Trademark fair use is a defense to claims of infringement, trademark dilution, cyberpiracy, or false advertising by a trademark owner.
Not every use of a registered trademark is infringing, in other words. There are third party uses that are permitted under US law—so long as they do not constitute one of the above offenses.
What Is The Trademark Fair Use Doctrine?
The so-called Trademark Fair Use Doctrine is a legal theory of defense against an accusation of infringement or other misuse of a trademark. (By the way, judges love to call lines of reasoning “doctrines” because it makes them feel like scientists explaining an empirically provable principle, which is anything but the case.)
Essentially, the fair use doctrine, or defense, holds that the use of a trademark by a third party (other than its owner) is fair, or not wrongful, when that use is:
- Descriptive;
- Nominative;
- Parodying;
- Or used in some form of news or commentary.
Underlying all of these permitted uses is the scope of US trademark protection itself. That is, the purpose of trademark protection is to allow exclusive use of a unique name, slogan, or logo to identify goods or services sold in interstate commerce by a specific seller.
For example, the Nike “swoosh” identifies that a shoe sold has been manufactured by and is being sold by the Nike corporation and not by anybody else. Consumers can feel good about by a shoe with that “swoosh” on it because it is a registered trademark and cannot be used by anybody else. They know that they are buying what they think they are buying.
Anyone else putting that “swoosh” on a tennis shoe is infringing Nike’s registered trademark and may be sued for that infringement (and should be).
But not every other use of that “swoosh” would constitute infringement. Such as the mention of it as an example in this article. That would be the “news and commentary” or possibly “descriptive” trademark fair use.
The basic consideration here and in all of the other permitted trademark fair uses is that the mark is whether the mark is being used to sell a third party’s product or service.
Nominative trademark fair use refers to the registered trademark owner’s product or service—but without any claim of ownership or that the third party is a source for the sale of that product or service.
To be a nominative trademark fair use, the product or service must be easily identifiable by consumer. Additionally, the trademark must only be used to the extend required for purpose of the use, and it cannot suggest any endorsement or approval by the actual owner of the trademark.
Likewise, a parodying use of a trademark cannot include any commercial purpose. That is, it cannot be used to sell the mark owner’s actual product or service, and it especially cannot be used to sell a third party’s product or service. It also cannot suggest any endorsement of the use by the owner.
What is parody? It’s a comedic use. For entertainment and, occasionally, for purposes of social commentary. It is not commercial, however.
If you’re in this author’s age-group, you may remember the old Wacky Packages stickers sold in the 1960s and into the early 1990s. These were (hilarious) product parodies, pure and simple, and provide, still, a great example of this trademark fair use.
Trademark Fair Use: Causes of Action When Not-So-Fair
What do you do when you think a third party is using your trademark in a manner that is not fair use?
The US Trademark Act (aka The Lanham Act), as well as other Federal and Michigan and other state statutes, create several causes of action for the use of an aggrieved trademark owner.
Specifically, the Trademark Act prohibits infringement, false advertising, dilution, and cyber-piracy.
Any person infringing on a registered trademark or engaging in false advertising is made liable in a civil action by the person damaged by such use under the Act.
Trademark dilution (diminishing of the trademark’s value) is a claim applicable only to so-called “famous” marks.
Under the Trademark Act, a trademark is “famous” if it is “… widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.”
The Act lists a number of factors for courts’ use in considering whether a trademark is suitably famous for its owner to allege that it has been diluted by the improper actions of a third party.
Trademark fair use is a defense to dilution. However, dilution, unlike infringement, does not require a complainant to prove a likelihood of confusion first.
Cyberpiracy occurs when a third party registers, traffics, or uses a domain name including a registered trademark with a bad faith intent to profit from the mark. The offense requires that the pirated mark be distinctive at the time of registration of the domain name, is identical or confusingly similar to the registered trademark, or, if the mark is famous, is identical, confusing, or dilutive of the mark.
Again, courts will parse a number of factors enumerate under the statute to determine the presence of bad faith.
In the Sixth Circuit case of Audi AG v. D’Amato, 469 F.3d 534 (6th Cir. 2006), the court awarded summary judgment and attorneys’ fees to plaintiff Audi against a defendant that utilized the “Audi” mark in a domain name. The court ruled that this constituted infringement, dilution, and cyber-squatting. It rejected the trademark fair use defense entirely due to the use’s “clear likelihood of confusion.”
Trademark Fair Use: The Bottom Line
The bottom line with regard to trademark fair use is that you should never presume that your use is defensible if utilizing a registered mark, re-purposing the mark, or just plain incorporating it into your own.
This is particularly true if the trademark in question is “famous.”
If you intend to register a domain name or utilize a mark as an act of parody or referentially, it is best to consult a trademark lawyer to determine in advance if your use could constitute infringement, dilution, or cyberpiracy—or if the odds of a well-heeled plaintiff alleging in court that your use amounts to such offenses outweighs the weight of your wallet.
Bear in mind that, if you are in the position of arguing fair use, you are already knee-deep in litigation and spending money on attorney’s fees that might have been avoided.
Noble Path Trademark Law is a boutique US law practice located in Metro Detroit and assisting enterprises in every industry with trademark registration, trademark renewal, trademark monitoring, and Office Action refusal response matters.
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