Reference no: EM131674953

Question: Smith, a satirist and outspoken critic of Walmart, created websites displaying designs and slogans that negatively parodied Walmart's registered marks. These designs and slogans incorporated the word Walocaust, a word Smith invented by combining the fi rst three letters of Walmart's name with the last six letters of the word holocaust. Smith also sold novelty items online that were printed with graphics that parodied the retailer's slogans, with the disclaimer that he was unaffiliated with the retailer. One design depicted a blue stylized bird modeled to resemble a Nazi eagle grasping a yellow smiley face in the same manner that a Nazi eagle is typically depicted grasping a swastika. Above the bird image, the word WAL*OCAUST was printed in a blue font comparable to that commonly used by Walmart. The lower court found that Walmart had failed to establish that a smiley-face icon it used for advertising was distinctive enough to merit trademark protection and that Smith's slogans and graphics were scathing parodies and therefore did not violate any Walmart trademarks or cause dilution of its marks. Do you think the court of appeals upheld Smith's defense that he was engaged in parody and that such parody precluded claims of trademark infringement and dilution?