of the protections the

First Amendment provides to editorials about and parodies of

trademarks.

Petitioners timely moved for rehearing by the Panel and en

banc. A divided court refused to rehear the case on August 24,

1994. Chief Judge Arnold and Judges Wollman and Morris

Sheppard Arnold voted for rehearing. Appendix III, at 40a.

REASONS FOR GRANTING THE WRIT

THE EIGHTH CIRCUIT OPINION SHARPLY

CONFLICTS WITH DECISIONS OF OTHER CIRCUITS

THAT GUARANTEE FIRST AMENDMENT PROTECTION

TO EDITORIAL PARODIES,

The Eighth Circuit’s decision starkly conflicts with

opinions from numerous circuit and district courts on the

protections against federal and state trademark law claims

afforded to editorial commentaries and parodies. Analytically it

is perhaps clearer to categorize the decisions in other circuits as

follows.

A. Noncommercial Parody of Trademark in Publications

The First Circuit reversed summary judgment on

trademark infringement and dilution claims against an “editorial

or artistic parody” of plaintiff’s catalogue in a two-page “article”

in defendant’s adult erotic entertainment magazine. In L.L. Bean,

Inc. v. Drake Publishers, Inc., 811 F.2d 26, 31 (1st Cir. 1987),

cert. denied, 483 U.S. 1013, the Court stated: “[i]t offends the

Constitution, however, to invoke the anti-dilution statute as a

basis for enjoining the noncommercial use of a trademark by a

defendant engaged in a protected form of expression.”

The Ninth Circuit held that a newspaper’s use of plaintiff’s

trademarked musical group name in a survey and article to be a

“fair use” not subject to liability under the Lanham Act. New Kids

on The Block v. New American Publishers, Inc., 971 F.2d 302 (9th

Cir. 1992).

The Tenth Circuit noted “the tension between the First

Amendment and trademark rights is most acute when a

noncommercial parody is alleged to have caused tarnishment, a

situation in which First Amendment protection is greatest.”

Jordache Ent. Inc. v. Hogg Wyld, Lid., 828 F.2d 1482, 1490 n.7

(10th Cir. 1987), holding a parody of a jean manufacturer’s logo

not to infringe even though defendant sold jeans with the

trademark parody on the product.

Even the Eighth Circuit had previously indicated some

recognition that a trademark parody expressing a “view” in a

book, magazine or film was “not restricted in any manner

whatsoever.” It stated its limits on an injunction which

prohibited only marketing of products or services with a

trademark parody. Mut. of Omaha Ins. Co. v. Novak, 836 F.2d 397,

402-03 and n.8 (8th Cir. 1987), cert. denied, 488 U.S. 933. Judge

Heaney’s dissent in Novak properly noted that “the majority

opinion cannot be squared with the First Amendment”

prohibition on prior restraint. Jd. at 405.

B. Commercial Parody of Trademark In Publications

The Second Circuit overruled state and federal trademark

claims against that defendant’s parody, “Spy Notes”, of

plaintiff’s trademarked “Cliff Notes.” Citing First Amendment

protections for “artistic parody” the court held that the trademark

laws must be construed “narrowly” to avoid conflicts with First

Amendment rights. Cliff’s Notes, Inc. v. Bantam Doubleday, 886

F.2d 490, 494 (2d Cir. 1989). See also, Yankee Publishing v. News

America Publishing, 809 F.Supp. 267 (S.D.N.Y. 1992) (in light of

First Amendment protections, that court rejected trademark law

claims against a satirical parody of the Old Farmer’s Almanac

cover) (cited in Campbell v. Acuff-Rose Music, 114 S. Ct. 1164,

1173 (1994)); and Girl Scouts v. Bantam Doubleday, 808 F. Supp.

1112(S.D.N.Y. 1992), aff’d, 996 F.2d 1477 (2d Cir. 1993).

The Ninth Circuit reversed judgment in favor of trademark

owner Disney on an infringement claim against a parody in an

“adult ‘counterculture’ comic book” of a Disney movie that

portrayed Disney characters as other than pure and wholesome.

Walt Disney Prod. v. Air Pirates, 581 F.2d 751 (9th Cir. 1978).

C. Trademark Parody in Marketing of Commercial Product

The Fourth Circuit upheld a jury verdict for the seller of

beach towels that used Anheuser-Busch’s Budweiser can design

and slogan, against Anheuser-Busch’s infringement claim.

Anheuser- Busch, Inc. v. L&L Wings, 962 F.2d 316 (4th Cir. 1992),

cert. denied, 113 S. Ct. 206.

The Seventh Circuit reversed summary judgment in favor

of a trademark owner, in light of First Amendment protections of

parody, suing for infringement against a “commercial

exploitation” of Nike’s slogan, name and logo in t-shirt sales by

defendant. Nike, Inc. v. Just Did It Enterprises, 6 F.3d 1225 (7th

Cir. 1993).

The Court of Customs and Patent Appeals ruled against an

opposition by Volkswagen to Defendant’s application for a

trademark that was a “customized” or “caricature” of

Volkswagen’s “Beetle” car. Volkswagenwerk Aktiengesellschaft

v. Rose’vear Ent., 592 F.2d 1180 (Cust. Ct. 1979).

In the Sixth Circuit, a district court denied Anheuser-

Busch’s motion for preliminary injunction against the use of a

verbatim quote of Anheuser-Busch’s slogan in the sale of roses by

a florist. Anheuser-Busch, Inc. v. Florists Ass’n of Cleveland, 603

F. Supp. 35 (N.D. Ohio 1984).

Quite simply, there is no principled way to reconcile the

Eighth Circuit’s decision in this case with any of the well-

reasoned opinions by the courts mentioned above. Certiorari is

necessary to protect Petitioners’ First Amendment rights and to

delineate the limited application of trademark laws to

commercial uses of marks.

After this decision, when potential trademark users sit down

to examine the case law, they will suffer major confusion. They

may ask, “How can a non-commercial parody of Anheuser-

Busch’s trademarks in an editorial violate state and federal

trademark laws when other courts have found that commercial

parodies of Anheuser-Busch’s trademarks to sell products in the

marketplace are not a violation?” We refer the Court specifically

to the decisions in Anheuser-Busch, Inc. v. L & L Wings, Inc., 962

F.2d 316 (4th Cir. 1992), cert. denied, 113 S. Ct. 206 (1993) and

Anheuser-Busch vy. Florists Association of Greater Cleveland,

603 F. Supp. 35 (N.D. Ohio 1984).

Many commentators opine that the noncommercial use of

trademarks in parodies does not constitute actionable

infringement or dilution, but rather is protected First

Amendment speech. See 2 J. McCarthy, Trademarks and Unfair

Competition, § 31:38, at p. 670 (2d ed. 1984); Dorsen, “Satiric

Appropriation and the Law of Libel, Trademark, and Copyright:

Remedies Without Wrongs,” 65 B.U.L. Rev. 923, 949-52 (1985);

Denicolar, “Trademarks as Speech: Constitutional Implications

of the Emerging Rationales for the Protection of Trade Symbols,”

1982 Wis. L. Rev. 158, 190-206 (1982); Note, “Trademark

Parody: A Fair Use and First Amendment Analysis,” 72 Va. L.

Rev. 1079, 1107-17(1986).

II.

THE EIGHTH CIRCUIT FAILED TO APPLY THE

STRICT SCRUTINY STANDARD OF REVIEW TO

REGULATIONS OF NON-COMMERCIAL SPEECH AND

REGULATED THE CONTENT OF PETITIONERS’

EDITORIAL MESSAGE.

The Circuit’s analytical framework was to decide first

whether the District Court erred in finding no likelihood of

confusion under the state and federal trademark laws. The Panel

stated that it was applying “an expansive interpretation of [the]

likelihood of confusion” test under the trademark laws. Appendix

I, at 7a. No reported case has ever applied such a broad

interpretation of the trademark laws in a non-commercial use of

trademarks. This singular approach amounts to regulating the

content of a publisher’s editorial message, a regulation otherwise

clearly prohibited under the First Amendment. Forsyth County v.

Nationalist Movement, 112 S. Ct. 2395, 2404 (1992); R.A. V. v. St.

Paul, 112S. Ct. 2538, 2542 (1992); Burson v. Freeman, 112S. Ct.

1846, 1858 (1992) (Kennedy, J., concurring).

Indeed, this decision is contrary to the “strict scrutiny” test

for regulations on non-commercial speech, that any such

regulation must be “necessary to serve a compelling interest and

must be narrowly drawn to achieve that end.” Simon & Schuster,

Inc. v. N.Y. Crime Victims Board, 112 S. Ct. 501, 509 (1991). See

also, Whitney v. California, 274 U.S. 357, 373 (1927) (Brandeis,

J., concurring and joined by Holmes, J.), finding that the right of

free speech is a “fundamental right” that may not be denied or

abridged unless necessary “to protect the state from destruction

or from serious injury, political, economic or moral.” Congress

and the states have no legitimate interest in regulating the content

of noncommercial editorial speech, even if that speech uses

unflattering caricatures of trademarks. Government may not

favor commercial viewpoints as expressed in trademarks at the

expense of editorial commentary on issues such as the

environment or widely publicized public figures such as

Anheuser-Busch. Lamb’s Chapel v. Center Moriches School, 113

S. Ct. 2141, 2147-48 (1993).

The opinion below insidiously undermines our

constitutional tradition of vigorously protecting free speech. It

also directly conflicts with a Second Circuit decision it cites,

Cliff's Notes v. Bantam Doubleday, 886 F.2d at 494, which held

that “because overextension of Lanham Act restrictions in the

area of titles might intrude on First Amendment values, we must

construe the act narrowly to avoid such aconflict.”

The District Court had properly examined Respondent’s

trademark claims “with special sensitivity to the purposes of

trademark law and the First Amendment rights of the defendant.”

Balducci Publications, 814 F. Supp. at 795-96, and its

“confidence in the power of free and fearless reasoning,”

Whitney, 274 U.S. at 377, merits reversal of the Eighth Circuit by

the Court.

Petitioners have found no other case, other than the Panel’s

decision, which has upheld state or federal trademark law actions

against the use of a trademark in a book, magazine or newspaper

in a non-commercial, editorial context. Indeed, “the expression

of editorial opinion on matters of public importance ... is

entitled to the most exacting degree of First Amendment

protection.” F-C.C. v. League of Women Voters, 468 U.S. 364,

375-76 (1984). This Court stated there “we would not hesitate to

strike . .. down as violative of the First Amendment” a “ban on

editorializing applied to newspapers and magazines.” Jd. at 376.

See also, Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241,

255 (1974) (“we reaffirm unequivocally the protection afforded

to editorial judgment and to the free expression of views on these

and other issues, however controversial”). In Bose Corp v.

Consumers Union, 466 U.S. 485 (1984), the Court found that a

product disparagement claim against a critical review of a

product in a magazine was constitutionally protected. Anheuser-

Busch’s trademark law claims are essentially indistinguishable

from that claim in Bose.

In finding Petitioners’ non-commercial use of caricatures of

Anheuser-Busch’s trademarks in their editorial parody violated

state and federal trademark laws, this opinion “almost

completely foreclosed a venerable means of communication that

is both unique and important.” City of Ladue v. Gilleo, 1148S. Ct.

2038, 2045 (1994). Parodies of trademarks and political

cartooning by their nature must conjure the original, albeit in a

fanciful or critical fashion. Hustler Magazine v. Falwell, 485 U.S.

46, 53-55 (1988)' and Cliff’s Notes, 886 F.2d at 495. Thus,

Petitioners lacked adequate alternative means by which to

express their editorial opinions on Anheuser-Busch and its

public involvement in this environmental disaster. Forsyth

County, 112 S. Ct. at 2401, holding that regulations on speech

must, among others, “leave open ample alternatives for

communication.”

