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Re: It appears that the Devil and Procter were in the public domain..
Chapman, Spira & Carson - Disscusion

From: Texas Lawyer, Susan Borreson
Date: 5/24/99
Time: 10:07:06 AM
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I guess that the fact that you hear a story that you know can not possibly be true it is OK to repeat it because it is "the public domain". What a crock! Anyway let's see what happens next in this convaluted matter. Amway can't really be serious. Robert A. Spira Chapman Spira and Carson LLC

Procter & Gamble Satanism Suit Goes Down in Flames

By Susan Borreson Texas Lawyer May 24, 1999

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A company that lost a suit accusing Amway Corp. and some of its distributors of spreading false rumors about its involvement with Satanism says the judge improperly applied the actual-malice standard and it will appeal.

Mike Gallagher, who represents Procter & Gamble, which filed the suit, says the appeal should decide whether the standard should apply in a Lanham Act case.

In Procter & Gamble Co. v. Amway Corp., et al., the consumer products giant accused some independent Amway distributors in Texas and Utah of spreading via their voice mail system an old rumor that P&G’s trademark symbolized its involvement in Satanism.

Charles "Chip" Babcock, of Houston’s Jackson Walker, who defended Amway Corp., says the rumor was already in public circulation before it reached Amway distributors. A Utah distributor, Randy Haugen, who repeated the rumor in voice mail messages to 21 other distributors, retracted the messages after Amway officials told him the rumor was false, Babcock says.

The trademark, a bearded man in the moon gazing at 13 stars, was registered in 1882. Changes added to the trademark in 1930 — what appeared to be horns and curly cues in the beard that resembled "666" — gave rise to the rumor, Babcock says. The changes were deleted in 1990, he says.

Procter & Gamble strongly denies the rumor. The man-in-the-moon design was popular in the 1800s, a company spokeswoman has said.

U.S. District Judge Vanessa Gilmore of Houston on May 15 granted defense motions for judgment as a matter of law after the two-week jury trial concluded but before jurors heard closing arguments. The judge ruled that the case against Haugen and a Texas distributor raised the same claims as a similar suit P&G filed against them in Utah federal court. The judge in that case dismissed the suit but P&G is appealing.

"We always felt this case was a byproduct of their failed litigation strategy in Utah," says Mike Mohr, vice president and deputy general counsel of Amway Corp.

After Gilmore dismissed the two distributors, Gallagher told Gilmore that he doubted whether the company could meet the actual-malice standard without those two defendants in the case. The company preferred a dismissal of all claims over proceeding to a jury so that they could appeal the issue.

Gilmore had ruled earlier, after the plaintiffs presented their case but before the defense presented evidence, that P&G is a limited-purpose public figure in its claim under the Lanham Act.

Gilmore found that since the company is a public figure, it must show that Amway distributors acted with actual malice in order to prove liability under the act, which addresses commercial speech.

"It is a case of great significance to every major corporation in America that has trademark protection, or to whom . . . trademark protection is important," says Gallagher, of Houston’s Gallagher, Young, Lewis, Hampton & Downey.

"If you’re a public figure, and most companies that have trademarks are public figures — otherwise they wouldn’t have them — then the only way you can protect yourself against trademark infringement is by showing malice," Gallagher says.

Babcock says Gilmore had ample precedent for her ruling that actual malice should apply to a public figure in a Lanham Act case, including an 8th U.S. Circuit Court of Appeals ruling in April, Porous Media Corp. v. Pall Corp., and a leading treatise on the subject. "To suggest that the judge has broken new ground, or is going to screw up commercial relationships in this country is ridiculous," Babcock says.

Babcock says the case, while unusual, met the standards that invoke First Amendment protections: The speech was a matter of public concern and the company acted as a public figure.

Babcock says P&G acted as a public figure by actively inserting itself into the controversy and launching a massive public relations campaign.

The company’s former CEO conceded that the speech at issue in the case was a matter of public concern, Babcock says. Testimony showed that P&G received more than 250,000 calls from consumers about the rumor, he says.

Babcock adds: "If that [the former CEO’s testimony is] true, then the speech at issue in this case is at the very core of First Amendment values, and it doesn’t matter what claim you bring it under — whether you call it defamation or product disparagement or Lanham Act or man in the moon with 13 stars and a curly beard — you still have to comply with the First Amendment, and no common law or statutory law can override that."


Last changed: March 17, 2000