On Trademark Nominative Fair Use

Trademark law is customary refer to as protecting goodwill in a mark.It defines the exclusive rights given to a producer of goods or services to use a distinctive mark to identify the origin of those goods or services.An infringement suit protects a mark owner against unauthorized uses of its mark or similar marks where a “likelihood of confusion” exists as to whether the infringing goods or services are in fact those of mark owner.Dilution protects an entirely distinct interest-protecting mark owner from unauthorized use of the mark by a non-competitor that weakens or devalues the mark.On the other hand,antitrust scholars are often skeptical about these rights for competition concerns because trademark protection unavoidably has at least some exclusionary impact on the market.Moreover,freedom of expression as a fundamental constitutional right is not only essential for the self-development of the speaker,but also essential for furthering cultural,social,and political processes in society.Nominative fair use is employed to strike a sound balance among these conflict interests.Nominative fair use reflects the fundamental fact that anybody should be free to refer to goods and services by their brand names without consumer likelihood of confusion or trademark dilution.While nominative fair use is conceptually the same when employed as a defense under either dilution or infringement claims,under dilution law the defense is statutory,established by the Trademark Dilution Reform Act of 2006(TDRA).Under the law of trademark infringement,nominative fair use is a judicially created exception to a markowner's exclusive rights that protects from liability the unlicensed use of a trademark that describes or refers to the senior user's goods or services.In 1992,the Ninth Circuit Court of Appeals laid out the definitive 3-prong test for determining whether a commercial user is entitled to a nominative fair use defense in New Kids on the Block.The most significant difference in judicial interpretations of nominative fair use is that between the Ninth Circuit and the Third Circuit.Firstly,this paper explores the oringins and classification of the nominative fair use principle.It defines nominative fair use as where the junior user uses another's trademark deliberately to refer to that party,for purposes such as: news reporting,commentary,parody,advertising(particularly comparative advertising).And then it divides the nominative fair use into commercial and noncommercial.Unlike a copyright,a trademark does not give the trademark holder the right to prohibitthe use of the word.Trademark law contains important limits that place a range of third party conduct beyond the control of the trademark owner.These limits on the trademark owner can be found in the scope of the proscription imposed by the law in question,which in turn helps to establish the elements of a plaintiff's prima facie claim.For example,not all unauthorized use of a mark is prohibited by trademark law.The proscription implicitly authorizes certain third party conduct without the permission of the trademark owner.Most notably,a plaintiff's rights are limited by the need to show that the defendant's activity is likely to cause consumer confusion;unauthorized use that is unlikely to cause confusion is not actionable.Because that element of the trademark infringement claim so directly comports with the core harm that the cause of action seek to avoid-consumer confusion-the prima facie claim does a tremendous amount of work in establishing limits on the trademark cause of action and thus making the scope of protection mesh with the limited purpose of trademark protection.So nominative use of a mark—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,it does not constitute unfair competition;such use is not trademark use because it does not imply sponsorship or endorsement by the trademark holder.“When 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.”From an competition viewpoint,a proper and efficient process of communication between mark participants is essential.The market mechanism of supply and demand only works properly if enterprises provide sufficient information about their products and services,so that consumers can make rational choices based upon the information.A lawful and non-confusion nominative fair use fosters the flow of information in markets.Injury done to a competitor as a result of fair competition has long been considered as non-tortious.The legal conflict between the protection of trademarks and norms protecting freedom of expression arises because trademark law grants right holders exclusive,albeit limited,rights to use their trademarks,such as the right to prevent use of identical signs on identical goods,the right to prevent confusing uses of trademarks on similar and non-similar goods and,in the case of trademarks that have gained reputation,the right to prevent detriment to,or the taking of unfair advantage of,the repute and distinctive character of the trademark.On the other hand,freedom of expression,as a fundamental human rights protected by Constitution,grants all individuals a right to express themselves freely.In this field,conflict between trademarkprotection and freedom of commercial expression may arise,where trademark law protects more than solely confusing use or third-party traders need to use protected trademarks in their commercial communications,for