Internet Trademark Case Summaries
J.K. Harris & Co. v. Kassel
62 U.S.P.Q. 2d 1926 (N.D. Cal. 2002), modified in part, 253 F. Supp. 2d 1120 (N.D. Cal. 2003)
Plaintiff provided tax-related services under the trade name “J.K. Harris,” and defendant operated a competing service through its “taxes.com” website. Defendant began posting criticisms about plaintiff’s services on its website, which it designed to maximize its search-engine placement when users searched for the term “JK Harris.” For example, defendant (1) used plaintiff’s trade name and permutations as a keyword seventy-five separate times; (2) created “header Tags” and “underline Tags” around sentences that used plaintiff’s trade name; (3) increased the font size and underlined sentences containing plaintiff’s trade name; (4) placed sentences containing plaintiff’s trade name at the top of its web pages; and (5) used hyperlinks to websites with information about plaintiff. As a result, when plaintiff’s trade name “JK Harris” was typed into a search engine, defendant’s website (entitled “Complaints about JK Harris Pile Up”) was listed among the first ten returned websites. Plaintiff alleged that defendant’s excessive use of its trade name caused initial-interest confusion in violation of Section 43(a) of the Lanham Act. Defendant countered that its use was a nominative fair use. Analyzing the nominative fair-use test, the court initially noted that defendant’s use of plaintiff’s trade name in links to other websites, even when disseminating truthful factual information, constituted a nominative fair use. Turning to the three prongs of the nominative fair-use test, the court held that defendant met the first prong because “J.K. Harris” is not readily identifiable without using the name. Defendant also met the third prong because it was clear that plaintiff did not endorse or sponsor defendant’s criticism website. But defendant failed to meet the second prong, which required that defendant use only so much of the mark as is reasonably necessary. Defendant’s uses of plaintiff’s trade name repeatedly in its keywords, in its tags, in a larger font, in underlined sentences, and in sentences placed at the top of its website went beyond what was “reasonably necessary” to identify plaintiff. In making this determination, the court cited the Ninth Circuit’s decision in Playboy v. Welles, which suggests that repeated uses of metatags may go beyond a nominative fair use. The court also held that defendant’s excessive use of the “JK Harris” trade name was likely to cause initial-interest confusion. Although the court issued a temporary restraining order and then a preliminary injunction against defendant, it did not enjoin all use of the “JK Harris” name. Rather, it prohibited defendant from “using more of Plaintiff’s trade name than is reasonably necessary to identify that it is Plaintiff’s services being described, including using ’J.K. Harris’ or any permutation thereof as a keyword . . . more often than is necessary to identify the content of the website; using ‘header Tags’ and ‘underline Tags’ around sentences including Plaintiff’s trade name on Defendant’s website . . . ; and increasing the prominence and font size of sentences which include Plaintiff’s trade name.”
On March 28, 2003, the district court granted the defendants’ request for reconsideration, vacated its March 2002 order, and issued a revised order. Specifically, the court withdrew its prior analysis of the nominative fair-use doctrine. As noted above, the court originally held that defendant did not meet the second prong of the nominative fair-use test because it used more of plaintiff’s mark that was reasonably necessary. In this new decision, however, the court held that defendant did in fact meet the second prong of the nominative fair-use test. In particular, the court noted that although defendant’s use of the mark was both “frequent and obvious,” those references were not “gratuitous.” Rather, defendant used the J.K. Harris name to refer to plaintiff by name so it could criticize plaintiff and did not use plaintiff’s mark more than necessary for that task. According to the court, “This referential use of Plaintiff’s trademark is exactly what the nominative fair use doctrine is designed to allow.” The First Amendment implications of defendant’s use of plaintiff’s mark for critical commentary appeared to greatly influence the court’s reconsideration of its earlier analysis. The court thus vacated the temporary restraining order, and denied plaintiff’s motion for preliminary injunction regarding defendant’s use of plaintiff’s mark in the ways described above.