In the Supreme Court of Georgia

Decided: November 21, 2016

S16A0655. MCHUGH FULLER LAW GROUP, PLLC v.
PRUITTHEALTH, INC., f/k/a PRUITT CORPORATION.

NAHMIAS, Justice.
In March 2015, McHugh Fuller Law Group, PLLC (“McHugh Fuller”)
began running a month-long, statewide Georgia advertising campaign targeting
PruittHealth, Inc. and its affiliated nursing homes (collectively, “PruittHealth”).
PruittHealth filed suit against McHugh Fuller under Georgia’s trademark antidilution statute, OCGA § 10-1-451 (b), in the Superior Court of Colquitt
County, and the trial court entered a permanent injunction prohibiting McHugh
Fuller from running ads about PruittHealth that include the company’s trade
names, service marks, or logos. As explained below, the single advertisement
that PruittHealth challenges did not violate § 10-1-451 (b). Accordingly, we
reverse the trial court’s injunction order.
1.

On March 15, 2015, McHugh Fuller, a Mississippi law firm that

focuses on suing nursing homes, ran the following full-page, color

 advertisement in the Sunday print and online editions of the Moultrie Observer
newspaper as part of a month-long, statewide ad campaign targeting nursing
homes affiliated with PruittHealth, Inc.:

2

 On March 31, 2015, PruittHealth filed a one-count complaint against
McHugh Fuller for trademark dilution, seeking interlocutory and permanent
injunctive relief under OCGA § 10-1-451 (b). PruittHealth also requested a
temporary restraining order, which the trial court issued on the same day. On
April 20, McHugh Fuller filed an answer raising First Amendment, fair use, and
numerous other legal and factual defenses. On May 5, the trial court held a
consolidated hearing on PruittHealth’s requests for interlocutory and permanent
injunctive relief.1
At the May 5, 2015 hearing, PruittHealth introduced copies of its
trademark registrations with the United States Patent and Trademark Office, the
Georgia Secretary of State, and Stephens County. Nick Williams, PruittHealth,
Inc.’s chief development officer in charge of branding, testified that PruittHealth
had made substantial investments in its marks, including engaging a national

1

McHugh Fuller objected to consolidating the permanent injunction trial with the
interlocutory injunction hearing without allowing full discovery, and the law firm enumerated the
trial court’s denial of that objection as error in its brief on appeal. However, at oral argument,
McHugh Fuller explicitly abandoned this challenge to the permanent injunction, so we will not
address it further. Cf. McHugh Fuller Law Group, PLLC v. PruittHealth-Toccoa, LLC, 297 Ga. 94,
96-98 (772 SE2d 660) (2015) (vacating permanent injunction issued under Georgia’s Uniform
Deceptive Trade Practices Act after an earlier month-long, statewide ad campaign targeting
PruittHealth, because the trial court failed to provide McHugh Fuller with proper notice that it would
decide permanent as well as interlocutory injunctive relief at the hearing).

3

 marketing firm, conducting focus groups, and obtaining feedback regarding
their strength, and that the marks are used on billboards, in advertisements, on
mouse pads and water bottles, and in a host of other marketing materials used
by PruittHealth in Georgia and surrounding states. Williams further testified
that McHugh Fuller’s March 2015 ad campaign, by associating PruittHealth’s
marks with brightly colored words like death, tarnishes the marks and
PruittHealth’s business reputation, noting that hospitals, the major referral
source for nursing home patients, had contacted him personally for an
explanation.
Vickie Patterson, the administrator of PruittHealth-Moultrie for 23 years,
and Mirandus Ponder, a nursing aide and a lifelong resident of Moultrie,
testified that in their view, the March 15 ad in the Moultrie Observer had
harmed their facility’s reputation and identity in the community. Patterson said
that she received multiple text messages about the ad on the day that it ran and
that “[p]eople that see this ad that don’t know us would believe that we’re a bad
facility.” Ponder said that she learned of the March 15 ad when she was in the
checkout line at a grocery store and overheard a woman ask another woman if
she had “read the advertisement of PruittHealth abusing their residents.” Ponder
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 added, “I’m there, and I know that [patients are] being taken care of. And it just
breaks my heart to have people thinking that that’s what’s going on.”
McHugh Fuller presented numerous exhibits and the testimony of Michael
J. Fuller, one of the law firm’s two partners and the person listed in the March
15 ad as being responsible for its content.2 Fuller explained how his firm uses
information from a federal government website, including annual nursing home
survey results, staffing levels, and quality measures, to identify facilities that the
firm believes are likely to have residents who have been injured through
negligence. Fuller testified that since running ads targeting specific PruittHealth
facilities in 2014, McHugh Fuller had received about 200 calls from potential
clients, was engaged by roughly 50 clients, and 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 entered the order on appeal. The court
found that
Defendant’s unauthorized use of Plaintiff’s service marks, trade
names and related logos in its advertisements likely tarnish

2

Fuller and his partner James McHugh are members of the Georgia Bar.

