Internet Library of Law
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Trademark - Fair Use - Internet Library of Law and Court Decisions - Updated November 3, 2008

Court refuses to enjoin defendants from operating web sites critical of plaintiffs' business, or from utilizing plaintiffs' common-law service mark in meta tags on those sites to attract visitors seeking information about plaintiffs. The court also refused to enjoin defendants from continuing to publish allegedly libelous statements about plaintiffs on their web sites.

In a 91 page decision, a three member panel of the Third Circuit, by a two to one margin, adopted a new test to determine the propriety of a defendant's use of another's mark to describe the mark holder's own product.  A classic example of such a nominative fair use is an advertisement by an independent auto repair shop that contains the marks "VW" and "Volkswagen" to accurately inform the public of the type of cars the shop repairs. 

The judges agreed that this issue should not be resolved by application of the "nominative fair use" test utilized by the Ninth Circuit in New Kids on the Block v. News America Pub., Inc., 971 F.2d 302 (9th Cir. 1992) and its progeny.  But the panel was unable to agree on the appropriate test to apply. 

The two member majority "adopted a two step approach to nominative fair use cases."  Under the majority's test, the mark holder bears the burden of proving that the challenged use of its mark is likely to confuse the consumer as to the source of defendant's product, or its affiliation with, or endorsement by, the mark holder. 

In making such a showing, the mark holder cannot rely on the ten factors regularly examined by the Third Circuit in trademark cases, known as the Lapp factors, to determine likelihood of consumer confusion.  Instead, the majority instructs that two of those factors -- degree of similarity between the owner's mark and the allegedly infringing mark, and the strength of the owner's mark -- be ignored altogether.  The majority directs the courts to focus primarily on the following four of the remaining eight factors: (1) the price of the goods and other factors indicative of the care and attention that may be expected of consumers when making a purchase, (2) evidence of actual confusion, (3) the length of time, if any, defendant has used the mark without actual confusion, and (4) the intent of defendant in utilizing the mark.  While courts may, in an appropriate case, consider the remaining Lapp factors, listed below, in analyzing if the mark holder has met its burden of establishing likelihood of confusion, the four factors noted above are the ones on which the courts should primarily focus.  The remaining Lapp factors courts may consider are: (1) whether the parties' goods are marketed through the same channels and advertised through the same media, (2) the extent to which the targets of the parties' sales efforts are the same, (3) the relationship of the parties' respective goods in the mind of the consumer because of a similarity of function, and (4) facts suggesting the consuming public may expect the mark owner to expand into the defendant's market.

Once the mark holder meets its burden of proving confusion under this modified Lapp test, the burden shifts to the defendant to prove the affirmative defense of nominative fair use.   As announced by the majority, this requires the defendant to show: (1) the challenged use of plaintiff's mark is necessary to describe both plaintiff's product or service and defendant's product or service; (2) defendant has used only so much of plaintiff's mark as is necessary to describe plaintiff's products or services; and (3) the defendant's conduct or language reflects the true and accurate relationship between plaintiff and defendant's products or services.  If the defendant can show each of these elements, he may proceed with the challenged use, even if it will engender some confusion among consumers.

In a scathing dissent, Circuit Judge Fisher strongly criticized the majority's new test as being both contrary to binding precedent and judicially unmanageable.  He further opined that the test adopted by the majority impermissibly places on the defendant the burden of negating likelihood of consumer confusion. 

Judge Fisher set forth his own alternative test for determining the propriety of a nominative fair use.  Under this test, there is no bifurcated, burden shifting, approach.  Nor is nominative fair use an affirmative defense to be established by the defendant making a challenged use of the mark at issue.  Rather, the appropriate inquiry for the court is whether the challenged use of the mark is likely to confuse consumers, as to which issue the mark holder bears the burden of proof.  In analyzing this issue, Judge Fischer would also use a modified Lapp test.  Under Judge Fischer's test, like that of the majority, courts would ignore both the similarity of the marks, and the strength of the mark.  Similarly, the courts would focus primarily on the same four Lapp factors that are at the center of their examination of confusion under the majority's test.  However, under Judge Fisher's test, negative findings on the remaining four Lapp factors would counsel against a finding of confusion arising out of defendant's nominative use.  Thus, a finding that the parties' goods were marketed through different channels or sold to different consumers, or performed different functions, would weigh against a finding of confusion.

As was to be expected, given that the District Court did not apply the newly minted nominative fair use test pronounced in the majority's opinion, the District Court's decision was reversed, and the case remanded for further consideration in light of the Third Circuit's decision.

