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Must a defendant demonstrate an absence of likelihood of confusion when asserting a fair use defense to trademark infringement? The 9th U.S. Circuit Court of Appeals has answered this question in the affirmative in KP Permanent Make-Up, Inc. v. Lasting Impressions I, Inc. [FOOTNOTE 1] Diametrically opposed to this view is the 2nd Circuit, which has held that fair use is an absolute defense to trademark infringement, thereby eliminating the need to reach the likelihood of confusion issue. [FOOTNOTE 2]The U.S. Supreme Court’s review of KP Permanentnext term will finally resolve this conflict. The facts giving rise to KP Permanentbegan in 1993, when Lasting Impressions registered the mark MICRO COLORS with the U.S. Patent & Trademark Office to describe its line of permanent makeup pigments. In March 2000, KP Permanent Make-Up commenced a declaratory relief action against Lasting Impressions, alleging that the term “micro colors” was merely a descriptive term and, since KP had been using it since 1991, the company was entitled to continue using the term in its marketing and advertising. Lasting Impressions counterclaimed, alleging that the use of the registered term infringed its incontestable mark. The U.S. District Court for the Central District of California granted summary judgment in favor of KP, finding that “micro color” was generic, or if not generic, descriptive. The court further found that KP’s use of the term was protected as a fair use, and thus, declined to address likelihood of confusion. On appeal, the 9th Circuit reviewed the elements required to assert a fair use defense, relying on its own previous holding in Cairns v. Franklin Mint Company, 292 F.3d 1139 (2002). Cairnsheld that the classic fair use defense “only complements the likelihood of customer confusion analysis” and that “nominative fair use … replaces the likelihood of customer confusion analysis.” Since KP Permanentinvolved classic fair use, and the 9th Circuit held that “when the classic fair use defense is raised, it is still necessary to analyze likelihood of confusion,” it reversed the district court’s ruling, holding that before concluding that KP’s use of “micro color” fell within the purview of the defense, the district court should first have conducted a likelihood of confusion analysis. Thus, the court denied summary judgment on the fair use defense. This holding directly conflicted with the fair use standard set forth by the 2nd Circuit in Cosmetically Sealed Indus., Inc. v. Chesebrough-Pond’s USA Co., 125 F.3d 28 1997). Faced with a split among the circuits, the U.S. Supreme Court granted certiorari to determine the elements of the fair use defense to an incontestable trademark as set forth in the Lanham Act, 15 U.S.C. �1115(b)(4). THE CIRCUIT SPLIT The fair use defense was enacted to prevent the monopolization of descriptive language. The defense prevents a trademark registrant from appropriating a descriptive term for its own use to the exclusion of others who may be prevented from accurately describing their own goods, or a characteristic of those goods. Section 33(b)(4) of the Lanham Act defines fair use as:
a use, otherwise than as a mark … of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of [another] party, or their geographic origin.

While courts by and large have been consistent in determining which terms can be afforded protection under a fair use analysis, they have differed in determining whether or not fair use is an absolute defense. [FOOTNOTE 3] As described earlier, the 9th Circuit construes the classic fair use doctrine to provide a valid defense to an infringement action only after the defendant has proven an absence of likelihood of confusion. The KP Permanentcourt reversed the district court’s finding of summary judgment for the defendant, stating that since “the application of the [likelihood of confusion] factors involves numerous genuine issues of material fact,” summary judgment was inappropriate. The 9th Circuit did not attempt to justify its decision by reference to the language or legislative history of the Lanham Act for indeed, it could not — the Lanham Act nowhere discusses the requirement that a likelihood of confusion must be disproved by a defendant asserting a fair use defense. The standard articulated by the 9th Circuit has raised the evidentiary bar for defendants to obtain relief using the classic fair use defense in an infringement action. The 9th Circuit requires a defendant to demonstrate that the allegedly infringing mark is used otherwise than as a mark, to describe the defendant’s goods or services, that it is used fairly and in good faith, and that there is no likelihood of customer confusion arising from such use. The same view is held by the well-known commentator J. Thomas McCarthy, who states that it is inconsistent to find both likely confusion and a fair use. He has concluded that “[a] court should never find that likelihood of confusion exists but refuse to enjoin it because defendant’s use is ‘fair.’” [FOOTNOTE 4] The 2nd Circuit has taken a position that is directly in conflict with that of the 9th Circuit, holding that fair use is a complete defense to trademark infringement. In Cosmetically Sealed, the court held that fair use is a defense to liability even if a defendant’s conduct would otherwise constitute trademark infringement, i.e., there is a likelihood of confusion. Both parties in that case were in the cosmetics business. The plaintiff marketed a lip gloss under the registered trademark “SEALED WITH A KISS.” The defendant used a promotional display involving postcards that bore the message “Seal it with a Kiss!!” While acknowledging that the phrases were “assuredly close,” the court, finding for defendant, held that the message was descriptive and went on to blame the plaintiff for taking a risk by “selecting as its mark a phrase that was not only descriptive but readily recognized by consumers.” OTHER CIRCUITS While the positions of the 9th and 2nd circuits represent the two extremes of the fair use spectrum, the Restatement (Third) of Unfair