MEMORANDUM - Directrouter.com

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MEMORANDUM 

TO: 

FROM: 

MLRC Property & Privacy Panel 

Timothy L. Alger, Esq. 

Brian W. Collins 

DATE: August 1, 2006 

RE: 

Nominative Fair Use Doctrine 

Outline and Hypotheticals 

I. INTRODUCTION 

The term "nominative fair use" in trademark law was coined to distinguish it from the 

statutory or classic defense of "fair use," which arises when a defendant uses a trademark in its 

descriptive sense to reference its own product (and the inquiry revolves around whether this 

trademark reference might confuse the public as to the relationship between the two). See 

15 U.S.C. §1115(b)(4) (2000). Unlike classic fair use and its "likelihood of confusion" 

standard, 1 nominative fair use is said to occur when the non-trademark holding party uses a 

trademark to reference the trademark holder's product. If the non-holder is not attempting to 

confuse the public when it uses the mark, it is a "non-confusing nominative use." Use of the 

trademark might be the only reasonable way to identify a particular product or service, or convey 

1 

The Ninth Circuit has held that in determining whether confusion between related goods is likely, the 

following factors are relevant (list is non-exhaustive, as other variables may come into play depending on the 

particular facts presented): strength of the mark; proximity of the goods; similarity of the marks; evidence of actual 

confusion; marketing channels used; type of goods and the degree of care likely to be exercised by the purchaser; 

defendant's intent in selecting the mark; and likelihood of expansion of the product lines. See AMF, Inc. v. 

Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979). Other circuits have similar, but not identical, tests. 

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a message that implicates a product or service. 2 

As a result, the trademark is not being used in its 

primary, descriptive sense, which would call for the classic fair use defense, but rather, such 

nominative use of the mark invokes the secondary, trademarked meaning and therefore must be 

treated differently. 

II. 

BACKGROUND 

Recognizing the necessity for permitting use of a trademark where no other description 

would reasonably suffice, the Ninth Circuit began to articulate boundaries between infringing 

and noninfringing use when the defendant non-holder used a trademark to refer to the trademark 

holder's product. See Volkswagenwerk Aktiengesellschaft v. Church, 411 F.2d 350, 352 (9th Cir. 

1969). The court held that for use of a mark to be acceptable, the manner in which it is used may 

not imply an affiliation such as sponsorship or endorsement. See id. (explaining that in using the 

word "Volkswagen" in an advertisement for service and repair of Volkswagen vehicles, 

defendant may not use the word in such a way that would suggest he is part of the Volkswagen 

organization). Additionally, the Ninth Circuit considered the degree to which the trademark is 

used, taking into account use of distinctive lettering style or color scheme. See id. Thus, use of a 

trademarked name in plain font is more likely to be considered noninfringing than use of the 

name as part of its trademarked logo. See id. (noting that the district court properly considered 

the appearance of the mark in defendant's advertisement and that it did not appear in the 

distinctive Volkswagen lettering, nor encircled in the "VW" emblem). This precedent played a 

valuable role when the Ninth Circuit articulated the nominative fair use doctrine in the 1990's. 

2 

New Kids on the Block v. News America Publishing highlights this concept with the example, "the 

professional basketball team from Chicago," which is less efficient and less likely to be understood than the 

"Chicago Bulls." 971 F.2d 302, 306 (9th Cir. 1992). 

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III. 

NINTH CIRCUIT'S NOMINATIVE FAIR USE DOCTRINE 

A. New Kids on the Block 

In 1992, the Ninth Circuit explicitly rejected the traditional trademark infringement 

analysis / "likelihood of confusion" test and adopted a new test that would govern nominative 

fair use analysis, under which a party might use another's trademark in truthfully referring to a 

particular product for purposes of comparison, criticism, point of reference and the like. New 

Kids on the Block v. News America Publishing, 971 F.2d 302, 308 (9th Cir. 1992); see Cairns v. 

Franklin Mint Co., 292 F.3d 1139, 1151 (9th Cir. 2002). At issue in New Kids was whether two 

newspapers had violated the Lanham Act when they employed the band's trademark while 

conducting polls that asked readers to vote for their favorite member of a famous boy band. 

Voters were charged a fee for each vote cast by telephone. The band alleged that the 

newspapers' use of the trademarked name in their polls implied that the band was sponsoring the 

polls. The court reasoned such nominative use of a trademark – where the only word reasonably 

available to describe a particular thing is pressed into service – lies outside the strictures of 

trademark law because it does not implicate the source-identification function that is the purpose 

of trademark. 292 F.3d at 308. 

