One of the first things entrepreneurs will need to do when branding new companies is to seek and obtain trademark protection. In addition, companies may at times seek to use third party trademarks without formally licensing those trademarks. These situations arise, for example, when companies use third party marks to either describe their own goods and services or refer to competitors.
This series of practice tips will delve into various ways a third-party trademark can be used without necessarily resulting in infringement. This use is also classified as “fair use”, and constitutes a defense to a trademark infringement lawsuit. Each part will analyze one type of “fair use” defense. Generally, fair use can be nominative or descriptive. In this particular post, we will examine descriptive fair use.
One of the main goals of trademark law is to avoid confusion in the marketplace and, to achieve this goal, it sets forth ways in which use of certain words can be restricted. This restriction, however, can sometimes become problematic as it clashes with other individual rights, such as the ones granted by the First Amendment.
How can we use a third-party trademark and avoid infringement?
Section 33(b)(4) of the Lanham Act sets out the statutory defense of descriptive fair use, which permits any “use… of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin…”. For instance, the use of the term “LARVACIDE” has been considered as descriptive fair use even though the term was subject of a trademark registration. In our LARVACIDE example, if a company produces a substance primarily used to kill larvae and utilizes the term “larvacide” or “larvicide” to describe its own products (despite it being a registered trademark in another company’s name), then a fair–use defense is likely going to succeed.
Which elements constitute descriptive fair use exactly?
The term cannot be used as a trademark, but in its primary descriptive sense. For example, if the term is used to describe an ingredient or characteristic of another product than the one marketed under the trademark, then the use will generally be considered as fair. Elements such as visual placement, size, and font all contribute to determine whether use constitutes trademark use or not. In addition, use must be in good faith. In our LARVACIDE example, if the term “larvacide” or “larvicide” is solely use to describe the characteristics of the marketed product, then this would likely constitute fair-use.
What constitutes “good faith”?
Use in good faith is a key element in the determination of whether use is fair. Use is considered in good faith when there is no intent to cause confusion in the marketplace or capitalize on the reputation and goodwill created by the owner of the trademark. Mere awareness that the used term is in fact a trademark does not negate good faith per se. Courts analyze several factors when making this determination. For example, the dissimilarity in packaging and labeling, the availability of alternative terms to describe the same goods, and generally the degree of confusion that such concurrent use would cause to consumers in the market.
What are some tips on how to minimize risk of using a term as a trademark?
- Use the designation in sentence text to the extent possible.
- Avoid capitalizing the designation if possible.
- Keep away from using the designation in domain names.
- Steer clear of highlighting the designation by depicting it in materials in:
- boldface or a distinguishing font;
- typeface that is larger than surrounding typeface; or
- taglines, titles, or headlines.
- Abstain from repeating the designation unnecessarily.