5

 Plaintiff’s and its affiliates’ business reputation [and] likely dilute
those marks and names, and that Plaintiff is likely to suffer
immediate and irreparable harm to its goodwill and contractual and
business relationships through Defendant’s unauthorized use in its
advertisements of service marks and trade names used and adopted
by Plaintiff, thereby violating OCGA § 10-1-451 (b).
The court permanently enjoined McHugh Fuller from running ads concerning
PruittHealth that include PruittHealth’s trade names, service marks, or logos.
On June 22, 2015, McHugh Fuller filed a motion to amend or for
reconsideration, which the trial court denied on June 30, 2015. McHugh Fuller
filed a timely notice of appeal to this Court, and the case was orally argued here
on April 27, 2016.
2.

This Court has addressed Georgia’s anti-dilution statute on several

occasions. See India-Am. Cultural Assoc., Inc. v. iLink Professionals, Inc., 296
Ga. 668, 673 (769 SE2d 905) (2015); Giant Mart Corp. v. Giant Discount
Foods, Inc., 247 Ga. 775, 776 (279 SE2d 683) (1981); Multiple Listing Service,
Inc. v. Metro. Multi-List, Inc., 223 Ga. 837, 840-843 (159 SE2d 52) (1968);
Dolphin Homes Corp. v. Tocomc Dev. Corp., 223 Ga. 455, 457-458 (156 SE2d
45) (1967). However, this case presents a scenario that we have not previously
encountered, where one business (McHugh Fuller) is using the marks of a
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 second business (PruittHealth) not to identify its own goods or services, but
rather to identify the goods or services of the second business. Thus, as we have
in the past when interpreting Georgia trademark law, we look for guidance to
general principles of American trademark law as reflected in persuasive federal
precedents interpreting Georgia’s and other jurisdictions’ anti-dilution statutes
and in trademark law treatises. See, e.g., Reis v. Ralls, 250 Ga. 721, 722-723
(301 SE2d 40) (1983); Kay Jewelry Co. v. Kapiloff, 204 Ga. 209, 212-213 (49
SE2d 19) (1948). See also Ackerman Security Systems v. Design Security
Systems, 201 Ga. App. 805, 806 (1) (412 SE2d 588) (1991) (following
Eleventh and old Fifth Circuit precedents applying Georgia trademark law).
Trademark law is part of the broader law of unfair competition. See
Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 428 (123 SCt 1115, 155
LE2d 1) (2003); Saunders System Atlanta Co. v. Drive It Yourself Co. of Ga.,
158 Ga. 1, 1-2 (123 SE 132) (1924). “The principle underlying trademark
protection is that distinctive marks – words, names, symbols, and the like – can
help distinguish a particular artisan’s goods from those of others.” B&B
Hardware, Inc. v. Hargis Indus., Inc., ___ U.S. ___ (135 SCt 1293, 1299, 191
LE2d 222) (2015). American trademark infringement law “broadly prohibits
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 uses of trademarks, trade names, and trade dress that are likely to cause
confusion about the source of a product or service,” thereby “protect[ing]
consumers from being misled by the use of infringing marks and also
protect[ing] producers from unfair practices by an ‘imitating competitor.’”
Moseley, 537 U.S. at 428 (citation omitted). Trademark infringement law’s
likelihood-of-consumer-confusion test mitigates potential conflicts between
trademark protection and the First Amendment. See San Francisco Arts &
Athletics, Inc. v. U.S. Olympic Comm., 483 U.S. 522, 535 n.12 (107 SCt 2971,
97 LE2d 427) (1987) (noting that “[t]he Government constitutionally may
regulate ‘deceptive or misleading’ commercial speech”). See also Mattel, Inc.
v. MCA Records, Inc., 296 F3d 894, 904-905 (9th Cir. 2002).
In 1946, Congress largely codified traditional trademark infringement law
in the Lanham Act, Pub. L. No. 79-489, 60 Stat. 427. But Congress resisted
calls to include a cause of action for trademark dilution, which lacks a commonlaw foundation and is not motivated by an interest in protecting customers. See
Moseley, 537 U.S. at 428-429; Walter J. Derenberg, The Problem of Trademark

8

 Dilution and the Antidilution Statutes, 44 Cal. L. Rev. 439, 440-441 (1956).3
The following year, Massachusetts adopted the first state statute protecting
trademarks from dilution. See Moseley, 537 U.S. at 430. See also Kapiloff, 204
Ga. at 213, 216 (referring, in a 1948 decision, to the concept of trademark
dilution).
In 1952, the General Assembly overhauled Georgia’s statutory trademark
scheme to conform to the Lanham Act in the Trade-Mark Act of 1952. See Ga.
L. 1952, p. 134. See also Derenberg, 44 Cal. L. Rev. at 439-440 & n.6
(discussing the revision of state trademark statutes in response to the Lanham
Act). Like the Lanham Act, the Trade-Mark Act of 1952 initially did not
incorporate the concept of trademark dilution, but in 1955, the General
Assembly enacted Georgia’s anti-dilution statute as an amendment to the TradeMark Act. See Ga. L. 1955, p. 453. See also Derenberg, 44 Cal. L. Rev. at 441
& n.7 (discussing the adoption of the early state anti-dilution statutes, including
Georgia’s).

