Articles

Trademarks on the Internet: How Does Fair Use Fare?

Trademark World
February 1999

Article

The classic case is where a defendant uses a plaintiff's mark in a descriptive or nontrademark way to describe the defendant's products or services. For example, a defendant's use of the term "sweet-tart" to describe its cranberry juice that tasted both sweet and tart constituted a fair use of that term and thus did not infringe the plaintiff's trademark SWEETARTS for candy.¹ The Lanham Act explicitly recognizes this "descriptive" fair-use defense, for it prevents trademark registrants from appropriating descriptive terms for their exclusive use and thereby decreasing the potential words that may be descriptive or generic in nontrademark contexts.² The second classic case involves "nominative fair use," which arises when a defendant uses a plaintiff's mark to identify the plaintiff's products or services in conjunction with its own product or services. To invoke this defense, the defendant must show three things:

1) that its product or service cannot be readily identifiable without using the plaintiff's mark,

2) that it uses only as much of plaintiff's mark as necessary to identify defendant's product or service, and

3) that the defendant does nothing with plaintiff's mark that suggests endorsement or sponsorship by the plaintiff.

Thus, a newspaper was permitted to use plaintiff's mark NEW KIDS ON THE BLOCK in conjunction with a revenue-generating newspaper survey encouraging fans to call a 1-900 number and vote for "the best kid on the block."³ There was no alternative way of identifying the musical group, the defendant used only what was necessary of the plaintiff's mark to describe the group,⁴ and nothing in the defendant's use suggested endorsement by the plaintiff. But what happens to the fair-use defense in disputes arising on the Internet? Based on a handful of cases decided over the last year, the doctrine thrives in cyberspace.

Descriptive Fair Use

In Lewis v. Rocky Mountain Internet,⁵ the court implicitly recognized a descriptive fair-use defense.  Plaintiffs operated a website entitled "The Daily Rockies Web," located at the domain name "rockies.com." That site featured information about the Colorado Rockies major league baseball team ("The Rockies"), including reproductions of The Rockies' trademarks and logos, and several references and representations indicating an association with the team. Plaintiffs sought a declaratory judgment that they were not infringing The Rockies' federally registered trademarks. The Rockies counterclaimed to enjoin plaintiffs from posting information about The Rockies on their website. The court found The Rockies likely to succeed on the merits of its infringement and dilution claims, and granted a preliminary injunction prohibiting plaintiffs from using The Rockies' trademarks and logos in any manner (including use as metatags6) to identify themselves, to identify any website, or to identify any other publication owned or controlled by plaintiffs that was in any way related to baseball, unless a different source was clearly identified in conjunction with use of The Rockies' marks. Unlike most other domain-name cases finding infringement or dilution, however, the court did not completely enjoin plaintiffs' use of the "rockies.com" domain name.⁷ Instead, the court ordered the plaintiffs to refrain from using the name in connection with any website dedicated in whole or in part to professional baseball, thus implicitly recognizing that there might be other descriptive or nontrademark purposes for which plaintiffs could use the "rockies.com" domain name.⁸

A similar result ensued in CD Solutions, Inc. v. Tooker.⁹ Plaintiff, a manufacturer of compact discs or "CDs," sought a declaratory judgment that its domain name "cds.com" did not violate defendant's rights in the federally registered trademark CDS ("Commercial Documentation Services") for desktop publishing and printing services. The court granted plaintiff's summary judgment motion, finding that defendant could not preclude plaintiff's use of the "cds.com" domain name to refer to compact disc products and services. According to the court, the term "CDs" was generic for compact discs, and defendant thus could not expand the scope of its rights in the CDS mark to include plaintiff's generic and descriptive use of that term in its domain name.

