Smith v. Wal-Mart Stores, Inc.

Wal-Mart Stores, Inc. (Wal-Mart) (defendant) sold goods and services through stores and www.wal-mart.com. Wal-Mart had registered rights in the WAL-MART trademark and service mark and often used a yellow smiley face with its registered marks. Charles Smith (plaintiff), who believed Wal-Mart was detrimental to the nation’s communities, created designs and slogans using the word “Walocaust” formed from Wal-Mart and holocaust. One design depicted a bird gripping a yellow smiley face, modeled after the Nazi eagle gripping a swastika. Smith’s designs were printed on promotional items sold on www.CafePress.com. Smith registered the domain name www.walocaust.com. Wal-Mart demanded that Smith cease selling products with anti-Wal-Mart designs and transfer the domain name to Wal-Mart. Smith sued for a judgment declaring his right to sell the merchandise, added a disclaimer to www.walocaust.com that it was unaffiliated with Wal-Mart, and registered the domain name www.wal-qaeda.com as commentary on Wal-Mart’s “terrorist” attack on his free speech. Wal-Mart counterclaimed for, among other claims, trademark infringement and dilution by tarnishment. Smith and Wal-Mart moved for summary judgment. Wal-Mart submitted a marketing manager’s affidavit stating that the smiley face had been used with Wal-Mart’s registered marks for years, Wal-Mart had invested substantial resources in developing it, and it had become synonymous with Wal-Mart.