Fair Use Has a Weird Relationship with Trademark
By now you know that fair use is a squishy, fact-intensive, unpredictable but absolutely necessary feature of copyright law. But at least fair use’s role in copyright law is well understood. It’s just hard to apply.
Fair use in trademark law, however, is another matter, as two recent appellate-level decisions involving the NAACP and WD-40 demonstrate. We don’t always even know how it works within the context of trademark law. In theory, it’s an “affirmative defense.” With an affirmative defense, even if you’ve broken the law, we say it’s still OK, often because we recognize some greater social good. In the context of copyright, we’re saying that, even if you copy stuff that’s protected by copyright, it’s OK because what you’ve done is more socially good than holding you liable for copying.
It’s Confusing Because of Confusion
But with trademark, applying fair use as an affirmative defense requires us to say something a little weird. The key concept in trademark law is confusion. Trademark law exists to prevent consumers from being confused and buying one product when they thought they were buying another, or thinking one product had a quality that it doesn’t really have. So, to apply fair use to trademark, we have to say, even if consumers are confused, what you’re doing is OK because there’s some greater social good at stake.
Is there ever a time when confusing consumers is OK? With copyright, we recognize the greater social good that we must use others’ copyrighted works to build our own works, or to criticize those works, or (much, much, much more controversially) to put copyrighted works in forms that consumers prefer.1 But it’s hard to think of a social good that could trump avoiding consumer confusion, which an ordinary part of our commercial experience. The right of free expression isn’t as robust with trademark as with copyright because we normally allow the state to regulate false, commercial speech. You don’t have a right to lie about your product (e.g., you say it has 100 calories when it really contains 300), and you might even be compelled to say things about your product that might prefer to stay silent about.
Trademark and Free Expression
While free expression might be attenuated in connection with trademark, it isn’t meaningless, either. If we allow trademarks too broad a scope of protection, we run the risk of interfering with our own common language.2 If we gave Apple, Inc. the exclusive right to use APPLE, then what would we call a certain crispy fruit? But we don’t need fair use to protect from this degree of overprotection. Trademark law has protections built in.
In the case of APPLE, trademark law doesn’t give Apple, Inc. the exclusive right to APPLE for everything. Instead, that right is limited to the goods and services (which we’ll just call “products”) that Apple, Inc. uses APPLE with, e.g., computers, computerized music players, mini-computers + cell phones, etc. In fact, because you can NEVER EVER obtain trademark rights for generic terms—e.g., APPLE for apples—we will always be free to call certain crisp fruits “apples.” Further, if you’re in a different industry and your products are different, then you can call your products APPLE if you want, e.g., APPLE Travel Agency.3 That’s why we have DELTA Airlines, DELTA faucets and DELTA Dental.
OK, fine, but what if we want to talk about Apple, Inc.’s products? Do we need fair use then? No. Perhaps you have an old APPLE iPHONE for sale, or maybe you want to criticize Apple, Inc. for any number of reasons (its products, its treatment of overseas workers, its corporate culture). That’s OK, too. Yes, you’re using APPLE to refer to Apple, Inc.’s products, but you aren’t using it “in connection with” any products of your own. You’re using it in connection with Apple, Inc.’s own products. It’s only trademark infringement if consumers would be confused about the source, origin, endorsement, etc. of YOUR products.
The Protections Are Baked Right In!
This “in connection with” requirement can be a powerful shield to protect free expression, without resort to fair use. This was amply demonstrated in the recent high-profile decision Radiance Foundation v. NAACP. In that case, a political organization criticized the National Association for the Advancement of Colored People by replacing the “Advancement” with something else (which resulted in an unfunny, puerile and offensive joke). The district court held that the political organization infringed the NAACP’s trademark rights, but the Fourth Circuit reversed. Although it discussed free speech rights at length, it didn’t rely on fair use. Instead, it saw free speech rights as confining trademark rights: where trademark rights end, free speech begins. In particular, trademark rights are to be strictly limited to uses “in connection with” the user’s products. In this case, the Fourth Circuit held that the political organization wasn’t using the NAACP’s trademarks to promote its own products, even thought it sought elsewhere to encourage donations.
