Sometimes it is necessary to use a third-party trademark to refer to the owner of a trademark or its goods and services, and not to describe a particular good or service. Can this use result in trademark infringement?
This second part of fair use of a trademark will examine the doctrine of nominative fair use, which regulates how third-party trademarks can be fairly and lawfully used by non-owners to refer to goods and services or their owners.
Not readily identifiable without use of the mark
Let’s assume reference needs to be made to Coca-Cola®. The Coca-Cola® mark is subject of numerous trademark registrations around the world. Imagine having to say “the American multinational beverage company based in Atlanta, Georgia” every time it is necessary to identify Coca-Cola®. This is what the doctrine of nominative fair use aims to avoid, by providing rules on how reference can be made to a third-party trademark without infringing on this party’s intellectual property rights.
Use of a third-party trademark is generally allowed when the party, their goods or services would not be readily identifiable without use of the mark. Use of the third-party mark does not need to be essential to constitute fair use. In other words, using the third-party mark does not need to be the only possible way to refer to the owner or its goods and services. As long as using the third-party mark is far simpler or more likely to be understood by the public, then use will likely fall within the definition of not being readily identifiable without use of the mark.
Only as much as reasonably necessary
While the ability to reference third-party marks deserves protection, so do the intellectual property rights of brand owners. Because of this, reference to third-party marks can only be made as much as reasonably necessary. Where do courts draw the line?
The line can differ depending on the circuit. For instance certain circuits, including the Ninth, clarified that the determination of whether use is “reasonably necessary” should not solely focus on the number of times a third-party mark is used, but rather the nature of such use. To avoid unnecessary use, it is helpful to:
- Avoid prominent and bold lettering
- Repeated use in stylized form
The stylized version of a third-party mark carries all of its commercial impression on the public, and is more likely to suggest endorsement of the third-party, while it provides little benefit in regards to the ability of referencing the mark. In the previous Coca-Cola® example, use of the mark in standard font is more likely to be considered reasonably necessary as opposed to the use of the stylized mark in its distinctive red background and white font.
Not suggesting sponsorship or endorsement
Another element in the court’s assessment on whether use is nominative and fair is whether such use suggests sponsorship or endorsement of the owner of the referenced mark. The aim is to avoid confusion in the marketplace as to affiliation because this can have great impact on the goodwill and reputation of brand owners.
The easiest way to ensure that sponsorship is not suggested is to include a disclaimer clarifying that the use of the mark is made for reference purposes and does not indicate endorsement from the brand owner. However, a disclaimer may not be strictly necessary.
Courts have also found no suggestion of sponsorship or endorsement even in absence of a disclaimer to that effect. For example, Courts have found that the appellation “former Chicago Bull” on Michael Jordan’s website does not suggest sponsorship or endorsement from the Chicago Bulls®.