Richards v. Cable News Network, Inc.,¹⁰ also involved the use of a generic term functioning as a trademark. Plaintiff owned the registered mark WORLD BEAT for a record label that sold prerecorded reggae-style tapes, records, and CDs. Defendant CNN operated a cable television show entitled "World Beat," which covered music news from around the world. CNN also maintained a "World Beat" section on its "cnn.com" website, which provided music information similar to the television show. Plaintiff sought to enjoin CNN's use of the WORLD BEAT name, alleging trademark infringement and unfair competition. The court found that the term "world beat" had become generic for a certain genre of music. It also noted CNN's "triple entendre" use of the term, to refer to the genre of "world music," to suggest the journalistic "beat" covering international music news, and to act as "a metaphor for the musical heartbeat of the globe." Recognizing the possibility of many nontrademark meanings for the term "world beat," the court held that although plaintiff continued to hold trademark rights in the term WORLD BEAT for prerecorded reggae music, he could not preclude CNN's use of the term in its generic sense in connection with its television show or website.  

In Avery Dennison Corp. v. Sumpton,¹¹ however, the court rejected the defendant's fair-use argument.  Avery Dennison ("AD"), owner of the well-known, federally registered trademarks AVERY and DENNISON for office products, moved for summary judgment on its trademark-dilution claim against Freeview Listings, Ltd. ("Freeview"), a Canadian Internet service provider. Freeview operated a service leasing e-mail addresses consisting of 12,000 family-name domains that capitalized on an Internet user's desire to have an e-mail address that includes the user's family name. Similar to a vanity license plate for an automobile, a user could lease an e-mail address containing the user's name (e.g., "john@smith.net") if Freeview held the desired domain name. The court granted AD's motion, labeling Freeview a "cybersquatter" and ordering it to transfer its domain name registrations for "avery.net" and "dennison.net" to AD in exchange for AD's payment of $300 per domain-name registration. The court held that Freeview's registration and use of the domain names constituted "commercial use" because Freeview did not use the domain names as its own but was in the business of selling or licensing use of the names to others. Notwithstanding Freeview's self-imposed limitation on the use of the domain names as e-mail addresses having meanings as surnames, the court held that the domain names possessed all meanings attributable to the words "Avery" and "Dennison," including as AD's trademarks. The court noted that nothing would prevent Freeview from changing its intended use of the domain names to selling or licensing them to the highest bidder. Although the court realized it could attempt to limit its denial of relief only so long as Freeview's business remained the same, the court believed "the result would almost certainly be to eliminate 12,000 words from their highest and best use as domain names." The court recognized the wide sweep of its ruling and the possibility that there may be legitimate, nontrademark uses of domain names that could overlap with famous trademarks. It noted, however, that this case did not involve such a situation as where a registrant might seek a domain name that corresponds with his surname. An appeal to the Ninth Circuit was filed on April 16, 1998, and is still pending. The Avery Dennison case arguably stands at odds with the Lewis, CD Solutions, and Richards decisions. The Avery Dennison court prohibited all use of the domain names by the defendant, including nontrademark uses, whereas the other courts declined to enjoin nontrademark uses of the domain names at issue. Perhaps the fact that the defendant in Avery Dennison had registered over 12,000 domain names played a role in the court's decision to issue a complete injunction. As a matter of public policy, the court stated that the defendant's use of the 12,000 domain names was not the "highest and best use." As noted above, however, the court distinguished this case from the situation where a domain name registrant having "Avery" or "Dennison" as a surname registered the "avery.net" or "dennison.net" domain names, leaving open the possibility that a fair-use defense might be successful under those circumstances.

Nominative Fair Use

In Patmont Motor Werks, Inc. v. Gateway Marine, Inc.,¹² the court applied the nominative fair-use defense in the Internet context. Defendant used plaintiff's GO-PED mark as a part of the postdomain path in its URL, www.idiosync.com/goped. Defendant also used the GO-PED mark on its website in connection with the resale of plaintiff's GO-PED branded motor scooters. Addressing plaintiff's claims of infringement, dilution, and unfair competition, the court recognized the "nominative fair-use" defense and found that defendant's use of the GO-PED mark to describe the items it offered for sale did not constitute trademark use. First, there was no viable way for defendant to identify the goods it offered without using plaintiff's mark. Second, defendant used the mark only to the extent necessary to convey information regarding the brand of the product. It did not use the GO-PED logo or any distinctive lettering. Third, defendant's use of the mark could not be construed to indicate sponsorship or endorsement by plaintiff. The court held as a matter of law that use of another's mark as a postdomain path in a URL by itself does not suggest endorsement, while use as a domain name itself might. The court thus granted defendant's motion for summary judgment on plaintiff's trademark claims and vacated an earlier preliminary injunction.

