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Playboy Enterprises, Inc., a Delaware Corporation, Plaintiff–Appellee, Argued and Submitted Sept 796 279 FEDERAL REPORTER, 3d SERIES Playboy Enterprises, Inc., a Delaware PLAYBOY ENTERPRISES, INC., corporation, Plaintiff–Counter– a Delaware corporation, Defendant–Appellee, Plaintiff–Appellant, v. Terri Welles, an individual, Defendant, v. and Terri WELLES, an individual; Terri Michael Mihalko, an individual; Ste- Welles, Inc., a California corporation; phen Huntington, an individual, Stephen Huntington, an individual; Defendants–Appellants. Michael Mihalko, an individual; Pip- Nos. 00–55009, 00–55229, 00– pi, Inc., a California corporation, De- 55537 and 00–55538. fendants–Appellees. United States Court of Appeals, Ninth Circuit. Playboy Enterprises, Inc., a Delaware corporation, Plaintiff–Appellee, Argued and Submitted Sept. 11, 2001 Filed Feb. 1, 2002. v. Terri Welles, an individual; Ter- Publisher of magazine sued model it ri Welles, Inc., a California cor- designated as ‘‘Playmate of the Year 1981’’ from using that phrase and others involv- poration, Defendants–Appellants, ing its trademarks on her Internet web- and site. The United States District Court for the Southern District of California, Judith Stephen Huntington, an individual; Mi- N. Keep, Chief District Judge, granted summary judgment for model. Publisher chael Mihalko, an individual; Pippi, appealed. The Court of Appeals, T.G. Nel- Inc., a California corporation, Defen- son, Circuit Judge, held that: (1) use of dants. trademarks in website’s headlines and ban- ner advertisements was nominative use; (2) Playboy Enterprises, Inc., a Delaware model’s inclusion of terms ‘‘playboy’’ and corporation, Plaintiff–Counter– ‘‘playmate’’ in metatags of her website was Defendant–Appellee, nominal use; (3) model’s repeated, stylized use of ‘‘PMOY 881,’’ on her wallpaper, or v. background, of her website was not nomi- Terri Welles, an individual; Terri native use. Welles, Inc., a California corporation, Affirmed in part, reversed and re- Defendants–Counter–Claimants–Ap- manded in part. pellants, 1. Federal Courts O776 and The Court of Appeals reviews a dis- trict court’s grant of summary judgment Pippi, Inc., a California corporation, de novo. Fed.Rules Civ.Proc.Rule 56, 28 Defendant–Appellant. U.S.C.A. PLAYBOY ENTERPRISES, INC. v. WELLES 797 Cite as 279 F.3d 796 (9th Cir. 2002) 2. Trade Regulation O375.1 bols associated with trademarks, and mod- The classic fair use case is one in el did nothing in conjunction with her use which the defendant has used the plain- of marks to suggest sponsorship or en- tiff’s mark to describe the defendant’s own dorsement by publisher. product. 8. Trade Regulation O375.1 3. Trade Regulation O375.1 To satisfy the first part of the three In a trademark infringement case, the part test for nominative use, the product test for ‘‘nominative use’’ is as follows: or service in question must be one not first, the product or service in question readily identifiable without use of the must be one not readily identifiable with- trademark; this situation arises when a out use of the trademark; second, only so trademark also describes a person, a place much of the mark or marks may be used or an attribute of a product and there is no as is reasonably necessary to identify the descriptive substitute for the trademark. product or service; and third, the user must do nothing that would, in conjunction 9. Trade Regulation O375.1 with the mark, suggest sponsorship or en- dorsement by the trademark holder. Model’s inclusion of terms ‘‘playboy’’ See publication Words and Phras- and ‘‘playmate’’ in metatags of her Inter- es for other judicial constructions net website was nominal use, excepted and definitions. from trademark infringement law, since there was no practical way of identifying 4. Trade Regulation O375.1 content of website without referring to In the context of trademark infringe- trademarked terms, trademarked terms ment, a nominative use may also be a accurately described contents of model’s commercial one. website in addition to describing model, 5. Trade Regulation O375.1 metatags used only so much of marks as In cases in which the defendant raises reasonably necessary and nothing was a nominative use defense to trademark done in conjunction with them to suggest infringement, the three factor nominative sponsorship or endorsement by trademark use test should be applied instead of the holder, website’s metatags did not repeat test for likelihood of confusion. terms extensively, and her site was not at top of list of search results when searching 6. Trade Regulation O340.1 by those terms. When a defendant uses a trademark nominally, the trademark will be identical 10. Trade Regulation O375.1 to the plaintiff’s mark, at least in terms of Model’s use of ‘‘PMOY 881,’’ as abbre- the words in question. viation for trademarked term ‘‘Playmate of 7. Trade Regulation O375.1 the Year 1981,’’ on her wallpaper, or back- Model’s use of trademarks of maga- ground, of her Internet website was not zine publisher in her headlines and banner nominative use and, on that basis, could advertisements was nominative use, ex- not be excepted from trademark infringe- cepted from law of trademark infringe- ment law, since name of model or her ment, since there was no practical way of likeness did not appear before or after identifying content of website without re- ‘‘PMOY 881’’ designation and repeated, ferring to trademarked terms, model used stylized use of ‘‘PMOY 881’’ designation only trademarked words, not font or sym- was not necessary to describe model. 