Unnecessary Nominative Use May Not Be Trademark Infringement

Savvy advertisers know that some uses of a competitor's trademark—"nominative" uses—generally are not considered infringement. An important but vague aspect of the doctrine of "nominative fair use" was recently illuminated by the First Circuit Court of Appeals in Swarovski AG v. Building #19, Inc. 1Specifically, the court held that unnecessary use of a mark does not by itself create a likelihood of confusion. The ruling is instructive to anyone who uses another's trademark, or whose trademark is used by another, in advertising.

The nominative fair use doctrine applies when one uses the trademark of another to refer to the markholder's products or services. For example, an independent auto repair shop that specializes in Volkswagens can use the registered trademark "Volkswagen" in its advertising without committing trademark infringement. Comparative advertising is a another example: It is well-established that you have a limited right to use another's mark when truthfully comparing your product to the markholder's product.

Although it is generally acknowledged that a proper nominative use is not an infringement, there is no national consensus on how the doctrine relates to the traditional "likelihood of confusion" test or what exactly is a proper nominative use. The Ninth Circuit Court of Appeals, for example, treats the doctrine as an alternative test for evaluating likelihood of confusion, whereas the Third Circuit Court of Appeals treats it as a defense to a finding of likelihood of confusion. 2Other circuits acknowledge the doctrine but have not officially endorsed any particular test.

One commonly recognized hallmark of a proper nominative use is "no unnecessary use." Even if use of the mark is necessary to identify the markholder's products or services, the use would still not be considered a "nominative fair use" if the alleged infringer "used more of the mark than necessary" to identify the markholder's goods and services.3 Several cases recognize that the "no unnecessary use" condition prevents an unauthorized user of the mark from using the distinctive lettering style or other design elements of the mark. Our independent VW repair shop, for example, can use "Volkswagen" or "VW" in its signage, but it cannot use VW's distinctive lettering style or color or the familiar encircled VW emblem. Beyond that, however, the "no unnecessary use" condition is poorly defined in the case law. This is the topic addressed by the First Circuit in...