The court in Playboy Enterprises, Inc. v. Welles,¹³ also invoked the nominative fair-use defense¹⁴ to defeat a trademark owner's infringement and dilution claims. Defendant Terri Welles won the title "Playmate of the Year" in 1981 from plaintiff PEI, publisher of PLAYBOY magazine and owner of the federally registered trademarks PLAYBOY, PLAYMATE, PLAYMATE OF THE MONTH, and PLAYMATE OF THE YEAR, the latter commonly abbreviated as PMOY. Welles established an Internet website located at the domain name "terriwelles.com," where she promoted herself as "Terri Welles-Playmate of the Year 1981" and provided links to other adult websites. PEI sued to preliminarily enjoin her use of PLAYMATE OF THE YEAR in the title of her website, her use of "PMOY '81" as a repeating background on the site, and her use of the terms PLAYBOY and PLAYMATE as metatags for the site, on the grounds that such uses infringed and diluted PEI's famous marks.The court denied PEI's motion on all counts, finding that Welles's use of PEI's marks were proper fair uses. According to the court, Welles had used PEI's marks in good faith to identify and describe herself as a former PLAYMATE OF THE YEAR, and there was no other way to describe the title bestowed on her by PEI. The court noted in Welles's favor that she did not use PEI's distinctive font or bunny logo anywhere on her site and that she had inserted disclaimers on almost every page of her website stating that her site was not affiliated with or endorsed by PEI and acknowledging PEI's ownership of its registered trademarks. As to Welles's use of PEI's marks as metatags, the court refused to find infringement where the metatags legitimately referenced editorial uses of the terms in the text of her website, as well as the subject of her site, namely, her identity as "Playboy Playmate of the Year 1981."¹⁵ It is interesting to note that the court permitted Welles's continued use of "PMOY '81" as a repeating background on her website. Though "PMOY '81" was an abbreviation of the title she was otherwise permitted to use descriptively, repeating the mark on the background on her web pages may have arguably exceeded the bounds contemplated by the fair-use doctrine-namely, to use what is necessary to describe one's goods or services, and no more.¹⁶

Conclusion

As these cases demonstrate, the basic tenets of both the descriptive and the nominative trademark fair-use defenses apply in cyberspace just as they do in more traditional contexts.¹⁷ We can expect to see more cases like these, where defendants will argue, and courts will continue to recognize, that the fair-use doctrine is alive and well on the Internet.

Endnotes
¹ See Sunmark, Inc. v. Ocean Spray Cranberries, Inc., 64 F.3d 1055 (7th Cir. 1995).

² See 15 U.S.C.A. § 1115(b)(4) (West 1998) (providing that "the use . . . of a term . . . which is descriptive of and used fairly and in good faith only to describe the goods or services of such party" is a defense to trademark infringement).

³ See New Kids on the Block v. News America Publ'g, 971 F.2d 302, 308 (9th Cir. 1991).

⁴ The second "nominative fair-use" requirement dictates that "only so much of the mark . . . may be used as is reasonably necessary to identify the product or service." Id. Thus, where a defendant uses a plaintiff's distinctive lettering style, color scheme, or logo, the nominative fair-use defense likely will fail. See, e.g., Chrysler Corp. v. Newfield Publications, Inc., 880 F. Supp. 504, 512 (E.D. Mich. 1995) (rejecting the fair-use defense on grounds that defendant adopted more of plaintiff's marks than necessary when it used plaintiff's distinctive lettering); Volkswagenwerk Aktiengesellschaft v. Church, 411 F.2d 350 (9th Cir. 1969) (finding fair use in part because defendant did not use plaintiff's distinctive lettering style or logo).