798 279 FEDERAL REPORTER, 3d SERIES 11. Trade Regulation O375.1 or service, but by creating an association Model’s reference on her Internet in consumers’ minds between a mark and a website to her title as ‘‘Playmate of the different good or service. Lanham Trade– Year 1981’’ was nominative use, and as Mark Act, § 43(c)(1), 15 U.S.C.A. such, was excepted from anti-dilution law; § 1125(c)(1). although model was in effect referring to 17. Trade Regulation O366 publisher’s product when she referred to Uses that do not create an improper her title, she did not diminish or dilute title association between a mark and a new by truthfully identifying herself as its one- product, but merely identify the trademark time recipient. Lanham Trade–Mark Act, holder’s products, are excepted from the § 43(c)(1), 15 U.S.C.A. § 1125(c)(1). reach of the anti-dilution statute. Lanham 12. Trade Regulation O366 Trade–Mark Act, § 43(c)(1), 15 U.S.C.A. Nominative uses, by definition, do not § 1125(c)(1). dilute trademarks. Lanham Trade–Mark 18. Trade Regulation O366 Act, § 43(c)(1), 15 U.S.C.A. § 1125(c)(1). Uses in comparative advertising are 13. Trade Regulation O366 excepted from the anti-dilution law. Lan- In the context of trademark dilution, ham Trade–Mark Act, § 43(c)(1), 15 ‘‘blurring’’ occurs when another person’s U.S.C.A. § 1125(c)(1). use of a mark creates the possibility that 19. Trade Regulation O366, 375.1 the mark will lose its ability to serve as a unique identifier of the plaintiff’s product. Nominative uses are excepted from Lanham Trade–Mark Act, § 43(c)(1), 15 anti-dilution law on the basis that a nomi- U.S.C.A. § 1125(c)(1). native use merely refers to the trademark See publication Words and Phras- holder’s product; it does not create an es for other judicial constructions improper association in consumers’ minds and definitions. between a new product and the trademark holder’s mark. Lanham Trade–Mark Act, 14. Trade Regulation O366 § 43(c)(1), 15 U.S.C.A. § 1125(c)(1). In the context of trademark dilution, ‘‘tarnishment’’ occurs when a famous 20. Trade Regulation O366, 375.1 trademark is improperly associated with Model’s repeated, stylized use of an inferior or offensive product or service. ‘‘PMOY,’’ as abbreviation for trademarked Lanham Trade–Mark Act, § 43(c)(1), 15 term ‘‘Playmate of the Year,’’ on her wall- U.S.C.A. § 1125(c)(1). paper, or background, of her Internet web- See publication Words and Phras- site was not nominative and, on that basis, es for other judicial constructions could not be excepted from anti-dilution and definitions. law. Lanham Trade–Mark Act, § 43(c)(1), 15. Trade Regulation O366 15 U.S.C.A. § 1125(c)(1). Dilution of a trademark may occur 21. Trade Regulation O366 through uses on the internet as well as elsewhere. Model’s repeated, stylized use of term ‘‘PMOY’’ on her Internet website could 16. Trade Regulation O366 not, as a matter of law, dilute trademarked Dilution of a trademark works its term ‘‘Playmate of the Year,’’ since trade- harm not by causing confusion in consum- marked term ‘‘Playmate of the Year’’ was ers’ minds regarding the source of a good not identical or nearly identical to term PLAYBOY ENTERPRISES, INC. v. WELLES 799 Cite as 279 F.3d 796 (9th Cir. 2002) ‘‘PMOY.’’ Lanham Trade–Mark Act, ment as to its claims of trademark in- § 43(c)(1), 15 U.S.C.A. § 1125(c)(1). fringement, unfair competition, and breach of contract against Terri Welles; Terri 22. Corporations 1.6(3) O Welles, Inc.; Pippi, Inc.; and Welles’ cur- Corporate veil would not be pierced, rent and former ‘‘webmasters,’’ Steven under California law, to impute to model, Huntington and Michael Mihalko. We who controlled corporation, obligation of have jurisdiction pursuant to 28 U.S.C. corporation not to use magazine’s designa- § 1291, and we affirm in part and reverse tion of model as ‘‘Playmate of the Year in part. 1981’’ without magazine’s consent; al- though magazine advanced sufficient evi- In a separate memorandum disposition, dence to establish unity of interest, there we resolve Welles’ cross-appeal of the dis- was no indication that adherence to fiction trict court’s grant of summary judgment of separate existence of corporation would as to her counterclaims for defamation, sanction a fraud or promote injustice.
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