Political cartooning and parodies have existed for literally

thousands of years. Campbell v. Acuff-Rose Music, 114 S. Ct. at

1172 (upholding a commercial parody in a song of the owner’s

copyrighted music as fair use under the copyright laws). The

danger posed here is the stifling of political cartooning in a

nation bred to broad freedoms of speech and the press. That is

particularly alarming, as set forth in a recent widely noted

commentary. See G. Trudeau, “Drawing Dangerously,” The New

York Times, July 10, 1994, at E19.

1. Like the infliction of emotional distress claim in Hustler Magazine

and the product disparagement claim in Bose, Respondent’s trademark law

infringement and dilution claims should have been subjected to the standard of

proof in New York Times v. Sullivan. The lower courts rejected that approach,

urged by Petitioners. |

III.

THE OPINION FAILED TO APPLY TO THE

DISTRICT COURT’S FACT FINDINGS THE CLEARLY

ERRONEOUS STANDARD OF REVIEW OR THE MORE

RIGOROUS STANDARD WHERE PROTECTED SPEECH

IS REGULATED.

This decision resulted from a de novo review of the evidence

and law, done for the apparent purpose of reversing the District

Court’s fact findings despite the existence of significant First

Amendment issues. Such approach is contrary to the precedents

of this Court. At a minimum, the Circuit Court was required to

follow the standard of review set out in Fed. R. Civ. P. $2(a). In

Amadeo v. Zant, 486 U.S. 214, 223 (1988) this Court held that the

“clearly erroneous” standard of review for a case tried before a

district court “is a deferential one” and “if the district court’s

account of the evidence is plausible in light of the record

reviewed in its entirety, the court of appeals may not reverse it

even though convinced that, if it had been sitting as the trier of

fact, it would have weighed the evidence differently.” Here, the

reviewing Panel simply chose not to accept the District Court’s

fact finding that there was no likelihood of confusion in Snicker’s

use of altered trademarks in the editorial parody context. The

District Court heard the witnesses, reviewed the conflicting

evidence firsthand in the give and take of trial, and its factual

conclusions were clearly supported by the evidence. “We

frequently have emphasized that ‘[w]here there are two

permissible views of the evidence, the factfinder’s choice

between them cannot be clearly erroneous.’ ” Jd. at 226.

Not only did the Eighth Circuit fail to apply the “clearly

erroneous” standard, it also did not employ the correct rule of

independent review, Bose Corp. v. Consumer’s Union, 466 U.S.

485. “[I]n cases raising First Amendment issues we have

repeatedly held that an appellate court has an obligation to ‘make

an independent examination of the whole record’ in order to

make sure that the ‘the judgment does not constitute a forbidden

intrusion on the field of free expression.’ ” Jd. at 499, quoting

New York Times v. Sullivan, 376 U.S. at 254. Here, instead of

“ensur[ing] that protected expression will not be inhibited,” Bose

at 505, the appellate court conducted a de novo review of the

district court’s factual finding of no likelihood of confusion. The

Eighth Circuit turned this Court’s First Amerdment

jurisprudence on its head to reverse District Judge Hamilton and

rule in favor of Anheuser-Busch.

The Court of Appeals acknowledged that the “primary

evidence” of alleged consumer confusion was a shopping mall

survey involving “301 beer drinkers or purchasers who claimed

to periodically review magazines or newspapers.” Appendix I, at

4a. Then it found that the survey, bought and paid for Anheuser-

Busch, “tilts the analysis in favor of Anheuser-Busch.” Jd. at 9a.

(Parenthetically, we note that Anheuser-Busch presented no

evidence of actual consumer confusion or complaints by

consumers that its beer might contain oil, as a result of this

Snicker editorial). This decision makes 301 beer drinkers the

arbiters of proper editorial opinion, and subjects First

Amendment rights to majority rule and a_ hand-picked

“democratic” process, i.e., the shopping mall survey. Long ago

this Court ruled that the freedoms of speech and press were

placed beyond the reach of majorities or any democratic process.

“One’s right to ... free speech, a free press, ... and other

fundamental rights may not be submitted to vote; they depend on

the outcome of no elections.” West Virginia State Board of

Education v. Barnett, 319 U.S. 624, 638 (1943). The Court has

ruled that “[l]isteners’ reaction to speech is not a content-neutral

basis for regulation.” Forsyth County, 112 S. Ct. at 2403. Speech

may not be regulated simply because it may offend some or

embarrass others. Hustler Magazine, 485 U.S. at 55-56.

The Eighth Circuit’s acceptance of a commercial survey as a

means of regulating non-commercial speech also means that if a

publisher cannot finance a countervailing survey (which in this

case cost over $10,000), the publisher’s First Amendment rights

are seriously jeopardized. Recently, in City of Ladue v. Gilleo,

this Court ruled that a citizen’s participation in public debate

cannot be made dependent upon his financial capabilities. 114 S.

Ct. at 2046-47. See also, Forsyth County 112 S. Ct. at 2402,

holding that “[s]peech cannot be financially burdened, any more

than it can be punished or banned, simply because it might offend

a hostile mob.”

IV.

THE OPINION IS CONTRARY TO STATUTORY LAW

AND SUPREME COURT JURISPRUDENCE WHICH

APPLY THE TRADEMARK LAWS ONLY TO

COMMERCIAL USES, AND THEREBY REGULATES

THE CONTENT OF PETITIONERS’ EDITORIAL

PARODY OF ADVERTISING.

By its terms the Lanham Act does not prohibit the use of

another’s trademarks in non-commercial speech. It is thereby

consistent with First Amendment mandates. Section 32(a) of the

Lanham Act prohibits only the unauthorized “use” of a

trademark “in connection with the sale, offering for sale,

distribution, or advertising of any goods.” 15 U.S.C. § 1114(a).

Likewise, § 43 of the Act prohibits unauthorized use of

trademarks “in connection with any goods or services.” 15 U.S.C.

§ 1125(a). “The intent of this chapter is to regulate commerce

within the control of Congress ....” 15 U.S.C. § 1127. “‘A

trademark only gives the right to prohibit the use of it so far as to

protect the owner’s good will against the sale of another’s

product as his.’ ” Champion Spark Plug Co. v. Sanders, 331 U.S.

125, 129 (1947), quoting Prestonette, Inc. v. Coty, 264 U.S. 359,

368 (1923) (Holmes, J.). See also, S.F. Arts & Athletics v. Olympic

Committee, 483 U.S. 522, 566 (1987) (Brennan, J., dissenting)

(discussing noncommercial speech and noting that under the

Lanham Act “a trademark violation occurs only when an

offending trademark is applied to commercial goods and

services” ).?

The Lanham Act includes a “fair use” type defense, albeit not

as explicit as § 107 of the Copyright Act, 17 U.S.C. § 107. Section

33(b)(4) of the Lanham Act permits the use of a trademark

“otherwise than as a trade or service mark ... which is

descriptive of and used fairly and in good faith only to describe to

users goods or services of such party.” 15 U.S.C. § 1115(b)(4).

See S.F. Arts, 483 U.S. at 565 (Brennan, J., dissenting) and Eli

Lilly & Co. v. Revlon, Inc., 577 F. Supp. 477, 485-86 (S.D. N.Y.

1983), citing Abercrombie & Fitch Co. v. Hunting World, 537 F.2d

4, 12 (2d Cir. 1976). In Campbell v. Acuff-Rose Music, this Court

recently held that even a commercial parody of a copyrighted

song could be fair use. 114 S. Ct. at 1179. Clearly, Petitioners’

non-commercial use of Anheuser-Busch’s trademarks in an

editorial ad parody qualified as “fair” use.

This dangerous application of the trademark laws to

Petitioners’ non-commercial speech amounts to a content-based

regulation and violates the First Amendment because it treats

Anheuser-Busch’s commercial speech (its trademarks) more

favorably than Balducci Publications’ non-commercial editorial

speech. Gilleo, 114S. Ct. at 2043 and Metromedia, Inc. v. City of

San Diego, 453 U.S. 490, 514 (1981), invalidating an ordinance

2. The Missouri statutes at issue also seem to apply only to commercial

uses of another’s trademark. Mo. Rev. Stat. § 417.056 prohibits “use . . . in

connection with the sale, offering for sale, or advertising of any goods or

services.” See Cushman v. Mutton Hollow, 782 S.W.2d 150, 157 (Mo. App.

1990), “ “The term unthls competition, as used to describe a generic class of

commercial activities. .

that discriminated on the basis of content of speech by broadly

prohibiting non-commercial messages. In her concurrence in

Gilleo, Justice O’ Connor summed up the point succinctly: “With

rare exceptions, content discrimination in regulations of the

speech of private citizens on private property or in a traditional

public forum is presumptively impermissible, and_ this

presumption is a very strong one.” 114 S. Ct. at 2047.

THE FIRST AMENDMENT PROHIBITS AS AN

UNLAWFUL PRIOR RESTRAINT ON SPEECH ANY

INJUNCTION AGAINST FUTURE USES’ OF

TRADEMARKS BY PETITIONERS IN AD PARODY

EDITORIALS.

The injunctive relief granted to Respondent by the Eighth

Circuit against the publishers of Snicker seeks to restrain future

editorial, parody and satire commentary like that in the back

page of their issue No. 5 1/2. Appendix I, at 17a-18a. Beyond

question, such relief would constitute a “prior restraint” on

protected speech, a hindrance absolutely prohibited by the First

Amendment. In the venerable case of Near v. Minnesota, 283

U.S. 697, 713 (1931) this Court held that prior restraints on

publication by the press are unconstitutional:

In determining the extent of the constitutional

protection, it has been generally, if not

universally, considered that it is the chief

purpose of the guarantee [of the liberty of the

press] to prevent previous restraints upon

publication.

This has been the rule throughout the years, Kunz v. New York,

340 U.S. 290 (1951), and continues to the present. City of

Lakewood v. Plain Dealer Pub. Co., 486 U.S. 750 (1988) (noting

that prior restraints on publication by the press are

unconstitutional censorship).

Further, in New York Times Company v. United States, 403

U.S. 713, 714 (1971) the Court noted that any prior restraint on

speech bears a “heavy presumption against its constitutional

validity.” The Court also held that the proponent of a prior

restraint “carries a heavy burden of showing justification for the

imposition of such a restraint.” Jd. This burden Anheuser-Busch

has not met. See Nebraska Press Association v. Stuart, 427 U.S.

539 (1976).

Especially troublesome here is the broad nature of the

injunction which Respondent seeks. Anheuser-Busch asked the

Court to permanently enjoin Balducci Publications from any

“false description” of piaintiff’s products and “any other use of

Respondent’s marks in publishing...any documents or

material. . .”. (Appellant’s App. 24). There is no way to create

such a remedy absent the gagging of Petitioners’ protected

speech. Enforcement of such a virtually boundless injunction

against free speech and press rights would suffer from gross

overbreadth and would subject to the solicitous conjecture of the

Eighth Circuit such constitutional rights as may remain to

Petitioners. See New York Times v. United States, 403 U.S. at 725-

26 (Brennan, J., concurring) (“the First Amendment tolerates

absolutely no prior judicial restraints of the press predicated

upon surmise or conjecture that untoward consequences may

result’).

Plainly, Respondent’s chosen relief is beyond the powers of

this Court or any court. The grant of its chosen injunction would

violate the constitutional prohibition against prior restraints on

free speech and free press rights.

CONCLUSION

For each of these reasons the Petition for Writ of Certiorari

should be granted. Reversal of the Eighth Circuit’s decision and

reinstatement of the ruling of the District Court is the only way

the First Amendment rights of editorial publishers and

cartoonists can be protected. Furthermore, reversal is necessary

to maintain uniformity among Circuits on the limits to non-

commercial uses of the trademark laws.

