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http://www.alfrankenweb.com/foxcourt.html Thanks to Bill Hochberg for the transcript. Because this is a court transcript, the'official' record does not note laughter in the courtroom, though there was much.
UNITED STATES DISTRICT COURT. SOUTHERN DISTRICT OF NEW YORK FOX NEWS NETWORK, LLC, Plaintiff,New York, N.Y.
v. 03 Civ. 6162 (RLC)(DC) PENGUIN GROUP (USA), INC., and ALAN S. FRANKEN, Defendants. ------------------------------x August 22, 20033:30 p.m.
Before: HON. DENNY CHIN, District Judge APPEARANCES HOGAN & HARTSON LLPAttorneys for Plaintiff BY: DORI ANN HANSWIRTHTRACEY A. TISKA KATHERINE M. BOLGER CAHILL GORDON & REINDELAttorneys for Defendants
BY: FLOYD ABRAMS
DEAN RINGEL
VON MALTITZ DERENBERG KUNIN JANSSEN & GIORDANO
Attorneys for Defendants THE COURT: Good afternoon. All right. I have read the papers. Let me hear from theplaintiff.
MS. HANSWIRTH: Good afternoon, Judge Chin. Dori Hanswirth, Hogan & Hartson, for plaintiff, Fox News Network. Judge Chin, can we have permission to put up ademonstrative exhibit?
THE COURT: Sure. MS. HANSWIRTH: Thank you. I am going to proceed. Your Honor, we view this as a fairly straightforward case of trademark infringement. As the court knows, thedefendants have placed Fox News's registered trademark "fair and balanced" on the cover of their book. As you can see, it's the third book. It's the third image on theexhibit. The first two are newspaper advertisements for the Fox News Channel, and the one on the right is the cover. THE COURT: I can see all that. You say it's a straightforward trademark case. Foxhas to prove likelihood of confusion, correct?
MS. HANSWIRTH: On the trademark infringement -- THE COURT: Yes. MS. HANSWIRTH: -- claim we have to prove likelihood of confusion. On thedilution claim, we don't.
THE COURT: I didn't ask about the dilution. I asked you about the trademark infringement. MS. HANSWIRTH: Yes. THE COURT: On the trademark infringement, let's start with that, the consumer. Whois the consumer?
MS. HANSWIRTH: The consumer can be either somebody who is a consumer of the
THE COURT: Don't you have to look at the type of book in question? We're not talking about mystery novel or a romance novel. We're talking about social andpolitical commentary and satire.
MS. HANSWIRTH: If you're talking about whether somebody will make an informeddecision as to whether to purchase a book, that doesn't necessarily mean the consumer is particularly sophisticated. THE COURT: The bottom line is, is it really likely that someone is going to beconfused into believing that Fox or Mr. O'Reilly are endorsing this book or are sponsoring this book? MS. HANSWIRTH: I would direct the court's attention to the Cliff Notes case,because the Cliff Notes case, which was decided by the Second Circuit in 19 --
THE COURT: My question is, do you really think it is likely that someone who walks into Borders and picks up Mr. Franken's book would believe that this book has beensponsored in some way or endorsed in some way by Fox?
MS. HANSWIRTH: I think that it is likely that consumers could believe that. When we are talking about the appreciable -- THE COURT: It is likely that consumers could believe that? Is that the test? Or is thetest that --
MS. HANSWIRTH: They would be confused. That's the test. And the threshold, yourHonor, in this circuit can be as low as 15 or 18 percent. In one case, in fact, 8 and a half percent of consumers were confused, and a court held that that was -- THE COURT: Do you think that the reasonable consumer would believe seeing theword "lie" above Mr. O'Reilly's face that Mr. O'Reilly or Fox were endorsing this book? MS. HANSWIRTH: Your Honor, it doesn't appear from this cover that it's notnecessarily true that anyone who saw this cover would think that the cover is accusing Mr. O'Reilly of lying. He's pointing his finger at somebody and it's not necessarilyeven true that someone who is looking at this and notices the "fair and balanced" mark would necessarily see that Mr. O'Reilly is there on the cover. To me it's quiteambiguous as to what the message is here. There's no real message that this is a humor book or a book of political satire. There's no indicating details like there was on thebook in the Cliff Notes case for anybody to know that this is a joke. And, in fact, even
though Mr. Franken has stated that his use of "fair and balanced" was a joke, there are no other jokes on this cover. It's a deadly serious cover, and it's using the trademark ofFox News to sell itself.
