On Monday, the New York Times Company filed an injunction against Kachingle in federal court and stated it was suing the company for violating its trademarks and intellectual property rights. The filing actually went up online on Scribd, via The Trademark Blog, before Kachingle received a copy of it. The main thrust of the complaint is that Kachingle is misrepresenting its relationship with the New York Times Company by using its signature design and “a confusingly similar imitation of The Times Trademarks” to persuade users to contribute money, in the false hopes that the company will accept that money, and that it will have any bearing on their already-decided decision to install a paywall on nytimes.com in the future. The filing also delineates previous conversations between the Times Company and Typaldos, starting in early 2009, in which the Times made it clear “that it was not interested in pursuing any business relationship with Kachingle.” Here are some more highlights from the filing (see pages six-eight):
26. Contrary to the representations made on the Kachingle websites, Kachingle’s interest in the ‘Stop the Paywall’ campaign against The Times is not to prevent The Times from instituting a paid subscription program. On information and belief, the purpose…is to piggy-back off the Times’ goodwill, reputation, and popularity, and to use the reputation and popularity of The Times’ blogs for Kachingle’s financial gain.
27. Kachingle further misleads consumers on its website under the ‘Q&A’ section when it asks whether The Times agreed to this arrangement. In response, Kachingle says no, ‘But we hope they will like it!’ See Exh. D. Kachingle already knew, at the time the website was launched, that The Times did not ‘like’ the business model that Kachingle had proposed….
I bet the Times lawyers had a chuckle over that one.
The filing goes on to explain how Kachingle’s conduct constitutes unfair competition and false advertising, and that “The Times has been and absent injunctive relief will continue to be, irreparably harmed.”
Steve Outing, a journalist who has been very vocal in his support of Kachingle (and whose blog is signed up with the service), calls the whole thing “a good-natured guerilla marketing campaign” and is optimistic that the scuffle with the Times will do Kachingle “a potentially big favor” by getting it some attention in the blogosphere. I am inclined to disagree.
Having spoken to Cynthia Typaldos and several people who have done business with Kachingle, I disagree with the Times’s accusation that Kachingle is misleading people for Typaldos’ own financial gain. True, Kachingle might benefit from the publicity, and if it got more people to sign up by virtue of its implied relationship with the Times, it obviously does stand to gain financially from the transaction fees. But the damages from this lawsuit will surely wipe out any small gains they’ve made.
All that leads me to believe that the Kachingle team simply did not know what it was getting itself into here. I think that their intentions have always been noble, and that they really don’t understand why news sites wouldn’t want to partner with them to start getting money for their content, from the loyal readers eager to contribute. But this “Stop the Paywall” clearly should have been thought through a little more, and Kachingle would definitely have benefited from some legal advice before it launched a site that looked just like a Times blog and led people to believe a partnership was forthcoming.
Kachingle has not yet directly addressed the complaints in the Times’s filing. At the conclusion of the document, Times demands a jury trial and asks to be awarded all the profits Kachingle has received from using their trademarks (which judging by the Leaderboard results will not be a lot of money), plus legal fees (which one can assume will be a ton of money). I’m not a lawyer, but it’s hard for me to see how this little start-up is going to get out of this thing alive.