The “Fair Use” of Another’s Trademarks

By: John A. DeMaro

There are instances where a business legitimately can and should use another firm’s trademark. Consumer comparison surveys (“Coke v. Pepsi”), product references (“We service Maytag . . .”), compatibility assurances (“IBM-compatible”), and a host of other settings justify the “fair use” of another business’ trademark — without express authorization. Nonetheless, advertisers typically approach the use of someone else’s trademark with trepidation. Caution is both understandable and prudent. Many holders of protected marks have a hair-trigger approach to firing off cease and desist letters or, worse, filing suit.

Many advertisers simply avoid the potential problem altogether. Yet there are circumstances where the unauthorized use of another’s mark will be classified as a “fair use” and condoned by the courts. It is essential to know the parameters within which such a use is permissible, before the advertisement, marketing piece or other matter is published.

Any discussion of trademarks, trademark infringement and unfair competition must begin with the Lanham Act, 15 U.S.C. §§1051-1127. The Lanham Act defines the term “trademark” as “any word, name, symbol, or device, or any combination thereof . . . used by a person . . . to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.” 15 U.S.C. §1127. A mark’s source-distinguishing ability allows it to serve those basic purposes that gave birth to trademark law in the first place, that is, to ensure that a product’s maker acquires the rewards of the reputation it has built, and to enable consumers to recognize and repurchase goods with which they have previously been satisfied.

In connection with trademark infringement, the Lanham Act was designed to prevent consumers from becoming confused as to either: (1) “the relationship between the trademark holder and a competitor seeking to use that trademark or a substantially similar mark in its own marketing efforts,” or (2) the source of the product. See Home Box Office, Inc. v. Showtime/The Movie Channel, Inc., 832 F.2d 1311, 1314 (2d Cir. 1987). Among other things, this section was meant to prevent a competitor from free-riding on a trademark owner’s goodwill and reputation.

Not all “unauthorized” use of a trademark is prohibited. “Fair use” is a defense to liability for trademark infringement and unfair competition.

A. The Use of Another’s Trademark In A Descriptive Sense
It is a basic principle marking an outer boundary of the trademark monopoly that, while trademark rights may be acquired in a word, symbol or device, acquisition of those rights does not prevent others from using the word, symbol or devise in good faith in its descriptive sense, and not as a trademark. “This principle is of great importance because it protects the right of society at large to use words or images in their primary descriptive sense, as against the claims of a trademark owner to exclusivity.” Car-Freshner Corp. v. S.C. Johnson & Son, Inc., 70 F.3d 267, 269 (2d Cir. 1995); see Champion Spark Plug Co. v. Sanders, 331 U.S. 125 (1947) (registering proper noun as trademark does not withdraw it from language, nor reduce it to exclusive possession of registrant). To come within this fair use defense a person must make use of the other party’s trademark (i) other than as a mark, (ii) in a descriptive sense, and (iii) in good faith. See 15 U.S.C. §1115(b)(4).

Because the trademark owner’s rights in the mark extend only to its significance in identifying source, not to the original descriptive meanings of a mark, it is sometimes difficult to tell what factors must be considered to determine whether a use is fair because it is descriptive. Courts look at whether the mark used describes certain aspects of the alleged infringer’s own goods, and whether the mark as used describes an action the alleged infringer hopes consumers will make of its product. The Restatement (Third) of Unfair Competition adopts as a relevant factor the “physical nature of the use in terms of size, location, and other characteristics in comparison with the appearance of other descriptive matter or other trademarks.” Restatement (Third) of Unfair Competition §28 cmt. C. (1995).

Cosmetically Sealed Inds., Inc. v. Chesebrough Pond’s USA Co., 125 F.3d 28 (2d Cir. 1997) is a noteworthy case. In Cosmetically Sealed the manufacturer of lip gloss that was marketed under the registered trademark “Sealed with a Kiss” brought a Lanham Act action against competitor that used the phrase “Seal it with a Kiss” in the point-of-sale promotional displays for its lipsticks. The district court entered summary judgment for the competitor, finding that “Seal it with a Kiss” was not used to identify its product but, rather, as an invitation to consumers to test the lipsticks’ durability by applying it, then sealing or imprinting a complimentary postcard. The Second Circuit affirmed and held that the competitor’s use of the phrase “Seal it with a Kiss” was descriptive in nature and, therefore, within the fair use defense to Lanham Act liability.

B. Reference to the Owner of the Mark or the Owner’s Goods or Services
Another species of the fair use defense is the use of a mark when referring to the owner of a mark or the owner’s goods or services. Once again, this defense is only available if the unauthorized user is not using the term for purposes of source identification and the use does not imply sponsorship or endorsement by the trademark owner. Obviously, a great deal of useful social and commercial dialogue would be all but impossible if speakers were under threat of an infringement lawsuit every time they made reference to a person, company or product by using its trademarks. The following cases illustrate this point.

