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ROMAG FASTENERS, INC. V. FOSSIL, INC.’S POTENTIAL EFFECTS ON THE FUTURE OF THE NOMINATIVE FAIR USE DOCTRINE IN TRADEMARK LAW

By: Lillian Fant

In Romag Fasteners, Inc. v. Fossil, Inc., the Supreme Court held that there is no requirement of showing willful infringement for a plaintiff to be awarded with profits as damages for a violation of 15 U.S.C. § 1117 (a) or (b).  The Court reasoned that because Congress specifically stated that there is a willfulness requirement for a violation of section 1117(c), this meant that the willfulness was intentionally left off of the other provisions.  In light of the Romag decision, the four-way circuit split on nominative fair use should be reconciled with this reasoning. Thus, this blog post argues that the proper approach to nominative fair use is that of the Second Circuit in International Information Systems Security Certification Consortium, Inc. v. Security University, LLC.


Introduction

“I fix cars, but I cannot tell you what kind.”  This would be the reality in a world where the doctrine of nominative fair use did not exist.  The overarching goal of nominative fair use is to allow the reference of another’s mark in order to properly convey goods or services being offered.[i]  A common example of nominative fair use is a car repair shop referencing the brands of cars it is able to fix.  There is a four-way circuit split on the proper approach to nominative fair use, and this blog post will summarize the approaches by the various circuits, address the recent Romag Fasteners, Inc. v. Fossil, Inc.[ii] decision, and express thoughts on the best approach to nominative fair use after the Court’s interpretation of the Lanham Act in Romag

Background: Test for Infringement and Classic Fair Use

Likelihood of confusion is the legal test for a claim of trademark infringement.[iii]  The test considers how likely it is that consumers will confuse the infringing mark with the plaintiff’s mark,[iv] looking at factors like: “the strength of [the plaintiff’s] mark, the degree of similarity between the two marks, the proximity of the products, the likelihood that the prior owner will bridge the gap, actual confusion, and the reciprocal of defendant’s good faith in adopting its own mark, the quality of defendant’s product, and the sophistication of the buyers.”[v]  

Descriptive Fair Use is defined as an affirmative defense in § 33(b)(4) of the Lanham Act.[vi]  This defense to trademark infringement is established on the basis that the accused infringement “is a use, otherwise than as a mark . . . or of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party.”[vii]  This type of fair use is typically called “descriptive” or “classic” fair use.[viii]  

The Four-Way Circuit Split on Nominative Fair Use

While classic fair use is a settled doctrine, there is a four-way circuit split on the proper approach to the nominative fair use defense.[ix]  The defense first appeared in the Ninth Circuit in New Kids on the Block v. New America Publishing, Inc[x]  The court held that “nominative use” of a mark is acceptable when “the use of the trademark [did] not attempt to capitalize on consumer confusion or to appropriate the cachet of one product for a different one.”[xi]  The court chose to use the same test as classic fair use which requires the user to show (1) that product or service cannot be readily identified without use of the mark, (2) only a “reasonably necessary” portion of the mark is used, and (3) the user doesn’t “suggest sponsorship or endorsement by the trademark holder” through the use.[xii]

The Fifth Circuit’s approach adopts the “nominative use concept” but applies a different test.[xiii]  The court asserted that for a defendant to use the defense, “the defendant (1) may only use so much of the mark as necessary to identify the product or service and (2) may not do anything that suggests affiliation, sponsorship, or endorsement by the mark holder.”[xiv]  In making this decision the court also noted that “the court should usually consider the nominative-use claim in conjunction with its likelihood-of-confusion analysis to avoid lowering the standard of confusion.”[xv]  Therefore, the Fifth Circuit’s approach considers the nominative fair use factors in conjunction with the likelihood of confusion factors.

