March 2017

People can get understandably touchy about their good name. This extends to the business world, where reputation can be everything.

So when Danish-Norwegian Eurodance group Aqua struck it big in 1997 with their chart-topping hit Barbie Girl, Mattel – maker of the Barbie fashion doll – were pretty upset about it. The doll maker argued the song clearly infringed its trade marks and copyright. According to Mattel, the song’s lyrics caused serious damage to its brand by portraying the Barbie character as a promiscuous ditz.

When Mattel filed suit, the record company refused to back down. It pointed out that the album cover included a statement that the song was ‘social commentary’ that was ‘not created or approved by the makers of the doll’. This was not enough for Mattel, who responded that the disclaimer was ‘akin to a bank robber handing a note of apology to a teller during a heist’.

Now it was the music company’s turn to get upset. Declaring that Mattel’s robber comparison was injurious to its reputation, it counterclaimed for defamation.

The case dragged on for years and very nearly reached the Supreme Court. Ultimately, however, both claims were dismissed by the United States Court of Appeals. Judge Alex Kozinski delivered judgement for a three-judge panel and, to put it in layman’s terms, he advised both parties to pull their heads in. The final sentence of his written decision included the firm direction that ‘[t]he parties are advised to chill’.

We don’t tend to see so many colourful cases in New Zealand. Nevertheless those who would damage the reputation of others put themselves at legal risk.

For example, if you infringe on a particularly well known trade mark in a way that ‘tarnishes’ the reputation of the protected goods or services, you could find yourself the target of an anti-dilution claim under the Trade Marks Act 2002. This action can be brought even if the goods and services you are selling are not directly competitive with the trade mark protected product. The basis of such a claim is that famous trade marks are especially susceptible to unflattering associations.

Furthermore, if you attack someone’s reputation in any public way then you may find yourself served with defamation proceedings. Unless you have a good defence, the result could be a substantial award of damages against you. Incorporated bodies like companies can only sue for defamation where they can show they have suffered some measurable pecuniary loss. This is not the case for natural persons, however, who can claim damages simply by virtue of the fact that their reputation has been harmed.

What if you’re the wronged party? These claims – or others – may well be open to you in the right circumstances. Before issuing any threats, however, you should consult your local Lawlink firm. They will be able to tell you if a claim is worthwhile – or whether you are better advised to chill.