In Clark and Olive Enterprises, Inc. v. America Online Inc., 2000 WL 33535712 (C.D. Cal. 2000), plaintiffs sued America Online (“AOL”) for trademark infringement based upon America Online’s use of Dick Clark’s name in a mass mailing of promotional advertising to members of the American Association of Retired Persons (“AARP”). The advertisement included the image of the detail of a Ford Thunderbird taillight with AOL’s and AARP’s logos. Below these logos appeared the following text: “If you danced to the Beatles, cruised in a Thunderbird, or tuned into Dick Clark, you have earned . . . 100 hours free [Internet service on AOL].” The plaintiffs argued that they own a federal service mark registration for the mark Dick Clark and that AOL’s use of the mark would confuse consumers into believing that Clark is associated with, or endorses, AOL’s services. The Court dismissed the Lanham Act claims finding that the promotion made fair use of the Dick Clark mark. According to the Court, the use of the name was a simple way to identify the individual, was not excessive, and, in its context together with other generational icons from the 1950’s and 1960’s, did not suggest sponsorship or endorsement by the individual.

In New Kids on the Block v. North American Pub., Inc., 971 F2d 302 (9th Cir. 1992), the Ninth Circuit affirmed summary judgment in favor of the defendant newspapers which had used the trademarked name of the band “New Kids on the Block” to refer to the band in polls it conducted for the purpose of stimulating newspaper sales. The Court referred to a “class of cases where the use of the trademark does not attempt to capitalize on consumer confusion or to appropriate the cachet of one product for a different one,” noting that “[s]uch 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: The Ninth Circuit stated that a commercial user is entitled to a nominative fair use defense if the user meets the following three requirements: (i) the product or service in issue must not be readily identifiable without reference to the mark; (ii) only so much of the mark may be used as is reasonably necessary to identify the product or service; and (iii) the user must not do anything to imply sponsorship or endorsement by the trademark owner. New Kids on the Block, 971 F2d at 308.

C. The First Sale Doctrine
The unauthorized use of another’s trademark is also permitted under the “first sale” doctrine. Under this doctrine a business that resells genuine, non-adulterated goods bearing a true mark cannot be held liable for trademark infringement, even if the distributor had no authority to do so from the actual trademark owner. See Polymer Technology Corp. v. Mimran, 975 F.2d 58 (2d Cir. 1992). “After the first sale, the brandholder’s control is deemed exhausted [and d]own-the-line retailers are free to display and advertise the branded goods. Secondhand dealers may advertise the branded merchandise for resale in competition with the sales of the markholder . . . .” Osawa & Co. v. B&H Photo, 589 F.Supp. 1163 (S.D.N.Y. 1984).

D. Comparative or Compatibility Advertising
Comparative advertising is advertising that compares the relative qualities of competitive goods or services. An example is a Nissan automobile ad that compare the price and features of the Nissan Sentra to the Toyota Camry. This unauthorized use of a rival’s trademark can be used so long as the advertising does not contain misrepresentations or create a reasonable likelihood that purchasers will be confused as to source, identity, or sponsorship of the advertiser’s product. See Cuisinarts, Inc. v. Robot-Coupe Int’l Corp., 509 F.Supp. 1036 (S.D.N.Y. 1981).

This use of another’s marks is beneficial because it promotes healthy competition and permits consumers to make more informed choices. The Federal Trade Commission (“FTC”) even encourages the naming of, or reference to competitors in comparative advertising. See 16 C.F.R. §14.15(b). However, the FTC’s regulations go on to state that there must be “clarity, and, if necessary, disclosure to avoid deception of the consumer.” Id.

Another type of advertising, compatibility advertising, is essentially advertising about a product’s fit with a competitor’s product or service. Compatibility advertising is similar to comparative advertising in that it “assists consumers and furthers the societal interest in the fullest possible dissemination of information.” Central Hudson Gas v. Public Service Comm. Of New York, 447 U.S. 557, 561-62 (1980).
Whether there is trademark infringement and a likelihood of confusion of buyers is a question to be determined by the specific language of the advertising copy. For example, in Weight Watchers Int’l, Inc. v. Stouffer Corp., 744 F.Supp. 1259 (S.D.N.Y. 1990), a compatibility advertising case, the Southern District of New York held that the maker of Lean Cuisine diet foods infringed on the Weight Watchers trademark when it discussed Weight Watchers food exchange values in such a way as to falsely imply endorsement or affiliation. The Court found that defendant’s use of the phrase “Stouffer’s presents Weight Watchers exchanges for all 28 Stouffer’s Lean Cuisine entrees” was ambiguous on its face and created a strong likelihood of consumer confusion. According to the Court, the use of the word “presents” between the marks “Stouffer’s” and “Weight Watchers” “creates the impression either that Stouffer owns Weight Watchers, or more likely that Stouffer is presenting these exchanges for Weight Watchers – in other words, that Weight Watchers gave Stouffer the exchanges to publish in the ad.” Weight Watchers, 744 F.Supp. at 1276. However, the Court noted that some of defendant’s uses of the trademark were not infringing, in that they only tried to convince those on the Weight Watchers program to eat Lean Cuisine by listing food exchanges, not to imply that Weight Watchers endorsed Lean Cuisine.


Trademark owners will inevitably scrutinize published materials bearing unauthorized uses of their marks. To avoid infringement and unfair competition claims, a user must avoid ambiguous language causing consumers to be confused as to source, identity or sponsorship of the user’s product or service. Within the established parameters, there is ample room to creatively and productively deploy trademarks owned by others.