The Third Circuit addressed nominative use in Century 21 Real Estate Corp. v. Lendingtree, Inc.[xvi]  The court created a two-step approach which “modified [the] likelihood of confusion test to be employed in nominative fair use cases.”[xvii]  First, the plaintiff must prove that the defendant’s use of the mark is likely to cause confusion.[xviii]  Second, once likelihood of confusion is proven, the defendant has the burden of proving the use is fair.[xix] The court modified the likelihood of confusion factors to “measure only those factors that are meaningful and probative in the context of nominative fair use.”[xx]  Although the other eight factors were considered potentially relevant in other cases, the Third Circuit chose to focus on four factors it considered to be most relevant in the context of the case before it.[xxi]  The factors considered were (1) the price of goods, (2) the length of time the defendant used the mark without actual confusion, (3) the intent of the defendant, and (4) “evidence of actual confusion.”[xxii]The second step of proving the use is fair requires the defendant to show:

(1) that the use of the plaintiff’s mark is necessary to describe both the plaintiff’s product or service and the defendant’s product or service;

(2) that the defendant uses only so much of the plaintiff’s mark as is necessary to describe plaintiff’s product; and

(3) that the defendant’s conduct or language reflect[s] the true and accurate relationship between plaintiff and defendant’s products or services.[xxiii]

If all three of these prongs are met in the affirmative, the defendant’s use of the plaintiff’s mark will be considered fair in the Third Circuit.[xxiv]

            The most recent addition to the circuit split was added by the Second Circuit in International Information Systems Security Certification Consortium, Inc. v. Security University, LLC.[xxv]  In Security University, the court held “that nominative fair use [was] not an affirmative defense to a claim of infringement under the Lanham Act.”[xxvi]  Additionally, the court held that the following nominative fair use factors should be considered in addition to the likelihood of confusion factors:

(1) whether the use of the plaintiff’s mark is necessary to describe both the plaintiff’s product or service, that is, whether the product or service is not readily identifiable without use of the mark;

(2) whether the defendant uses only so much of the plaintiff’s mark as is necessary to identify the product or service; and

(3) whether the defendant did anything that would, in conjunction with the mark, suggest sponsorship or endorsement by the plaintiff holder, that is, whether the defendant’s conduct or language reflects the true or accurate relationship between the plaintiff’s and defendant’s products or services.[xxvii]

In determining its approach to nominative fair use, the Second Circuit analyzed the other circuits’ approaches and specifically dismissed the Third Circuit’s approach of treating nominative fair use as an affirmative defense on the grounds that there are enumerated affirmative defenses in the Lanham Act, and nominative fair use is not one.[xxviii]  

New Supreme Court Case Addressing Interpreation of the Lanahm Act

The Romag Fasteners, Inc. v. Fossil Group, Inc. case addressed the question of whether an award of profits to a plaintiff would require that the plaintiff show the defendant’s infringement was willful.[xxix]  The Supreme Court looked to 15 U.S.C. § 1117(a)[xxx] and reasoned that because the statute states “willful” before “violation under section 1125(c) of this title” and the absence of the word “willful” before “violation under section 1125(a) or (d) of this title” that Congress intentionally left out the willful requirement for an award of damages under a violation of trademark rights under section 1125(a) or (d).[xxxi]  The Court reasoned that its “limited role is to read and apply the law those policymakers have ordained.”[xxxii]

Best Path Moving Forward: Adopting the Second Circuit’s Approach

The Court’s emphasis on what is in one provision of the Lanham Act and what is excluded from another provision leads to the conclusion that the proper approach to nominative fair use for a standard trademark infringement claim is the approach of the Second Circuit.  The Second Circuit recognized that nominative use was not expressly mentioned as an affirmative defense for the standard infringement provision of the Lanham Act.[xxxiii] This means that nominative use should not be treated as an affirmative defense as the Third Circuit has treated it.[xxxiv]  By including the language that establishes the descriptive fair use defense as an affirmative defense, and Congress not amending the Lanham Act to contain language about an affirmative defense of nominative fair use, there is an inference that the inclusion of descriptive fair use defense implies that the nominative fair use defense should not be an affirmative defense.[xxxv]  

Treating nominative fair use as an affirmative defense, when Congress has not given it such power, could result in an unfair use of a mark being treated as fair. Thus, a defendant could use a mark in a way that is likely to cause confusion as to source or sponsorship, but so long as they meet separate “nominative fair use” factors the confusion would not matter at all. By instead treating the doctrine of nominative fair use as a negating defense or a way to alter the consideration of the likelihood of confusion factors there will be more certainty for plaintiffs asserting claims of trademark infringement. Thus, a plaintiff would not need to worry that if they put on a showing for likelihood of confusion, and confusion was found, that a defendant could assert nominative fair use and avoid trademark infringement liability.

