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Using Third Parties' Trademarks: Unpacking Commerciality Using Third Parties’ Trademarks: Unpacking Commerciality, Competition, and Confusion By Brooke Erdos Singer and Maxine Sharavsky I. Introduction ment defenses,8 the following sections provide insight into Drawing the line between permissible and imper- how courts draw the boundary between commercial and missible uses of a third party’s trademark (whether in non-commercial use in various contexts. a competitive context or otherwise) is a matter of some 1. Advertising complexity, involving consideration of the bounds of First Amendment protected speech, the distinctions be- The use of a mark “in connection with a good or ser- tween commercial and non-commercial use, defenses to vice” does not require use of the mark in connection with infringement and dilution that are available for purposes offering a specific product or service: an advertisement’s of allowing competition and critique, and, of course, the general promotion of patronage or intent to enhance con- likelihood of consumer confusion as to the source or en- sumer goodwill is likely to be found to constitute com- dorsement of goods or services. Further complicating the mercial use, as explained by the Seventh Circuit in Jordan 9 analysis is the lack of consistency in the treatment of these v. Jewel Food Stores, Inc. Time, Inc., the publisher of Sports topics from jurisdiction to jurisdiction. Illustrated magazine, published a commemorative issue of the magazine devoted exclusively to Michael Jordan in This article sets forth a basic framework for consider- celebration of his induction into the NBA Hall of Fame. ing whether the use of a third party’s trademark is per- Jewel-Osco supermarket placed a full-page spread in the missible, with particular emphasis on uses in advertising magazine congratulating Jordan on his induction (but not and digital contexts. It also presents some hypothetical advertising any particular product or offer). Jordan sued examples to explore the boundaries and potential pitfalls Jewel-Osco alleging, inter alia, false endorsement under associated with uses of third-party marks.1 the Lanham Act.10 The district court held that the ad was fully protected noncommercial speech, but the Seventh II. A Framework for Use of Third Parties’ Circuit reversed, explaining that “[a]n advertisement is no Trademarks less ‘commercial’ because it promotes brand awareness or loyalty rather than explicitly proposing a transaction in a A. Distinguishing Between Commercial and Non- specific product or service.”11 Commercial Use Both the Supreme Court’s First Amendment juris- 2. Gripe Sites prudence and the Lanham Act afford a higher level of In Bosley Medical Institute, Inc. v. Kremer12 the Ninth protection to non-commercial speech than to commercial Circuit held that the defendant’s maintenance of a gripe speech, including, in the context of the Lanham Act, with site located at www.BosleyMedical.com (incorporating the respect to uses of third-party trademarks. Under the First plaintiff’s registered trademark), where the defendant “to Amendment, non-commercial speech may be subject to put it mildly, was uncomplimentary of the Bosley Medi- governmental regulation only if the regulation survives cal Institute”13 and its hair restoration services, was not strict constitutional scrutiny.2 Commercial speech also is infringing because the defendant was not using the mark entitled to First Amendment protection,3 but the regula- “in connection with the sale of goods or services” where tion of commercial speech is subject to a less rigorous the defendant’s website “contain[ed] no commercial links level of judicial scrutiny.4 . offer for sale any product or service or contain paid advertisements from any other commercial entity.”14 First Amendment protections and the favored treat- However, businesses considering using their competi- ment of non-commercial speech are reflected in the fact tors’ trademarks to critique the competitors’ products and that under the Lanham Act and related case law, it is a services should note that the identity of the critic matters: defense to both trademark infringement and trademark the Bosley holding was based, in large part, on the fact that dilution claims that the challenged use of another’s the defendant was not offering competing services to the trademark is non-commercial. Specifically, with respect public (such that the defendant’s use of the Bosley Medical to trademark infringement claims, it is a defense that the mark could not have misled consumers into purchasing a use of another’s mark is not “on or in connection with competing product).15 a good or service.”5 With respect to trademark dilution claims,6 it is a defense that the use of another’s mark is “noncommercial.”7 Although there is little