Online Use of Third Party Trademarks: Can Your Trademark Be Used without Your

Permission?
Author(s): Linda A. FriedmanSource: Business Law Today , (February 2016), pp. 1-4
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BUSINESS LAW TODAY
Online Use of Third Party Trademarks: Can Your
Trademark Be Used without Your Permission?
The explosion of user-generated content on
the Internet, not to mention the prolifera-
tion of domain name registration options
and the competition among advertisers
and other businesses to attract visitors to
their websites, has increased the burden of
trademark owners to police the online use
of their trademarks by others. Consumers,
competitors, and others are increasingly
posting comments, ads, or other content
on social media, in which they freely use
trademarks owned by another party for
their own purposes. These purposes are of-
ten at odds with the trademark owner’s in-
terests, such as diverting internet traffic to
the user’s website or disparaging the trade-
mark owner or its products in blogs over
which the trademark owner has no control.
However, simply because the use of an-
other’s trademark is unauthorized by the
trademark owner does not make it an in-
fringing use. Trademark owners must not
only be diligent in monitoring use of their
trademarks online, but also recognize the
differences among infringing uses to be
challenged, questionable uses to be further
monitored, harmless uses to be ignored,
and uses that may be annoying, but do not
infringe.
Likewise, anyone who chooses to use a
Published in Business Law Today, February 2016. © 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
103.68.37.134 on Tue, 19 May 2020 06:06:43 UTC
By Linda A. Friedman
trademark without the owner’s permission
should be mindful not only of the potential
liability for infringement, but also of other
potential consequences, such as violation
of laws other than trademark laws or viola-
tion of a social media platform’s terms of
use, leading to loss of privileges. It is the
responsibility of the user—whether a com-
petitor of the trademark owner or a con-
sumer—to respect the brand owner’s rights
and to comply with applicable laws and
terms of use. Yet, there are limits to a brand
owner’s right to control use of its marks.
Online Use of Another’s Trademark
Can Lead to Liability and Other
Consequences
Trademark Law Prohibits Infringement,
False Advertising, Cyberpiracy, and
Dilution
State and federal trademark laws protect
trademarks from use by others if the use
is likely to lead to confusion. In addition,
the trademark dilution doctrine, which ap-
plies only to famous marks under the fed-
eral trademark statute and under most state
statutes that address dilution, protects eli-
gible trademarks from “tarnishment” and
“blurring” when another uses the protected
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trademark to identify his own business; the
doctrine differs from infringement in that
likelihood of dilution can be proven with-
out any likelihood of confusion.
The federal trademark statute, the Lan-
ham Act, also creates a cause of action of
cyberpiracy, also called cybersquatting,
that arises when a person uses (or “regis-
ters” or “traffics in”) a domain name that is
identical or confusingly similar to a trade-
mark owned by another, if done with a bad
faith intent to profit from use of the mark.
1999 Anti-Cybersquatting Consumer Pro-
tection Act, 15 U.S.C. § 1125(d).
Finally, using another party’s trademark
in a misleading way can give rise to liabil-
ity, regardless of whether it constitutes tra-
ditional infringement claim and regardless
of whether the trademark enjoys a federal
trademark registration. Section 43(a) of the
Lanham Act provides a cause of action that
extends beyond traditional infringement,
and essentially affords a cause of action for
false advertising. The claim is available to
anyone likely to be damaged when:
1. Any person . . . uses in commerce
any word, term, name, symbol, or
device, or any combination thereof,
or any false designation of origin,
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false or misleading description of
fact, or false or misleading repre-
sentation of fact, which
a. is likely to cause confusion, or to
cause mistake, or to deceive as
to the affiliation, connection, or
association of such person with
another person, or
b. 
in commercial advertising or
promotion, misrepresents the
nature, characteristics, qualities,
or geographic origin of his or her
or another person’s goods, ser-
vices, or commercial activities.
15 U.S.C. § 1125(a) (emphasis added).
Thus, a false advertising claim can arise
when a person uses another company’s
trademark in an ad in the course of dispar-
aging the product or comparing the product
unfavorably to the company’s competing
product, if the ad makes false or mislead-
ing statements about the trademark owner
or its product.