Court holds that unauthorized internet reseller of plaintiff’s tanning products is not guilty of trademark infringement as a result of its use of plaintiff’s trademarks in the meta tags of a website at which such products are sold, and as search engine keywords triggering the display of a link to such a website.  In reaching this result, the Court rejected plaintiff’s claim that such use of its marks causes actionable ‘initial interest confusion’ by directing those searching for plaintiff’s site to that of the defendant.  To sustain such a claim, holds the court, defendant’s conduct must be deceptive.  Plaintiff failed to meet this burden because defendant’s site does indeed offer plaintiff’s products for sale, and thus, its use of plaintiff’s mark in the site’s meta tags is not deceptive, but rather accurately describes the contents of defendant’s site.  This was true, held the Court, notwithstanding the fact that S & L offered plaintiff’s competitors products for sale on its site as well.

The Court also dismissed trademark dilution claims arising out of defendant’s use of plaintiff’s marks.  The Court held that, under the circumstances, defendant’s use of plaintiff’s marks in the meta tags of its site, and as search engine key words, constituted a permissible nominative fair use of those marks.  To establish that a use of a trademark qualifies as a permissible nominative fair use, the defendant must ‘do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.’  Notably, the Court reached this result because plaintiff failed to submit adequate evidence as to the impact this use of its marks had on the listing of defendant’s site in search results for plaintiff’s mark.  The Court left open the possibility that such a use of plaintiff’s mark may not qualify as a nominative fair use if in fact it caused defendant’s site to appear at or near the top of search engine results for plaintiff’s mark, and thereby suggested that plaintiff sponsored or endorsed defendant’s site. 

The Court denied so much of defendant’s motion for summary judgment which sought dismissal of copyright infringement claims arising out of its use of electronic renderings of plaintiff’s products to promote the sale of such products on its web site.  Issues of facts as to whether defendant copied such images from plaintiff’s web site, or created its own, precluded an award of summary judgment.  In allowing this claim to proceed to trial, the Court rejected defendant’s argument that its alleged use of plaintiff’s images was protected as a fair use.  Notwithstanding the fact that defendant’s use did not effect the potential market for plaintiff’s images – which plaintiff does not offer for sale – the Court rejected defendant’s fair use argument, pointing to the fact that its use was commercial, and copied plaintiff’s image, which was a creative work, in its entirety.

Finally, the Court rejected plaintiff’s claim for intentional interference with contractual relations, which arose out of prohibitions contained in contracts with plaintiff’s distributors precluding their resale of plaintiff’s products to Internet resellers such as defendant.  Defendant obtained plaintiff’s products from tanning salons, to whom the distributors were permitted to sell such products.  Because there was no evidence either that such tanning salons were acting as defendant’s agent in purchasing goods from plaintiff’s distributors, or that defendant directly purchased such goods from the distributors in breach of the prohibitions contained in their agreements, this claim failed.

In this domain name dispute, Court issues a preliminary injunction enjoining defendant from continuing to utilize the domain name "edgaronline.com." Such action, determined the court, is likely to falsely imply that plaintiff Edgar Online Inc. is the source of the material found at defendant's web site in violation of section 43(a) of the Lanham Act.

Plaintiff operates a website at the domain name "edgar-online.com" and claims a common law trademark in the mark "Edgar Online." Plaintiff's use of this mark commenced prior to defendant's. Plaintiff and defendant each operate competing web sites which offer users access to the SEC's EDGAR database. Plaintiff charges users a fee for the searches they are able to conduct on plaintiff's web site. Defendant offers his service for free, which service apparently lacks some of the functionality found on plaintiff's site.

Though unregistered, the court found that plaintiff's mark was entitled to protection under Section 43(a). Relying on Jews for Jesus v. Brodsky, 993 F. Supp. 993 F. Supp. 282 (D.N.J. Mar. 6, 1998) aff'd. 159 F. 3d 1351 (3d Cir. 1998) the court further held that defendant's use occurs in commerce in connection with goods and services, notwithstanding its conclusion that plaintiff "does not earn revenues from his website." Said the court:

As in Jews for Jesus v. Brodsky ... [defendant] uses a domain name that is virtually identical to plaintiff's name mark, he thereby impedes some Internet users from reaching plaintiff's website and interferes with plaintiff's distribution of its services. In Jews for Jesus, confronted with such circumstances, the Court determined that the false designation of origin occurred in interstate commerce "in connection with goods and services" within the meaning of Section 43(a). The same is true here."

The Court holds that the purchase of keyword advertisements triggered by a search containing another's trademark constitutes a use of that mark in commerce sufficient to give rise to trademark infringement claims.  The Court accordingly denied a motion by defendant The MLS Online.com to dismiss trademark infringement claims arising out of its purchase of keyword advertisements from Google and Yahoo that displayed 'sponsored links' to defendant's website when a user entered plaintiff's Edina Realty trademark as a search term.

