By Jeff Roberts
NEW YORK (Reuters) - Life insurance firm Coventry First is suing an anonymous critic for sending fake Twitter messages in which the company appears to cheer for the death of policy holders.
In a lawsuit filed on Tuesday in Philadelphia federal court, Coventry sued the Twitter user known as @coventryfirst, who has been sending tweets like "horrible weekend ... no plane crashes" and "natural disasters are good for business!"
Coventry is a leading player in the secondary life insurance market, in which investors pay individuals for the right to collect on their policies.
The industry first gained prominence in the 1980s when investors bought the policies of AIDS patients expecting a quick payout but then incurred losses when people with HIV began living longer.
Since then, the secondary life insurance market has been criticized by those who object to betting on death, and has attracted scrutiny from courts and state insurance regulators. The controversy has made the industry sensitive to criticism.
In its lawsuit, Coventry accused the anonymous critic of unfair competition and trademark infringement, saying the "numerous 'tweets' about the life settlement industry is likely to cause confusion in the marketplace," and sought a court order for monetary damages and the destruction of the Twitter page.
The company has also issued a subpoena asking Twitter to reveal the identity of the account holder, according to Coventry's lawyer, Camille Miller. Twitter did not reply to requests for comment.
This is not the first time a major company has become entangled with a Twitter prankster. Last year, at the height of the gulf oil spill, a Twitter account called @BPGlobalPR caused a stir with a series of insensitive tweets like "We've eliminated the huge turtle surplus in the gulf." The account continues to operate.
As for Coventry, its chance of shutting down the offending Twitter account appears uncertain due to courts' obligations to balance the right of brand owners against overall free speech values.
"We don't have a lot of bright-line rules in trademark law," said Lisa Ramsey, a law professor at the University of San Diego, adding that some courts require a commercial use before they will find infringement has occurred.
To prove a trademark claim, Coventry must also show that the fake Twitter account is leading to confusion in the minds of consumers.
"When there's a site that's obviously meant to be a joke, there's not going to be confusion," said Greg Beck, a lawyer at Public Citizen. "Even if there's a few very dense people who don't get it, that's not enough."
The case is: Coventry First, LLC v. Does 1-10, U.S. District Court for the Eastern District of Pennsylvania, No. 2:11-cv-03700.
(Reporting by Jeff Roberts; Editing by Eddie Evans and Jerry Norton)