The court held that a defendant who uses a trademark to describe the plaintiff's product, 

rather than its own, is entitled to this nominative fair use defense provided it meets the following 

three requirements: 

(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 or marks may be used as is reasonably necessary to 

identify the product or service; and 

(3) The user must do nothing that would, in conjunction with the mark, suggest 

sponsorship or endorsement by the trademark holder. 

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Id. Thus, the court held that the newspapers did not constitute unfair competition because the 

use met all three of the requirements. Id. at 308-09. Further, the court observed that a 

nominative use may also be a commercial one because while the band had a service mark right in 

its name, “that right does not entitle them to control their fans' use of their money . . . . [T]he 

trademark laws do not give the [bandmembers] the right to channel their fans’ enthusiasm (and 

dollars) only into items licensed or authorized by them.” Id. at 309. 

B. Ninth Circuit Clarifies and Refines the Doctrine 

Following New Kids, the Ninth Circuit reiterated that when a nominative fair use defense 

is raised, the aforementioned test should be applied in lieu of the likelihood of confusion test 

typically used in trademark infringement cases. Playboy Enter., Inc. v. Welles, 279 F.3d 796, 

801 (9th Cir. 2002). The court reasoned that since the "likelihood of confusion" test focuses its 

analysis on the similarity of the marks, it would be nearly impossible for a defendant to succeed 

on a nominative fair use defense that analyzed likelihood of confusion. See id. 

However, while the Ninth Circuit justified its creation of the nominative fair use defense, 

it struggled with determining when to apply it. Even though it is clear that the defense is 

available to a defendant who uses a trademark to refer to the trademark holder's product, to what 

it is referring is not always clear – the trademarked product, or ultimately, its own product. 

Subsequently, the Ninth Circuit decided that the nominative fair use defense is appropriate where 

the defendant uses a trademark to describe the trademark holder's product – even in situations 

where the ultimate reference is to the defendant's own product – while classic fair use is left to 

cases where the defendant uses a trademark to describe only its own product. Cairns v. Franklin 

Mint Co., 292 F.3d 1139, 1151 (9th Cir. 2002). 

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IV. 

NOMINATIVE FAIR USE OUTSIDE THE NINTH CIRCUIT 

A. Interpretation by Other Circuits 

Largely because so many trademark infringement cases are heard by the Ninth Circuit, 

few other courts have spoken on the precise issue of how the nominative fair use defense is 

successfully invoked. Moreover, the courts that have referenced the defense by name have done 

so only in reference to what district courts had done with the issue or to decline to adopt the 

Ninth Circuit's test as a whole. See, e.g., Chambers v. Time Warner, Inc., 282 F.3d 147, 156 (2d 

Cir. 2002) (noting that the district court applied the standard for nominative fair use as 

articulated by the Ninth Circuit, but finding that the court had erred in its application); see also 

PACCAR, Inc. v. Telescan Technologies, L.L.C., 319 F.3d 243, 256 (6th Cir. 2003) (noting that 

the Sixth Circuit has never followed the ''nominative fair use'' doctrine; the court was ''not 

inclined'' to adopt it in that case), overruled in part on other grounds, KP Permanent Make-Up, 

Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004); Pebble Beach Co. v. Tour 18 I Ltd., 155 

F.3d 526, 546 n. 13 (5th Cir. 1998) (adopting the Ninth Circuit's nominative fair use test only in 

part). In Pebble Beach, the 5th Circuit held that a defendant using a trademark in reference to 

the trademark holder's product, in order to ultimately describe its own product, should not have a 

nominative fair use defense. Id. at 545. The court reasoned that if nominative fair use prohibits 

the defendant from using the trademark in a way that suggests affiliation, sponsorship, or 

endorsement of the trademark holder, the defendant by definition cannot use the trademark to 

identify its own goods because that use would not be nominative and would suggest such 

affiliation, sponsorship, or endorsement. Id. at 546. 

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B. Supreme Court and Nominative Fair Use 

The United States Supreme Court has not ruled explicitly on the issue of nominative fair 

use. Indeed, the Supreme Court recently refused to address nominative fair use in KP Permanent 

Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 115 (2004), a case on cert from the 

Ninth Circuit (which discussed the nominative fair use defense extensively in its opinion). The 

Supreme Court reversed the Ninth Circuit, which held that the classic fair use defense requires a 

showing by the defendant that there is no likelihood of confusion. KP Permanent Make-Up, 

Inc. v. Lasting Impression I, Inc., 328 F.3d 1061, 1073 (9th Cir. 2003). In reversing, the 

Supreme Court held that before the defendant even has to assert a fair use defense, the burden is 

on the plaintiff trademark-holder to demonstrate a likelihood of confusion. If confusion is 

demonstrated, this does not preclude the defendant from asserting a classic fair use defense, but 

simply shifts the burden to the defendant to show that the use – even if confusing – is fair. Thus, 

consumer confusion and fair use are not mutually exclusive, but rather that the latter will in 

essence serve to rebut or excuse the former so that the use is deemed permissible. 