The Court also denied defendant's motion to dismiss trademark infringement claims arising out of its use of plaintiff's mark in hidden text and links found on its website, and in the text of its sponsored links, which motion was premised on the ground that this was a permitted nominative fair use of plaintiff's marks.  Adopting the 'fair use' test followed by the Third Circuit, the Court held such uses of plaintiff's mark were not necessary to the description of defendant's product or services.

Finally, the Court dismissed trademark dilution claims advanced by plaintiff Edina Realty as a result of its failure to provide evidence of actual dilution.

Court holds that the use by defendant Camp Systems International ("Camp") of maintenance manuals prepared by plaintiff Gulfstream Aerospace Corporation ("Gulfstream") to advise owners of the need for maintenance of their Gulfstream aircraft is a permissible fair use of those manuals.  Court accordingly grants Camp's motion for summary judgment, and dismisses both copyright and trademark infringement claims advanced by Gulfstream arising out the placement by Camp of portions of those manuals on its computer system, which manuals Camp made available, and transmitted, to both the aircraft's owner and appropriate repair personnel.

The Ninth Circuit affirmed so much of the District Court's decision which held that defendant infringed plaintiff's trademark by his "pervasive" use of plaintiff's mark in both the metatags and text of his websites, on which he sold a competing product.  The Ninth Circuit also affirmed so much of the District Court's decision which awarded plaintiff substantial attorneys' fees for this infringement, agreeing with the lower court's determination that this was an "exceptional" case justifying such an award in light of defendant's willful use of the mark.

The Ninth Circuit reversed and remanded so much of the District Court's decision that held that defendant's conduct diluted plaintiff's mark, in light of the Supreme Court's recent decision in Moseley v. V. Secret Catalogue, Inc, which mandated proof of actual dilution to sustain a trademark dilution claim.

Court denies plaintiff's request for a preliminary injunction, and refuses to enjoin defendant, a direct competitor, from repeatedly using plaintiff's trade name on a web site containing information critical of plaintiff.  The challenged uses were designed to and did dramatically increase the site's ranking on search engines in response to queries for plaintiff's name.  The Court held that such use was a permitted nominative fair use of plaintiff's trade name. 

The Court rendered this decision on defendants' motion for reconsideration.  In reaching this result, the Court vacated its prior order, enjoining defendants from using plaintiff's mark in ways designed to dramatically increase the site's ranking on search engines.  In this vacated order, the court had enjoined defendants from "using 'J.K. Harris' or any permutation thereof as a keyword for the taxes.com website more often than is necessary to identify the content of the website," from using header tags and underline tags around sentences containing plaintiff's trade name, or from increasing the prominence and font size of sentences which include plaintiff's trade name.  In this vacated order, the court denied plaintiff's request to enjoin defendants from making any use of plaintiff's trade name on the site however, holding that defendants could use the trade name in links to other sources of information about plaintiff on the web, as well as in disseminating truthful factual information about plaintiff, provided such use was "reasonably necessary" and not excessive.

The court also enjoined defendants from continuing to post on its website several identified negative statements about plaintiff, derived from third parties, which plaintiff claimed were false and/or misleading.

Court issues preliminary injunction, enjoining defendants, direct competitors of plaintiffs who operate a commercial website containing information critical of plaintiff, from continuing certain uses of plaintiff's trade name on that site.  The injunction enjoined defendants from using plaintiff's mark in ways designed to dramatically increase the site's ranking on search engines in response to queries for plaintiff's trade name.  The court enjoined defendants from "using 'J.K. Harris' or any permutation thereof as a keyword for the taxes.com website more often than is necessary to identify the content of the website," from using header tags and underline tags around sentences containing plaintiff's trade name, or from increasing the prominence and font size of sentences which include plaintiff's trade name.  The court denied plaintiff's request to enjoin defendants from making any use of plaintiff's trade name on the site however, holding that defendants could use the trade name in links to other sources of information about plaintiff on the web, as well as in disseminating truthful factual information about plaintiff, provided such use, as noted above, was "reasonably necessary" and not excessive.

The court also enjoined defendants from continuing to post on its website several identified negative statements about plaintiff, derived from third parties, which plaintiff claimed were false and/or misleading.