Respectfully submitted,

RICHARD E. SCHWARTZ

Counsel of Record

JAMES E. PARROT

RICHARD SCHWARTZ &

ASSOCIATES, LTD.

Attorneys for Petitioners

640 Raeder Place

727 North First Street

St. Louis, Missouri 63102-2501

(314) 231-2110

APPENDIX I — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE EIGHTH CIRCUIT

FILED JUNE 30, 1994

United States Court of Appeals

For the Eighth Circuit

No. 93-2196

Anheuser-Busch, Inc.,

Plaintiff-Appellant,

Balducci Publications; Richard Balducci; Kathleen Balducci,

Defendants-Appellees.

Appeal from the United States District Court for the Eastern

District of Missouri.

Submitted: November 17, 1993

Filed: June 30, 1994

Before MCMILLIAN, Circuit Judge, JOHN R. GIBSON*,

Senior Circuit Judge, and BOWMAN, Circuit Judge.

* The HONORABLE JOHN R. GIBSON was Circuit Judge of the United

States Court of Appeals for the Eighth Circuit at the time this case was submitted,

and took senior status on January 1, 1994, before the opinion was filed.

Appendix I

JOHN R. GIBSON, Senior Circuit Judge.

Anheuser-Busch, Inc., appeals from the judgment of the

district court dismissing its federal and state trademark

infringement, trademark dilution, and unfair competition claims

against Balducci Publications and its publishers, Richard and

Kathleen Balducci, for the use of registered Anheuser-Busch

trademarks in a fictitious advertisement for “Michelob Oily.” See

1S U.S.C. §§ 1114(1), 1125(a) (1988); Mo. Rev. Stat.

§§ 417.056, 417.061 (1986). We have carefully reviewed the

record before us, and we reverse.

Anheuser-Busch operates a brewery in St. Louis. Its

products include the Michelob family of beers: Michelob,

Michelob Dry, Michelob Light and Michelob Classic Dark. For

use in its marketing of these products, Anheuser-Busch owns

several federally-registered trademarks: (1) Michelob; (2)

Michelob Dry; (3) A & Eagle Design; (4) Bottle and Label

Configuration; (5) Bottle Configuration; (6) Vertical Stripe

Design; (7) the phrase “ONE TASTE AND YOU’LL DRINK IT

DRY;” and (8) Vertical Stripe and A & Eagle Design. Of these, (1)

and (3) are also registered Missouri trademarks.

Balducci Publications is a publishing business owned by

Richard and Kathleen Balducci, also defendants in this case.

Balducci Publications has published Snicker, a humor magazine,

since April 1987. The back cover of issue 5-1/2, published in

April 1989, contains a mock advertisement for the fictitious

product “Michelob Oily.” A reduced copy of the advertisement is

attached as Appendix A. The advertisement states in bold type,

“ONE TASTE AND YOU’LL DRINK IT OILY” immediately

above “MICHELOB OILY®.” The accompanying graphics

include a partially-obscured can of Michelob Dry pouring oil

Appendix I

onto a fish, an oil-soaked rendition of the A & Eagle design (with

the eagle exclaiming “Yuck!”) below a Shell Oil symbol, and

various “Michelob Oily” products bearing a striking resemblance

to appellants’ Michelob family. This resemblance was quite

intentional, as evidenced by the admitted use of actual Anheuser-

Busch “clip-art”' in replicating several of the protected

trademarks. In smaller text the ad opines, “At the rate it’s being

dumped into our oceans, lakes and rivers, you'll drink it oily

sooner or later, anyway.” Finally, the following disclaimer is

found in extremely small text running vertically along the right

side of the page: “Snicker Magazine Editorial by Rich Balducci.

Art by Eugene Ruble. Thank goodness someone still cares about

quality (of life).” A full-size reproduction of this part of the ad is

contained in Appendix B.

Balducci continues to sell back issues of Snicker —

including Issue 5-1/2. Advertising for back issues of the

magazine has included the words “Michelob Oily” and a blue

ribbon design associated with Anheuser-Busch.

Mr. Balducci stated at trial that he used the parody to

comment on: (1) the effects of environmental pollution,

including a specific reference to the then-recent Shell oil spill in

the Gasconade River — a source of Anheuser-Busch’s water

supply; (2) Anheuser-Busch’s subsequent decision to

temporarily close its St. Louis brewery; and (3) the proliferation

of Anheuser-Busch beer brands and advertisements. The

defendants concede they possessed no knowledge that any

Anheuser-Busch product actually contained oil.

1. Clip-art consists of collections of pictures which may be inserted into a

new publishing application, such as an advertisement. Anheuser-Busch distributes

clip-art to ensure accurate and consistent representation of its marks.

Appendix I

Anheuser-Busch, displeased with Balducci’s extensive use

of its trademarks and the possible implication that its products

were tainted with oil, brought this suit in May 1989. It asserted

five causes of action: (1) infringement of federally-registered

trademarks, 15 U.S.C. § 1114(1); (2) federal unfair competition,

15 U.S.C. § 1125(a); (3) state trademark infringement, Mo. Rev.

Stat. § 417.056; (4) common law unfair competition; and (5) state

law trademark dilution, Mo. Rev. Stat. § 417.061. It sought one

dollar in nominal damages and injunctive relief.

Other than the Balducci ad itself, the primary evidence

offered by Anheuser-Busch was a study designed by Jacob

Jacoby, Ph.D., and conducted under the supervision of Leon B.

Kaplan, Ph.D. This survey, conducted in St. Louis shopping

malls, involved 301 beer drinkers or purchasers who claimed to

periodically review magazines or newspapers. The surveyors

showed the Balducci ad to 200 participants and a Michelob Dry

ad to the remaining 101. Of those viewing the Balducci ad, many

expressed an impression of Anheuser-Busch’s role in its creation.

For example, fifty-eight percent felt the creators “did have to get

permission to use the Michelob name.” Fifty-six percent believed

permission would be required for the various symbols and logos.

Six percent of the classified? responses construed the Balducci ad

to be an actual Anheuser-Busch advertisement. Almost half

(45%) found nothing about the parody which suggested it was an

editorial, and seventy-five percent did not perceive it as satirical.

Virtually none (3.5%) noticed the tiny disclaimer on the side of

the ad. Fifty-five percent construed the parody as suggesting that

Michelob beer is or was in some way contaminated with oil. As a

2. The staff at Princeton Research & Data Consulting Center, Inc. classified

the answers to open-ended questions. Balducci objects to this classification process

generally, but offers no persuasive evidence that any significant number of

responses have been erroneously classified.

Appendix I

result, twenty-two percent stated they were less likely to buy

Michelob beer in the future.

After a bench trial, the district court ruled in favor of

Balducci on each of the five theories. Although the court found

that “Defendants clearly used Plaintiff’s marks in their ad parody,

they used some of those marks without alteration, and they did so

without Plaintiff’s permission,” it dismissed the trademark

claims because “Defendants’ use of [the] marks did not create a

likelihood of confusion in the marketplace.” Balducci, 814 F.

Supp. at 793. In reaching this decision, the court expressed the

need to give “special sensitivity” to the First Amendment aspects

of the case. Jd. at 796. Accordingly, the court concluded that

although “Plaintiff’s statistical evidence [might] well be

persuasive in the context of a classic trademark infringement

case,.... where the allegedly infringing use occurs in an

editorial context,” more persuasive evidence of confusion is

required. Jd. at 797. The court similarly dismissed the state law

dilution claim, stating that “because Defendant’s use of

Plaintiff’s marks occurred in an editorial context, there is no

threat of tarnishment through association with shoddy or

disharmonious products.” /d. at 799. Finally, the court rejected

the unfair competition claims because the “parody was not in any

way connected with the sale of a product and because Plaintiff has

failed to establish a likelihood of confusion in the marketplace.”

Id. at 798.

On appeal, Anheuser-Busch contends the district court gave

inordinate weight to Balducci’s First Amendment claims and

erred in finding no likelihood of confusion. Balducci contends

the court correctly found no likelihood of confusion and,

furthermore, argues the ad parody is absolutely protected by the

First Amendment.

Appendix I ”

This case involves the tension between the protection

afforded by the Lanham Act to trademark owners and the

competing First Amendment rights of the parodist. Our analysis

of the district court’s decision encompasses two related, but

distinct steps. We begin by considering whether the district court

erred in finding no likelihood of confusion. Since a trademark

infringement action requires a likelihood of confusion, this

finding, if upheld, decides this case. If we conclude the court

erred in finding no likelihood of confusion, we must consider

Balducci’s additional argument that the First Amendment

protects it from liability.

Section 32(1) of the Lanham Act protects owners of

registered trademarks from uses “likely to cause confusion, or to

cause mistake, or to deceive.” 15 U.S.C. § 1114(1). The

determination of whether “likelihood of confusion” exists is a

factual determination which we review under the clearly

erroneous standard. Mutual of Omaha Ins. Co. v. Novak, 836 F.2d

397, 398 (8th Cir. 1987); SquirtCo v. Seven-Up Co., 628 F.2d

1086, 1091 (8th Cir. 1980). However, our review is not so limited

when, as here, the district court’s “conclusions are inextricably

bound up in its view of the law.” Calvin Klein Cosmetics Corp. v.

Lenox Labs., 815 F.2d 500, 504 (8th Cir. 1987). Rather than first

considering whether Balducci’s ad parody was likely to confuse

the public and then considering the scope of First Amendment

protection, the district court conflated the two. The court

essentially skewed its likelihood of confusion analysis in an ©

attempt to give “special sensitivity” to the First Amendment,

holding Anheuser Busch to a higher standard than required in a

“classic trademark infringement case.” Balducci, 814 F. Supp. at

796-97. Since we cannot separate the court’s factual finding of

Appendix I

confusion from its legal conclusions, we conduct a de novo

review of the well-developed record before us. Calvin K lein, 815

F.2d at 504.

Many courts have applied, we believe correctly, an

expansive interpretation of likelihood of confusion, extending

“protection against use of [plaintiff’s] mark on any product or

service which would reasonably be thought by the buying public

to come from the same source, or thought to be affiliated with,

connected with, or sponsored by, the trademark owner.”

McCarthy, Trademarks and Unfair Competition § 24.03, at 24-

13 (3d ed. 1992); Novak, 836 F.2d at 398; Nike, Inc. v. “Just Did

It” Enters., 6 F.3d 1225, 1228 (7th Cir. 1993); Dallas Cowboys

Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 204-

O05 (2d Cir. 1979); Jordache Enters., Inc. v. Levi Strauss, No. 91

CIV. 3704, 1994 WL 4430, at *6 (S.D.N.Y. Jan. 3, 1994). This

approach seems consistent with congressional intent, as

evidenced by the express inclusion during the 1989 revision of

the Lanham Act of protection against confusion as to “origin,

sponsorship, or approval.” 15 U.S.C. § 1125(a). This court

enumerated several factors pertinent to the finding of likelihood

of confusion in SquirtCo, 628 F.2d at 1091: (1) the strength of the

trademark; (2) the Similarity between the plaintiff’s and

defendant’s marks; (3) the competitive proximity of the parties’

products’; (4) the alleged infringer’s intent to confuse the public;

(5) evidence of any actual confusion; and (6) the degree of care

reasonably expected of the plaintiff’s potential customers. These

factors are not a distinct test, but represent the sort of

considerations which a court should consider in determining

whether likelihood of confusion exists. We briefly consider the

application of these factors to this case.

Appendix I

Anheuser-Busch possessed several very strong’ trademarks

that Balducci displayed virtually unaltered in the ad parody.