Georgia’s anti-dilution statute, which is the sole basis for

3

In 1995, Congress amended the Lanham Act to include a federal cause of action for
trademark dilution. See Federal Trademark Dilution Act of 1995, Pub. L. No. 104-98, 109 Stat. 985
(FTDA). In 2006, Congress substantially revised the FTDA. See Trademark Dilution Revision Act
of 2006, Pub. L. No. 109-312, 120 Stat. 1730 (TDRA) (codified at 15 USC § 1125 (c)). PruittHealth
did not include a federal trademark dilution claim in its complaint against McHugh Fuller.

9

 PruittHealth’s complaint against McHugh Fuller, is now codified without
substantive amendment at OCGA § 10-1-451 (b), amidst the rest of Georgia’s
statutory trademark scheme. See generally OCGA § 10-1-440 to 10-1-454.
OCGA § 10-1-451 (b) says in full:
Every person, association, or union of working men adopting and
using a trademark, trade name, label, or form of advertisement may
proceed by action; and all courts having jurisdiction thereof shall
grant injunctions to enjoin subsequent use by another of the same
or any similar trademark, trade name, label, or form of
advertisement if there exists a likelihood of injury to business
reputation or of dilution of the distinctive quality of the trademark,
trade name, label, or form of advertisement of the prior user,
notwithstanding the absence of competition between the parties or
of confusion as to the source of goods or services, except that this
Code section shall not deprive any party of any vested lawful rights
acquired prior to March 4, 1955.
Under this statute, actionable trademark dilution can take two forms:
The first is a “blurring” or “whittling down” of the distinctiveness
of a mark. This can occur where the public sees the mark used
widely on all kinds of products. 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.
Original Appalachian Artworks, Inc. v. Topps Chewing Gum, Inc., 642 FSupp.
1031, 1039 (N.D. Ga. 1986). See Restatement (Third) of Unfair Competition
§ 25 (1) (a) & (b) (1995) (Mar. 2016 update) (hereinafter Restatement); 4 J.
10

 Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 24:67
(4th ed. Mar. 2016 update) (hereinafter McCarthy); 2 Anne Gilson LaLonde,
Gilson on Trademarks § 5A.01[2] (2016) (hereinafter Gilson). See also 6 Louis
Altman & Malla Pollack, Callmann on Unfair Competition, Trademarks and
Monopolies § 22:17 (4th ed. June 2016 update) (hereinafter Callman) (“Dilution
threatens two separable but related components of advertising value: it may blur
a mark’s product identification, or it may tarnish the affirmative associations a
mark has come to convey.” (footnotes omitted)).
At issue in this case is tarnishment, which OCGA § 10-1-451 (b) describes
as “subsequent use by another of the same or any similar trademark, trade name,
label, or form of advertisement” adopted and used by a person, association, or
union “if there exists a likelihood of injury to business reputation . . . of the prior
user, notwithstanding the absence of competition between the parties or of
confusion as to the source of goods or services.” See Moseley, 537 U.S. at 432
(suggesting that references to “injury to business reputation” in state antidilution statutes like Georgia’s are the textual basis for trademark tarnishment
claims). This theory of liability “has had some success when defendant has used
plaintiff’s mark as a mark for clearly unwholesome or degrading goods or
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 services.” 4 McCarthy § 24:70. See, e.g., Original Appalachian Artworks, 642
FSupp. at 1040 (involving a defendant’s “‘borrowing plaintiff’s good will to
make it the butt of a joke’” (citation omitted)). The Restatement explains:
The selling power of a trademark . . . can be undermined by a use
of the mark with goods or services such as illicit drugs or
pornography that ‘tarnish’ the mark’s image through inherently
negative or unsavory associations, or with goods or services that
produce a negative response when linked in the minds of
prospective purchasers with the goods or services of the prior user,
such as the use on insecticide of a trademark similar to one
previously used by another on food products.
Restatement § 25 cmt. c. The basic idea is that “the consumer’s distaste for the
unsavory or inferior product has ‘rubbed off’ on the famous trademark, thereby
damaging it.” Sandra L. Rierson, The Myth and Reality of Dilution, 11 Duke
L. & Tech. Rev. 212, 246 (2012).
However, not every unwelcome use of one’s trademark in the advertising
of another provides a basis for a tarnishment claim. See 6 Callman § 22:19.
Tarnishment can occur “only if the defendant uses the designation as its own
trademark for its own goods or services.” 4 McCarthy § 24:122. “[C]ases 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
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 cases.” 2 Gilson § 5A.01 [6]. See Restatement § 25 cmt. i (“[E]xtension of the
antidilution statutes to protect against damaging nontrademark uses raises
substantial free speech issues and duplicates other potential remedies better
suited to balance the relevant interests.”).
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 ad used

