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On Jan. 9, 2003, the U.S. Supreme Court granted certiorari to decide whether a fair use defense to trademark infringement can trump a finding of likely confusion. KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 328 F.3d 1061 (9th Cir. 2003), cert. granted, 124 S. Ct. 981 (2004). The decision to grant certiorari in this case is especially interesting in light of other recent cases also from the 9th U.S. Circuit Court of Appeals in which certiorari was denied. Among the cases not accepted by the Court is Jardine v. Brother Records, Inc., 318 F.3d 900 (9th Cir.), cert. denied, 124 S. Ct. 155 (2003). In that case, the 9th Circuit re-articulated its understanding of the fair use and nominative fair use doctrines and found that the defendant’s use of THE BEACH BOYS was not traditional fair use because the term was not used in its ordinary descriptive sense, but as a trademark. The 9th Circuit also found that the “nominative fair use defense” did not apply because the defendant could not show that he had done nothing to imply sponsorship or endorsement by the plaintiff. In a case involving issues closely related to Jardine, Garcia v. Horphag Research Ltd., 337 F.3d 1036 (9th Cir. 2003), cert. denied, 124 S. Ct. 1090 (2004), the petitioner unsuccessfully argued that the Supreme Court should clarify that initial interest confusion alone is not sufficient to prove likely confusion and that the 9th Circuit was wrong to require a defendant to relying on the nominative fair use defense to prove the absence of confusion. Unlike Horphag and Jardine, which have received a fair amount of discussion in the legal press, Lasting Impression passed by largely unnoticed. However, the fact that this case, unlike both Jardine and Horphag, involved only questions of traditional fair use not implicating trade names, such as THE BEACH BOYS or PYCNOGENOL, suggests that the Supreme Court believes it best to try to isolate the issues surrounding the traditional fair use defense for purposes of judicial review. As noted above, it is clear that the question of fair use is going to be critical in resolving many emerging trademark-related issues on the Internet. The fact that the Supreme Court accepted certiorari in the case with perhaps the simplest fact pattern suggests that the Supreme Court recognizes that these issues are complex and should not be ruled on prematurely. THE DECISIONS BELOW In Lasting Impression, the plaintiff, KP Permanent Make-Up (“KP”), filed for a declaratory judgment that its use of “MICROCOLORS” for permanent make-up did not infringe defendant Lasting Impression’s registration of a logo mark including the words “MICRO COLORS.” When the action commenced, the registration for the mark was incontestable. According to KP, however, the term “micro colors” is generic. KP also claimed that by virtue of its senior use of the term MICROCOLORS it was KP and not Lasting Impression whose rights were being infringed. The district court rejected Lasting Impression’s argument that its incontestable logo registration prevented KP from challenging the genericness of the term MICRO COLORS, because those words appeared in the registration as part of the logo. “[T]he presumption of distinctiveness is limited to the exact form of the mark as registered.” KP Permanent Make-Up, Inc. v. Lasting Impression, Inc., slip op. at 6 (C.D. Cal. May 16, 2001). Similarly, the district court found that Lasting Impression could not rely on the incontestable status of this logo registration to avoid proving secondary meaning in the phrase, which was registered only as part of the logo. Because Lasting Impression provided little evidence of secondary meaning, the district court concluded that MICRO COLORS was generic and that its use by KP was protected under the fair use doctrine. Based on these findings, the district court did not reach the question of whether KP’s use was likely to cause confusion. It granted KP’s motion for summary judgment and dismissed the case. The 9th Circuit reversed. The circuit court found that Lasting Impression obtained a federal registration in 1993 for the logo mark based on a claim of first use in April 1992. It also found that KP had begun using the phrase “micro color” as early as 1990 on its bottle labels, preceding the name of the pigment in the bottle (i.e., “MICROCOLOR: BLACK”). In 1999 KP began a new use of this term, namely the use of MICRO COLOR in a stylized format in its marketing brochures. As the 9th Circuit explained:
The brochures display the term ‘micro color’ in a stylized format. ‘Micro color’ sits directly over the word ‘pigment,’ and a vial with pigment flowing out of it is depicted to the side of the word display. Additionally, under both the vial and the phrase ‘micro color pigment’ is the word ‘chart.’ Both the words ‘pigment’ and ‘chart’ appear in a smaller size type than the term ‘micro color,’ making the term the most dominant feature of the image. The brochure on which this image appears contains a chart displaying all the various colors in which KP’s pigments are available.

