Are Review Sites Infringing on Trademarks of the Products and Services They Review? It Appears Not.
Everyone here at MWR Legal is buzzing about a recent court decision in favor of allowing trademark use in product and service reviews. International Payment Services, LLC v. CardPaymentOptions.com, 2:14-cv-02604-CBM-JC (C.D. Cal. June 5, 2015) (“IPS”). We provided legal analysis to the defendant that significantly contributed to his victory.
The dispute revolved around the fair use of trademarks. The defendant runs a website that reviews and rates credit card processing companies, and identifies the companies by name, often with its attendant logo or other brand identifier. One company received a bad review and sued the defendant for trademark infringement and related grievances.
A Trademark (or Servicemark) is anything that identifies the source of good or a service to the public. Typically it is a product name or a logo or some combination. Trademark infringement happens when someone uses a mark that is so similar to another’s trademark that there is likelihood that the public will be confused about who is the real source of the goods or services. For there to be such a likelihood, it is not enough that the two marks in question be identical or even alike. The marks must also be used with a similar good or service. Lexis (the online database) and Lexus (the automobile manufacturer) can have similar names without causing a likelihood of confusion because it is unlikely that a database would be confused for a car.
In the IPS case, the defendant subscribed to Google’s AdWords, so that whenever someone searched for IPS, an ad for the defendant’s review of IPS and displaying the IPS trademark would appear in the Sponsored Links section of the search results. Such use of the IPS trademark is allowed under a doctrine called “Nominative Fair Use” which allows the use of someone’s trademark to identify the trademark holder’s goods or services.
Here are a couple of formal explanations of fair use that I have modified from the opinion and commented on. You can see the original language here.
When a defendant uses another’s trademark to refer to the trademarked good itself, this use is called nominative fair use and does not constitute trademark infringement. The nominative fair use defense applies where: (1) the product is not “readily identifiable” without use of the mark; (2) defendants did not use more of the mark than necessary; and (3) defendants do not falsely suggest they were sponsored or endorsed by the trademark holder. The nominative fair use analysis is appropriate where a defendant has used the plaintiff’s mark to describe the plaintiff’s product. The idea is that it is fair to identify someone’s product by using the name of the product. Hence, Nominative Fair Use.
The Lanham Act, which is the federal statute governing trademarks, provides that “nominative fair use of a famous mark by another person other than as a designation of source for the person’s own goods or services is not actionable as dilution by blurring or dilution by tarnishment, including use in connection with (i) “advertising or promotion that permits consumers to compare goods or services;” or (ii) “identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner.” 15 U.S.C. § 1125(c)(3)(A)
Journalists and critics rely on the protections of the fair use defense to be able to identify goods and services by name in their reporting and reviews. Fair Use is limited to specific situations and is intended to prevent intellectual property protections from being in conflict with important social priorities such as free speech and creative expression. It is gratifying to have contributed to an outcome in the IPS case that illustrates the proper application of a Nominative Fair Use defense in trademark law.
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