Thus, the first two SquirtCo factors weigh heavily in favor of

Anheuser-Busch. The third factor, competitive proximity, is less

one-sided. Balducci does not directly compete with Anheuser-

Busch. Confusion, however, may exist in the absence of direct

competition. SquirtCo, 628 F.2d at 1091. Moreover, Balducci

published the parody on the back cover of a magazine — a

location frequently devoted to real ads, even in Snicker. This

location threatens to confuse consumers accustomed to seeing

advertisements on the back cover of magazines.

Our analysis of Balducci’s intent relies, of necessity, on

circumstantial evidence. According to Richard Balducci, he

sought to comment on certain social conditions through parody.

“An intent to parody is not an intent to confuse.” Jordache

Enters., Inc. v. Hogg Wyld, Ltd., 828 F.2d 1482, 1486 (10th Cir.

1987). Other factors, however, suggest Balducci had, if not an

intent to confuse, at least an indifference to the possibility that

some consumers might be misled by the parody. For example, no

significant steps were taken to remind readers that they were

viewing a parody and not an advertisement sponsored or

approved by Anheuser-Busch. Balducci carefully designed the

fictitious ad to appear as authentic as possible. Several of

Anheuser-Busch’s marks were used with little or no alteration.

The disclaimer is virtually undetectable. Balducci even included

a ® symbol after the words Michelob Oily. These facts suggest

that Balducci sought to do far more than just “conjure up” an

image of Anheuser-Busch in the minds of its readers. Cf. Walt

Disney Productions v. Air Pirates, 581 F.2d 751, 758 (9th Cir.

3. Balducci concedes that Anheuser-Busch’s trademarks, developed

through sizeable and prolonged advertising, are quite strong.

Appendix I

1978), cert. denied, 439 U.S. 1132 (1979) (in copyright context,

“fair use” doctrine does not entitle parodist to copy everything

needed to create the “best parody;” rather, the parodist may copy

only that portion of the protected work necessary to “conjure up

the original”). These factors limit the degree to which Balducci’s

intent to parody weighs in favor of a finding of no likelihood of

confusion.

Balducci’s desired message, or humor, presumably hinged

on consumers’ ultimate realization that although this

“advertisement” was based on the painstaking duplication of

Anheuser-Busch’s marks, it was in fact a parody or editorial

parody. We have significant doubt as to whether many consumers

would develop this understanding of Balducci’s true purpose.

There is a distinct possibility, accepted by the district court, “that

a superficial observer might believe that the ad parody was

approved by Anheuser-Busch.” Balducci, 814 F. Supp. at 797.

The back cover of magazines is frequently used for

advertisements and cannot be expected to command the

thoughtful deliberation of all or even most of the viewing public.

The district court down-played this fact, observing that “[o]nce

again. . . the First Amendment concerns at issue in this litigation

require a closer examination of Plaintiff’s claims.” Jd. When

objectively viewed, the fourth and sixth SquirtCo factors (i.e.,

intent and degree of care) may not fully support Anheuser-Busch,

but they are consistent with a finding that the parody presented a

significant likelihood of confusing consumers.

The survey evidence, whether considered as direct or

indirect evidence of actual confusion, tilts the analysis in favor of

Anheuser-Busch. Over half of those surveyed thought Balducci

needed Anheuser-Busch’s approval to publish the ad. Many of

these presumably felt that such approval had in fact been

10a

Appendix I

obtained. Six percent thought that the parody was an actual

Anheuser-Busch advertisement. Other courts have accepted

similar survey findings. See Novak, 836 F.2d at 400; Nat’l

Football League Props., Inc. v. New Jersey Giants, Inc., 687 F.

Supp. 507,517 (D.N.J. 1986) (citing decisions relying on surveys

showing 8.5% to 15% confusion); Schieffelin & Co. v. Jack

Company of Boca, 1994 WL 144884 at *15 (S.D.N.Y. Mar. 31,

1994). In Novak, for example, “approximately ten percent of all

the persons surveyed thought that Mutual ‘goes along’ with

Novak’s product.” 836 F.2d at 400. The court found this

persuasive despite the existence of “some ambiguity” in the

survey question. Jd. Thus, we are left with evidence, obtained by

means of a valid consumer survey, that strongly indicates actual

consumer confusion.

Our review of the record before the district court, including

the Balducci ad and the survey evidence,‘ convinces us that the

court erred in finding no likelihood of confusion. The court

reached its finding only after it mistakenly weighted its analysis

in favor of Balducci in an effort to satisfy the limits set by the First

Amendment. We believe the better course would have been to

analyze the likelihood of confusion first and then proceed to an

analysis of the First Amendment issues.

Having determined that a likelihood of confusion exists, we

must next consider Balducci’s argument that the First

Amendment protects it from liability for its ad parody. Parody

4. Wehave considered Balducci’s argument attacking the survey’s findings

because of alleged shortcomings in its methodology; however, like the district

court, we have “no quarrel with the [survey's] design or execution.” Balducci, 814

F. Supp. at 797; cf. ConAgra Inc. v. Geo. A. Hormel & Co.,784F. Supp. 700, 734(D.

Neb. 1992), aff'd, 990 F.2d 368 (8th Cir. 1993).

lla

Appendix I

does implicate the First Amendment’s protection of artistic

expression. Cliffs Notes, Inc. v. Bantam Doubleday Dell Pub.

Group, 886 F.2d 490, 493 (2d Cir. 1989). Based on this, Balducci

argues it has an absolute First Amendment right to use plaintiff’s

trademarks in its parody. No such absolute right exists. See id. at

493-94 (“Trademark protection is not lost simply because the

allegedly infringing use is in connection with a work of artistic

expression.”) (quoting Silverman v. CBS Inc., 870 F.2d 40, 49 (2d

Cir.), cert. denied, 492 U.S. 907 (1989)); Nike, 6 F.3d at 1228:

Dallas Cowboys Cheerleaders, 604 F.2d at 206 (defendant liable

for using cheerleader uniform in X-rated film); Pillsbury Co. v.

Milky Way Productions, Inc., 215 U.S.P.Q. 124, 135 (N.D. Ga.

1981) (defendant liable for dilution for publishing cartoon of

“Poppin’ Fresh” and “Poppie Fresh” doughpersons engaging in

sexual intercourse and fellatio); Edgar Rice Burroughs, Inc. v.

Manns Theaters, 195 U.S.P.Q. 159, 162 (C.D. Cal. 1976)

(defendant liable for using TARZAN mark in X-rated film).

In arguing against the reasoning of these many cases,

Balducci relies on this court’s opinion in Mutual of Omaha Ins.

Co. v. Novak, 836 F.2d 397 (8th Cir. 1987), cert. denied, 488 U.S.

933 (1988). In Novak, a panel of this court upheld an injunction

against Novak’s continued sale of anti-war T-shirts, coffee mugs

and other products containing words such as “Mutants of

Omaha” and bearing symbols with a likeness to plaintiff’s Indian

head logo. /d. at 398. In dicta, the court stated that the injunction

“in no way infringes upon the constitutional protection the First

Amendment would provide were Novak to present an editorial

parody in a book, magazine, or film.” Jd. at 402. This language

does not support absolute protection for editorial parody, but

merely reflects the fact that a parody contained in an obvious

editorial context is less likely to confuse, and thus more deserving

of protection than those displayed ona product. See Nike, 6 F.3d

12a

Appendix I

at 1228; Jordache Enters., Inc. v. Hogg Wyld, Ltd., 625 F. Supp.

48, 55 (D.N.M. 1985), aff’d, 828 F.2d 1482 (10th Cir. 1987); 3

J.T. McCarthy § 31:38 at 31-213. A parody creating a likelihood

of confusion may be subject to a trademark infringement action.

Cliffs Notes, 886 F.2d at 494 (confusing parodies are “vulnerable

under trademark law”); L.L. Bean, Inc. v. Drake Publishers Inc.,

811 F.2d 26, 32 n.3 (1st Cir.) (confusing parodies “implicate[] the

legitimate commercial and consumer protection objectives of

trademark law”), cert. denied and appeal dismissed, 483 U.S.

1013 (1987).

There is no simple, mechanical rule by which courts can

determine when a potentially confusing parody falls within the

First Amendment’s protective reach. Thus, “in deciding the reach

of the Lanham Act in any case where an expressive work is

alleged to infringe a trademark, it is appropriate to weigh the

public interest in free expression against the public interest in

avoiding consumer confusion.” Cliffs Notes, 886 F.2d at 494.

“This approach takes into account the ultimate test in trademark

law, namely, the likelihood of confusion as to the source of the

goods in question.” Jd. at 495 (internal quotations omitted).

In applying this balancing test, we begin with the recognition

that parody serves as a “humorous form of social commentary

and literary criticism that dates back as far as Greek antiquity.”

Bean, 811 F.2d at 28. Balducci purports to comment on several

matters, including environmental pollution and Anheuser-

Busch’s brand proliferation. The First Amendment’s protection

of social commentary generally, and parody in particular, is

certainly implicated in this case. “The fact that parody can claim

legitimacy for some appropriation does not, of course, tell either

parodist or judge much about where to draw the line.” Campbell

v. Acuff-Rose Music Inc., 114 S. Ct. 1164, 1172 (1994). “The

13a

Appendix I

benefit to the one making the parody ... arises from the humorous

association, not from public confusion as to the source of the

marks.” Jordache Enters., 828 F.2d at 1486. Thus, we must weigh

the public interest in protecting Balducci’s expression against the

public interest in avoiding consumer confusion.

Applying this standard, we are convinced that the First

Amendment places no bar to the application of the Lanham Act in

this case. As we have discussed, Balducci’s ad parody was likely

to confuse consumers as to its origin, sponsorship or approval.

This confusion might have to be tolerated if even plausibly

necessary to achieve the desired commentary — a question we

need not decide. In this case, the confusion is wholly unnecessary

to Balducci’s stated purpose. By using an obvious disclaimer,

positioning the parody in a less-confusing location, altering the

protected marks in a meaningful way, or doing some collection of

the above, Balducci could have conveyed its message with

substantially less risk of consumer confusion. Other courts have

upheld the use of obvious variations of protected marks. See, e.g.,

Cliffs Notes, 886 F.2d at 496 (“Spy Notes” held not to infringe

“Cliffs Notes” mark); Jordache Enters., 828 F.2d at 1485-88

(comparing “Jordache” and “Lardashe” jeans). The First

Amendment does not excuse Balducci’s failure to do so. As the

Second Circuit observed:

A parody must convey two simultaneous —

and contradictory — messages: that it is the

original, but also that it is not the Original and

is instead a parody. To the extent that it does

only the former but not the latter, it is not only

a poor parody but also vulnerable under

trademark law, since the customer will be

confused.

14a

Appendix I

Cliffs Notes, 886 F.2d at 494; see Nike, 6 F.3d at 1228. Balducci’s

ad, developed through the nearly unaltered appropriation of

Anheuser-Busch’s marks, conveys that it is the original, but the

ad founders on its failure to convey that it is not the original.

Thus, it is vulnerable under trademark law since the customer is

likely to be confused, as the record before the district court

demonstrated.

We believe it is important to acknowledge the limits of our

holding today. We do not hold that Balducci’s extensive

borrowing of Anheuser-Busch’s trademarks amounts to a per se

trademark violation. Unlike copyright and patent owners,

trademark owners have no right in gross. See McCarthy

§ 24.03[4][d]; Jordache, 625 F. Supp. at 56 (trademark owner

“does not own in gross the penumbral customer awareness of its

name, nor the fallout from its advertising”). By taking steps to

insure that viewers adequately understood this was an

unauthorized editorial, Balducci might have avoided or at least

sharply limited any confusion, and thereby escaped from

liability. Absent such measures, Balducci’s ad parody was likely

to confuse consumers and fall subject to federal trademark law.