instance: in the context of comparative advertising or in other commercial communications that are aimed at informing or communicating with consumers.The ever-expanding scope and strength of trademark rights has caused justifiable fears of a threat to free expression.Nominative fair use for speech-interests would ensure that socially valuable discourse could exempt from the threat of lawsuits brought by trademark owners.Trademark law specifically contains two separate doctrines of fair use: descriptive fair use,which is also referred to as “classic fair use”,and nominative fair use.Descriptive fair use is a defense to trademark infringement when the term used by the third party is descriptive or geographically descriptive of its goods,services,or business,or is the personal name of the third party or a person connected with the third parity,and the third party has used the term fairly and in good faith solely to describe the third party's goods,services,or business or to indicate a connection with the named person.Descriptive fair use has been applied to registered trademarks,unregistered trademarks,common law cases,and under §43(a)of the Lanham Act.The second type of fair use in trademark law is nominative fair use.Unlike descriptive fair use,the Lanham Act does not contain a nominative fair use defense and its implementation has developed entirely under common law.The definitions and analysis used in applying trademark nominative fair use have evolved significantly over the 25 years since its emergence at 1992 New Kids case.As there is no statutory protection granted to the nominative fair use,and as the concern that the mark-holder is attempting to remove words from ordinary everyday usage is not present in nominative use,it can be concluded nominative fair use only exists when there is no likelihood of confusion as to the relationship between the user and the mark-holder.The classic rationales of freedom of non-commercial expression explain that expression on matters of public interest deserves strong protection even if it is exaggerated,offensive,oppositional,or false,because such expression may contribute to the quest for truth or to various processes in a democracy.It became clear that freedom of non-commercial expression must prevail over trademark rights,even if a degree of economic harm is present,such as consumer confusion or trademark dilution.The limits of freedom of non-commercial expression must be found,for example,where,taking all the relevant facts and factors in anindividual case into account,criticism or comment no longer bears any factual relationship to an issue of public interest connected to the trademark,but rather primarily disparages the trademark at stake.The rationale for the protection of commercial expression,including the freedom third parties to use signs protected by trademark rights,can be found in the positive effects of commercial expression for a citizen in today's society;it is thus a freedom to provide information to(potential)consumers.Purely commercial expression,which includes the intended purpose of a product or service,in particular as accessories or spare parts,or use in comparative advertising,may be restricted by requirement that there is no likelihood of confusion or dilution.Opposing to the Ninth Circuit's New Kids test or the Third Circuit's bifurcated analysis,a commercial nominative use is fair provided it meets the following two requirement: first,the product or service in question must be one not readily identifiably without use of the trademark;second,the defendant's use of the plaintiff's mark is not likely to cause sponsorship or source confusion,or dilution.In the first instance,the court should determine whether the party claiming nominative fair use is using the plaintiff's mark otherwise than as a designation of source for that party's own goods or services.In the second step,the court should determine whether the defendant's use of the plaintiff's mark is likel to cause sponsorship confusion or source confusion,or dilution.To do that,the court need not look through the multi-factor standard confusion analysis.Instead the court may replace its standard inquiry with a more truncated analysis,including consideration of a more limited set of factors.Nominative fair use is not an affirmative defense,but a legal conclusion that is reached when a third party uses the plaintiff's trademark to refer to the plaintiff and such use does not cause public confusion as to the true and accurate nature of the relationship between the parties.Only in cases where the plaintiff fails to meet its burden to establish that the nominative use is confusing is such use fair.Conversely,such use is only fair when the plaintiff fails to meet its burden;there is no affirmative defense to be raised and a defendant to an infringement suit can only rebut the plaintiff's case.Although the third amendment of the Trademark Law in China has just formally introduced the fair use doctrine into the Trademark Law,it is already not referred to the nominative fair use.Similar to the proposals rendered by the U.S.A scholar,China Trademark Law can add two clauses to Art.59 as follow:(1)“That the use of the tradmark is a use,otherwise than as a mark,which is descriptive of and used fairly and in good faith only torefer to or comment upon the trademark or the trademark owner's goods or services.”(2)“Any noncommercial use of a mark shall not be actionable.”...