In light of the language of the Lanham Act and the Romag decision, the remaining circuits should adopt the Second Circuit’s approach in Security University and consider both the likelihood of confusion as well as the additional nominative fair use factors when determining if the nominative use is, in fact, fair.  Additionally, if Congress is unhappy with this decision, as Justice Gorsuch said, “the place for reconciling competing and incommensurable policy goals like these is before policy makers,” thus Congress can step in and cure this confusion.[xxxvi]


[i] John M. Desmarais, Trademark Law: An Open-Source Casebook at 611 (Barton Beebe, N.Y.U., 6th ed. 2019).

[ii] Romag Fasteners, Inc. v. Fossil Group, Inc., 590 U. S. ___ , slip op. 1 (Apr. 23, 2020).

[iii] About Trademark Infringement, USPTO (Jun. 8, 2018), https://www.uspto.gov/page/about-trademark-infringement.

[iv] 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 23:1 (5th ed. 2020).

[v] Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961).

[vi] 15 U.S.C. § 1115(b)(4) (2018).

[vii] Id.

[viii] Desmarais, Supra note i, at 588.

[ix] Paul Llewellyn & Kyle Gooch, Second Circuit Expands Split on Nominative Fair Use, INTABulletin (2016) https://www.inta.org/INTABulletin/Pages/Normative_Fair_Use_7120.aspx.

[x] New Kids on the Block v. New America Publishing, Inc. 971 F.2d 302 (9th Cir. 1992).

[xi] Id. at 308. (reasoning that “[w]hen the mark is used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth”).

[xii] Id.

[xiii] Pebble Beach Co. v. Tour 18 I Ltd., 155 F.3d 526 (5th Cir. 1998).

[xiv] Id. at 546.

[xv] Id.

[xvi] Century 21 Real Estate Corp. v. Lendingtree, Inc., 425 F.3d 211 (3d Cir. 2005).

[xvii] Id. at 221-22.

[xviii] Id.

[xix] Id.

[xx] Id. at 224 (reasoning that in the context of nominative fair use “certain Lapp factors are either unworkable or not suited or helpful as indicators of confusion in this context”).

[xxi] Id. at 224.

[xxii] Id. at 225-26.

[xxiii] Id. at 222.

[xxiv] Id. at 232.

[xxv] Int’l Info. Syss. Sec. Certification Consortium, Inc. v. Sec. Univ., LLC, 823 F.3d 153 (2d Cir. 2016).

[xxvi] Id. at 156.

[xxvii] Id.

[xxviii] Id. at 167. (“[T]he Lanham Act explicitly provides that descriptive fair use is an affirmative defense. And nominative fair use cannot fall within § 1115(b)(4)’s language, as nominative fair use is not the use of a name, term, or device otherwise than as a mark which is descriptive of and used merely to describe the goods or services of the alleged infringer.”).

[xxix] Romag, 590 U. S. ___ , slip op. at 1 (2020).

[xxx] 15 U.S.C. § 1117(a)  (“When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 1125(a) or (d) of this title, or a willful violation under section 1125(c) of this title, shall have been established . . . , the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.”).

[xxxi] Romag, 590 U. S. ___ , slip op. at 2-3 (citing the relevant portion of the Lanham Act and stating “[n]or does this Court usually read into statutes words that aren’t there.  It’s a temptation we are doubly careful to avoid when Congress has (as here) included the term in question elsewhere in the very same statutory provision.”).

[xxxii] Romag, 590 U. S. ___ , slip op. at 7.

[xxxiii] See Sec. Univ., 823 F.3d at 167. (“[W]e reject the Third Circuit’s treatment of nominative fair use as an affirmative defense.”).

[xxxiv] Id.

[xxxv] See 15 U.S.C. § 1115(b)(4); See also Sec. Univ., 823 F.3d 153, 167 (“[T]he Lanham Act explicitly provides that descriptive fair use is an affirmative defense. And nominative fair use cannot fall within § 1115(b)(4)’s language, as nominative fair use is not the use of a name, term, or device otherwise than as a mark which is descriptive of and used merely to describe the goods or services of the alleged infringer.”).

[xxxvi] Romag, 590 U. S. ___ , slip. op. at 7.

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