C. Century 21: The Third Circuit's Twist on Nominative Fair Use 

Following the KP decision by the Supreme Court, the Third Circuit felt obligated to 

examine the Ninth Circuit's test under the reasoning that nominative fair use is a derivative of 

classic fair use. Century 21 Real Estate Corp. v. Lendingtree, Inc., 425 F.3d 211, 228 (3d Cir. 

2005). The Third Circuit declined to follow the nominative fair use defense as promulgated by 

the Ninth Circuit. Instead, it championed the reintegration of the "likelihood of confusion" 

analysis and proceeded to adopt a bifurcated approach that examines both likelihood of 

confusion and nominative fair use. Id. at 222-32. 

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In Century 21, plaintiffs sold real estate through its franchisees, who operated by 

reference to plaintiffs' trademarks. Defendant, a consumer-oriented Internet business, provided 

real estate broker referral service on its web site, and a variety of plaintiffs' franchisees 

participated in defendant's service. Plaintiffs' infringement claim arose after they discovered 

various trademarked illustrations and statements contained on defendant's website, and defendant 

in turn asserted nominative fair use as a defense. The district court entered a preliminary 

injunction upon a finding that a likelihood of consumer confusion existed (an inquiry which the 

Ninth Circuit rejects in its nominative fair use analysis), and defendant appealed. 

On appeal, the Third Circuit disagreed with the fundamental distinction that the Ninth 

Circuit drew between classic and nominative fair use standards. While it accepted the Ninth 

Circuit's view that nominative fair use cases deserve a distinct analysis, the Third Circuit did not 

accept the "legal basis or advisability of supplanting the likelihood of confusion test entirely." 

Id. at 220. In fact, the court found that even a defendant's nominative use has the potential of 

confusing consumers with respect to its products or services: Since the defendant ultimately uses 

the plaintiff's mark in a nominative case in order to describe its own product or services, even an 

accurate nominative use could potentially confuse consumers about the plaintiff's endorsement or 

sponsorship of the defendant's products or services. Id. at 220-21. The Third Circuit adopted a 

two-step analysis in nominative fair use cases: (1) placing the burden of persuasion on the 

plaintiff to prove likelihood of confusion 3 (the step that the Ninth Circuit eschewed) and (2) once 

plaintiff has met the burden of proving that confusion is likely, the burden shifts to defendant to 

3 

Recognizing that the "likelihood of confusion" test from classic fair use does not lend itself perfectly to a 

nominative fair use fact pattern, the Third Circuit narrowed the inquiry focus to four factors that appear the most 

relevant: (1) the price of the goods and other factors indicative of the care and attention expected of consumers 

when making a purchase; (2) the length of time the defendant has used the mark without evidence of actual 

confusion; (3) the intent of the defendant in adopting the mark; and (4) the evidence of actual confusion. Century 21 

at 225-26. 

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show that its nominative fair use of plaintiff's mark is nonetheless fair (which can be 

accomplished by satisfying a three-pronged nominative fair use test derived to a great extent 

from the one promulgated by the Ninth Circuit) 4 . Id. at 222-32. After designing this bifurcated 

approach reincorporating "likelihood of confusion," the Third Circuit reversed the district court's 

preliminary injunction order and remanded the case for further proceedings under the new 

standard. 

V. CONCLUSION 

The concept of nominative fair use is categorized as an affirmative defense to allegations 

of trademark infringement that arise when the non-trademark holding party uses an actual 

trademark to reference the trademark holder's product, even in situations where the ultimate 

reference is to the defendant's own product. Under the impetus that the non-holder is not 

attempting to confuse the public, the Ninth Circuit replaced the classic fair use test of "likelihood 

of confusion" with a three-factor analysis that determines whether a party truthfully refers to a 

particular trademark product or service for purposes of comparison, criticism, point of reference, 

etc. The Third Circuit now has offered a new approach that the "likelihood of confusion" test 

back in the nominative fair use inquiry (step one of a two-step process where step two is a threeprong 

inquiry substantially similar to the Ninth Circuit's stand-alone test), on the logic that even 

a defendant's nominative use has the potential of confusing consumers with respect to its 

products or services. 

