This article will address the doctrine of nominative fair use under the trademark laws. In a prior article, I discussed the doctrine of descriptive fair use. In a descriptive fair use case, the defendant uses the plaintiff’s trademark to describe its own product or service. In contrast, in a nominative fair use case, the defendant uses the plaintiff’s trademark to describe the plaintiff’s product, even though its ultimate goal is to describe its own product or service.
In the Ninth Circuit
The nominative fair use doctrine was first recognized by the Ninth Circuit in New Kids on the Block v. News America Publishing, 971 F. 2d 302 (1992). The elements of this doctrine in the Ninth Circuit are that: (1) the product or service in question must be one not readily identifiable without use of the trademark; (2) only so much of the mark is used as is reasonably necessary to identify the product or service; and (3) the user must do nothing that would suggest sponsorship or endorsement by the trademark holder.
In New Kids, the plaintiff was a popular teen band, and the defendants were two newspapers. The newspapers used the trademark to publicize their telephone polls about the band. The Ninth Circuit found that all three requirements were satisfied. First, the newspapers could not offer this “service” without use of the band’s name. Second, the newspapers only named the band in order to identify them as the subject of the polls. Third, nothing in the announcements suggested endorsement or joint sponsorship by the band. Significantly, in the Ninth Circuit, the nominative fair use analysis is not an affirmative defense. Rather, it replaces the multipart likelihood of confusion test. Cairns v. Franklin Mint Co., 292 F.3d 1139, 1151 (9th Cir. 2002).
In the Third Circuit
The Third Circuit has also expressly adopted the nominative fair use doctrine, but its approach is different than that of the Ninth Circuit. In the Third Circuit, the plaintiff must first show that there is a likelihood of confusion. Assuming that the plaintiff does so, the defendant can still avoid liability by establishing nominative fair use as an affirmative defense. Century 21 Real Estate v. Lendingtree, 425 F.3d 211 (3d Cir. 2005). The same three factors used by the Ninth Circuit are to be considered, but they are articulated somewhat differently in the Third Circuit. As to the first requirement, the Third Circuit stated that while it should be shown whether the plaintiff’s product needs to be identified by its mark, it also should be examined “whether defendant’s use of it … is necessary to accurately describe what defendant does or sells, or whether its reference to plaintiff’s mark is … gratuitous.” The Third Circuit added that it need not be shown that defendant’s use of the mark is indispensible in order to find this factor fulfilled. Rather, the district courts only need to be satisfied “that the identification by the defendant of plaintiff’s product or service would be rendered significantly more difficult without use of the mark.” As to the second requirement, while the Ninth Circuit requires that the defendant use only so much of the mark as necessary to identify the plaintiff’s product or service, the Third Circuit’s test is “whether the quantum of the plaintiff’s mark used by the defendant was appropriate.” Finally, the Third Circuit’s standard for the third requirement is whether the “defendant’s conduct or language reflect the true and accurate relationship between plaintiff and defendant’s products or services.” This includes both what the defendant did to suggest sponsorship, as well as its “failure to state or explain some aspect of the relationship.”
In the Second Circuit
The Second Circuit, and the district courts within it, have recognized the nominative fair use doctrine and used it for numerous years, including several district court decisions adopting the Ninth Circuit’s test. However, prior to 2016, the Second Circuit had not endorsed either the Ninth or Third Circuits’ test for nominative fair use. In International Information Systems Security Certification Consortium v. Security University, 823 F.3d 153 (2016), the Second Circuit announced its test for the application of nominative fair use, rejecting the approach of both the Ninth and Third Circuits.