Il.

Although our trademark infringement holding dictates our

disposition of this case, we must discuss Anheuser-Busch’s

dilution claim because the validity of this claim may affect the

relief available to it.°

5. For example, the Missouri anti-dilution statute requires automatic

imposition of an injunction. See Gilbert/Robinson, Inc. v. Carrie Beverage —

Missouri Inc., 758 F.Supp. 512,528 (E.D. Mo. eo ),

and cert. denied, 114S.Ct. 338 (1993).

15a

Appendix I

Missouri’s anti-dilution statute provides that “[l]ikelihood

of injury to business reputation or dilution of the distinctive

quality of a mark. . . shall be a ground for injunctive relief.” Mo.

Rev. Stat. § 417.061. This statute provides greater protection than

the Lanham Act by expressly permitting claims “notwithstanding

the absence of competition between the parties or the absence of

confusion as to the source of goods or services.” Id. Dilution

comes in two distinct forms. The most common form prohibits

uses which, although not likely to confuse consumers as to

source, tend to weaken the unique association of the mark with

the trademark owner. See, e.g., Tiffany & Co. v. Boston Club, Inc.,

231 F. Supp. 836, 844 (D. Mass. 1964) (enjoining Boston

restaurant’s use of New York jeweler’s “Tiffany” mark). More

applicable to this case, however, is the second form of dilution —

commonly referred to as “tarnishment.” Courts have frequently

enjoined the “tarnishment” of a mark through association with

unsavory goods, persons or services. See, e.g., Chemical Corp. of

America v. Anheuser-Busch, Inc., 306 F.2d 433, 436-38 (Sth Cir.

1962) (enjoining use of “Where there’s life . . . there’s bugs!”

Slogan), cert. denied, 372 U.S. 965 (1963); Original Appalachian

Artworks, Inc. v. Topps Chewing Gum, Inc., 642 F. Supp. 1031,

1039 (N.D. Ga. 1986) (tarnishment “occurs when a defendant

uses the same or similar marks in a way that creates an

undesirable, unwholesome, or unsavory mental association with

the plaintiff’s mark”); Pillsbury, 215 U.S.P.Q. at 135 (enjoining

cartoon portrayal of trade characters engaged in sexual

intercourse and fellatio published in adult magazine); American

Express Co. v. Vibra Approved Laboratories Corp., 10

U.S.P.Q.2d 2006, 2013 (S.D.N.Y. 1989) (enjoining defendant’s

use of plaintiff’s trademark in distribution of condom credit

card); Coca-Cola Co. v. Gemini Rising, Inc., 346 F. Supp. 1183,

1190-91 (E.D.N.Y. 1972) (enjoining “Enjoy Cocaine” posters

because customers might be “turned off” by so-called “spoof”).

l6a

Appendix I

In this case, the majority of those surveyed construed the ad

parody as suggesting that Michelob beer contains oil. This

relationship obviously tarnishes the marks’ carefully-developed

images. Moreover, the tarnishment results from a negative,

although vague, statement about the quality of the product

represented by the trademark. The plain language of the Missouri

anti-dilution statute reaches this situation.

Balducci argues that the application of the anti-dilution

statute to enjoin the ad parody’s publication would violate the

First Amendment. Balducci contends that the First Amendment

prevents any construction of an anti-dilution statute that would

enjoin perceived tarnishment in a non-commercial context. The

only case we discovered which supports such a sweeping

statement is L.L. Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26

(Ist Cir.), cert. denied and appeal dismissed, 483 U.S. 1013

(1987). In Bean, the First Circuit considered a parody of the

plaintiff’s mail-order catalog. The parody, contained in an adult

erotic magazine, consisted of a two-page article entitled “L.L.

Beam’s Back-to-School-Sex-Catalog.” (Emphasis added.) The

article portrayed nude models using fictitious products in

sexually explicit manners and contained facsimiles of Bean’s

trademarks. The court concluded that applying the Maine anti-

dilution statute would be unconstitutional because the First

Amendment protects the “use of a trademark in anoncommercial

setting such as an editorial or artistic context.” Jd. at 334.

We reject Balducci’s First Amendment argument. We begin

by observing that Balducci’s analysis conflicts with the holding

of several cases. See, e.g., Pillsbury, 215 U.S.P.Q. at 135; Coca-

Cola Co., 346 F. Supp. at 1191-93. Moreover, the facts in Bean

differ significantly from the facts in this appeal. First, the catalog

parody made no derogatory comment about Bean’s products’

17a

Appendix I

quality. Balducci’s parody, as demonstrated by the survey,

suggested that Anheuser-Busch products were contaminated with

oil. This unsupported attack was not even remotely necessary to

Balducci’s goals of commenting on the Gasconade oil spill and

water pollution generally. Nor does Balducci’s asserted purpose

of commenting on Anheuser-Busch’s brand proliferation give it

carte blanche to attack Anheuser-Busch products. Second, and

more importantly, the catalog parody was located inside a 100-

page magazine. Bean, 811 F.2d at 32. Readers presumably

discovered it only after perusing the magazine or reviewing the

table of contents, which labelled the article as “humor” and

“parody.” In contrast, Balducci placed its parody on the back

cover with only a tiny disclosure. Thus, the casual viewer might

fail to appreciate its editorial purpose. Even the Bean court felt it

Significant that “neither the [catalog parody] nor appellant’s

trademark was featured on the front or back cover of the

magazine.” Jd. For these reasons, as well as those contained in our

discussion of Balducci’s First Amendment arguments in the

trademark context, we conclude the district court erred in

dismissing Anheuser-Busch’s dilution claims.

The final question presented in this case involves the proper

remedy. Anheuser-Busch seeks one dollar in damages and an

injunction against further infringement. The requested nominal

damages seem proper given the survey evidence suggesting

actual confusion. See Brunswick Corp. v. Spinit Reel Co., 832

F.2d 513, 525 (10th Cir. 1987) (awarding damages based on

survey evidence); PPX Enters., Inc. v. Audiofidelity Enters., Inc.,

818 F.2d 266, 271 (2d Cir. 1987) (same).

Injunctive relief is also appropriate and, under the Missouri

anti-dilution statute, required. The injunction sought by

Anheuser-Busch, however, is quite broad. It would permanently

18a

Appendix I

enjoin Balducci from publishing any “false description” of

Anheuser-Busch products or “publishing [the protected marks in]

. .. any documents or material.” This relief seems to encompass a

great number of uses which might amount to no infringement at

all. Courts should tread cautiously when considering injunctive

relief against future publication. The proponent of prior restraint

“ ‘carries a heavy burden of showing justification for the

imposition of such a restraint.’ ” New York Times Co. v. United

States, 403 U.S. 713, 714 (1971) (quoting Bantum Books, Inc. v.

Sullivan, 372 U.S. 58, 70 (1963)). The parties have not developed

a satisfactory record or fully briefed this issue. Thus, we decline

to delineate the precise limits which the First Amendment might

place on the scope of the injunctive relief available to Anheuser-

Busch.

We reverse the district court’s dismissal of Anheuser-

Busch’s trademark infringement (15 U.S.C. § 1114(1)) and

dilution (Mo. Rev. Stat. § 417.061) claims and instruct the district

court to enter judgment for Anheuser-Busch on these claims and

award appropriate relief.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

19a

Appendix I

APPENDIX A

Reduced-size reproduction. Original is on 11-1/4 x 17-1/2 inch

ONE TASTE

| AND

YOU'LL

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\v aceh gt US wervens

Riicgn 46Aline rates being dumpedinicow = EAR can

\\\o\b Zi eceans, iokes ond avers, you™ dink & .

20a

Appendix I

APPENDIX B

Full-size reproduction of lower-right corner of Appendix A.

oe a

imped into our

rs, you'll drink if

yway.

Snickers Mogazine Editorial by Rich Boiduccl Art by Eugene Ruble. Thank goodness someone stil cores About Qquolity (of Ife).

—

2la

APPENDIX II— MEMORANDUM AND ORDER OF THE

UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF MISSOURI, EASTERN

DIVISION FILED FEBRUARY 22, 1993

Cause No. 89-0872-C(7)

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

ANHEUSER-BUSCH, INC.,

Plaintiff,

BALDUCCI PUBLICATIONS, et al.,

Defendants.

MEMORANDUM AND ORDER

Plaintiff Anheuser-Busch, Inc. asserts five causes of action

in this matter: (1) trademark infringement under Section 32(1) of

the Lanham Act, 15 U.S.C.§ 1114(1): (2) unfair competition

under Section 43(a) of the Lanham Act, 15 U.S.C. § 1 125(a); (3)

infringement of trademarks registered in Missouri under Mo.

Rev. Stat. § 417.056; (4) common law unfair competition; and (5)

dilution of Plaintiff’s marks and injury to its business reputation

under Mo. Rev. Stat. § 417.061. Plaintiff seeks one dollar in

nominal damages and injunctive relief. The Court heard evidence

on this matter June 25, 26, and 29, 1992. Also pending before the

Court is Plaintiff’s Motion For Leave to Supplement the Record.

22a

Appendix II

I. Motion for Leave to Supplement the Record

Plaintiff seeks leave to supplement the record to add

Supplemental Exhibits 1, 2, 3, and 4. These Exhibits are the

current issue of Snicker magazine, the November 1992 edition of

the St. Louis Journalism Review, and excerpts from both

publications. The excerpted portions state that Snicker magazine

is now distributed nationwide. Defendants do not oppose

Plaintiff’s Motion. The Court will grant Plaintiff’s Motion to

Supplement the Record.

II. Findings of Fact

1. Plaintiff Anheuser-Busch, Inc. is a Missouri corporation that

brews a wide variety of popular beers. Among those beers is the

Michelob family of beers which includes Michelob, Michelob

Dry, Michelob Light and Michelob Classic Dark.

2. Plaintiff’s Missouri brewery uses water from the Gasconade

River to produce its beers. There was an oil spill in the Gasconade

River in 1988. Plaintiff’s beers were not contaminated as a result

of the oil spill.

3. Plaintiff owns various federally registered trademarks which

it uses to market its beers. The following trademarks are at issue

in this litigation: (1) Michelob: (2) Michelob Dry; (3) A & Eagle

Design; (4) Bottle and Label Configuration; (5) Bottle

Configuration; (6) Vertical Stripe Design; (7) the phrase “ONE

TASTE AND YOU’LL DRINK IT DRY;” and (8) Vertical Stripe

and A & Eagle Design.

4. Inaddition, the A & Eagle Design and the term “Michelob” are

registered Missouri trademarks. |

23a

Appendix II

5. These marks are all famous and are generally known to refer to

Anheuser-Busch and to beer brewed by Anheuser-Busch.

6. Plaintiff uses its marks to advertise its products. Plaintiff has

also used its marks in a series of advertisements concerning the

environment.

7. Defendant Balducci Publications is a Missouri business entity

owned by Defendants Richard Balducci and Kathleen Balducci.

Defendants publish Snicker magazine, a humor magazine.

8. Snicker magazine is distributed throughout the St. Louis area

and, as of the end of 1992, nationwide.

9. Issue No. 5 1/2 of Snicker was published in April 1989. On the

back cover of Issue 5 1/2 Defendants published a mock

advertisement for a fictional product called Michelob Oily. This

mock advertisement is the subject matter of this lawsuit.

10. The mock advertisement contains the phrase “One Taste and

You’ ll Drink it Oily” in bold type and the phrase “Michelob Oily”

followed by the symbol ®. At the bottom of the page is the phrase

“At the rate it’s being dumped into our oceans, lakes and rivers,

you'll drink it oily sooner or later, anyway.” At the side of the

page, in small type, are the words: “Snicker Magazine Editorial

by Rich Baiducci. Art by Eugene Ruble. Thank goodness

someone still cares about quality (of life).”