uniformity in judicial ap- PrintedBROOKE withERDOS permission SINGER is afrom: partner Bright at Davis Ideas &, Spring Gilbert, 2017, LLP in Vol. New 26, York, No.1, proaches to determining whether a use is non-commercial publishedSecretary ofby the the Section, New York and State Chair Bar of Association,the Section’s One Advertising Elk Street, Law for purposes of infringement, dilution, and First Amend- Albany,Committee. New M YorkAXINE 12207 SHARAVSKY is an associate at Davis & Gilbert. NYSBA Bright Ideas | Spring 2017 | Vol. 26 | No. 1 171 2342 3. Fan Sites fair use beyond purely literal identification of goods and UsingIn Taubman Third Co. v. Webfeats Parties’,16 the defendant, Trademarks: a web services Unpacking to permit the use of certain figurative expressions, designer, operated a website using the name of the plain- such as the words “love potion” to advertising a perfume tiff’sCommerciality, shopping mall as its domain Competition, name; the website anddespite Confusion the ownershisp by a competing fragrance com- 24 includedBy Brooke information Erdos aboutSinger the and mall Maxineand links Sharavskyto the pany of a trademark registration for LOVE POTION. In 25 websites of tenant stores. The defendant described the KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. the Supreme Court held that a party raising a descriptive site as a “fan site” with no commercial purpose, but it ment defenses,8 the following sections provide insight into I. Introduction fair use defense does not have the burden to negate a like- contained links to the defendant’s web design business how courts draw the boundary between commercial and Drawing the line between permissible and imper- lihood of consumer confusion,26 although the ability of the and to his girlfriend’s apparel business. The inclusion of non-commercial use in various contexts. thesemissible links uses led ofthe a Sixththird party’sCircuit trademarkto conclude (whether that, “though in party claiming infringement to prove a likelihood of con- a competitive context or otherwise) is a matter of some 27 minimal[ly],” the defendant was using the plaintiff’s sumer1. Advertising confusion is relevant to the fair use analysis. markcomplexity, in a commercial involving manner. consideration17 The courtof the wasbounds clear, of First Amendment protected speech, the distinctions be- The availabilityuse of a mark of “inthe connectiondescriptive withfair use a good defense or ser - however, that aside from the commercial links on the providesvice” does reasonable not require comfort use of theto businesses mark in connection that third withpar- website,tween commercial it found “no and use non-commercial ‘in connection withuse, defensesthe ad- to infringement and dilution that are available for purposes ties’offering (including a specific their product competitors’) or service: trademark an advertisement’s ownership vertising’ of goods and services” and that the Lanham of allowing competition and critique, and, of course, the ofgeneral terms promotion that are descriptive of patronage or suggestive or intent to of enhance key goods con - Act therefore could not properly be invoked.18 Case law likelihood of consumer confusion as to the source or en- orsumer services goodwill in an isindustry likely to will be foundnot prevent to constitute the use comof the- regarding fan sites or other fan content is limited, likely dorsement of goods or services. Further complicating the samemercial terms use, to as describe explained such by thegoods Seventh or services Circuit in in a non-Jordan because, as a practical matter, businesses stand to benefit 9 analysis is the lack of consistency in the treatment of these trademarkv. Jewel Food manner. Stores, Inc. However, Time, businesses Inc., the publisher expecting of toSports rely from fan content and thus are more likely to tolerate or topics from jurisdiction to jurisdiction. onIllustrated a descriptive magazine, fair usepublished defense a mustcommemorative take care to issueuse the encourage it and/or to resolve conflicts with fan content of the magazine devoted28 exclusively to Michael Jordan in 19 terms “in good faith,” meaning, according to at least creatorsThis without article sets litigation. forth a basic framework for consider- somecelebration circuits, of withouthis induction intent into “to thetrade NBA on Hallthe good of Fame. will ing whether the use of a third party’s trademark is per- Jewel-Osco supermarket placed a full-page spread in the 4. Social Media Platforms of the trademark owner by creating confusion as to the missible, with particular emphasis on uses in advertising sourcemagazine of the congratulating goods or services.” Jordan 29on To his avoid induction any inference (but not andCourts digital have contexts. not directly It
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