PruittHealth’s marks in a descriptive manner to identify the specific PruittHealth
facility; indeed, McHugh Fuller was counting on the public to identify
PruittHealth-Moultrie by the PruittHealth marks used in the ad. 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. No one reading the
ad reproduced above would think that McHugh Fuller was doing anything other
than identifying a health care facility that the law firm was willing to sue over
its treatment of patients. In short, the ad very clearly was an ad for a law firm
and nothing more.
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 PruittHealth has cited no case analogous to this one to support its position.
PruittHealth relies on Original Appalachian Artworks, but there a federal district
court found tarnishment under Georgia’s anti-dilution statute because the
defendant’s “Garbage Pail Kids” cards and stickers “derisively depict[ed] dolls
with features similar to [the plaintiff’s] Cabbage Patch Kids dolls in rude,
violent and frequently noxious settings.”

642 FSupp. at 1032, 1040.

PruittHealth also cites Pillsbury Co. v. Milky Way Productions, Inc., No. C78679A, 1981 WL 1402 (N.D. Ga. Dec. 24, 1981), but there the district court
found tarnishment under Georgia’s anti-dilution statute because the defendant
used Pillsbury’s “Poppin’ Fresh” and “Poppie Fresh” trade characters along with
its trademark and jingle in a highly sexualized and “depraved context” in the
magazine Screw. Id., at *14. And in NBA Properties v. Untertainment Records
LLC, No. 99 CIV. 2933 (HB), 1999 WL 335147 (S.D.N.Y. May 26, 1999), the
district court found tarnishment under federal and New York law where the
defendant juxtaposed a distorted NBA logo containing the silhouetted basketball
player with a gun in his right hand and the words “SPORTS, DRUGS, &
ENTERTAINMENT.” Id., at *9. See also PepsiCo, Inc. v. #1 Wholesale, LLC,
No. 07-CV-367, 2007 WL 2142294, at *1-2, 4 (N.D. Ga. July 20, 2007) (finding
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 tarnishment under federal law and OCGA § 10-1-451 (b) where the defendants
advertised and sold bottle, can, and food cannister safes for the concealment of
illicit narcotics manufactured using plaintiff PepsiCo’s products and bearing its
famous Pepsi, Doritos, and other trademarks); Rierson, 11 Duke L. & Tech.
Rev. at 247 n.125 (collecting additional cases where dilution by tarnishment has
been found, all of which involve the defendant’s association of a mark with sex
or illegal drugs).
Contrary to PruittHealth’s assertion in the trial court, trademark law does
not impose a blanket prohibition on referencing a trademarked name in
advertising. “Indeed, it is often virtually impossible to refer to a particular
product for purposes of comparison, criticism, point of reference, or any other
purpose without using the mark.” New Kids on the Block v. News Am. Pub.,
Inc., 971 F2d 302, 306 (9th Cir. 1992). Moreover, interpreting OCGA § 10-1451 (b) expansively to prohibit the use of PruittHealth’s marks to identify its
facilities and services in any way, as the company urges, would raise profound
First Amendment issues. See Mattel, 296 F3d at 904 (explaining that reading
the federal anti-dilution statute to prohibit all unauthorized use of trademarks
“would . . . create a constitutional problem”). See also Florida Bar v. Went For
15

 It, Inc., 515 U.S. 618, 623 (115 SCt 2371, 132 LE2d 541) (1995) (“It is now
well established that lawyer advertising is commercial speech and, as such, is
accorded a measure of First Amendment protection.”). “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.” New Kids on the Block, 971 F2d at 307.
Accordingly, the trial court erred in entering the permanent injunction against
McHugh Fuller based on OCGA § 10-1-451 (b).4 If PruittHealth believes that
McHugh Fuller’s advertisements are untruthful or deceptive, the company must
seek relief under some other statutory or common-law cause of action.
Judgment reversed. All the Justices concur.

4

In light of this conclusion, we need not decide whether, as McHugh Fuller contends,
OCGA § 10-1-451 (b) includes an implicit fair use defense like the express defense in the federal
TDRA. See 15 USC § 1125 (c) (3).

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