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April 16, 2007

VIA FAX AND U.S. MAIL

The Honorable Mark L. Shurtleff Attorney General

Office of the Attorney GeneralPO Box 142320

Salt Lake City UT 84114-2320

Dear Mr. Shurtleff,

We write to urge you to stay implementation of S.B. 236, the Trademark Protection Act.The undersigned are consumer advocacy groups and law professors that are deeply

concerned with protecting the interests of consumers online. Having carefully reviewedthe legislation, we believe that the legislation’s restrictions on using trademarks to trigger

competitive advertising will have a devastating effect on Internet users, online speech,and Internet commerce. To wit:

• S.B. 236 Would Harm Consumers. S.B. 236 would interfere with thefundamental purpose of trademarks: to improve consumer access to accurate

information about goods and services. Trademarks are essentially shorthandterms that designate the origin of a product. Comparative advertising uses those

shorthand terms to provide more information about the trademarked product andcompetitive products. That is why comparative trademark use is clearly protected

under federal trademark law. If it weren’t, PepsiCo would not be able to tellconsumers that more people think Pepsi tastes better than Coke, and Apple would

not be able to differentiate its products from Microsoft's in comical ways onnational television every night. Using trademarks as keywords to trigger

competitive ads is nothing more than the online equivalent of allowing a billboardowner to lease the space next to a McDonald’s location to a fast food competitor;

or, the strategic placement of competing generic products beside famous brandson store shelves.

• S.B. 236 Threatens Free Speech. Because it creates a cause of action againsteveryday, non-deceptive commercial speech, S.B. 236 represents a dangerous step

toward transforming trademarks into monopolies on language. Courts have takencare to ensure that trademark restrictions do not undermine the First Amendment



protections that extend to both commercial and noncommercial speech.1

As oneinfluential trademark decision notes: “[I]t is important that trademarks not be

‘transformed from rights against unfair competition to rights to controllanguage.’”

2Courts and legal commentators have long recognized that

trademarks—words, symbols, colors—are also essential components of everyday

language, used by companies, consumers and citizens to share information. Asthe Ninth Circuit Court of Appeals3

put the matter, “Much useful social andcommercial discourse would be all but impossible if speakers were under threat of

an infringement lawsuit every time they made reference to a person, company or product by using its trademark.” Indeed, as a leading jurist and legal

commentator has observed, trademarks have “come to carry so muchcommunicative freight, [that] allowing the trademark holder to restrict their use

implicates our collective interest in free and open communication.”4 It is for thesereasons that trademark law has traditionally embodied a balance between property

rights and free speech. By inhibiting competitors’ ability to communicateefficiently and truthfully with consumers about products, S.B. 236 upsets this

balance to impose a heavy burden on commercial speech, with little or nocountervailing consumer benefit.

• S.B. 236 Burdens Interstate Commerce. As Utah’s Office of Legislative Researchand General Counsel has already indicated, this legislation would place an

extraordinary burden on interstate commerce. If the law takes effect, any Internetsearch engine that receives a search request must first determine whether a user is

located within Utah. If the user is in Utah, the Internet search engine must thencheck the search terms against Utah's registry of trademarks to prevent the

unlawful triggering of advertising. Literally millions of search requests fromlocations worldwide each day would be subject to verification of location. Once

verified, the search engine would then have to use a separate process for delivering advertising to Utah. Alternatively, a search engine might merely

decide to check all searches against the state's registry to avoid the need toascertain the location of each user, while disproportionately impacting non-

Utahan entities. Enactment of this bill may make the cost of doing business inUtah too high for an Internet search engine and it may decide to block traffic from

Utah, altogether.

Moreover, the law does not appear to be limited to trademarks owned by Utah-

based businesses. Thus any company that sells goods and services in Utah,among other places, could register its marks in the electronic registration database

and, for a relatively nominal fee, gain a cause of action against comparative

1. See generally, Virginia State Bd. Of Pharmacy v. Citizens Consumer Council, 425 U.S. 748,

(1976) (commercial speech protected by First Amendment)

2 See CPC Int’l, Inc. v. Skippy Inc., 214 F.3d 456, 462 (4th Cir. 2000)

3 New Kids on the Block v. News America Publ’g, Inc., 971 F.2d 302, 307 (9th Cir. 1992)

4 See Alex Kozinski, Trademarks Unplugged , 68 N.Y.U. L. R EV. 960, 973 (1993)



advertising.

The burdens on interstate commerce do not end there. Advertisers will also have

to check the database before launching any online ad campaign—even if theyaren't trying to target Utah customers and even if they know their competitors

aren't located in Utah. Thus, for example, a New Jersey business trying to cater to New Jersey customers that wants to buy the keywords of a New Jersey competitor

would still have to check the Utah database (and pay the Utah tax for doing so)unless the advertiser can figure out how not to reach Utah computer screens. In

addition, the law appears to reach both online and offline advertising. Theoperative restriction applies to use of an electronic registration mark “to cause the

delivery or display of” an advertisement. Taken literally, this language couldcover other types of direct marketing (such as buying mail lists if the list is

generated with reference to a competitor's electronic registration mark) and possibly even in-person marketing (e.g., giving consumers that ask about Ford

cars brochures for Toyota or Nissan vehicles).

In sum, the burden this law imposes will be enormous, and easily outweighs any

imagined benefit the legislation offers.

• S.B. 236 May Be Preempted. Finally, the undersigned believe that federal law

may preempt some or all of the bill’s provisions. First, S.B. 236’s restrictions oncomparative advertising directly conflict with the Lanham Act, which carves out

fair uses of marks in comparative advertising. See in 15 U.S.C. 1125(C)(4)(A).Second, to the extent that the provision is intended to create a cause of action

against search engines or other online service providers, the law may be preempted by 47 U.S.C. 230, which protects service providers from claims that

the users of their services violated state laws, such as state trademark laws.5

In light of the above, we strongly urge you to stay implementation of the bill pending

further investigation of the damage it may do consumers and the likelihood (or lack thereof) that it can survive legal challenge.

5 Perfect 10, Inc. v. CC Bill , _ F.3d _ (9th Cir. 2007).



Thank you for your prompt attention to this matter.

Regards,

Corynne McSherry Electronic Frontier Foundation

Paul Alan Levy

Public Citizen

Gigi B. SohnAlex Curtis

Public Knowledge

Eric Goldman

Professor of LawSanta Clara University School of Law



cc: The Honorable Jon M. Huntsman, Jr.Governor

East Office Building, Suite E220P.O. Box 142220

Salt Lake City, Utah 84118-2220

Fax: (801) 530-1528

Francine A. Giani

Executive Director Utah Department of Commerce

160 East 300 South, 2nd Floor Box 146701

Salt Lake City, UT 84114-6701Fax: (801) 530-6446

Senator Dan R. Eastman

968 Canyon Crest Dr.Bountiful, Utah 84010

Fax: (801) 326-1475

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EFF: utahletter