The Nominative Fair Use "Defense" in Trademark Law: Confusion in the US Circuit Courts of Appeal

Applied inconsistently and confusingly, the nominative fair use analysis has been adopted in some U.S. Circuit Courts of Appeal.  This confusion is exemplified in the recent Second Circuit's International Information Systems Security Certification Consortium v. Security University decision. Notably, that case rejects both the Ninth Circuit's and the Third Circuit's approach to nominative fair use.

NKOTB
Ibolya Nyikos

Nominative fair use analysis in trademark law developed from the distinguished former Chief Judge Kozinski of the Ninth Circuit's opinion in the 1992 New Kids on the Block v. News Am. Pub., Inc. case.  Chief Judge Kozinski, the well-known libertarian, is the author of the excellent "Trademarks Unplugged" article. Nominative fair use is different from the classic descriptive fair use defense because the alleged infringer is essentially using the trademark of another to refer to the trademark owner. The classic descriptive fair use defense is ordinarily utilized when an alleged infringer is using the trademark of another to fairly describe the alleged infringer's goods or services.  However, nominative fair use could even apply to a fanciful mark because the alleged infringer is trying to directly refer to the trademark owner itself.


In New Kids on the Block, Chief Judge Kozinski set forth the elements for the test: "First, the product or service in question must be one not readily identifiable without the use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder."  Chief Judge Kozinski ultimately found a newspaper's use of the New Kids on the Block trademark in a for-profit telephone poll concerning the band was a nominative fair use.  Notably, Chief Judge Kozinski's concerns with the First Amendment protection of free speech loomed large--and the case did involve a newspaper and the public's expression of which New Kid was the "best."  After New Kids on the Block, the Ninth Circuit itself confusingly applied the test.  For example, some courts placed the burden on the trademark owner to prove a lack of nominative fair use and others placed the burden on the alleged infringer to prove nominative fair use.  Courts also either applied nominative fair use as a replacement for the likelihood of confusion test and others applied it as a defense.  In the 2010 Toyota Motor Sales v. Tabari decision, Chief Judge Kozinski explained that post-KP Permanent Make-Up v. Lasting Impression, a Supreme Court case, the burden is on the trademark owner to prove a lack of nominative fair use and nominative fair use replaces the likelihood of confusion test.

Boy Bands & Libertarians! MEEOW!

Some Circuits have considered nominative fair use and others have not.  The Third Circuit modified the Ninth Circuit's approach in Century 21 v. Lending Tree by revising the factors to attempt to more accurately reflect the necessity of the trademark by the alleged infringer and a concern with preventing any potential consumer confusion.  As distinguished from the Ninth Circuit, the Third Circuit expressly recognizes there could be a likelihood of confusion and the nominative fair use defense could apply.  The Third Circuit's approach seems to recognize broader protection for an alleged infringer's use of a mark than the Ninth Circuit's approach which may contemplate that any confusion would not allow nominative fair use to apply.  Under the Third Circuit approach, after the trademark owner proves likelihood of confusion under a modified test, the alleged infringer must prove: "(1) the use of plaintiff's mark is necessary to describe both the plaintiff's product or service and the defendant's product or service; (2) the defendant uses only so much of the plaintiff's mark as is necessary to describe plaintiff's product; and (3) the defendant's conduct or language reflect the true and accurate relationship between plaintiff and defendant's products or services."

On May 18, 2016, the Second Circuit in International Systems Security Certification Consortium v. Security University addressed the nominative fair use analysis in the context of the use of a certification mark.  Specifically, the court rejected nominative fair use as an affirmative defense (the Third Circuit approach) mostly because Congress specifically provided for affirmative defenses in the Lanham Act and did not provide for nominative fair use.  The court also appears to reject the Ninth Circuit approach; however, the Second Circuit notes the nominative fair use tests applied by the Third and Ninth Circuits are relevant for determining whether there is a likelihood of confusion.  The Second Circuit conflates the Ninth Circuit and Third Circuit test, and seemingly takes a swipe at the Third Circuit's word play.  The Second Circuit stated:

It's not always so black and white.

When considering a likelihood of confusion in nominative fair use cases, in addition to discussing each of the Polaroid (likelihood of confusion) factors, courts are to consider: (1) whether the use of the plaintiff's mark is necessary to describe both the plaintiff's product or service and the defendant's product or service, that is, whether the product or service is not readily identifiable without use of the mark; (2) whether the defendant uses only so much of the plaintiff's mark as is necessary to identify the product or service; and (3) whether the defendant did anything, that would, in conjunction with the mark, suggest sponsorship or endorsement by the plaintiff holder, that is, whether the defendant's conduct or language reflects the true and accurate relationship between plaintiff's and defendant's products or services.

The Second Circuit also provided guidance on applying the factors: "When assessing the second nominative fair use factor, courts are to consider whether the alleged infringer 'step[ped] over the line into a likelihood of confusion by using the senior user's mark too prominently or too often, in terms of size, emphasis, or repetition.' . . . Additionally, when considering the third nominative fair use factor, courts must not, as the district court did here, consider only source confusion, but rather must consider confusion regarding affiliation, sponsorship, or endorsement by the mark holder."

The confusion in the U.S. Circuit Courts of Appeal make the existence and application of the nominative fair use defense ripe for consideration by the U.S. Supreme Court.  Hopefully, the U.S. Supreme Court will get the opportunity to clarify the doctrine soon.

For more on former Chief Judge Kozinski, enjoy this blog post from Above the Law including highlights from the Judge's relatively recent interviews at Yale Law School and this blog post concerning his views relating to the immigrant experience and judging.