– Draeke Weseman, Weseman Law Office, PLLC
Things that can potentially upset people can also really benefit a lot of people.
—Aktarer Zaman, Founder of Skiplagged
Last week, Tim wrote a great post about a recent lawsuit filed by In-N-Out Burger against DoorDash, a food delivery startup. DoorDash is an on-demand delivery service that allows customers to order food from restaurants that don’t deliver. In-N-Out Burger, a popular California fast food chain with no delivery service, doesn’t want DoorDash delivering its fast food. So what did In-N-Out do? Sue, of course! After all, DoorDash is using In-N-Out trademarks to tell customers that it will deliver In-N-Out’s food! Deception! Unfair Competition!
Never mind that nominative fair use – the right to use a trademark to identify the corresponding trademarked product – is well established and has protected numerous innovative businesses, both big and small, over the years. That’s why I agree with Tim that the smart money is that DoorDash will raise a nominative fair use defense, and I think it would be successful. But the bigger problem for me is that these lawsuits keep popping up.
Consider Aktarer Zaman, founder of an online flight search service called Skiplagged. The website takes publicly available flight information and reorganizes it to show you opportunities for cheaper flights in very specific situations. United Airlines and its partner Orbitz, of course, were not happy about this disruption in their industry. So what did they do? Sue, of course! After all, Skiplagged was using United Airlines’ and Orbitz’s own trademarks to tell customers that the flights were on United Airlines and could be booked through Orbitz! Deception! Unfair Competition!
Orbitz quickly settled but United Airlines pressed on, only to have its case dismissed because it sued Zaman in the wrong place. (Sort of ironic when you figure an airline should be able to fly its lawyers to the right place.) Un-deterred, United Airlines decided to target its own customers with threats of voiding tickets and revoking rewards status. Meanwhile, Zaman successfully raised over $80,000 through the crowdfunding platform gofundme.com to defend himself.
I don’t know how much money United Airlines and Orbitz spent on its case against Zaman, or how many consumers heard about it or the threats from United Airlines and will rethink flying with them, but, in my opinion, having a trademark tantrum anytime there’s a new kid on the block is just a total waste. For a long time, the law hasn’t supported plaintiffs in these types of trademark cases and, even if it did, stopping one startup will not stop them all. One need only look at the Recording Industry Association of America’s futile war against file sharing under the RIAA’s stretched theories of copyright law to see how far awry a mistaken focus on litigating against consumer demand for innovation can go. Those lawsuits didn’t kill piracy; iTunes, Pandora, and Spotify did.
Thankfully, not all companies react to innovation like United Airlines and Orbitz, the RIAA, or In-N-Out. Turning back to food delivery, for example, Taco Bell teamed up with DoorDash, rather than start a fight. Dunkin’ Donuts is developing its own delivery service. And Starbucks and Chipotle, even if reluctantly, are partnering with Postmates, a competitor to DoorDash. These companies understand that consumer demand is king, as expressed by Taco Bell’s CEO Brian Niccol:
Delivery is yet another example of how we’re using technology and innovation to respond to consumers’ wants and needs, further evolving the Taco Bell experience for customers… we see a tremendous opportunity to bring the Taco Bell experience to fans where and when they want it most. Taco Bell has always been about value and convenience, and we believe delivery is the next step in catering to today’s on-demand culture that’s driving consumer behavior.
This is the right response, rather than focusing on all of the quality control excuses that you typically see from companies having a trademark tantrum. In-N-Out would be wise to keep up and figure out a delivery solution, rather than suing one. Likewise, United Airlines should see the consumer demand that supports Skiplagged and either partner up, buy it out, or meet this very real demand for fair flight pricing on its own, instead of just crying foul and threatening to punish customers.
As attorneys, we can be the ones who tell our clients what they want to hear when they feel their business model is threatened by new technology. We can twist and contort the law, waste clients’ time and money, and possibly damage their reputation through mostly frivolous and futile lawsuits, all the while telling them they’re right. Or we can be the ones who work as strategic partners to advise them differently, to tell them there is an alternative to having a trademark tantrum, and to help them make those deals happen.