The Meaning and Scope of the Trademark Fair Use Defense
Most intellectual property practitioners are familiar with the concept of a "fair use" defense in the context of copyright infringement actions. But the decision by the United States Supreme Court in KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004) devoted quality time to considering the meaning and scope of the fair use defense as it exists in the context of trademark infringement actions. In so doing, the High Court made its own "lasting impression" on trademark infringement analysis.
15 U.S.C. § 1115(b)(4) provides the trademark fair use defense to a party whose "use of the…name, term, or device…charged to be an infringement is a use, otherwise than as a mark…of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party." (Emphasis added.) In essence, a term must be used descriptively, not as a mark, fairly, and in good faith to meet this statutory "fair use" standard.
The Lasting Impression case involved a dispute over competing uses of variations of the term "microcolor." The Lasting Impression company owned an incontestable registered trademark including the term MICRO COLORS with respect to permanent make-up pigmentation products. KP Permanent Make-Up company began using the term "microcolor" in marketing brochures in association with its similar products. Lasting Impression sued KP Permanent Make-Up for trademark infringement, and KP raised the fair use defense.
The case came to the Supreme Court because of a split between the federal Circuit Courts of Appeal regarding the proper interpretation of the trademark infringement fair use defense. Some Circuits (including the Ninth, from which the case was appealed) held that the fair use defense required the alleged infringer to affirmatively demonstrate that no likelihood of consumer confusion between the challenged use and the mark at issue exists. That fair use standard essentially placed on the alleged infringer the burden of proving a lack of any likely confusion.
Quite differently, other Circuits allowed the fair use defense to remain viable even where there was some likelihood of confusion between the challenged use and the mark at issue. Those Circuits reasoned that, because it was the trademark owner’s burden to prove a likelihood of confusion in a trademark infringement action, the fair use defense could not reasonably be interpreted to require the alleged infringer to negate all suggestion of a likelihood of confusion. Instead, these Circuits examined the degree of likely confusion in determining whether the use of a mark by the alleged infringer was, in fact, fair.
The Supreme Court agreed with the second standard described above. In trademark infringement actions, the Court held that a party raising the statutory affirmative defense of fair use does not have an independent burden to negate any likelihood that consumers will be confused about the origin of the subject goods or services. According to its decision in Lasting Impression, some possibility of consumer confusion is compatible with the fair use defense. Even where there is some likelihood of confusion, fair use can be raised as a successful defense, and the burden of proving likelihood of confusion remains on the party charging infringement.
Still, the extent of likely confusion is relevant to the assessment of fair use, and has an impact on what will be considered an objective "fair use," such that courts will balance and weigh the degree of likely confusion in deciding whether the fair use defense is valid.
The Lasting Impression case itself was remanded to the Ninth Circuit. Interestingly, the Ninth Circuit still refused to uphold summary judgment for KP based on the fair use defense because it held that material issues of fact existed regarding the degree of likely confusion between the companies’ uses of the term "microcolor." See KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 408 F.3d 596 (9th Cir. 2005).
So, what "lasting impressions" can be drawn from the Supreme Court’s decision? It appears that, when evaluating whether the statutory fair use defense will operate to repel claims of trademark infringement, parties may follow four basic steps:
- Determine whether the challenged use is a term or device, as opposed to a symbol or picture. The fair use defense only applies to "terms or devices."
- Determine whether the challenged term is being used as a mark. The fair use defense does not apply to terms that are being used as actual marks.
- Determine whether the challenged term is truly descriptive. The fair use defense only applies to terms that are being used to describe the relevant goods or services of the alleged infringer.
- Determine whether the challenged term is being used fairly and in good faith to describe the goods or services at issue. Here, parties should examine the complete context of the use and the degree of likely confusion (using all potential factors from AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979) or otherwise) when conducting an analysis of whether the pertinent use will be considered fair.
Altogether, the viability of the trademark infringement fair use defense will vary according to the situation. Individuals and companies should always consider the scope of the protections afforded by the trademark infringement fair use defense and be deliberate and careful when deciding how to brand and advertise their goods and services, so as to avoid using marks and/or terms in such a way as to make an infringing "lasting impression."
 15 U.S.C. § 1115(b)(4) also lays out a fair use defense for use of one’s own name, which is not discussed in this article.