⁵ 96-CV-4693 (D. Colo. Sept. 26, 1997).

⁶ Metatags are keywords hidden in the HTML code of a web page. They enable search engines to index the web page so that it can be recalled as a "hit" when the keywords are entered as a search query. Thus, a web page about baseball might include as metatags: baseball, sports, home run, outfield, and strike-out.

⁷ See, e.g., McGraw v. Salmon, 1998 U.S. Dist. LEXIS 10987 (C.D. Cal. June 30, 1998); Panavision Int'l, L.P. v. Toeppen, 945 F. Supp. 1296 (C.D. Cal. 1996), aff'd, 141 F.3d 1316 (9th Cir. 1998); Playboy Enters., Inc. v. Calvin Designer Label, 985 F. Supp. 1220 (N.D. Cal. 1997); Hasbro, Inc. v. Internet Enter. Group, Ltd., 40 U.S.P.Q.2d 1479 (W.D. Wash. 1996).

⁸ For example, the "rockies.com" domain name could be used in connection with a tourism website for the Rocky Mountains area.

⁹ 47 U.S.P.Q.2d 1755 (D. Or. 1998).

¹⁰ 15 F. Supp. 2d 683 (E.D. Pa. 1998).

¹¹ 999 F. Supp. 1337 (C.D. Cal. 1998).

¹² 1997 WL 811770 (N.D. Cal. Dec. 18, 1997).

¹³ 7 F. Supp. 2d 1098 (S.D. Cal. 1998).

¹⁴ Although the court did not discuss the case as involving nominative fair use, it falls within this group of cases because defendant used plaintiff's marks to refer to plaintiff's goods and services rather than her own.

¹⁵ Contrast this "editorial" use with Playboy Enterprises, Inc. v. Calvin Designer Label, 985 F. Supp. 1220 (N.D. Cal. 1997), and Playboy Enterprises, Inc. v. AsiaFocus International Inc., 3 E.C.L.R. (BNA) 599 (E.D. Va. Apr. 10, 1998). In these cases, the defendants used PEI's registered marks PLAYBOY and PLAYMATE in their metatags, though their Websites bore no relation to the goods or services of PEI. This clearly is not fair use under the Welles analysis. A question arises, however, about whether a company could use a competitor's marks as metatags on its website where there is comparative advertising mentioning that competitor on the website. Since comparative advertising is a permissible nontrademark use, see Smith v. Chanel, Inc. 402 F.2d 562 (9th Cir. 1968), and 15 U.S.C.A. § 1125(c)(4)(A) (West 1998), the inclusion of a competitor's mark in the metatags would arguably "reference the legitimate editorial uses of the [competitor's mark] contained in the text of defendant's website." Welles, 7 F. Supp. 2d at 1104. The authors are not aware of any decisions on this issue.

¹⁶ See New Kids on the Block v. News America Publ'g, 971 F.2d 302, 308 (9th Cir. 1991) (holding that in nominative fair-use cases, the defendant's use must be kept to a minimum, using only what is necessary to identify or describe the goods or services).

¹⁷ As in traditional trademark cases, there are also limits to what the court will accept as fair, nontrademark use of another's trademark. See Jews for Jesus v. Brodsky, 993 F. Supp. 282 (D.N.J.) (enjoining defendant from using "jewsforjesus.org" for a website espousing views antithetical to plaintiff's organization), aff'd, No. 98-6031 (3d Cir. 1998); Planned Parenthood Fed'n of America v. Bucci, 42 U.S.P.Q.2d 1430 (S.D.N.Y. 1997) (enjoining defendant from using domain name "plannedparenthood.com" for an antiabortion website), aff'd, 152 F.3d 920 (2d Cir.), cert. denied, 1998 WL 249092 (U.S. Oct. 5, 1998). In both cases, the plaintiffs' marks were used by the defendants, not to identify or describe their goods or services, or as editorial commentary on the plaintiffs' services, but to intentionally divert traffic away from the plaintiffs' websites. These were considered trademark uses and the defendants were subject to liability for trademark infringement and dilution.

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