St. Paul-based Hubbard Broadcasting has sued Facebook and its subsidiary Instagram, accusing the social media giants of trademark infringement and unfair competition that could lead to “irreparable harm” unless the court stops them.
The suit claims that Instagram’s new video file-sharing service, Reels, infringes on and dilutes the trademark of Hubbard’s long-established REELZ digital cable and satellite TV network, which reaches more than 50 million U.S. homes.
Hubbard’s complaint was filed in Minnesota’s U.S. District Court on Aug. 11. As of this writing, defendants had yet to file their reply.
Hubbard says Facebook’s Instagram service rolled out its similarly named media service in early August after filing a bad-faith trademark application. It did those things knowing that REELZ existed as a longstanding registered trademark and service, according to the complaint—and it did so with a splash.
“Much fanfare has accompanied the rollout, and the media space has been all abuzz about ‘Reels,’” Hubbard’s complaint says. “Defendants even accelerated their originally planned launch date by several weeks, bringing ‘Reels’ into the homes of a largely captive American audience during the pandemic.”
The social media giant’s intent, Hubbard alleges, is “to profit from the distinctiveness of, and the goodwill in, the nearly identical REELZ® trademarks.”
The allegedly infringing trademark likely will cause confusion and mistakes, and deceive people into believing that the defendants’ goods and services are somehow connected to Hubbard’s, the complaint says. In fact, the complaint says, that already has happened.
The complaint points to a July 31 Forbes.com story, which described the new Instagram service, while linking to Hubbard’s REELZ website. That story was still on the site as of Monday, but it has since been removed.
The family-owned St. Paul broadcaster started its first radio station in 1923 and launched KSTP-TV in 1948. It started its REELZ cable TV network in 2006 and has evolved it into a streaming media and satellite platform.
Hubbard’s complaint demands a jury trial. It also asks for an order from U.S. District Court Judge David S. Doty forcing Facebook/Instagram to cease using its Reels trademark, or any other mark that is “confusingly similar” or unfairly competitive to REELZ.
Hubbard also asks the court to declare Instagram’s Reels trademark invalid and stop the U.S. Patent and Trademark Office from granting its application.
The plaintiff further seeks treble damages for injuries caused by the trademark infringement and unfair competition, as well as an order awarding Hubbard any profits derived from use of the Reels name, plus court costs and attorneys’ fees.
David v. Goliath
Reels appears positioned as Instagram’s American answer to TikTok, the dominant Chinese provider of goofy short video clips, shot by consumers and shared on social media. Citing national security concerns, President Donald Trump earlier this month signed an executive order effectively banning TikTok in the United States.
“Reels gives people new ways to express themselves, discover more of what they love on Instagram and help anyone with the ambition of becoming a creator take center stage,” Instagram says on its Reels website.
Hubbard’s complaint portrays Facebook and Instagram as a titanic corporate axis that is swooping in from Menlo Park, Calif., to snuff out one of the last media independents.
“Plaintiffs’ REELZ® network is one of the last truly independent television networks remaining in today’s media landscape dominated by corporate giants,” the complaint says. “[REELZ] has gained a reputation as an independent voice, picking up and exhibiting content that more mainstream networks felt was ‘too hot to touch.’”
The company list such sensationalistic shows as “JFK: The Smoking Gun,” “The Kennedys: After Camelot,” and “American Trial: The Eric Garner Story,” among REELZ’s “too hot” projects.
Such is its reputation for independence that Hubbard says it has been able to capitalize, forming an independent news platform under the banner “Independence Happens Here.” That includes a web site www.independencehappenshere.com, which “highlights the importance of independent businesses and aims to keep freedom of thought and innovation alive.”
“As a result of the foregoing, the REELZ® trademarks are famous and highly distinctive, and are widely recognized by the general consuming public of the United States as a designation of a single origin,” the complaint says.
