Supreme Court Expands Trademark Defense of Fair Use

On Dec. 8, 2004, the Supreme Court, in KP Permanent Make-up, Inc. v. Lasting Impression I, Inc., reversed a Ninth Circuit decision, holding that a defendant raising the trademark defense of fair use does not have to show that its use of a descriptive term is not confusingly similar to the mark at issue.

In trademark law, the fair use defense provides that a defendant may use an otherwise protected mark not as a trademark but merely for its descriptive meaning. For example, the term “apple” is a registered trademark for computers. However, it is fair use for others to use that word commercially to describe the fruit. By contrast, the more commonly known concept of copyright fair use provides a limited right to use portions of copyrighted material, such as the contents of a book or a song, without authorization from the copyright owner for purposes such as educational use or parody.

In this case, in response to a cease and desist letter from Lasting, KP sought a declaratory judgment that its use of the term “microcolor” did not infringe on Lasting’s “Micro Colors” trademark. Lasting counterclaimed, claiming trademark infringement by KP. At issue was whether KP, by raising the statutory affirmative defense of fair use under the federal Lanham Act, 15 U.S.C. § 1115(b)(4), had the burden of showing that its fair use did not create any likelihood of confusion with Lasting’s mark. The Court noted that a plaintiff in a trademark infringement action must show likelihood of confusion before an affirmative defense is even required. The statutory affirmative defense of fair use requires only that the defendant used the mark as a descriptive term in good faith to describe the goods, services, or their geographic origin. See § 1115(b)(4). According to the Court, “it makes [no] sense to provide an affirmative defense of no confusion plus good faith, when merely rebutting the plaintiff’s case on confusion would entitle the defendant to judgment, good faith or not.” In other words, if defendant’s use of a descriptive term does not cause any confusion with plaintiff’s mark, the fair use defense is unnecessary. Rather, fair use recognizes that the law will allow some consumer confusion so that others may use descriptive terms in their ordinary meaning.1

The Court, however, did not go so far as to say that confusion is irrelevant in a fair use analysis. Rather, the Court noted the possibility that if an alleged fair use of a mark causes a great deal of confusion, the use may not be “objectively fair.” The Court appears to be hinting that once a plaintiff has made a prima facie case of trademark infringement (i.e. likelihood of confusion), and a defendant has shown that its use of the mark was fair (regardless of whether confusion was caused), the burden goes back to the plaintiff to show that so much confusion was caused by defendant that the fair use defense should not be allowed. Whether or not that is true remains undecided for now. What we now know is that the trademark fair use defense does not require a defendant to prove that its use will create no likelihood of confusion.

Footnotes:

1 The Court specifically did not address the concept of “nominative fair use,” enunciated by the Ninth Circuit in the New Kids on the Block case in 1992. That concept allows unauthorized use of a mark (e.g., Chicago Bulls) when there is no better way to describe the goods or services protected by the mark, so long as no sponsorship or endorsement is suggested by the user. The Supreme Court has yet to substantively address this concept.