Earlier this month, the cosmetics multi-level marketer Mary Kay Inc. (“Mary Kay”) sued Internet coupon company RetailMeNot, Inc. (“RetailMeNot”) in a federal court in Dallas for alleged trademark violations. Specifically, Mary Kay’s trademark lawsuit takes issue with the Mary Kay coupon codes that RetailMeNot purportedly provides to online consumers.
Should the RetailMeNot lawsuit concern Internet coupon companies and other online marketers that use third-party trademarks?
RetailMeNot’s Internet Coupon Marketplace
RetailMeNot, the world’s largest marketplace for digital coupon codes, boasts over 500,000 coupons from 50,000 stores. Many of the codes are collected and posted by the company itself, while others are submitted by the website’s user community or by retailers directly.
Consumers visiting RetailMeNot’s marketplace search for and discover online coupon codes based on retailer name, product category, success rate and other characteristics. The RetailMeNot website includes coupon codes relating to Mary Kay, which manufactures and sells cosmetics through a multi-level marketing (MLM) model.
Mary Kay’s Trademark Lawsuit
Since its formation in 1963, Mary Kay has registered a variety of trademarks with the U.S. Patent and Trademark Office. On March 13, 2015, Mary Kay sued RetailMeNot in the Northern District of Texas pursuant to the Lanham Act for alleged trademark infringement, unfair competition, false advertising and trademark dilution. The cosmetics company brought separate claims of unfair competition under Texas common law.
Mary Kay alleges that RetailMeNot used the registered MARY KAY® marks without permission and with full knowledge of its trademark rights. Additionally, according to the complaint, RetailMeNot advertised May Kay coupon codes merely to increase the number of consumers visiting its website, despite the fact that Mary Kay does not offer coupon or deal codes or sell products directly to consumers (on its website or otherwise). Mary Kay fears that the alleged use has harmed its brand and could mislead, deceive and/or confuse consumers about the company’s services and commercial activities.
Although the complaint does not provide a specific dollar amount, Mary Kay has asked the court to award a wide range of damages, including all profits that RetailMeNot received in connection with the alleged trademark violations. Further, Mary Kay has requested that Judge Sam A. Lindsay enjoin RetailMeNot from using its trademarks, which could include removing Mary Kay coupons from its site and refraining from future postings involving the cosmetics company.
Take Care When Navigating Third-Party Brands
As evidenced by this lawsuit, a number of legal issues surround trademarks and the marketing and sale of third-party goods and services. Companies that create or share Internet coupons or other forms of online promotional material should ensure that their business practices comply with all applicable state and federal trademark, marketing and unfair competition laws.