The court acknowledged the tension between trademark protection and free speech, “but they are not in conflict so long as [trademark law] hews faithfully to [its] purposes.” The court went on:
It is for this reason that an actionable trademark claim does not simply require that the alleged infringer used in commerce the mark that the trademark holder possesses. It also requires that the infringer’s use be “in connection with” goods or services in a manner that is “likely to cause confusion among consumers…
The Problem with Descriptive Terms
Another built-in shield against overprotection trademarks is the exclusion of “generic” terms (e.g., APPLE brand apples) and the semi-exclusion of “descriptive” marks. I’ve already talked about generic terms, and you can see how that would constitute a wholesale filching from our language. The restrictions on “descriptive” marks are just as important.
Descriptive marks describe some quality of your products. If you used BIG APPLE to describe your tours of New York City, BIG APPLE is just describing where your tours take place. Or, if you told your customers that your product is the APPLE OF YOUR EYE, you’re just describing how precious your product is. Unlike generic terms, descriptive marks have the potential to become fully protectable marks, but unlike marks like APPLE (for computers), KODAK (for cameras)4, they aren’t “born” protectable. You have to use the descriptive mark (proto-mark?) extensively until you can prove that consumers have started to see the mark as not merely descriptive but as indicating a quality source of that kind of product. Sometimes that’ll be easy, as for SOUTHWEST Airlines and McDONALD’S5 hamburgers. Often, that’s difficult or impossible.6
The danger with descriptive marks—and why they’re kind of disfavored—is that people quite naturally use descriptive terms to describe all manner of products. You might say your products are the BEST, or that you’re QUICK, or that your computers are full of POWER, or that you’re located in TENNESSEE. If someone has managed to obtain a valid, protectable descriptive mark, can we continue to use that term to describe related products, using the term’s ordinary meaning?
So, once again, we don’t need fair use because our right to free expression doesn’t overlap with descriptive marks, right? Well, not so fast. Remember, sometimes those marks really do become trademarks, and those trademarks might really interfere with your right to use the English language. This is particularly a problem when a descriptive mark isn’t recognized as such during the process to obtain a U.S. registration. Once the registration issues, the mark is presumptively valid (though the presumption can be overcome). But that’s OK, because you can still cancel the registration—unless it’s been five years, then you can’t (on descriptiveness grounds).
It’s Called “Corrosion Inhibitor” Because it Inhibits Corrosion.
A good example of this conflict, and the need for “fair use” arose in the recent Seventh Circuit decision, Sorensen v. WD–40 Co. In that case, Sorensen owned the mark THE INHIBITOR for “capsules containing corrosion inhibiting chemicals for use in connection with metallic objects.” WD–40 had introduced a new product called “WD–40 SPECIALIST Long-Term CORROSION Inhibitor.”. You’ll notice that “long-term” and “inhibitor” are in fairly large all-capitals but clearly smaller than the other elements of the product name.
Sorensen sued for trademark infringement, and WD–40 asserted the defense of “descriptive fair use” (sometimes known as “classic fair use”). WD–40 argued that it was simply using the word “inhibitor” to describe what its product does: it inhibits corrosion. The trial court granted WD–40 summary judgment, and Sorensen appealed to the Seventh Circuit Court of Appeals, which affirmed.
“Descriptive fair use” is a defense against a claim of trademark infringement, meaning WD–40 had the burden of proving the elements of the defense. As explained by the Seventh Circuit, elements are designed to protect everyone’s right to use a descriptive term, while respecting the rights of the trademark owner. WD–40 thus had to prove that (1) it did not use INHIBITOR “as a trademark”; (2) it used INHIBITOR to describe its own products; and (3) it used INHIBITOR “fairly and in good faith.”
The Seventh Circuit held that WD–40 proved all three of these elements. It found it didn’t use INHIBITOR in “as a trademark” because it wasn’t used prominently when compared to the other elements around it. The court found it was used to describe what the product does. And the court found that, even though WD–40 might have been aware of Sorensen’s rights, and even though WD–40 didn’t attempt to “clear” INHIBITOR before use7, it didn’t use INHIBITOR in bad faith. In essence, the court held that if you genuinely believe that you aren’t using a term as a trademark, your subsequently use isn’t bad faith.8 This is good news, since the point of the fair use defense is so you don’t have to spend money and time on a clearance search for every little thing you’re considering putting on your product or in your advertising.
