ATLANTA — The Supreme Court of Georgia has reversed a Colquitt County court ruling that prohibited a law firm from running advertisements soliciting abuse and neglect cases against a nursing home in Moultrie.  

In an opinion released Monday, Justice David Nahmias wrote for a unanimous court that the single advertisement challenged in the lawsuit did not violate Georgia’s trademark “anti-dilution” statute, according to a summary provided by the court.

According to briefs filed in the case, McHugh Fuller Law Group is a Mississippi-based law firm that specializes in nursing home abuse. In 2015, it began running a statewide advertisement campaign in Georgia against PruittHealth, Inc. to win business from people who “suspect that a loved one was NEGLECTED or ABUSED” at one of its nursing homes. One of the advertisements, which ran on March 15, 2015, in The Moultrie Observer, was a full-page color ad directed at the PruittHealth-Moultrie nursing home. The ad included PruittHealth’s service marks and trade names, as well as bold-faced words such as “Bedsores,” “Broken Bones,” “Unexplained Injuries,” and “Death.”

PruittHealth sued McHugh Fuller under the state’s trademark anti-dilution statute (Georgia Code § 10-1-451 (b)), which requires a court to issue an injunction (a court order requiring a certain action be halted) against anyone who uses someone’s trade name without permission if there is even a “likelihood” that the use will injure the business reputation, according to the court summary. The trial court entered a temporary restraining order against the law firm, scheduled a hearing and notified the parties that it intended to consider PruittHealth’s request for a permanent injunction.

At a May 2015 hearing, PruittHealth’s chief development officer in charge of branding testified that PruittHealth had made substantial investments in its marks and that by associating the marks with bold-faced words such as “death,” McHugh Fuller was “tarnishing” PruittHealth’s marks and business reputation, the summary said.

A law partner with McHugh Fuller testified that his firm relied on information from a federal government website to identify nursing homes the firm believed were likely to have residents who had been injured by negligence, the summary said. He testified McHugh Fuller had filed about 11 negligence lawsuits against PruittHealth alleging that patients had suffered bedsores, broken bones, unexplained injuries, or death.

On June 1, 2015, the trial court issued a permanent injunction, prohibiting the law firm from running any more ads that used PruittHealth’s trade names, service marks, or logos. The trial court found that the firm’s use of PruittHealth’s marks in its advertisements “likely tarnish Plaintiff’s and its affiliates’ business reputation [and] likely dilute those marks and names….” The law firm then appealed to the Georgia Supreme Court, asking the high court to vacate the trial court’s order that granted PruittHealth a permanent injunction.

In a 2015 case, the same law firm appealed a court ruling that concluded it had engaged in “false and misleading” advertising about a PruittHealth nursing home in Toccoa, Georgia, the court summary said. In that case, the state Supreme Court threw out the permanent injunction awarded to PruittHealth based on a procedural error and remanded the case to the Stephens County court.

Monday’s opinion points out that the Georgia Supreme Court has addressed trademark dilution on several occasions.

“However, this case presents a scenario that we have not previously encountered, where one business (McHugh Fuller) is using the marks of a second business (PruittHealth) not to identify its own goods or services, but rather to identify the goods or services of the second business,” the opinion says.

Under Georgia Code § 10-1-451 (b), trademark dilution can take two forms: “The first is a ‘blurring’ or ‘whittling down’ of the distinctiveness of a mark,” the opinion says. “The second type of dilution is tarnishment, which occurs when a defendant uses the same or similar marks in a way that creates an undesirable, unwholesome, or unsavory mental association with the plaintiff’s mark.” At issue in this case is tarnishment.

“However, not every unwelcome use of one’s trademark in the advertising of another provides a basis for a tarnishment claim,” the opinion says. “Tarnishment can occur ‘only if the defendant uses the designation as its own trademark for its own goods or services. Cases in which a defendant uses the plaintiff’s mark to refer to the plaintiff in a context that harms the plaintiff’s reputation are not properly treated as tarnishment cases.’”

“Here, McHugh Fuller was advertising its legal services to individuals who suspect that their loved ones have been harmed by negligent or abusive nursing home services at a specific PruittHealth nursing home,” the opinion says. “The ad did not attempt to link PruittHealth’s marks directly to McHugh Fuller’s own goods or services. McHugh Fuller was advertising what it sells — legal services, which are neither unwholesome nor degrading — under its own trade name, service mark, and logo, each of which appears in the challenged ad.”

“In short, the ad very clearly was an ad for a law firm and nothing more,” the opinion says. “Contrary to PruittHealth’s assertion in the trial court, trademark law does not impose a blanket prohibition on referencing a trademarked name in advertising.” Furthermore, interpreting the statute “expansively to prohibit the use of PruittHealth’s marks to identify its facilities in any way, as the company urges, would raise profound First Amendment issues. …

“Much useful social and commercial 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. …

“Accordingly, the trial court erred in entering the permanent injunction against McHugh Fuller based on § 10-1-451 (b),” the opinion concludes. “If PruittHealth believes that McHugh Fuller’s advertisments are untruthful or deceptive, the company must seek relief under some other statutory or common-law cause of action.”