12. Plaintiff has used the slogan “Somebody still cares about

quality” and the trademark “ONE TASTE AND YOU’ LL DRINK

IT DRY” to advertise and sell its products.

11. The mock advertisement depicts a human hand holding a

24a

Appendix II

crumpled Michelob Dry can. The thumb of the hand partially

obscures the word “Dry.” Oil and an oily fish spill from a spigot

inserted in the can. The can is a photograph of an actual Michelob

Dry can.

13. At the center of the page, is a drawing of an oil-drenched

eagle exclaiming “Yuck!” The eagle is standing inside of the

letter “A.” This design strongly resembles, but is not identical to,

Plaintiff’s A & Eagle logo.

14. Asix pack of beer is depicted at the bottom left-hand corner

of the page. In the bottom right-hand corner of the page, there is a

representation of two beer bottles and a mug of beer. “Michelob

Oily” is written on all of the bottles and on the mug. The bottles

are in the trademarked configuration of Michelob Dry bottles.

15. The mock advertisement published on the back page of Issue

-5.and described in Findings of Fact 9 — 14 is an ad parody.

16. Defendants produced the ad parody to express an opinion

regarding the dangers of pollution in the nations waterways and

also to comment on Plaintiff’s “brand proliferation.”

17. Defendant Richard Balducci expressed negative opinions

regarding Plaintiff’s corporate officers and its employees.

18. The artwork on the back page of Issue 5 1/2 was prepared, in

part, by Eugene Ruble at the direction of Richard Balducci.

19. Mr. Ruble used Anheuser-Busch clip-art to prepare the piece.

Clip-art is prepared by Anheuser-Busch to ensure accurate and

consistent representation of Plaintiff’s marks. Specifically, Mr.

Ruble used clip art to represent the six pack of Michelob Oily, the

25a

Appendix II

two bottles of Michelob Oily and the mug, and the words

“Michelob Oily.”

20. In addition, Mr. Ruble used the Anheuser-Busch A & Eagle

design as the basis for his rendition of an “A” and an eagle in the

ad parody.

21. Insum, Defendants clearly used Plaintiff’s marks in their ad

parody, they used some of those marks without alteration, and

they did so without Plaintiff’s permission.

22. Defendants’ use of Plaintiff’s marks did not create a

likelihood of confusion in the marketplace.'

23. Any Findings of Fact not specifically stated in these Findings

of Fact but set forth in the Conclusions of Law is incorporated

herein.

III. Conclusions of Law

A. Jurisdiction

The case presents claims arising under the trademark laws of

the United States. The Court has jurisdiction over these claims

pursuant to 15 U.S.C. § 1121 and 28 U.S.C. § 1338. The Court has

supplemental jurisdiction over Plaintiff’s state law claims. 28

U.S.C. § 1367. -

B. Trademark Infringement

Plaintiff maintains that Defendants’ unauthorized use of

1. Thereasoning underlying this Finding of Fact is discussed below.

26a

Appendix II

Plaintiff’s marks constitutes trademark infringement in violation

of Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1).?

Whether an allegedly infringing use of a protected mark violates

the Act depends upon whether, under all the circumstances, there

is a likelihood of confusion as to source, sponsorship or

affiliation. SquirtCo. v. Seven-Up Co., 628 F.2d 1086 (8th Cir.

2. The Act provides in pertinent part:

Any person who shall, without the consent of the

registrant —

(a) use in commerce any reproduction,

counterfeit, copy, or colorable imitation of a

registered mark in connection with the sale,

offering for sale, distribution, or advertising of

any goods or services on or in connection with

such use is likely to cause confusion, or to cause

mistake or to deceive; or

(b) reproduce, counterfeit, copy or colorably

imitate a registered mark and apply such

reproduction, counterfeit, copy, or colorable

imitation to labels, signs, prints packages,

wrappers, receptacles or advertisements

intended to be used in commerce upon or in

connection with the sale, offering for sale,

distribution, or advertising of goods or services

on or in connection with which such use is likely

to cause confusion, or to cause mistake, or to

deceive.

shall be liable in a civil action by the registrant for the

remedies hereinafter provided.

15U.S.C. § 1114(1)(a), (b).

27a

Appendix II

1980); J. Thomas McCarthy, Trademarks and Unfair

Competition, 31:38 (1984). In SquirtCo, the court identified six

factors relevant to a determination of whether the allegedly

infringing use of another’s trademark creates a likelihood of

confusion: (1) the strength of the mark; (2) the similarity between

the trademark and the defendant’s mark; (3) the competitive

proximity of the products on which the respective marks are

placed; (4) the intent of the alleged infringer to pass off his goods

as those of the trademark holder; (5) the incidents of actual

confusion; and (6) the degree of care likely to be exercised by the

potential customers of the trademark holder. Jd. at 1091.

The Eighth Circuit applied the likelihood of confusion

factors in Mutual of Omaha Ins., Co. v. Novak, 836 F.2d 397, 399

(8th Cir. 1987) cert. denied 488 U.S. 933 (1988). In that case, the

defendant, Michael Novak, was a designer who manufactured

and distributed T-shirts and coffee mugs bearing the slogan

“Mutant of Omaha.” Defendant’s merchandise also depicted a

side-view of a feather-bonneted, emaciated human head.

Defendant’s design was intended to raise awareness of the threat

of nuclear war. Mutual of Omaha contended that defendant’s use

of these designs infringed Mutual of Omaha’s trademark in its

Indian head logo and in the phrase “Mutual of Omaha.” The court

concurred.

However, in upholding a permanent injunction entered by

the district court, the Eighth Circuit noted that the injunction “in

no way infringes upon the constitutional protection the First

Amendment would provide were Novak to present an editorial

parody in a book, magazine, or film.” Jd. at 402. The court further

stated that Novak was “prohibited from using the design only in

the specific commercial ways mentioned in the injunction.” /d. at

403 n.8. On its face, this language would seem to support

28a

Appendix II

Defendants’ argument that their use of Plaintiff’s marks in an ad

parody is absolutely protected under the First Amendment to the

United States Constitution. However, in Mutual of Omaha, the

also consults the reasoning of trademark cases wherein the First

Amendment defense is squarely presented.

It is well-settled that parody is a form of expression

protected by the First Amendment. Hustler Magazine, Inc. v.

Falwell, 485 U.S. 46 (1988); Cliffs Notes, Inc. v. Bantam

Doubleday Dell Pub. Group. Inc., 886 F.2d 490, 493 (2d Cir.

1989). Trademark parody is a subspecies of the genre that pokes

fun at or criticizes a business entity by spoofing the entity’s

trademarks. Trademark parody is only effective if the mark is

well-known and the parody is enough like the original to invoke

an association. Cliffs Notes, 886 F.2d at 494 (“the keystone of

parody is imitation”). Thus, trademark parodies raise a legal

tension not unlike that addressed by the fair use doctrine of

the trademark owner and the rights of the parodist to free

expression.

In resolving this tension, courts have considered the

purposes of trademark protection. Trademark is a form of

intellectual property. L.L. Bean. Inc. v. Drake Publisher, Inc., 811

F.2d 26, 29 (1st Cir. ) cert. denied 483 U.S. 1013 (1987). By

registering a trademark,

[t]he owner of the mark acquires the right to

prevent the goods to which the mark is

applied from being confused with those of

others and to prevent his own trade from

being diverted to competitors through their

use of misleading marks.

29a

Appendix II

Power Test Petroleum Distributor, Inc. v. Calcu Gas, Inc., 754

F.2d 91, 97 (2d Cir. 1985) (quoting Industrial Rayon Corp. v.

Dutchess Underwear Corp. , 92 F.2d 33, 35 (2d Cir. 1937), cert.

denied, 303 U.S. 640 (1938)). The scope of the trademark

owner’s property right is determined by the purposes of

trademark law: to eliminate consumer confusion and unfair

competition in the marketplace. L.L. Bean, 811 F.2d at 29. See

also Jordache Enterprises Inc . v. Hogg Wyld Ltd ., 828 F.2d

1482, 1486 (10th Cir. 1987) (trademark protects against

confusion as to the source of a mark; “which is not the same thing

as aright not to be made fun of” ) (quoting 2 J . Thomas McCarthy,

Trademarks and Unfair Competition, 31:38 at 670 (2d ed.

1984)).

In L.L. Bean, the First Circuit distinguished between

allegedly infringing uses of a registered trademark for

commercial purposes and trademark parody. In L.L. Bean,

plaintiff sought to enjoin the publication of the October 1984

issue of High Society magazine because the magazine continued

a two page parody entitled “L.L. Beam’s Back-To-School-Sex-

Catalog.” The parody incorporated a facsimile of the L.L. Bean

trademark in a mock advertisement for sex-related products. The

district court granted summary judgment for plaintiff on its state

law anti-dilution claim?’ and enjoined further publication. The

First Circuit held that the injunction offended the First

Amendment. The court considered the scope of a trademark

owner’s property rights and determined that the trademark

owner’s rights extend only to unauthorized commercial uses of a

3. Plaintiff also brought trademark infringement, unfair competition and

deceptive trade practices claims. Likelihood of confusion is an element of all of

these claims. Because likelihood of confusion is a question of fact, the court denied

summary judgment on those claims. L.L. Bean, 811 F.2d at 27.

30a

Appendix II

registered mark. /d. at 29 (citing Lucasfilm Ltd. v. High Frontier,

622 F. Supp. 931, 933-35 (D.D.C. 1985)). The court balanced the

limited scope of this property right against the importance of

parody and determined that the injunction must fall. Jd. at 33.

It is important to note that the likelihood of confusion issue

was not before the court in L.L. Bean. The court acknowledged

that a parody which engendered confusion in the marketplace

would implicate the legitimate commercial and consumer

protection objectives of trademark law. Jd. at 32 n.3. The difficult

task presented by trademark parody cases is to determine when

the defendant’s use of a registered mark in an editorial context

creates a likelihood of confusion in the marketplace and therefore

implicates the purposes of the Lanham Act.

The courts that have grappled with this issue have not settled

on a uniform approach. The First Circuit, in L.L. Bean,

recognized that a trademark parody might engender marketplace

confusion but did not propose a test for determining when such

confusion exists. The Second Circuit has adopted a balancing

test. Specifically, the Second Circuit asks whether, in a given

instance, the public interest in avoiding consumer confusion

outweighs the public interest in free expression. Cliffs Notes,

supra; Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989). This

court sees no reason to abandon the traditional likelihood of

confusion test set forth in SguirtCo, provided that it is applied

with special sensitivity to the purposes of trademark law and the

First Amendment rights of the Defendants. See, e.g., Pillsbury

Co. v. Milky Way Productions, Inc., 215 U.S.P.Q. (BNA) 124

(N.D. Ga. 1981) (applying likelihood of confusion factors to

parody of Poppin’ Fresh doughboy in Screw magazine).

The first two factors of the likelihood of confusion test are

3la

Appendix II

easily addressed. The parties agree that Plaintiff’s marks are

strong. There is also a great similarity between Plaintiff’s marks

and Defendants’ rendition of those marks in its ad parody.

However, Defendant’s humor magazine and Plaintiff’s beers are

not in competitive proximity. See Pillsbury, 215 U.S.P.Q. (BNA)

at 133-34 (food products and pornographic magazines “not even

remotely similar’). Plaintiff attempts to mitigate this obvious fact

by noting that Defendant’s parody is of a beer advertisement and

Plaintiff uses its marks in beer advertisements. In addition,

Plaintiff notes that it has used its marks in a series of

advertisements concerning the environment. This is

unpersuasive. Plaintiff has identified a superficial similarity of

uses. This does not amount to a plausible concern that the

products at issue in this litigation are competing for consumer

doliars or attention in the marketplace. See Mutual of Omaha, 836

F.2d at 399, 402-03 n.8 (distinguishing between infringing use of

mark on similar though not directly competitive products and

protected use in noncommercial pamphlets); J. Thomas

McCarthy, Trademarks and Unfair Competition, 31.37 (2d ed.