In six related lawsuits arising out of the sale by online Canadian-based pharmacies of both branded and generic versions of plaintiff's popular anticholesterol medication "Zocor," the Court granted motions to dismiss trademark infringement claims challenging defendants' purchase of the keyword "Zocor" from search engines to trigger the display of "sponsored links" to defendants' websites.  Such purchases do not constitute the requisite 'use in commerce' of plaintiff's mark necessary to sustain such claims.  The Court also granted defendant CrossBorder's motion to dismiss trademark infringement claims arising out of its use of plaintiff's trademark "Zocor" on its website, at which CrossBorder sold both plaintiff's own product, as well as a generic version described as "generic simvastatin."  "Simvastatin" is the active ingredient in "Zocor."  Because it sold branded Zocor at its website, this was a permitted fair use of plaintiff's mark.

The Court declined at this early stage of the proceedings to dismiss the trademark infringement and dilution claims advanced against the remaining defendants.  Defendants link the "Zocor" mark to web pages at which they sold both branded Zocor and generic products described alternatively as "generic Zocor," "Zocor generic" or "Zocor-generic."  The Court was unwilling on this motion to determine whether such uses were likely to confuse consumers as to the source and sponsorship of these generic products, and hence unwilling to declare them permitted fair uses of plaintiff's trademarks.

Finally, the Court granted the motion to dismiss for want of personal jurisdiction of defendant CanadaDrug's CEO.  This individual, a Canadian resident, was neither alleged to have personally undertaken any actions in the United States in furtherance of the infringing activities at issue, nor been a "primary actor" therein.

In this trademark infringement suit, the court enjoined defendant, a truck listing service, from using plaintiff's registered federal trademarks in either the domain name, meta tags, site title or wallpaper of web sites that inform consumers of entities offering plaintiff's trucks for sale.

Use of plaintiff's trademark in the "path" or "second level" of a domain name does not constitute trademark infringement because the "path" or "second level" does not identify the origin of the web site, but rather only describes the site's organization. In addition, limited use of plaintiff's federally registered mark to describe a product being sold by defendant constitutes 'nominative fair use' of the mark, and not trademark infringement, because, inter alia, the product is one not readily identifiable without the use of the mark.

The court denied plaintiff's motion for a preliminary injunction enjoining defendants from continuing to "key" advertisements for adult entertainment products to the words "playboy" and "playmate." Plaintiff Playboy holds federal trademarks in both "Playboy" and "Playmate," which marks it uses in connection with the sale of adult entertainment products. Defendants Netscape and Excite each operate search engines. For a fee, defendants will display an advertiser's banner ads in random rotation on web pages containing the results of searches produced by defendants' search engines. For an increased fee, defendants will display an advertiser's banner ads whenever a user utilizes one of a series of designated terms in his search. This practice, known as "keying," allows the advertiser to target his ads and reach a more receptive audience.

Defendants key various adult entertainment ads to a group of over 450 terms, which include the terms "playboy" and "playmate." As a result, individuals who use one of those terms in a search are greeted not only by a list of web sites which contain the word "playboy" or "playmate", but also by a paid banner advertisement from a purveyor of adult entertainment services. These banner ads do not contain either the word "playboy" or "playmate."

Plaintiff argued that this practice constitutes both trademark infringement and dilution, in violation of federal law and the laws of the State of California. The court disagreed.

The court held that defendants' activities did not constitute either trademark infringement or dilution because defendants were not using plaintiff's trademarks, a perquisite for such a claim. Instead, held the court, defendants were simply using words found in the English language over which plaintiff did not hold a monopoly. Defendants' use of "playboy" and "playmate" in their keying activities is but one of several permitted uses that do not require a trademark owner's consent.

The court further held that plaintiff's infringement claim failed because plaintiff had not shown consumer confusion, or that individuals who saw the banner ads on web pages containing their search results believed that those ads were affiliated with or endorsed by Playboy. In reaching this conclusion, the court held the Ninth Circuit's "initial interest confusion" doctrine, set forth in Brookfield, inapplicable to the case at bar.

Plaintiff's dilution claim failed because plaintiff could not show that defendants' actions blurred or tarnished plaintiff's marks, or otherwise lessened their ability to serve as an advertising agent for goods or services.

Lastly, the court held that defendants' use of "playboy" and "playmate" in keying was both a permitted fair use of plaintiff's marks, as well as a use protected by the First Amendment.

Defendant, a former "Playmate of the Month" and "Playmate of the Year," was permitted to use those trademarks on her website, and to use the marks "Playboy" and "Playmate" in meta tags, despite plaintiff Playboy's objections. Such was a permissible fair use of plaintiff's marks because such marks described who defendant was.

