Privé Vegas, LLC and two of its owners sued Las Vegas-based blogger Michael Politz last week, alleging trademark infringement, dilution, and "disaparagement" under the Lanham Act, defamation, trade libel, tortious interference with business relations, and extortion. The company operates a nightclub called "Privé" in the Planet Hollywood Casino in Las Vegas.  Politz operates the TheVegasEye.com blog, which covers goings-on in the Las Vegas entertainment and hospitality industries and provides restaurant reviews and reports on celebrity sightings and the like.

According to the complaint, filed in federal district court in Nevada, Politz published a post on July 23, 2008 reporting on a lawsuit Privé brought against four former employees. In his post, Politz allegedly made false statements about the lawsuit and about management "shaking down" employees for tip money to be placed in a "Slush Fund." Cmplt. ¶ 20. At the top of his post, Politz included a graphic of  Privé's trademark (shown on the right).

In addition, on August 12, 2008, Politz allegedly posted on his blog an anonymous letter to the State of Nevada Gaming Control Board, which purported to be written by a former employee of Privé.  The letter made a number of allegedly defamatory statements, including that Privé forced employees to work late hours without pay, that management sold drugs through the nightclub, and that management allowed underaged girls to enter the club and served them liquor. Cmplt. ¶¶ 25, 28, 30, 32, 33. At the top of the post, Politz included a graphic of the Privé trademark surrounded by a red circle with a line through it:

The nightclub filed suit in federal court after Politz failed to comply with a demand letter sent in August. The most interesting thing about this case, to my mind, are the federal trademark claims, which provide Privé the grounds for bringing the case in federal court in the first place. When the parties to a lawsuit are from the same state, as they are here, federal courts can hear cases involving state law claims like defamation and trade libel only if the court has "original jurisdiction" over a federal law claim that arises out of the same set of facts.  28 U.S.C. § 1367(a). Here, the trademark claims ostensibly provide that "original jurisdiction."

Privé alleges that Politz "infringed upon, disparaged, diluted and tarnished" its  trademark by using it alongside defamatory statements about the club.  Cmplt. ¶ 57. None of these bases for a trademark claim look promising.

Privé's claim for trademark infringement is doomed.  Not only is Politz's use of the trademark to illustrate his commentary and criticism probably "nominative fair use," but there is no possibility that readers would be confused into believing that Privé is the source or sponsor of Politz's blogging services.  As we explain in our legal guide, a "likelihood of confusion" is essential to successful trademark claim. 

As for the trademark disaparagement claim, it looks like Privé's lawyers should have done a bit more research.  Just last September, the Ninth Circuit Court of Appeals, whose decisions are binding authority on the federal district court in Nevada, held that "no such claim exists under the Lanham Act." Freecycle Network, Inc. v. Oey, No. 06-16219, slip. op. at 13244-45 (9th Cir. Sept. 26, 2007). To the extent the nightclub is trying to make out a claim for disparagement of its goods and services (rather than its trademark), then it would have to show that Politz made false statements "in commercial advertising or promotion." 15 U.S.C. § 1125(a)(1)(B)  That it cannot do so is plain from the allegations in its own complaint. 

As for the trademark dilution claim, Privé will never get past the threshold requirement that the trademark in question be "famous." See 15 U.S.C. § 1125(c)(1)-(2)(A). The club only opened its doors for business on December 31, 2007, and I doubt if anyone outside of Las Vegas would even recognize its name. 

As Ryan Gile of the Las Vegas Trademark Attorney blog points out, the federal court could conceivably decline to exercise jurisdiction over this case because of the weakness of the federal claims and the centrality to the dispute of the state law defamation and trade libel claims. I'll be watching this one closely because I'd love to see a decision dealing with the widespread practice of using a company's logo for illustration when blogging about it.  You can check for updates in our database entry, Privé Vegas, LLC v. Politz.