Trademarks and Fair Use:

Some Rules of the Road

Corynne McSherryStaff Attorney

Trademark Basics• Trademarks are not copyrights

– What is protected: words, symbols, colors, etc. used in commerce to designate the source of goods and services

– Roots in consumer protection and unfair competition

– Distinct “use” and “fair use” principles– Distinct approaches to secondary liability

Trademark Use

•Is the mark being used in commerce?

•Is the mark placed on any goods, containers, displays or advertisements?

Noncommercial Use

Nominative Fair Use

“Most useful social and commercial discourse would be all but impossible if speakers were under threat of an infringement lawsuit every time they made reference to a person, company or product by using its trademark.” The New Kids on the Block v. New Am. Publ’g, Inc., 971 F.2d 302, 306 (9th Cir. 1992).

NFU applies where: “a mark user has used the plaintiff's mark to describe the plaintiff's product, even if the defendant's ultimate goal is to describe his own product . . . .” Cairns v. Franklin Mint Co., 292 F.3d 1139, 1152 (9th Cir. 2002).

E.g., “We repair Volkswagens.” and “Soda lovers say Pepsi tastes better than Coca Cola.”

Compare “classic” fair use: Essentially a nontrademark use.

Elements of Nominative Fair Use

(1)the markholders’ product or service in question is not readily identifiable without use of the trademark;

(2)only so much of the mark or marks was used as was reasonably necessary to identify the product or service; and

(3)the user did nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.

First Amendment Balance

• Lanham Act applies “to artistic works only where public interest in avoiding consumer confusion outweighs public interest in free expression.” Walking Mountain, 353 F.3d at 807.

• Origin: Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989) (Use of trademark in literary title).

• Adopted by Ninth Circuit in Mattel v. MCA Records, 296 F.3d 894 (9th Cir. 2002) (use of trademark in song title).

ESS Entertainment v. Rockstar: Video game uses animated image based on real strip club. Fair use?

• No nominative fair use: Rockstar Games did not design the Pig Pen to identify or refer specifically to the Play Pen => NFU defense doesn’t apply

• BUT First Amendment protects use of Play Pen’s trademarks and trade dress

Linden Labs: Proceed and Permit Notice

• “Linden Lab objects to any implication that it would employ lawyers incapable of distinguishing such obvious parody. Indeed, any competent attorney is well aware that the outcome of sending a cease-and-desist letter regarding a parody is only to draw more attention to such parody, and to invite public scorn and ridicule of the humor-impaired legal counsel. Linden Lab is well-known for having strict hiring standards, including a requirement for having a sense of humor, from which our lawyers receive no exception. . . . Notwithstanding the foregoing, it is possible that your use of the modified eye-in-hand logo for Second Life, even as parody, requires license from Linden Lab, especially with respect to your sale of goods with the parody mark at http://www.cafepress.com/getafirstlife/. Linden Lab hereby grants you a nonexclusive, nontransferable, nonsublicenseable, revocable, limited license to use the modified eye-in-hand logo (as displayed on http://www.getafirstlife.com/ as of January 21, 2007) to identify only your goods and/or services that are sold at http://www.cafepress.com/getafirstlife/. This license may be modified, addended, or revoked at any time by Linden Lab in its sole discretion.”

Secondary Liability

Contributory Liability• Intentional inducement OR• Supply with actual or constructive knowledge the

product will be used to infringe a mark – When service rather than product, court must consider

“the extent of the control exercised by the defendant over the third party’s means of infringement” Lockheed Martin Corp v. Network Solutions, Inc. 194 F. 3d 980, 984 (9th Cir. 1999).

– Specifically, there must be “direct control and monitoring of the instrumentality used by the third party to infringe.” Id.

– No liability where defendant lacked“the power to remove infringing material” or “directly stop [its]distribution of the Internet.” Perfect 10 v. Visa Int’l Service Assoc., et al., 494 F3d 788, 807 (9th Cir 2007)

Vicarious Liability

• Defendant and infringer must have:– Actual or apparent partnership– Authority to bind each other in

transactions with third parties OR– Joint ownership or control over

infringing product

The Innocent Infringer

• Limits liability for printers, publishers and broadcasters who innocently publish/broadcast infringing ads-- injunctive relief only.

• Extends to web marketplaces, e.g., eBay, if no prior knowledge of infringing nature of seller’s goods or services. Hendrickson v. eBay, 165 F.Supp.2d 1082 (C.D. Cal. 2001).

Trademark Dilution

• Dilution by blurring or tarnishment• In practice, tends to follow

infringement• Recent liberalization of standard--only

have to show likelihood of dilution• ONLY nationally famous marks• Fair use, noncommercial use and

constitutional limits apply