Supp. 1990) (First Amendment protection greatest when parody

appears in magazine because magazines are “a traditional

medium for conveying information”).

With regard to the intent of the alleged infringer, the Court

notes that Defendant Richard Balducci testified that his intent in

producing the ad parody was to comment on the pollution in our

water supply, particularly as a result of an oil spill in the

Gasconade River, and to spoof the proliferation of Plaintiff’s

brands of beer. Plaintiff suggests that Defendants were motivated

by an intent to injure Plaintiff. In support of this contention,

Plaintiff notes that Mr. Balducci criticized the chairman of

Anheuser-Busch for failing to use his wealth to benefit the St.

Louis community. Mr. Balducci also directed negative remarks

about the Anheuser-Busch employees to Ms. Serrano, Anheuser-

32a

Appendix Il

Busch corporate counsel. However, Mr. Balducci’s opinions

about Plaintiff, its chairman and its employees are not relevant

here. The relevant intent is whether Defendants intended to pass

their product off as that of Plaintiff. See SquirtCo, 628 F.2d at

1091. The record contains no suggestion, and Plaintiff does not

contend, that Defendants intended to pass off Snicker magazine

as an Anheuser-Busch product or even that they intended to pass

off their ad parody as an actual Anheuser-Busch advertisement.

Defendants rely heavily on a survey designed by Jacob

Jacoby, Ph.D. and conducted under the supervision of Leon B.

Kaplan, Ph.D. to show a high incidence of actual confusion

regarding sponsorship or authorization of the ad parody. The

survey was conducted in shopping malls in the St. Louis area. The

301 respondents were beer drinkers or purchasers who claimed to

read or look through magazines or newspapers at least once a

month. Two hundred participents were shown the ad parody. The

rest were shown a regular Michelob Dry ad. The survey indicated

that 58% of the participants exposed to the ad parody believed

that “the people who were responsible for creating [the ad

parody] did have to get permission to use the Michelob name.”

Plaintiff’s Exhibit 3, Jacoby Report at 21. Similarly, 56% of the

participants believed that the people who created the ad parody

had to get permission to use the A & Eagle logo and other

pictures. Plaintiff’s Exhibit 3, Jacoby Report at 22. In addition,

when asked what came to mind when they saw the back page of

Snicker, 6% of the participants responded with answers that were

classified* as indicating that they thought the piece was an

Anheuser-Busch advertisement. Plaintiff’s Exhibit 3, Jacoby

Study, at 13.

4. Answers to open-ended questions were classified, or coded, by the staff at

Princeton Research & Data Consulting Center, Inc. (PRCC) under the supervision

of Leon B. Kaplan. PRCC staff members read the answers and developed a set of

response categories. These categories were approved by Dr. Jacoby.

33a

Appendix II

Plaintiff suggests that these results mandate a finding that

the ad parody creates a likelihood of confusion with Plaintiff’s

marks. The Court has no quarrel with the design or execution of

the Jacoby study. However, in the context of an editorial

presented in a humor magazine, these statistics are not

convincing evidence that Defendants’ ad parody has created a

likelihood of confusion in the marketplace. First, the Court notes

that half of the participants who saw the Snicker ad parody

responded affirmatively when asked “As you look at this page, is

there anything about it that says or suggests to you that it is an

editorial?” Plaintiff’s Exhibit 3, Jacoby Study, at App. B, table

15. In addition, when asked what came to mind when they saw the

back page of Snicker, 37% of the participants responded with

answers that were classified as indicating that they thought the

piece was satire. Jacoby Study, app. B, table 4. Plaintiff’s

Statistical evidence may well be persuasive in the context of a

classic trademark infringement case wherein the plaintiff claims

that defendant benefited in the marketplace by virtue of an

unauthorized use of plaintiff’s marks. However, the Court

concludes that, here, where the allegedly infringing use occurs in

an editorial context, the evidence fails to establish that

Defendants’ use of Plaintiff’s marks has created actual confusion

in the marketplace.

Finally, Plaintiff contends that the degree of care a potential

consumer will exercise in assessing the sponsorship of the ad

parody is heavily influenced by the fact that the ad parody is on

the back cover of Snicker magazine where other, legitimate,

advertisements appeared in some previous issues. Once again,

however, the First Amendment concerns at issue in this litigation

require closer examination of Plaintiff’s claim. The Court accepts

the possibility that a superficial observer might believe that the ad

parody was approved by Anheuser-Busch. However, Plaintiff has

34a

Appendix II

failed to establish that a consumer’s failure to exercise the care

necessary to distinguish between Plaintiff’s marks and

Defendants’ use of those marks will, in and of itself, influence

marketplace decisions.°

For all of the foregoing reasons, the Court finds that Plaintiff

has failed to establish that Defendants’ ad parody creates a

likelihood of confusion in the marketplace and consequently,

Plaintiff has failed to prove its claim of trademark infringement

under the Lanham Act. Accordingly, the Court will enter

judgment for Defendants on Plaintiff’s claim for trademark

infringement under section 32(1) of the Lanham Act.

C. Unfair Competition Claims

Plaintiff alleges that Defendants’ ad parody also violates

Section 43(a) of the Lanham Act.® Plaintiff maintains that

5. The Jacoby study indicates that some people may be less likely to drink or

purchase Michelob beer because, as a result of Defendants’ ad parody, they believe

that it is contaminated with oil. This alleged result stems, however, from the content

of Defendants’ ad parody and is not the result of a mistaken reliance on an infringing

use of Plaintiff's marks. See e.g. Cliffs Notes, 886 F.2d at 496-97 (considering

whether consumers would believe defendant’ s parody of Cliffs Notes was actually

produced by Cliffs Notes and purchase it in mistaken reliance on those elements of

the parody that were similar to Cliffs Notes).

6. Section 43(a) of the Lanham Act provides: bean zk

(a) Any person who, on or in connection with any

goods or services, or any container for goods, uses in

commerce any word, term, name, symbol, or device, or

any combination thereof, or any false designation of

origin, false or misleading description of fact, or false

or misleading representation of fact, which —

(Cont'd)

35a

Appendix II

Defendants’ unauthorized use of the Anheuser-Busch marks both

creates a likelihood of confusion and misrepresents “the nature,

characteristics, [or] qualities” of Anheuser-Busch beer. The

likelihood of confusion issue has been addressed above. With

regard to Plaintiff’s allegation that Defendants’ ad parody

misrepresents the quality of Plaintiff’s beers, the Court notes that,

by its terms, Section 43(a) of the Lanham Act applies to

misrepresentations concerning the nature, characteristics, and

qualities of another’s goods “in commercial advertising or

promotion.” 15 U.S.C. § 1125(a)(2) (emphasis added); WSM, Inc.

v. Hilton, 724 F.2d 1320, 1331 (8th Cir. 1984) (Section 43(a)

creates federal remedy for unfair competition in connection with

the sale of a product).

Plaintiff contends that Defendants do use Plaintiff’s marks to

(Cont'd)

(1) is likely to cause confusion, or to cause

mistake, or to deceive as to the affiliation,

connection, or association of such person with

another person, or as to the origin, sponsorship,

or approval of his or her goods, services, or

commercial activities by another person, or

(2) in commercial advertising or promotion,

misrepresents the nature, characteristics,

qualities, or geographic origin of his or her or

another person’s goods, services or commercial

activities,

shall be liable in a civil action by any person who

believes that he or she is or is likely to be damaged by

such act.

15U.S.C. § 1125(a).

36a

Appendix II

sell their product because a portion of the ad parody is shown in

connection with an advertisement for back issues of Snicker

magazine. Plaintiff has provided no support for the proposition

that noncommercial speech is converted to commercial speech

when a magazine publisher provides some indication of the

contents of his publication in order to entice sales. In New York

Times Co. v. Sullivan, 376 U.S. 254, 266 (1964), the Supreme

Court held that “alleged libellous statements [that] would

otherwise be constitutionally protected ... do not forfeit that

protection because they were published in the form of a paid

advertisement.” The Court reasoned that it would shut off an

important avenue for the dissemination of information and ideas

if otherwise protected speech lost its protection because it was

published in exchange for money. Jd. A similar rationale applies

here. Mcreover, although Plaintiff did not introduce any evidence

addressing the likelihood of confusion arising from Defendants’

use of a small portion of this ad parody in connection with an

advertisement for back issues, it stands to reason that if the full

page, back cover parody did not engender a likelihood of

confusion, the use at issue here does not either.

Because Defendants’ ad parody was not in any way

connected with the sale of a product and because Plaintiff has

failed to establish a likelihood of confusion in the marketplace,

the Court will enter judgment for Defendants on Plaintiff’s unfair

competition claims. .

D. State Law Claims based on Infringement and Unfair

Competition

Plaintiff contends that Defendants’ ad parody infringes its

marks in violation of Mo. Rev. Stat. § 417.056 and also

constitutes common law unfair competition. The elements of

37a

Appendix II

these state law claims are identical to the elements of claims

asserted under the Lanham Act. Novak, 836 F.2d at 398 n.1; WSM,

Inc., 724 F.2d at 1331 n.6. Therefore, for the reasons set forth

above, the court will enter judgment for Defendants on Plaintiff’s

state law infringement and unfair competition claims.

E. State Law Anti-Dilution Claim

Finally, Plaintiff claims that Defendants’ ad parody violates

Missouri’s anti-dilution statute.” State anti-dilution statutes

provide a broader protection than the trademark infringement and

unfair competition provisions of the Lanham Act. To establish a

violation of Mo. Rev. Stat. 417.061, Plaintiff must show that its

marks are valid, that the marks are distinctive, and that

Defendants’ use of the marks created a likelihood of dilution of

the distinctive quality of Plaintiff’s marks. Gilbert/Robinson,

Inc. v. Carrie Beverage-Missouri, Inc., 758 F. Supp. 512, 527

(E.D. Mo. 1991). Clearly, Plaintiff’s marks are valid and

distinctive. Plaintiff maintains that the same evidence that

establishes a likelihood of confusion also establishes a likelihood

of dilution of Plaintiff’s marks. In addition, Plaintiff maintains

that Defendants’ ad parody tarnishes Plaintiff’s reputation

7. Missouri’s anti-dilution law provides:

Likelihood of injury to business reputation or of

dilution of the distinctive quality of a mark registered

under sections 417.005 to 417.066, or a mark valid at

common law, shall be a ground for injunctive relief

notwithstanding the absence of competition between

the parties or the absence of confusion as the source of

goods or services.

Mo. Rev. Stat. §417.061(1).

38a

Appendix II

insofar as it suggests or implies that Plaintiff’s beers are

contaminated with oil. Plaintiff cites to no authority construing

the Missouri statute in the face of a First Amendment defense.

The Court’s own research indicates that the cases decided under

Mo. Rev. Stat. § 417.061 concern claims brought by trademark

holders against other market actors.

The First Circuit addressed the purpose of anti-dilution

statues as follows:

A trademark is tarnished when consumer

capacity to associate it with the appropriate

products or services has been diminished.

The threat of tarnishment arises when the

goodwill and reputation of a plaintiff’s

trademark is linked to products which are of

shoddy quality or which conjure associations

that clash with the associations generated by

the owner’s lawful use of the mark.