The Ninth Circuit Court of Appeals holds that defendant Terri Welles' use of plaintiff's trademarks "Playboy" and "Playboy Playmate of the Year" in the meta tags, masthead and various banner advertisements appearing on her web site neither infringe nor dilute those marks. These uses of plaintiff's marks by defendant, a model named by plaintiff as "Playmate of the Year" in 1981, are permissible nominative uses necessary to allow Ms. Welles to accurately describe herself and the content of her site. Such nominative uses of a mark are permissible when (1) the product being described is not readily identifiable without use of the trademark; (2) only so much of the mark is used as is reasonably necessary to identify the product; and (3) the user of the mark does nothing that suggests sponsorship by the owner of the mark. Plaintiff's trademark dilution claims failed because a nominative use is exempt from anti-dilution laws, as such a use refers to plaintiff's own product and therefore does not create an improper association between plaintiff's mark and the product of another. In reaching these determinations, the Ninth Circuit affirmed the decision of the district court below.

The Ninth Circuit also held that defendant's repeated use of the alleged mark "PMOY '81" in the wallpaper of her site was not a permitted nominative use because it was not necessary to describe Ms. Welles in light of the court's determination that she can use the phrase "Playboy Playmate of the Year 1981" on her web site. As such, the court reversed so much of the decision of the district court which dismissed the trademark infringement and dilution claims plaintiff asserted as a result of this use, and remanded those claims to the district court for a determination as to whether "PMOY '81" is a mark entitled to trademark protection.

(Court held that defendant's use of the phrase "Radio Channel" on its website, at which it offered "streaming media programming" to the public, did not infringe the rights of plaintiff, which operated a website entitled "The Radio Channel" at www.radiochannel.com," in that mark. Defendant used "Radio Channel" to describe the content contained in one of sixteen program groupings found on its site. Each of these other program groupings was also called a "channel" and featured names such as the Business Channel and the Education Channel. Each page on which such phrase appeared also contained defendant Broadcast.com's trademark and logo. The court held that this was a permissible fair use of the mark because defendant used the mark "(1) in good faith and (2) in its descriptive sense.")

Court holds that defendant violated the Anticybersquatting Consumer Protection Act by registering sixteen domain names containing misspellings of plaintiff’s trademark, at which domains defendant operated web sites that voiced his complaints about plaintiff’s business practices.  Defendant did not offer any goods or services for sale at these web sites, and there is no mention in the record of any attempts by defendant to try and sell the domain names to the plaintiff.

Affirming the decision of the district court below, the Tenth Circuit dismisses trademark infringement, unfair competition and cybersquatting claims brought by plaintiff Utah Lighthouse Ministry as a result of defendant Allen Wyatt’s operation of a non-commercial website at domains containing the names of both plaintiff and its principals, which website in turn linked to articles criticizing plaintiff’s principals found on defendant Fair’s website.  Plaintiff was created to criticize the Church of Jesus Christ of Latter-day Saints.  Fair is an organization that responds to criticisms of that Church.  Wyatt’s website was designed to look like that of the plaintiff, incorporating elements and content found thereon with slight alterations, and contained no disclaimer as to the site’s affiliation with the plaintiff. 

The Tenth Circuit affirmed the dismissal of plaintiff’s Lanham Act trademark infringement and unfair competition claims on the grounds that plaintiff had failed to establish that defendant had used its trademark in commerce.  In reaching this result, the Court held that links from Wyatt’s website to that of Fair, at which books were offered for sale, were too attenuated to constitute a commercial use because the links took the user to pages of that site containing criticism of plaintiff, and not to those pages of the site at which books were offered for sale.  The Court further held that the use of plaintiff’s trademark in the operation of a site that diverted consumers from plaintiff’s commercial site to a non-commercial site was not a commercial use sufficient to sustain a Lanham Act claim.  In reaching this result, the Court refused to follow a contrary decision of the Fourth Circuit. 

The Tenth Circuit also dismissed plaintiff’s trademark infringement claim on the ground that plaintiff failed to establish the requisite likelihood of consumer confusion arising out of defendant Wyatt’s operation of his site.  The Court relied both on its analysis of the traditional likelihood of confusion factors, as well as its determination that defendant’s site was a successful parody of that of the plaintiff.

Finally, the Tenth Circuit dismissed plaintiff’s cybersquatting claim, advanced under the Anticybersquatting Consumer Protection Act (“ACPA”), on the ground that the defendants lacked the requisite bad faith intent to profit from their use of plaintiff’s mark, given their site was non-commercial, and intended to criticize plaintiff.   The Tenth Circuit held that such claim also failed because defendant Wyatt fell within the protection of the ACPA’s safe-harbor provision, which precludes a finding of bad faith intent to profit if ‘the court determines that the [defendant] believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.’