THE COURT: Do you think the use of the phrase "lying liars" can be a joke? MS. HANSWIRTH: It can be, but it isn't necessarily. I mean, look at the title of Mr.O'Reilly's book "The Completely Ridiculous and American Life."
THE COURT: Let me ask you about that: Mr. O'Reilly uses in his book "the good, the bad and the completely ridiculous." Is that not a play on "The Good, the Bad and theUgly"?
MS. HANSWIRTH: I don't know. THE COURT: You don't know whether that's a play on "The Good, the Bad and the Ugly." MS. HANSWIRTH: I don't know. THE COURT: Well, assume that it is. Is that not a play on a trademarked phrase? MS. HANSWIRTH: That's a title of a movie. THE COURT: Yes. And I assume there's some kind of protection for the title of the movie "The Good, the Bad and the Ugly." MS. HANSWIRTH: Your Honor, there generally -- THE COURT: I think that I have in some of the papers, it might have been the amicusbrief, a representation that the phrase "the good, the bad and the ugly" is a trademarked phrase. MS. HANSWIRTH: I don't know that that's the case. And I don't know -- THE COURT: Well, I mean, isn't Mr. O'Reilly doing exactly the same thing using atrademarked phrase in the title of his book? The good, the bad --
MS. HANSWIRTH: He's not doing it to confuse. He's certainly not using it to sell the product.
trademark of the defendant, Spy, was on the cover, "a Spy book." We don't have any other trademark on this cover. This is much too subtle to be considered a parody underthe existing Second Circuit precedent.
THE COURT: But I mean the purpose of the trademark law is to avoid publicconfusion and avoid deceiving consumers as to the source of a product and here. I guess we go back to the question of whether there really is any likelihood that aconsumer is going to be deceived into believing that this is a Fox product merely because the phrase "fair and balanced" is used in the title, it seems to me. MS. HANSWIRTH: That is the core issue under the Lanham Act, Section 1125(a). THE COURT: OK. What else do you want to tell me? MS. HANSWIRTH: On the dilution claim, which, as your Honor knows, does notrequire Fox News to prove a likelihood of confusion, our case is crystal clear. Once again, the defendants have used our trademark on their book to sell a product, to pokefun at Fox News, to ridicule its number one talent, Mr. O'Reilly. And Fox News certainly has a commercial interest in Mr. O'Reilly's image. In fact, they have thecontractual right to control his image and likeness.
Under the dilution laws -- we've sued under two dilution statutes, your Honor, under the New York State statute and the federal statute in the Lanham Act. Under the NewYork State statute, the showing that we have to make for dilution is that our mark is distinctive and that the defendant's use of it is either blurring it or causing some kind of tarnishment. With respect to the blurring, not only does the use of the mark blur this with Mr.Franken, but it blurs it with the other subjects of his book, especially the people who are also on the cover, such as Ms. Coulter. Ms. Coulter is in the upper left hand ofthose four television images.
The first few chapters of Mr. Franken's book are about Ms. Coulter, and they are extremely derogatory. Somebody looking at this could certainly think that Ms. Coulterhad some sort of official relationship with Fox News, which she doesn't. So this cover is certainly blurring. I would also add that the name of one of Ms. -- THE COURT: The President and the Vice President are also on the cover, are theynot?
MS. HANSWIRTH: Yes, they are.
THE COURT: Is someone going to think that they are affiliated with Fox? MS. HANSWIRTH: I think Mr. Franken does. THE COURT: OK. MS. HANSWIRTH: So, yes, somebody could think that. The name of one of Ms. Coulter's books is "Liberal Lies About the American Right." It's clear that this iswhere Mr. Franken lifted the rest of the title of his book. So there's even --
THE COURT: Even assuming he did lift it, it seems to me he's playing on the words. That's what he's doing. It's a play on words. MS. HANSWIRTH: It's more a blurring, your Honor, if you're taking Fox News'srecognizable slogan and Ms. Coulter's title --
THE COURT: On that theory, one would be extremely restricted in the ability to criticize anybody. I mean, these are public figures who put themselves out there. Andany time they are criticized in the context of the use of a phrase "fair and balanced," you're suggesting that there would be dilution and blurring and that would not bepermitted?