L.L. Bean, 811 F.2d at 31. The First Circuit concluded that

“neither the strictures of the first amendment nor the history and

theory of anti-dilution law permit a finding of tarnishment based

solely on the presence of an unwholesome or negative context in

which a trademark is used without authorization.” /d.

This Court has previously concluded that Defendants’ use of

Plaintiff’s marks does not create a likelihood of confusion in the

marketplace. Thus, Plaintiff’s attempt to use that test to prove its

allegations of dilution must fail. Moreover, because Defendants’

use of Plaintiff’s marks occurred in an editorial context, there is

no threat of tarnishment through association with shoddy or

disharmonious products. Accordingly, the Court will enter

vs is \

Di ae atin

39a

Appendix II

judgment for Defendants on Plaintiff’s state law anti-dilution

claim.

IT IS HEREBY ORDERED that Plaintiff’s claims for relief

are DISMISSED with prejudice.

Dated this 22nd day of February, 1993.

s/ Jean C. Hamilton

UNITED STATES DISTRICT JUDGE

40a

APPENDIX Il] — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE EIGHTH CIRCUIT

DATED AUGUST 24, 1994

United States Court of Appeals

For the Eighth Circuit

No. 93-2196EMSL

Anheuser-Busch, Inc.,

Appellant,

Balducci Publications; Richard Balducci; Kathleen Balducci,

Appellees.

Order Denying Petition for

. Rehearing and Suggestion

for Rehearing En Banc

The suggestion for rehearing en banc is denied. Chief Judge

Arnold, Judge Wollman and Judge Morris Sheppard Arnold

would grant the suggestion for rehearing en banc.

The petition for rehearing by the panel is also denied.

August 24, 1994

Order Entered at the Direction of the Court:

s/ Michael E. Gans

Clerk, U.S. Court of Appeals, Eighth Circuit

4la

APPENDIX IV — CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

U.S. Const. amend. 1

Congress shall make no law respecting an

establishment of religion, or prohibiting the

free exercise thereof; or abridging the

freedom of speech, or of the press, or the right

of the people peaceably to assemble, and to

petition the government for a redress of

grievances.

15 U.S.C. § 1114. Remedies; infringement; innocent

infringement by printers and publishers

(1) Any person who shall, without the consent of the

registrant —

(a) use in commerce any reproduction,

counterfeit, copy, or colorable imitation of a

registered mark in connection with the sale,

offering for sale, distribution, or advertising

of any goods or services on or in connection

with which such use is likely to cause

confusion, or to cause mistake, or to deceive;

(b) reproduce, counterfeit, copy, or

colorably imitate a registered mark and apply

such reproduction, counterfeit, copy, or

colorable imitation to labels, signs, prints,

packages, wrappers, receptacles or

advertisements intended to be used in

commerce upon or in connection with the

42a

Appendix IV

sale, offering for sale, distribution, or

advertising of goods or services on or in

connection with which such use is likely to

cause confusion, or to cause mistake, or to

deceive.

shall be liable in a civil action by the registrant for the remedies

hereinafter provided. Under subsection (b) of this section, the

registrant shall not be entitled to recover profits or damages

unless the acts have been committed with knowledge that such

imitation is intended to be used to cause confusion, or to cause

mistake, or to deceive.

(2) Notwithstanding any other provision of this chapter, the

remedies given to the owner of a right infringed under this

chapter or to a person bringing an action under section 1125(a) of

this title shall be limited as follows:

(A) Where an infringer or violator is

engaged solely in the business of printing the

mark or violating matter for others and

establishes that he or she was an innocent

infringer or innocent violator, the owner of

the right infringed or person bringing the

action under section 1125(a) of this title shall

be entitled as against such infringer or

violator only to an injunction against future

printing.

Where the infringement or violation

complained of is contained in or is part of paid

advertising matter in a newspaper, magazine,

or other similar periodical or in an electronic

43a

Appendix IV

communication as defined in section

2510(12) of Title 18, the remedies of the

owner of the right infringed or person

bringing the action under section 1125(a) of

this title as against the publisher or distributor

of such newspaper, magazine, or other similar

periodical or electronic communication shall

be limited to an injunction against the

presentation of such advertising matter in

future issues of such newspapers, magazines,

or other similar periodicals or in future

transmissions of = such electronic

communications. The limitations of this

subparagraph shall apply only to innocent

infringers and innocent violators.

available to the owner of the right infringed or

person bringing the action under section

1125(a) of this title with respect to an issue of

a newspaper, magazine, or other similar

periodical or an electronic communication

containing infringing matter or violating

matter where restraining the dissemination of

such infringing matter or violating matter in

any particular issue of such periodical or in an

electronic communication would delay the

delivery of such issue or transmission of such

electronic communication after the regular

time for such delivery or transmission, and

such delay would be due to the method by

which publication and distribution of such

periodical or transmission of such electronic

44a

Appendix IV

communication is customarily conducted in

accordance with sound business practice, and

not due to any method or device adopted to

evade this section or to prevent or delay the

issuance of an injunction or restraining order

with respect to such infringing matter or

violating matter.

(D) As used in this paragraph —

(i) the term “violator” means a

person who violates section 1125(a) of

this title; and

(ii) the term “violating matter”

means matter that is the subject of a

violation under section 1125(a) of this

title.

15 U.S.C. § 1125. False designations of origin and false

descriptions forbidden

(a) Any person who, on or in connection with any goods or

services, or any container for goods, uses in commerce any word,

term, name, symbol, or device, or any combination thereof, or

any false designation or origin, false or misleading description of

fact, or false or misleading representation of fact, which —

(1) is likely to cause confusion, or to

cause mistake, or to deceive as to the

affiliation, connection, or association of such

person with another person, or as to the

origin, sponsorship, or approval of his or her

4Sa

Appendix IV

goods, services, or commercial activities by

another person, or

(2) in commercial advertising or

promotion, misrepresents the nature,

characteristics, qualities, or geographic

origin of his or her or another person’s goods,

services, or commercial activities,

shall be liable in a civil action by any person who believes that he

or she is or is likely to be damaged by such act.

(b) Any goods marked or labeled in contravention of the

provisions of this section shall not be imported into the United

States or admitted to entry at any customhouse of the United

States. The owner, importer, or consignee of goods refused entry

at any customhouse under this section may have any recourse by

protest or appeal that is given under the customs revenue laws or

may have the remedy given by this chapter in cases involving

goods refused entry or seized.

15 U.S.C. § 1115. Registration on principal register as

evidence of exclusive right to use mark; defenses

(a) Evidentiary value; defenses

Any registration issued under the Act of March 3, 1881, or

the Act of February 1905, or of a mark registered on the principal

action shall be admissible in evidence and shall be prima facie

evidence of the validity of the registered mark and of the

registration of the mark, of the registrant’s ownership of the

mark, and of the registrant’s exclusive right to use the registered

46a

Appendix IV

mark in commerce on or in connection with the goods or services

specified in the registration subject to any conditions or

limitations stated therein, but shall not preclude another person

from proving any legal or equitable defense or defect, including

those set forth in subsection (b) of this section, which might have

been asserted if such mark had not been registered.

(b) Incontestability; defenses

To the extent that the right to use the registered mark has

become incontestable under section 1065 of this title, the

registration shall be conclusive evidence of the validity of the

registered mark and of the registration of the mark, of the

registrant’s ownership of the mark, and of the registrant’s

exclusive right to use the registered mark in commerce. Such

conclusive evidence shall relate to the exclusive right to use the

mark on or in connection with the goods or services specified in

the affidavit filed under the provisions of section 1065 of this

title, or in the renewal application filed under the provisions of

section 1059 of this title if the goods or services specified in the

renewal are fewer in number, subject to any conditions or

limitations in the registration or in such affidavit or renewal

application. Such conclusive evidence of the right to use the

registered mark shall be subject to proof of infringement as

defined in section 1114 of this title, and shall be subject to the

following defenses or defects:

(1) That the registration or the

incontestable right to use the mark was

obtained fraudulently; or

(2) That the mark has been abandoned by

the registrant; or

47a

Appendix IV

(3) That the registered mark is being

used, by or with the permission of the

registrant or a person in privity with the

registrant, so as to misrepresent the source of

the goods or services on or in connection with

which the mark is used; or

(4) That the use of the name, term, or

device charged to be an infringement is a use,

otherwise than as a mark, of the party’s

individual name in his own business, or of the

individual name of anyone in privity with

such party, or of a term or device which is

descriptive of and used fairly and in good

faith only to describe the goods or services of

such party, or their geographic origin; or

(5) That the mark whose use by a party is

charged as an infringement was adopted

without knowledge of the registrant’s prior

use and has been continuously used by such

party or those in privity with him from a date

prior to (A) the date of constructive use of the

mark established pursuant to section 1057(c)

of this title, (B) the registration of the mark

under this chapter if the application for

registration is filed before the effective date

of the Trademark Law Revision Act of 1988,

or (C) publication of the registered mark

under subsection (c) of section 1062 of this

title: Provided, however, That this defense or

defect shall apply only for the area in which

such continuous prior use is proved; or

48a

Appendix IV

(6) That the mark whose use is charged as

an infringement was registered and used prior

to the registration under this chapter or

publication under subsection (c) of section

1062 of this title of the registered mark of the

registrant, and not abandoned: Provided,

however, That this defense or defect shall

apply only for the area in which the mark was

used prior to such registration or such

publication of the registrant’s mark; or

(7) That the mark has been or is being

used to violate the antitrust laws of the United

States; or

(8) That equitable principles, including

laches, estoppel, and acquiescence, are ~

applicable.

Mo. Rev. Stat. § 417.061.

§ 417.061. Injunctive relief, when — order for payment to

owner of mark — destruction of counterfeit marks. —

1. Likelihood of injury to business

reputation or of dilution of the distinctive

quality of a mark registered under sections

417.005 to 417.066, or a mark valid at

common law, or a trade name valid at

common law, shall be a ground for injunctive

relief notwithstanding the absence of

competition between the parties or the

absence of confusion as to the source of goods

or services. ,

49a

Appendix IV

2. Any owner of a mark registered under

section 417.005 to 417.066 may proceed by

suit to enjoin the manufacturer, use, display

or sale of any counterfeits or imitations

thereof and any court of competent

jurisdiction may grant injunctions to restrain

such manufacture, use, display or sale as may

be by the said court deemed just and

reasonable, and may require the defendants to

pay to such owner all profits derived from or

damages suffered by reason of such wrongful

manufacture, use, display or sale; and such

court may also order that any such

counterfeits or imitations in the possession or

under the control of any defendant in such

case be delivered to an officer of the court, or

to the complainant, to be destroyed.

3. The enumeration of any right or

remedy herein shall not affect a registrant’s

right to prosecute under any penal law of this

state.

Mo. Rev. Stat. § 417.056.

§ 417.056. Prohibited acts — civil action for damages, when.

— Subject to the provisions of section 417.066, any person who

shall:

(1) Use, without the consent of the registrant,

any reproduction, counterfeit, copy, or

colorable imitation of a mark registered under

sections 417.005 to 417.066 in connection

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with the sale, offering for sale, or advertising

of any goods or services on or-in connection

with which such use is likely to cause

confusion or mistake or to deceive as to the

source of origin of such goods or services; or

(2) Reproduce, counterfeit, copy or colorably imitate any

such mark and apply such reproduction, counterfeit, copy or

colorable imitation to labels, signs, prints, packages, wrappers,

receptacles, or advertisements intended to be used upon or in

conjunction with the sale or other distribution in this state of such

goods or services;

shall be liable to a civil action by the owner of such registered

mark for any or all of the remedies provided in section 417.061,

except that under subdivision (2) hereof the registrant shall not be

entitled to recover profits or damages unless the acts have been

committed with knowledge that such mark is intended to be used

to cause confusion or mistake or to deceive.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.