TMI v. Maxwell [1]

In 2002, TMI Inc., a homebuilder operating under the name Trendmaker Homes, sued Joseph Maxwell over his gripe site, alleging that Maxwell had violated federal and Texas anti-dilution provisions, and the federal Anti-Cybersquatting Consumer Protection Act (“ACPA”).

Maxwell registered the domain name www.trendmakerhome.com and posted a website at this address to air his complaints about Trendmaker Homes, with whom he had a negative business experience. The website told Maxwell's story of his dispute with Trendmaker Homes, contained a "Treasure Chest" section, where users were meant to post information about trustworthy contractors and tradespersons, and included a disclaimer at the top of the home page indicating that it was not TMI's site. After Maxwell's one-year registration expired, TMI sent him a cease-and-desist letter. Maxwell then registered another domain name, www.trendmaker.info, and TMI sued him in federal court in Texas.

After a bench trial, the district court found that Maxwell, who represented himself, had violated the federal and state anti-dilution provisions and the ACPA and ordered him to pay $40,000 in statutory damages and $40,000 in attorneys' fees.

On appeal, Maxwell was wepresented by Public Citizen attorneys Paul Alan Levy and Alan B. Morrison. On April 21, 2004, the Fifth Circuit Court of Appeals reversed the district court and held that the federal anti-dilution provision required a commercial use of the mark in question, and that Maxwell's airing of gripes without any anticipation of commercial gain was not a commercial use. The court emphasized that Maxwell had not attempted to divert business from TMI, the Treasure Chest did not receive any postings (other than one added by Maxwell about a tradesperson he had engaged in the past), and Maxwell's website did not receive any paid advertisements. On the ACPA claim, the Court of Appeals determined that there was no evidence that Maxwell registered the domain name with a bad faith intent to profit. Again, the court emphasized the non-commercial nature of the site, as well as the fact that Maxwell never offered to sell the domain name to TMI. Finally, the court also overturned the district court's adverse finding under the Texas anti-dilution provision, citing Express One Int’l, Inc. v. Steinbeck, 53 S.W.3d 895, 899 (Tex. App. – Dallas 2001) ("[The Texas anti-dilution statute] is not intended to address non-trademark uses of a name to comment on, criticize, ridicule, parody, or disparage the goods or business of the name’s owner").