The 9th Circuit disagreed with the district court’s treatment of Lasting Impression’s registration. It noted that the Park ‘N Fly decision by the Supreme Court involved the words “Park ‘N Fly” within a logo mark. Park ‘N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189 (1985). In Park ‘N Fly, the 9th Circuit, through Judge Anthony Kennedy (now Justice Kennedy) held that the most salient feature of the Park ‘N Fly logo registration was the words “Park ‘N Fly.” Park ‘N Fly v. Dollar Park and Fly, 718 F.2d 327 (9th Cir. 1983). As explained by the 9th Circuit in Lasting Impression, the Supreme Court in Park ‘N Fly expressly noted that Park ‘N Fly also owned a separate word-only registration which had not become incontestable, but concluded that the word-only registration did not affect the outcome of the decision. KP Permanent Make-up, Inc. v. Lasting Impression I, Inc., et. al, 328 F.3d 1061, 1068-1069 (9th Cir. 2003), citing 469 U.S. at 192 n.2. Thus, like the Supreme Court in Park ‘N Fly, the 9th Circuit held in Lasting Impression that the phrase MICRO COLORS was the most salient feature of the mark, and therefore protected by the presumption of validity conferred by its incontestable status. Based on this analysis, the burden was on KP to demonstrate the genericness of MICRO COLORS. The circuit court found that KP’s linguistic argument failed, as did its contention that Lasting Impression admittedly used the term in an arguably generic fashion. Thus, the 9th Circuit determined that Lasting Impression owned a mark subject to protection. The 9th Circuit also examined the evidence of fair use and likelihood of confusion. After explaining the difference between the nominative fair use defense and the classic fair use defense, the 9th Circuit stated that in a case involving the nominative fair use defense, proving a likelihood of confusion is irrelevant. The question in such cases ultimately is whether the defendant did anything to imply sponsorship or endorsement by the plaintiff of the defendant’s product. In contrast, in a traditional fair use case the likelihood of confusion factors still apply. Because its Sleekcraft confusion test is highly fact dependent, the 9th Circuit reversed and remanded for consideration of these factors. It may ultimately be significant that the 9th Circuit did not rule on likelihood of confusion. KP filed for certiorari on the limited question of whether “the classic fair use defense to trademark infringement require [sic] the party asserting the defense to demonstrate an absence of likelihood of confusion, as is the rule in the 9th Circuit, or is fair use an absolute defense, irrespective of whether or not confusion may result, as is the rule in other Circuits.” See KP’s Petition for Writ of Certiorari at i. KP noted with some force that if an affirmative defense of fair use applies only when the plaintiff failed to prove confusion, then it would apply only in cases in which there is no need for an affirmative defense because the plaintiff would have failed to make out its prima facie case in any event. One might think at first that the logo registration at issue in this case is a complicating factor likely to confuse more than instruct. But it was probably astute of the Supreme Court to take on this issue directly, since so many disputes about trademarks on the Internet involve the degree of protection for logo marks. For instance, the case now pending against American Blinds, in which Google seeks determination of whether its sale of the key words “American Blinds” is a trademark violation, involves an evaluation of what rights flow to American Blinds from its logo registration that includes the words “American” and “blinds.” Additionally, by focusing on a case involving words that are clearly descriptive, if not generic, the Supreme Court will be able to decide the role of confusion in a fair use case not clouded by debates over whether it was nominative or classic fair use. Indeed, the clearly descriptive nature of the marks involved may explain why the Supreme Court accepted Lasting Impression over the other cases. In this case the term “microcolor,” as first used by the plaintiff, appeared to identify a product in a descriptive manner. Therefore, unless the presence of confusion can create a different outcome, there is little doubt that this case falls within the ambit of the statutory fair use defense. The change in the nature of the plaintiff’s use will also allow the Supreme Court to analyze what the Lanham Act means by “use, otherwise than use as a mark.” 15 U.S.C. � 1115(b)(4). POLICY REPERCUSSIONS AND POSSIBLE OUTCOME From a policy viewpoint, the question raised in Lasting Impression is whether any use that causes confusion can ever be “fair.” The pro-trademark owner view will argue that any use causing confusion by definition cannot be use in “good faith.” The other side would counter that if a plaintiff has adopted as its trademark a mark that is so highly descriptive that the use of that term in its descriptive sense will cause confusion, then so long as it does nothing to advance this confusion, this use ought to be protected under the Lanham Act. Clearly, this question has many implications for application of the Lanham Act to the Internet. While perhaps not as “sexy” a case as others before it, the Supreme Court was wise to accept Lasting Impression as it will allow the Court to consider important legal issues in a less emotionally charged case. Predictions? Each time it has heard a trademark case since deciding Taco Cabana in 1992, the Supreme Court has scaled back relief for the trademark holder. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992), see Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003); Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003); TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001); Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205 (2000). In addition, the Supreme Court has reversed decisions by the 9th Circuit more than those of any other circuit. Thus, if history is a guide, one can anticipate that the Supreme Court will reverse the 9th Circuit and affirm the district court’s grant of summary judgment to the plaintiff. Stephen W. Feingold is a partner in the New York office of Pitney Hardin Kipp & Szuch LLP www.pitneyhardin.com, where he leads the firm’s Trademark and Copyright Group. Gerry A. Fifer and Elyse A. Marcus are attorneys in the Trademark and Copyright Group in the New York office. If you are interested in submitting an article to law.com, please click here for our submission guidelines. To subscribe to the monthly newsletter “The Intellectual Property Strategist,” click here.

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