Competition takes an intermediate position. The Restatement, at �28, cmt. b (1995), provides that “[t]he fair use defense can be applicable even if a trademark owner presents sufficient evidence to prove a likelihood of confusion. … A defendant who uses a descriptive term fairly and in good faith to describe its goods or services is not liable for infringement even if some residual confusion is likely.” Some circuits have adopted the Restatement position, while others have taken different approaches. The 1st Circuit, in Leathersmith of London, Ltd. v. Alleyn, has interpreted the likelihood of confusion as an alternative to the fair use defense, not as an element of the defense. [FOOTNOTE 5] The Leathersmithcourt first held that there had been no showing of likelihood of confusion and thus, no infringement. Then the court held that the defendant met the elements of the fair use defense, thus finding for the defendant. The 4th Circuit looks at the degree of customer confusion in its fair use analysis, noting that a use is less likely to be found fair if there is a degree of confusion. In Shakespeare Company v. Silstar Corporation of America, 110 F.3d 234 (1997), the court held that a finding of likely confusion does not preclude consideration of the fair use defense. The court concluded: “It defies logic to argue that a defense may not be asserted in the only situation where it even becomes relevant. If a fair-use defense is not to be considered when there is a likelihood of confusion, then it is never to be considered.” The 5th Circuit held, in Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1181 (1980), cert. denied, 450 U.S. 981 (1981), that even if there were confusion, the defendant would still be entitled to prevail on its fair use defense if it met the elements of �1115(b)(4), since “to hold otherwise would effectively eviscerate the fair-use defense.” A few years later in Zatarains. Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786 (1983), the 5th Circuit held that the fair use defense is available “so long as such use does not lead to customer confusion as to the source of the goods or services.” The 7th Circuit has recognized that the fair use defense cannot be maintained in a trademark infringement action if there is a likelihood that consumer confusion would result from defendant’s good faith use of the allegedly infringing term. [FOOTNOTE 6] The 8th Circuit, in Dow Brands v. Helene Curtis, 863 F.Supp. 963 (D.Minn. 1994), initially grappled with the issue of whether the fair use defense is available only in actions involving descriptive marks. Since there was no 8th Circuit precedent on this question, the court examined the law of other jurisdictions, concluding that the fair use defense is not limited to descriptive marks, but can be applicable as against all incontestable registered marks. As for the interplay between the fair use defense and likelihood of confusion, the court noted that “a fair use defense cannot be maintained if there is a likelihood that consumer confusion would result from defendant’s good faith use of the allegedly infringing term.” CONCLUSION The subject of fair use and likelihood of confusion arrived at the Supreme Court’s doorstep on two other occasions, but never saw the light of day: Two similar petitions for certiorari from the 1st and 5th circuits were denied in the early 1980s. Next term, the Court will finally have the opportunity to provide the trademark bar with long-awaited guidance about the interplay of the fair use defense and likelihood of confusion in trademark actions. If the Court affirms KP Permanent, the ruling would have far-reaching implications for trademark owners and practitioners alike. First, summary judgment would rarely be granted when a fair use defense is asserted because the defendant would have an additional element in his burden of proof — that of disproving likelihood of confusion — a fact-intensive inquiry typically part of the plaintiff’s case. A defendant using a descriptive term to describe — in good faith — his goods or services would have to incur the expense of conducting a survey and/or going to trial to prove an absence of likelihood of confusion. Should this occur, lawsuits involving a fair use defense would become far more protracted, more costly and would deplete already scarce judicial resources. Second, free competition could be jeopardized by limiting a competitor’s ability to accurately describe his goods lest he be sued for trademark infringement by the owner of a descriptive mark. Indeed, the danger exists that some owners of descriptive marks may try to monopolize descriptive terms, which is inconsistent with the principles of trademark law. In sum, trademark lawyers should be sure to track this case, as it could well shape the way companies and their marketing departments develop and create new brands and trademarks and the way lawyers counsel their clients regarding these important issues. Lynda M. Braun is counsel in the litigation department and a member of the IP media practice group of Weil, Gotshal & Manges ( www.weil.com ). Kaanji Irby, an associate at the firm, assisted in the preparation of this article. If you are interested in submitting an article to law.com, please click here for our submission guidelines. FOOTNOTES: FN1328 F.3d 1061 (9th Cir. 2003), cert. granted, 124 S. Ct. 981 (Jan. 9, 2004). FN2See Cosmetically Sealed Indus., Inc. v. Chesebrough-Pond’s USA Co., 125 F.3d 28 1997). FN3Courts have established two types of fair use: (i) classic fair use, in which the defendant uses the plaintiff’s mark to describe the defendant’s own product; and (ii) nominative fair use, in which the defendant uses the plaintiff’s mark to describe the plaintiff’s product. This article addresses the classic fair use defense, as nominative fair use is not applicable in the case at bar. FN4McCarthy on Trademarks & Unfair Competition �11:47 (4th ed. 2004). FN5695 F.2d 27 (1st Cir. 1982), cert. denied, 459 U.S. 1209 (1983). FN6 Sunmark, Inc. v. Ocean Spray Cranberries, Inc., 64 F.3d 1055 (7th Cir. 1995).

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