MS. HANSWIRTH: Absolutely not, your Honor. THE COURT: Absolutely not meaning that's not what you're saying? MS. HANSWIRTH: That's not what I'm saying. THE COURT: OK. MS. HANSWIRTH: You can go on to the Internet and you can see hundreds of webpages and Internet sites that are extremely critical of the Fox News Channel. The Fox News Channel, the more popular it gets, the more criticism it gets. Fox News Channeldoes not take any action against those people. It's their First Amendment right to criticize Fox News. The difference here is that this is a commercial use. This is on abook cover. This is being used to sell a product. And Fox News does have an interest in the way its trademark is being used, and in fact it has a duty to protect itstrademark.
THE COURT: OK. Let me ask one other question. I'm not really sure that it's
MR. ABRAMS: Good afternoon, your Honor. THE COURT: Good afternoon. How do you respond to the blurring argument; in other words, the trademark is on the cover and it's being blurred or tarnished because of the context? MR. ABRAMS: I respond by saying that a book is allowed to criticize the holder of atrademark and is allowed to mock the trademark as well.
There's nothing in the law which says that you can't criticize Mr. O'Reilly or Fox or anyone that holds a trademark. As that long list of titles that the Authors' Leaguefurnished to you shows, many of them are indeed extremely critical of the holder of the trademark. Beyond that, with respect to blurring and dilution, dilution falls within,as the Yankee Publishing case and other cases we've cited shows, the general ambit of intellectual property rights that have to be subjected to First Amendment scrutiny. It would be a different country we would be living in if you couldn't publish a book --let's change the title and make it worse -- and say Fox News is not fair and balanced. Could it possibly be the case that that's not protected by the First Amendment? In thedilution case --
THE COURT: Suppose a competitor did a commercial and used the phrase and said Fox News is not fair and balanced? MR. ABRAMS: A competitor can say that. And the Deere case really makes very clear in the dilution area that when you are talking about social commentary asopposed to a comparison of two lawnmowers, which was what was involved there, that there is enormous First Amendment protection for the commentary. That's just what Judge Newman was talking about in that case in the context of adilution claim.
And it's a natural and almost an obvious I would argue result because to rule otherwise is to rule out, to make off bounds, off limits a whole realm of discussion ofpublic figures and public events.
That's one of the reasons why in the different areas of intellectual property law that are implicated in this case the courts have in different words amounting to the samething made clear that in the dilution area, in the Deere case, in the trademark area, in the Ginger Rogers case, in one area after another that intellectual property claims haveto comport with First Amendment norms. That's why --
THE COURT: Let me ask a different question. MR. ABRAMS: Yes. THE COURT: The mark is registered. MR. ABRAMS: Yes. THE COURT: What is the import of that? MR. ABRAMS: That it is prima facie valid, and as of December of this year, if it is not successfully challenged, it becomes not subject to challenge as a valid mark. Now, number one, even if it is a valid mark, it has to be interpreted consistently withFirst Amendment norms. I mean, there was a valid mark involved in all of the cases that we've been citing to you. The only way that it would help them if this mark wereincontestable is with respect to one argument we made in a footnote to you, and that relates to an issue which is not much before you, but would be before Judge Cartermuch later in the case. That is, if this case persists, we will argue that the trademark itself should be deemed invalid. That is something that we will argue, and if it hadbeen initially determined that it was incontestable, then we couldn't make that argument. But that's the only way that it harms us. All the First Amendment constraints on trademark law, all the First Amendment limitations on blurring law, all remain in effect notwithstanding the fact that they havea trademark.
I wanted to return, your Honor, to one of the very first things that you asked Ms. Hanswirth. It comes up in two ways. I think it's relevant to return to how this casebegan. You referred to Ms. Brandy. I'm not now talking about the legal incompetence of so much of what is in her affidavit. I'm talking about how this all started. It startedwith Exhibit V to her affidavit, which is a letter that she wrote to Penguin in which she said something which is utterly and totally inconsistent with what was Hanswirthhas said to you today.