The Second Circuit disagreed with the Third Circuit that nominative fair use is an affirmative defense to a showing of a likelihood of confusion. The flaw found by the Second Circuit is that the Third Circuit’s rationale was based a Supreme Court’s decision finding that descriptive fair is an affirmative defense. More specifically, the Second Circuit found that the Supreme Court’s decision was distinguishable because descriptive fair use is statutorily defined as an affirmative defense, while nominative fair use was judicially created. The Second Circuit also disagreed with the Ninth Circuit that nominative fair use supplants the likelihood of confusion test. The Second Circuit concluded that, in assessing whether there was a likelihood of confusion, the district court “should consider the Third and Ninth Circuit’s nominative use factors in addition to [analyzing each of] the Polaroid factors.”1
The Second Circuit articulated the second and third requirements of nominative fair use somewhat differently from both the Third and Ninth Circuits. As to the second nominative use factor, the Second Circuit stated that a district court should consider “whether the alleged infringer ‘step[ped] over the line into a likelihood of confusion by using the senior user’s marks too prominently or too often, in terms of size, emphasis or repetition.’” As to the third requirement, the Second Circuit stated that, “courts must not … consider only source confusion, but rather must consider confusion regarding affiliation, sponsorship or endorsement by the mark holder.”
In this author’s view, International Information Systems does not provide adequate guidance for a district court to apply the nominative fair use factors in the overall assessment of whether a likelihood of confusion exist. While the Second Circuit appears to be saying that both the Polaroid and nominative use factors should be considered on a case-by-case basis as part of a single analysis, it does not sufficiently delineate what weight should be given to the nominative fair use factors as compared to the Polaroid ones. It appears to be an open question under the test adopted by the Second Circuit in International Information Systems whether a strong showing in a particular case that all of the nominative use factors are so telling that they would trump a showing of likelihood of confusion under the Polaroid test.2 It remains to be seen how the district courts within the Second Circuit will apply International Information Systems.
To date, there is only one reported district court decision applying International Information System. In Nespresso USA v. Africa America Coffee Trading Co., 2016 WL 3162118 (S.D.N.Y. June 2, 2016), the district court used both the Polaroid factors and the nominative use ones, seemingly applying the International Information Systems test. In that case, the plaintiff was a well-known maker of espresso as well as espresso machines. It also made and sold espresso capsules for use in its espresso makers. The defendant made espresso capsules which were compatible with plaintiff’s machines. The district court applied the Polaroid factors and found that they showed that plaintiff had “met its burden of demonstrating a likelihood of confusion.” The district court then found that defendant’s use of plaintiff’s marks fit the definition of nominative use. The district court stated that it must consider the nominative use factors and, upon doing so, found that they were not met. The district court concluded that defendant’s “highly stylized, eye-catching use of the [plaintiff's] mark is likely to create ‘confusion regarding affiliation, sponsorship, or endorsement by’” plaintiff. It further found that defendant failed the second nominative fair use factor by stepping “‘over the line into a likelihood of confusion by using the [plaintiff's] mark too prominently … in terms of … emphasis.’” It is not clear how the district court was applying the International Information Systems test. The district court applied the Polaroid test for likelihood of confusion and the nominative use test separately, and found that each of them called for a finding of infringement. The district made no attempt to determine the interplay between the two tests, and how they should be balanced. By finding that plaintiff had met its burden under the Polaroid test, and then shifting to a separate analysis of the nominative fair use test, the decision could be read as treating nominative fair use as a defense to liability, which is inconsistent with International Information System.
1. In its decision in Polaroid v. Polarad Elecs., 287 F. 2d 492 (1961), the Second Circuit established an eight factor test to determine a likelihood of confusion. They are: (1) the strength of the Plaintiff’s mark; (2) the degree of similarity of the marks; (3) the proximity of the products; (4) the likelihood the parties will bridge the gap; (5) actual confusion; (6) the defendant’s intent in using the mark; (7) the quality of the defendant’s product; and (8) the sophistication of the buyers. This test continues to be used in the Second Circuit.
2. The Second Circuit in International Information Systems cited with approval its prior decision in Tiffany (NJ) v. eBay, 600 F. 3d 93 (2010), which found that nominative fair use can defeat a trademark infringement claim where defendant’s use of plaintiff’s mark “is necessary to describe that plaintiff’s product and does not imply a false affiliation or endorsement by plaintiff of the defendant.”