4 

The Third Circuit's prongs (along with the deviation, if any, from the Ninth Circuit's test) are: (1) that 

the use of plaintiff's mark is necessary to describe both the plaintiff's product or service and the defendant's product 

or service [where Ninth Circuit Prong 1 only inquired into necessity of using trademark to describe plaintiff's 

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

product [no significant deviation]; and (3) that the defendant's conduct or language reflect the true and accurate 

(footnote continued) 

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VI. 

HYPOTHETICALS 

Number One: 

Dave is an contractor of substantial regard. Ten years ago he was contacted by 

SwitchTime, an organization dedicated to honoring employees in the construction industry. 

SwitchTime asked Dave to be its Work Person of the Year, to which he enthusiastically agreed. 

Recently, Dave started his own business and set up a web site advertising his services to 

potential clients. Included prominently on his web site banner and headlines was his former 

affiliation with SwitchTime, noting that he was a past Work Person of the Year honoree. An 

employee at SwitchTime noticed the web site and notified the company's administration. Can 

SwitchTime sue Dave for trademark infringement of its name and the Work Person of the Year 

designation, supposing both are registered trademarks? 

Number Two: 

HistoricalStamps.com is a large dealer of historic stamps, with customers including 

antique collectors and general stamp enthusiasts throughout the world. GoPostal.com is a rising 

competitor of HistoricalStamps.com. Recently, the webmaster of HistoricalStamps.com entered 

the company name in an Internet search engine, only to receive numerous results for 

GoPostal.com, effectively drowning out the remaining results for HistoricalStamps.com. The 

webmaster immediately informed HistoricalStamps.com's management, and she explained to 

them that GoPostal.com was strategically and excessively using HistoricalStamps.com's 

trademarked name in their own metatags in order appear in the search results alongside 

relationship between plaintiff and defendant's products or services [an inquiry Third Circuit contends is broader than 

Ninth Circuit's "sponsor or endorsement" inquiry]. Id. at 229. 

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HistoricalStamps.com. Can HistoricalStamps.com sue GoPostal.com for trademark 

infringement, or does GoPostal have a nominative fair use affirmative defense? 

RECENT CASES DEALING WITH NOMINATIVE FAIR USE 

Edina Realty, Inc. v. TheMLSonline.com, Slip Copy, 2006 WL 737064 (D. Minn. 2006): defendant - a 

full-service real estate brokerage firm that directly competes with plaintiff - argues nominative fair use 

against the trademark infringement claims (relating to metatags and internet search terms) by plaintiff - 

the largest real estate brokerage firm in the Midwest. The court used Century 21's (Third Circuit) 

nominative fair use test to find that defendant's use did not constitute nominative fair use as a matter of 

law. None of their uses requires the Edina Realty mark. In its advertisements and hidden links and 

hidden text, defendant could easily describe the contents of its website by stating that it includes all real 

estate listings in the Twin Cities. Similarly, defendant could rely on other search terms, such as Twin 

Cities real estate, to generate its advertisement. In addition, defendant's use of the Edina Realty mark in 

its advertisement does not reflect the true relationship between plaintiff and defendant. Defendant's 

advertisement that has appeared on Yahoo, for example, places the Edina Realty mark in the headline, 

which is underlined and in bold font. The name of defendant's company is listed in much smaller font at 

the bottom of the ad. 

Gulfstream Aero. Corp. v. Camp Sys. Int'l, Inc., 428 F. Supp. 2d 1369 (D. Ga. 2006): Plaintiff, a jet 

aircraft manufacturer, sued defendant, an aircraft maintenance tracking company, for copyright and 

trademark infringement related to the company's use of the manufacturer's maintenance manuals. The 

court also found that the defendant was protected under the nominative fair use defense (as articulated by 

Ninth Circuit) and therefore was not liable to the manufacturer for trademark infringement. 

Ty, Inc. v. Publications Intern., Ltd., Not Reported in F. Supp. 2d, 2005 WL 464688 (N.D.Ill. 2005): 

plaintiff manufacturer of "Beanie Babies" alleged that defendant publisher committed trademark 

infringement when it sold books about stuffed animals the manufacturer produced and used pictures of 

those animals in its books. In weighing tests of nominative fair use, the opining judge noted that while 

consumer confusion is relevant to the issue of fair use, "it does suggest that I should not disregard a 

defense of nominative fair use simply because a likelihood of confusion exists. The Ninth Circuit test 

provides sound criteria for assessing when nominative use is fair or unfair, despite a likelihood of 

confusion among consumers." Since whether the extent of defendant's use of plaintiff's trademarks was 

reasonable is a question of fact for jury, defendant was not entitled to summary judgment on plaintiff's 

claim. 