All that is in sharp contrast to Facebook and Instagram, the company’s complaint says. “Defendants are an enormous, global media conglomerate,” the complaint says. “Defendants constitute the world’s largest social media network, with more than 3 billion people using one of its apps monthly.”
Facebook captures 23% of all U.S. digital advertising revenue and brought in almost $70 billion in advertising last year—99% of its total revenue, the complaint says.
“Plaintiffs, despite their own national renown and substantial market presence, now find themselves in the shadow of a titan who has chosen to take for itself plaintiffs’ valuable brand identity,” the company’s complaint alleges.
The suit alleges violations of 15 U.S.C. Sec. 1051, known as the “Lanham Act,” and related claims under various Minnesota state laws.
Christopher K. Larus, the plaintiff’s lead attorney, would not comment for this story, referring questions to Hubbard’s general counsel, Ryan Vandewiele. He did not return calls for comment.
Because no response has yet been filed, it is not yet clear who is representing defendants in the case.
‘A strong claim’
Hubbard’s trademark claim appears valid, said Sharon K. Sandeen, director of the Intellectual Property Institute at the Mitchell Hamline School of Law.
“They were the first to use ‘REELZ,’” Sandeen said. “The fact that it’s a ‘Z’ versus an ‘S’ doesn’t matter.”
The primary test for courts in weighing out trademark infringement cases is the likelihood of confusion, she said. There are several factors for determining if there is confusion, two of which appear relevant in this case, she said.
First is the similarity of the trademarks. In this case, she notes, they are phonetically identical. “From a point of view of the marks themselves, I think that’s a strong claim,” she said.
The second factor is the similarity of the goods and services. That, she said, likely will be the key point of contention. There are plenty of instances where companies operate with exactly the same trademarks, Sandeen said, provided their businesses are so different that no confusion is likely to result.
The plaintiffs argue that confusion over the REELZ/Reels trademarks is enhanced because their two business models are either identical or closely related, and also because they will be marketed and offered over similar channels.
“The defendant will argue that they’re not,” Sandeen said.
The professor said it’s virtually inconceivable that a company with Facebook/Instagram’s resources failed to perform a search to learn that “Reels” closely mirrors another registered trademark. Assuming that it did, she said, it may have proceeded anyway, for one of four reasons:
- Facebook doesn’t think its new Instagram service is substantially similar to Hubbard’s offering, so there will be no confusion in the marketplace.
- There might be confusion, but Facebook is willing to take a chance on that. “Maybe Hubbard won’t care and they can get away with it,” Sandeen said. If this was the strategy, it clearly failed.
- Hubbard does object to the infringement, but Facebook thinks it “can just beat them into submission,” Sandeen said.
- Or maybe Hubbard minds, but once the lawsuit is filed, Facebook will change its behavior—by potentially buying out Hubbard or some other strategy.
“There’s a lot of things you can do,” the professor said. “I don’t know which of those scenarios they are engaging in.”
Sandeen said she is not surprised that Hubbard portrays itself as the little guy in a David v. Goliath legal narrative. That is a common tactic in intellectual property cases, she said, and it can be particularly effective in jury trials.
“They don’t like to see inventions or creativity, or in this case trademarks of the little guy being infringed,” she said.
Regardless, Hubbard’s dystopian narrative of a corporate behemoth coming to town to crush its relatively tiny competitor is not necessarily pure paranoia. Sandeen says such things happen frequently—as when the Amazon online retailer was sued by Minneapolis’ feminist Amazon Bookstore Collective.
Jeff Bezos’ online retailer fought that case in court, eventually settling for an unspecified amount that kept the bookstore collective in business for another decade—under the new name True Colors—before folding in 2012.
“The point was that Amazon didn’t respect Amazon Bookstore’s rights and essentially ignored them,” Sandeen said.
What’s different here is that Facebook isn’t taking on an independent bookstore or an isolated little hamburger joint that wants to call itself “Burger King.”
“This happens all the time,” Sandeen said. “The thing is that it happens because a lot of companies are not in a position like Hubbard is, to have the resources to bring litigation.”
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