Why Do We Need Fair Use at All? It’s Not Confusing.
But if you are using a mark in a “non-trademark” and purely descriptive way, how could you be liable for trademark infringement in the first place? By definition, it would seem that consumers couldn’t be confused. They wouldn’t look at the WD–40 label and think, “Huh, INHIBITOR. I’ll have to remember that for next time I need corrosion inhibitor.” They’ll think instead, “Oh, it inhibits corrosion. Maybe I need some of that.”
The key to any case of trademark infringement is “likelihood confusion,” and likelihood of confusion would seem to be the ultimate brake on overprotection of trademarks. And, really, it should be. But there are a couple of reasons why isn’t a reliable backstop. First, the major “likelihood of confusion” factors—strength of the mark, similarity of the two marks9, and similarity of the products—don’t take into account anything like “non-trademark” use. Perhaps it should, like a “prominence of the allegedly infringing use” factor. Second, likelihood of confusion is a classic fact-intensive, multi-factor jury question, i.e., a legal quagmire. You really don’t know how the jury is going to rule, and from the defense’s point of view, that’s not very comforting, even though the defense no longer shoulders the burden of proof. “Descriptive fair use,” by contrast, is a fairly straightforward idea that can be decided by the court on summary judgment or, failing that, is something a jury can get its head around.
This all raises a more fundamental question: is there ever a time when we would tolerate a confusing use of a mark? Remember that the social good of trademark law is to prevent consumer confusion. If WD–40’s use of INHIBITOR really did confuse consumers, should it nevertheless be able to use INHIBITOR under “descriptive fair use”? (Or is that just impossible?)
The Problem with Protecting Endorsement & Nominating a Solution
Oh, is this difficult? Then consider the other (non-statutory) kind of fair use in trademark law: “nominative fair use.” The defense is not universally recognized. It permits use of someone else’s mark to promote your own products, provided that (1) you really can’t say what you want to say about your product without using the mark, (2) you don’t use more of the mark than you need to, and (3) you don’t do anything “that would suggest sponsorship or endorsement by the mark holder.”
The idea is to let you say things like, “We sell APPLE products,” “Our products are better than APPLE’s,” or even “APPLE sucks!” These are “trademark” uses of APPLE because either they refer to our own products, or they suggest an association with or endorsement by Apple, Inc. That’s right: you infringe trademark not only by confusing consumers into the source of the goods, but also by the mere suggestion that you or your products are associated with or endorsed by the mark owner. You can see how that might lead to some overprotection.
We want to promote honest and accurate communication between businesses and their customers, and you can’t really say these (presumably) accurate things without using the mark APPLE. But it’s not as easy as that, because Apple still has a right not to be falsely associated with you. If customers think Apple has endorsed you, they’d be more likely to patronize your store, and you’d be trading on Apple’s goodwill in APPLE. So, there’s no problem saying “We sell APPLE products,” and it’s clearly illegal to say, “We are an authorized APPLE retailer,” or to use the Apple logo (since that’s more than you need to say what you want to say). But there’s a pretty wide gray area in between. What if, for example, you had a website that showed lots of completely accurate pictures of your APPLE merchandise10 At some point, it starts looking like you’re associated with Apple, even if you’re never dumb enough to actually say so.
Since suggesting sponsorship or endorsement would constitute an act of trademark infringement, the “nominative fair use” defense ends up not being much of a defense at all. You still pretty much have to prove that you aren’t infringing, so what’s the point? Perhaps it’s just a useful way of focusing on a certain type of use, and isn’t really a defense at all. Or (as one court has held), it really is a defense, but instead of having to prove you aren’t suggesting an affiliation, you just have to accurately describe your relationship with the markholder.
Fair Use Should Start Where Likelihood of Confusion Ends, But it Doesn’t.
Ideally, fair use should start where likelihood of confusion ends11, and we wouldn’t need fair use defenses to claims of trademark infringement. But our likelihood of confusion analysis is not up to the job. It doesn’t take into account “trademark use” or lack thereof, it’s too squishy12, and it treats all forms the confusion the same.13. Further, over time, the rights of mark owners have expanded, but there’s been no corresponding consideration of free expression rights. Thus, we still need the defenses of “descriptive fair use” and even “nominative fair use” (once we work out what it is).
Thanks for reading!