Novell, Inc. v. Unicom Sales, Inc., Not Reported in F. Supp. 2d, 2004 WL 1839117 (N.D.Cal.,2004): 

plaintiff software developer alleged that defendant companies unlawfully marketed and distributed copies 

of plaintiff's NetWare software. Because defendants' passed all three prongs of the Ninth Circuit's 

nominative fair use test, the court concluded that the depiction of the developer's product in defendants' 

advertising was within the scope of nominative fair use. 

Brother Records v. Jardine, 318 F.3d 900 (9th Cir. 2003): plaintiff management company alleged that 

defendant - former member of "The Beach Boys" and the plaintiff company - infringed on its trademark 

by touring and performing under the name, "Beach Boys Family and Friends." The court held that 

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because the defendant's use of the trademark suggested sponsorship or endorsement by the management 

company/trademark holder, his nominative fair use argument failed and summary judgment for plaintiff 

was affirmed. 

PACAAR Inc. v. Telescan Techs., L.L.C., 319 F.3d 243, 256 (6th Cir. 2003), overruled on other 

grounds in K. P. Permanent Make-Up, 125 S. Ct. at 547: In dicta, the Court observed that even if the 

defense applied, the defendant in that particular case could not satisfy the elements of the Ninth Circuit's 

test (finding that defendant's use of the marks "go beyond using the marks as is reasonably necessary to 

identify" the plaintiff's products). However, the Court also conflated the Ninth Circuit analysis with the 

likelihood of confusion analysis, noting that the defendant's use of the plaintiff's marks in its domain 

names created a "likelihood of confusion as to whether its web sites are affiliated with [the plaintiff]." 

J.K. Harris & Co., LLC v Kassel, 253 F. Supp. 2d 1120, 1125 (N.D. Cal. 2003): Plaintiff tax 

representation/negotiation company alleges defendant competitor published unfavorable information 

about plaintiff on defendant's web site, and that by using Plaintiff's trademarks as "metatags" allows 

search engines to bring up results including defendant's web site when users are searching for plaintiff. 

However, the court found that defendants' use of the plaintiff's trade name satisfied all three prongs of the 

Ninth Circuit nominative fair use test, thus plaintiff was not entitled to a preliminary injunction limiting 

defendants' use of its trade name. 

World Impressions, Inc. v. McDonald's Corp., 235 F. Supp. 2d 831 (N.D. Ill. 2002): nominative fair 

use defense negated where a mapmaker who stylized the defendant company's new amusement park on 

their map (plaintiff drew a castle and used stylized writing of the trademark "Disneyland" on the map). 

Plaintiff's reliance on distinctive lettering, rather than plain lettering, went "beyond mere nominative use." 

Id. 

Downing v. Abercrombie & Fitch, 265 F.3d 994 (9th Cir. 2001): group of surfers sued the clothing 

company for publishing a photograph of them in their catalogue, with identification of their names, for its 

commercial benefit without their authorization. The company was not entitled to the nominative fair use 

defense because [Prong 3] there was a genuine issue as to whether the company did nothing that would 

have, in conjunction with the surfers' names and pictures, suggested sponsorship or endorsement by the 

surfers. 

Clark v. America Online Inc., 2000 WL 33535712 (C.D. Cal. 2000): defendant AOL's advertising use 

of the service mark DICK CLARK was a nominative fair use because there was no descriptive substitute 

for the name Dick Clark to conjure up the era of the 1950s, there was only the minimum amount 

necessary used and there was no implied endorsement by Dick Clark of the AOL product. 

Nihon Keizai Shimbun, Inc. v. Comline Business Data, Inc., 166 F.3d 65 (2d Cir. 1999): defendant's 

use plaintiff NIKKEI's mark to identify the source of defendant's translations of articles from NIKKEI 

newspapers was entitled to nominative fair use protection. 

Liquid Glass Enters. v. Dr. Ing. h.c.F. Porsche AG, 8 F. Supp. 2d 398 (D.N.J. 1998): plaintiff car care 

products corporation used Porsche's trademarks in its advertisements for car polish. The New Jersey 

district court initially analyzed the case under the nominative fair use defense articulated by the Ninth 

Circuit. However, it conflated the test with the plaintiff's burden of proving likelihood of confusion and 

found that plaintiff's fair use defense was defeated, in part, because Porsche would "likely prevail in 

demonstrating that the use of Porsche's trademarks ... in Liquid Glass's advertisements would likely 

confuse consumers as to Porsche's connection with Liquid Glass". 

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