The lawsuits below established that everyone in the United States can freecycle in peace without threat of overreaching trademark claims.
It also established that using a word generically is not trademark infringement, saying a word is generic is not trademark infringement, and encouraging others to use a word generically is not trademark infringement.
During the first few years of the grassroots freecycle movement (2003-2005), everything was freely given away to everyone -- "freecycle", the freecycle logo, and how to set up your own freecycle group. This made sense and was in harmony with the whole freecycling ethic. Key objectives were: free and legal.
This was documented in Salon.com (Nov 25, 2003), The New York Times (March 16, 2004), The San Jose Mercury News (Jan 27, 2004), The Wall Street Journal (May 6, 2004), People (May 10, 2004), and hundreds of other publications.
Then The Freecycle Network (TFN) decided to take back what it had given away by claiming a trademark on the word freecycle. The person in TFN who drove this decision was Deron Beal, TFN's founder, paid Executive Director, and primary controller of TFN's board of directors (as of 1/1/2011 the board still consists of only Deron, his wife, and a personal friend). Such a small board with the paid executive director in charge of it is a bad practice -- too many conflicts of interest and no independent oversight.
TFN used its incorrect trademark claim to bully or delete thousands of independent freecycle groups including the original FreecycleSunnyvale group in November 2005 because those "rogue" groups wanted to use the word freecycle freely just as it had been used in the New York Times, Wall Street Journal, People, and hundreds of other publications and thousands of groups.
To defend itself (and help shield other groups), the FreecycleSunnyvale group filed a lawsuit in California against TFN. TFN counterattacked with a SLAPP lawsuit in Arizona against Tim Oey, one of the moderators of FreecycleSunnyvale, as well as Tim's wife who had nothing to do with freecycling. This was an attempt to shut Tim up by attacking him and his family financially.
In November 2007, the 9th Circuit Court of Appeals essentially ended the AZ SLAPP lawsuit and reaffirmed that using the word freecycle generically is not trademark infringement, saying freecycle is generic is not trademark infringement, and encouraging others to use the word freecycle generically is not trademark infringement (these were essentially the claims TFN made against Tim and his wife).
In November 2010, the 9th Circuit Court of Appeals reaffirmed an earlier district court ruling saying: "TFN engaged in naked licensing and consequently abandoned the trademarks." This reaffirmed the original open freecycling movement's stance (as embodied by the case that FreecycleSunnyvale brought against TFN) that freecycle and the freecycle logo had been freely given away.
Moral: If you give something away for free, it's not right to demand it back.
In other words, it was wrong for TFN to be an ersatzgiver.
Why should freecycle be free rather than a trademark? Let us count the ways...
No appeal was made to the Supreme Court so the ruling is final -- freecycling is now free and legal (and legally free) once again.
Groups and individuals in the US who wish to use the word freecycle are now free to do so without needing to fear a lawsuit from TFN. As a further consequence, the original freecycle logo (used as a graphic and not a trademark) and the name "The Freecycle Network" are also free to use.
In Detail (with corroborating references):
Here is a detailed timeline of freecycling legal events with references. Items of particular note are highlighted in red. There are 3 intertwined legal threads, one lawsuit in California (CA), one lawsuit in Arizona (AZ), and the Trademark Trial and Appeal Board (TTAB) opposition.