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Intellectual Property

Beware the Fog of Giving: When Similar Charities Collide

The Wounded Warrior Project's (WWP) $1.7 million judgment against a similar charity, the Wounded Warriors Family Support, Inc. (WWFS), was recently affirmed by the Eighth Circuit. WWP had alleged that WWFS sowed confusion on the Internet by using a website to solicit donations intended for WWP, in violation of the Nebraska Consumer Protection Act (NCPA), Neb. Rev. Stat. § 59-1602 et seq.

Both WWP and WWFS operated charities to help wounded soldiers, and in doing so, WWP operated two websites, and, while WWFS operated the website  The websites were very similar, with WWFS changing its website's color scheme and font and the text phraseology to mimic WWP's website. The WWFS site displayed a disclaimer at the bottom, but it was written in a difficult-to-read typeface with cream on white coloring.

In WWP, Inc. v. Wounded Warriors, Inc., 566 F. Supp. 2d 970 (D. Neb. 2008) [enhanced version available to subscribers], the district court proffered that WWP did not have a valid common law trademark. Addressing the likelihood of WWP's success on the merits, the district court categorized the WWP mark as "descriptive," stating that:

Because the Court has found "wounded warrior project" descriptive, any trademark thereon depends for its validity on whether the term has acquired a secondary meaning.

. . . .

Here, WWP has failed to establish secondary meaning. Although it has spent considerable sums on advertising and marketing, there is insufficient evidence in the record to suggest that this spending has created secondary meaning. There has been no evidence of an exclusive association in the minds of consumers between "wounded warrior" and WWP. Moreover, the defendant has identified several other organizations, media articles, and internet sites unaffiliated with WWP that use the term "wounded warrior." Based on the evidence presented, the Court finds that while the public may recognize the terms "wounded warrior," or "wounded warrior project," it does not presently associate those terms with a single source. Therefore it cannot be said that the term has acquired secondary meaning. Because the Court has found that the term is descriptive and lacks secondary meaning, it also finds that any claim to the exclusive right to use the term "wounded warrior project" is invalid.

(citations and footnotes omitted)

However, a jury awarded WWP $ 425,000 on its NCPA claim (for loss to WWP's reputation and goodwill) and $ 1,267,719 on a claim for unjust enrichment (for misdirected donations). In WWP, Inc. v. Wounded Warriors Family Support, Inc., 2011 U.S. App. LEXIS 579 (8th Cir. Neb. Jan. 12, 2011) [enhanced version / unenhanced version available from lexisONE Free Case Law], the Eighth Circuit affirmed. The Eighth Circuit found that:

With respect to the crux of WWFS's argument, i.e., that there is insufficient evidence WWFS knowingly kept donations intended for WWP, a reasonable jury could credit the expert testimony of Kirchner, a forensic accountant, that WWFS possessed misdirected funds. A reasonable jury could also find WWFS's conduct in changing the name and appearance of its website, as well as placing an anemic disclaimer at the bottom, was designed to engender confusion among donors and amounted to a deceptive and unfair trade practice. . . . A reasonable juror might find the fact WWFS cashed checks that clearly referenced WWP's fundraising events as damning evidence against WWFS. Even if WWFS did not know WWP had sponsored the event, WWFS certainly knew WWFS had not done so.

. . . .

. . . Libby Baker, Regent of the Enoch Crosby Chapter of the Daughters of the American Revolution (DAR), testified her organization decided to donate $198 to WWP after learning about WWP's backpack program from one of WWP's executives. Intending to do so, Baker "googled" the phrase "Wounded Warriors," happened upon WWFS's website, and mailed a check to an Omaha, Nebraska, address listed thereon. Baker thought she had donated to WWP, but in reality the DAR sent a check to WWFS. WWFS cashed the check, and months passed without the DAR ever receiving a letter of confirmation or acknowledgment regarding its donation. Members of the DAR thought the lack of courtesy was "odd" and "decided . . . [the DAR] certainly wouldn't donate again" to WWP.