Fair Use: No Harm No Foul!

With apologies to Chick Hearn, when it comes to the fair use of someone else's trademark, the courts upon finding same, are in effect, stating, "No Harm No Foul!"

Additionally, there is (Statutory) Fair Use and then there's (Nominative) Fair Use. Confused? No worries, because...

Recently, the 9th Circuit U.S. Court of Appeals discussed "nominative fair use" in the matter of:

Toyota Motor Sales U.S. A. Inc. v. Tabari, No. 07-55344, July 8, 2010.

In an opinion written by Chief Judge Kozinski, the court reversed and remanded the District Court's finding of trademark infringement. In a stern and specific ruling, Judge Kozinski stated that on remand the District Court shall use "New Kids" likelihood of confusion test to ascertain a finding of fair use and that the Sleekcraft test for likelihood of confusion was not applicable where a defendant has made a showing of nominative fair use, as in this case. To quote the Court on this point, "When considering the scope and timing of any infringement on remand, the district court must eschew application of Sleekcraft and analyze the case solely under th rubric of nominative fair use.

note: "Sleekcraft" refers to the ordinary test for likelihood of confusion in the 9th Circuit, as set forth in the case, AMF v. Sleekcraft Boats, 599 F.2d, 341, 348-49 (9th Cir. 1979).

To the facts of this case: The Defendant Tabari registered and was using the internet domain names: buyalexus.com and buyorleaselexus.com

The Tabaris were using the term Lexus to describe their business of brokering Lexus automobiles and this the Court held to be a fair use and therefore not infringing.

The "New Kids" test re nominative fair use is named after an earlier and precedential 9th Circuit case, namely, New Kids on the Block v. News Am. Publishing, Inc., 971 F.2d 302, 308 (1992). This New Kids case was later relied upon by the 9th Circuit in the 2002 case, Playboy Enterprises, Inc. v. Welles, 279 F.3d 796, 801. This test is described by the Court as follows:

"In cases where a nominative fair use defense is raised, we ask whether (1) the product was "readily identifiable" without use of the mark; (2) defendant used more of the mark than necessary; or (3) defendant falsely suggested he was sponsored or endorsed by the trademark holder... This test "evaluates the likelihood of confusion in nominative use cases."

Additionally, the court clearly indicated that as to the burden of proof with respect to this defense:

"A defendant seeking to assert nominative fair use as a defense need only show that it used the mark to refer to the trademarked good, as the Tabaris undoubtedly have here. The burden then reverts to the plaintiff to show a likelihood of confusion."

Conclusion: In this case, the 9th Circuit has made clear that the nominative fair use defense can apply to domain names that incorporate third party trademarks, just as the Playboy v. Welles case indicated that use of a mark in a website's metatags constituted nominative fair use.

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Respectfully submitted,

William E. Maguire, Esq.
LAW OFFICES OF WILLIAM E. MAGUIRE
Los Angeles, California

www.TrademarkEsq.com

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