Unauthorized Use of Another’s Mark Online May Infringe or Qualify As Fair Use
Case law has developed criteria for determining when nominative fair use – i.e, use of another’s mark to refer to the mark’s owner or its product, rather than to the defendant – is, in fact, “fair.”
An oft-cited nominative fair use case, New Kids on the Block v. News America Publishing, Inc., 971 F.2d 302, 308 (9th Cir. 1992), held that a commercial user is entitled to a nominative fair use defense by satisfying three requirements:
- The product/service must not be “readily identifiable” without use of the trademark.
- “Only so much of the mark or marks may be used as is reasonably necessary to identify the product or service.”
- “The user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.”
This three-part test has been applied to evaluate trademark owners’ challenges when their trademarks are used in domain names, in metatags, and in other ways online. Some courts have focused more on whether the use is likely to cause confusion and whether any infringement can be based on a viewer’s initial confusion (referred to as “initial interest confusion”) if the initial confusion is dispelled once the viewer visits the site.
In 2002, in an early case of online use, the Ninth Circuit applied its New Kids test to find that the former Playmate of the Year 1981 could promote her title on her website and in the site’s metatags (see sidebar with cases that have considered whether fair use applies to various online uses of another’s mark). The defendant’s site did not present the “Playmate of the Year” title in the same font as the Playboy magazine title, nor did it display the Playboy bunny logo. By the time of trial, the site also posted a nonendorsement disclaimer. However, the repeated, stylized use of “PMOY #81” on the site’s wallpaper, or background, did not qualify as fair use.
Although the Ninth Circuit upheld the use of Playboy trademarks as metatags in the case of the former Playmate of the Year, other cases have reached a variety of conclusions based on the facts of the case, on whether the doctrine of initial interest confusion was recognized by the court, and whether the doctrine applied to the facts. If the trademark in question is actually used on the website itself, and in a legitimate way, as was the case with the Playmate of the Year 1981, then use of the trademark in metatags is likely to be defensible. On the other hand, if the website does not refer to the trademark that is hidden in metatags, or if the website does refer to the trademark but in a way that does not qualify as fair use, then use of the term in metatags is less likely to qualify as fair use.
Use of another’s mark in a domain name, like use as a metatag, may be an infringement or it may be non-infringing, depending on the likelihood of confusion. If the domain containing the other’s trademark is registered or used with a bad faith intent to profit from the mark, the use of the mark in the domain constitutes cybersquatting, even in the absence of likelihood of confusion. Fair use is not a defense to cybersquatting, but if the website accessible from the domain name uses the mark in a way deemed to be a fair use, then the bad faith element of the cybersquatting offense may not be met.
Trademark owners have challenged unauthorized use of their trademarks not only in domain names and metatags, but also in search engine advertising campaigns and keyword purchases. Typically, marketing advisors recommend these campaigns as a way to direct traffic to the advertiser’s website, to achieve a higher ranking in search results, and perhaps also to divert traffic from a competitor’s website. If the advertiser uses a trademark belonging to its competitor in a sponsored ad, it is likely to be infringing. However, the unauthorized use of another’s mark can be legitimate fair use, such as in comparative advertising that compares the advertiser’s product to the product of the trademark owner, or a gripe site that criticizes the products or services of the trademark owner.
Unauthorized use of another’s mark in search engine keyword purchases, however, will survive an infringement challenge, despite the absence of fair use, if the trademark owner cannot persuade the court or jury of likelihood of confusion.
Unfair or Deceptive Online Trademark Use Also Violates the Federal Trade Commission Act
While Section 43(a) of the Lanham Act provides a private right of action for false or misleading advertising, the FTC regulates advertising by its rules and guidelines and by bringing enforcement actions under the Federal Trade Commission Act, which bars “unfair or deceptive acts or practices.” Use of another party’s trademark or reference to another company in advertising can result in unintended violation of Section 5 of the FTC Act, 15 U.S.C. § 45.
In 2000, the FTC issued the Dot Com Disclosures, addressing how Section 5 of the FTC Act applies to online advertising. The guidance addressed the requirement to make affirmative disclosures when an ad would be deceptive or unfair without the affirmative disclosure. In 2013, the FTC updated the Dot Com Disclosures in a 53-page guide that illustrates how and when to make the disclosures on digital devices and otherwise online. The guidelines reaffirm that disclosures that are required to avoid evoking deception law must be presented clearly and conspicuously. If a smartphone’s screen size prevents a disclosure from being clear and conspicuous, then the ad should not be run in that medium.
The FTC’s “Guide Concerning the Use of Endorsements and Testimonials in Advertising” is also relevant to advertising that refers to another company. An endorsement is defined as any advertising message, including the “name or seal of an organization . . . that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser.”
As a general matter, the endorsement must reflect honest opinions of the endorser and may not convey express or implied representations that would be deceptive if made by the advertiser. If the advertisement states that the endorser uses the product, the endorser must have been a bona fide user of it. If there is a material connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement, such that the audience does not reasonably expect the connection, the guidelines advise that the connection should be disclosed. Endorsements by consumers are addressed separately from endorsements by experts and by organizations.
YouTube, for example, states that, as a courtesy to trademark owners, it has created trademark complaint procedures with respect to use of trademarked terms in connection with YouTube Promoted Videos promotions, which enable trademark owners to submit complaints via a link. A separate link is available for complaints about use of trademarks in a Sponsored Video. YouTube encourages trademark owners to resolve complaints directly with the YouTuber, but YouTube offers to perform a limited investigation of reasonable complaints, and may remove content in cases of clear infringement.
Twitter’s trademark policy prohibits the use of business names or logos with intent to mislead. Twitter reserves the right to reclaim usernames on behalf of businesses whose trademarks are used in usernames. Users are allowed to create news feed, commentary, and fan accounts, but the username and profile name should not be the trademark of the subject or company and the biography should include a statement to distinguish it from the company.
Instagram warns that, when appropriate, it will disable accounts of users who “repeatedly infringe other people’s intellectual property rights.”