She said in the second paragraph, "The placement of Mr. O'Reilly's photograph on the book's cover juxtaposed with the title is false and defamatory per se of Mr. O'Reilly.Such placement unquestionably designates Mr. O'Reilly as one of the 'lying liars' to which the book's title refers. This designation is patently false. Further, it's beyonddispute that calling Mr. O'Reilly a liar is libelous per se," and it goes on to say that's
about her. There that was a direct statement, and she still didn't get the injunction that she wanted. But in that case the court said, where you're talking about the title of, in that case it was a movie, but that's no different, because of First Amendment concerns, therecannot be an injunction entered and there cannot be a cause of action stated under the Lanham Act unless the title has "no artistic relevance whatever," or the title "explicitlymisleads as to the source or control of the work."
Confusion, even if it existed -- and it doesn't -- wouldn't suffice to meet that test. This obviously has an artistic message, just as "Fred and Ginger" did, just as New Yorkmagazine did when it was parodying the Farmer's Almanac. Whatever else you can say, even if one could argue about confusion, it simply cannot be said that this is asituation in which there is some explicit misleading as to the source or control of the work. In our view, should end the inquiry. THE COURT: All right. I understand the point. MR. ABRAMS: Thank you. THE COURT: Let's take a five-minute recess, and I'm going to come back out andrule.
(Recess) THE COURT: The plaintiff, Fox News Network, has moved for a preliminaryinjunction to enjoin the defendants from using the phrase "fair and balanced" and any photographs of Bill O'Reilly or other Fox personnel in connection with Mr. Franken'sbook. Accordingly, the standard is whether Fox has shown irreparable harm, a likelihood of success, and a balancing of equities in its favor. There are hard cases and there are easy cases. This is an easy case, for in my view thecase is wholly without merit, both factually and legally. Accordingly, the motion for a preliminary injunction is denied. Factually, I conclude that there is no likelihood of confusion as to the origin andsponsorship of the book. It is highly unlikely that consumers are going to be misled into believing that Fox or Mr. O'Reilly are sponsors of the book. That is evident fromthe cover viewed as a whole. It is evident by Mr. Franken's name being featured prominently across the top. It is evident from the word "lies" in big red letters acrossthe faces of the other four individuals on the cover. It is evident from the phrase "the
lying liars who tell them." I don't know if there is a difference between consumers who would buy the book and Fox viewers. I don't know if Fox is arguing that its viewers are less sophisticated than those who would buy Mr. Franken's book. I don't know. But either way, I think we aretalking about relatively sophisticated consumers here. We are talking about a book that offers political and social commentary and satire. As to Fox viewers, I think it is less likely that they will be confused because theyknow the individuals on the cover, and they've got to conclude that Mr. O'Reilly is not endorsing this book. The mark is a weak one. As trademarks go, the phrase "fair and balanced" is a weakmark, not because of the content of the words, but because the words are used so frequently, particularly in the context of journalism, the press and the media. There has been no evidence of actual confusion. I conclude also that there is no badfaith. To be sure, the defendants are using the mark intentionally, but that's not bad faith. The intentional use here is in the form of parody. There certainly was no intenton the part of Mr. Franken to palm himself on off as a Fox commentator. There was no intent on his part to mislead consumers into believing that he was somehowaffiliated with Fox.
From a legal point of view, I think it is highly unlikely that the phrase "fair and balanced" is a valid trademark. I can't accept that that phrase can be plucked out of the marketplace of ideas and slogans. Even assuming for the moment that it is a valid mark, however, and even assumingthere is some danger of confusion, here the First Amendment trumps. The First Amendment requires us to weigh the public interest in free expression against thepublic interest in avoiding confusion. In particular, titles, titles of books, movies, etc., have great protection under the First Amendment, and the Second Circuit has held inthe Rogers case and the Cliff Notes case that the Lanham Act cannot could be construed narrowly to intrude on First Amendment values in this context. The expressive element of titles requires more protection than labeling, for example,for commercial products. Mr. O'Reilly himself used the trademark phrase, or a play on the trademarked phrase "the good, the bad and the ugly" in his book entitled, "TheGood, the Bad and the Completely Ridiculous in American Life." As the Authors' Guild has pointed out in its very helpful amicus brief, there is a long list of similarsuch uses of trademarked phrases or names.