Trademark Law Permits “Fair Use” of
Another’s Mark
However, use of another’s trademark is
permissible if it qualifies as fair use. The
fair use doctrine, consistent with the First
Amendment, allows a person to use anoth-
er’s trademark either in its non-trademark,
descriptive sense to describe the user’s own
products (classic, or descriptive, fair use)
or in its trademark sense to refer to the
trademark owner or its product (nominative
fair use). The Lanham Act expressly pro-
tects fair use from liability for trademark
infringement, dilution and cyberpiracy.
Descriptive Fair Use is a Defense to
Infringement
The Lanham Act specifies that good faith,
descriptive fair use is an affirmative de-
fense to an infringement claim. Before the
affirmative defense is ever reached, howev-
er, the plaintiff must first show, as part of its
prima facie case, evidence of likelihood of
confusion from the defendant’s allegedly
descriptive use of the trademark.
Published in Business Law Today, February 2016. © 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
103.68.37.134 on Tue, 19 May 2020 06:06:43 UTC
The U.S. Supreme Court addressed the
fair use defense in a 2004 decision that
did not involve online trademark use, but
which should be instructive to online use.
KP Permanent Make-Up, Inc. v. Lasting
Impression I, Inc., 543 U.S. 111 (2004).
The owner of an “incontestable” federal
registration of a trademark that included
the words “Micro Colors” sued a competi-
tor that used the term “micro color” in its
ads marketing permanent cosmetic make-
up. The court did not decide whether the
ads’ use of “micro color” was a fair, non-
trademark use of the words to describe the
makeup. Rather, the court addressed the
relationship of the fair use defense to the
plaintiff’s burden to establish likelihood of
confusion. As the court explained, the de-
fendant claiming fair use does not have the
burden to show that confusion is unlikely. If
the plaintiff establishes evidence of likeli-
hood of confusion, the defendant may then
present evidence that its use was a fair use.
Interestingly, the court stated that it “does
not rule out” the possibility that some de-
gree of consumer confusion is compatible
with fair use.
Fair Use Avoids Liability for Dilution and
Cyberpiracy
In addition to the statutory fair use defense
to infringement, the Lanham Act addresses
the fair use doctrine also in the antidilution
and cyberpiracy causes of action. Section
43(c) of the Lanham Act, the dilution pro-
hibition, expressly excludes fair use from
the cause of action, rather than listing it as
a defense. 15 U.S.C. § 1125(c)(3)(A).
Fair use appears again in Section 43(d),
the cyberpiracy prohibition. The concept is
referenced first in connection with deter-
mining the defendant’s bad faith in using
the mark in its domain name, which is an
element of the claim, and separately as a
defense. The statute provides that the court
may consider, in determining if the defen-
dant’s use of the mark was in bad faith,
whether the mark’s use is a “bona fide non-
commercial use or fair use in a site acces-
sible under the domain name.” An example
would be a fan site that incorporates the
other party’s mark in its domain name and
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February 2016
uses the mark on the site to refer to the ob-
ject of the fan site. Another example would
be use of a mark in a domain for a website
devoted to customer complaints or other
criticism of the product or its seller, such
as the domains being offered under the ge-
neric top-level domain (gTLD) .sucks.
The federal trademark statute separately
provides a complete defense to cyberpiracy
if the defendant “believed or had reason-
able grounds to believe” that the use of the
mark in the domain was a “fair use or oth-
erwise lawful.” 15 U.S.C. § 1125(d)(1)(B)
(ii).
Unauthorized Use of Another’s Mark
Online May Infringe or Qualify As Fair
Use
Case law has developed criteria for deter-
mining when nominative fair use—i.e, use
of another’s mark to refer to the mark’s
owner or its product, rather than to the de-
fendant—is, in fact, “fair.”
An oft-cited nominative fair use case,
New Kids on the Block v. News America
Publishing, Inc., 971 F.2d 302, 308 (9th
Cir. 1992), held that a commercial user is
entitled to a nominative fair use defense by
satisfying three requirements:
• The product/service must not be “read-
ily identifiable” without use of the
trademark.
• “Only so much of the mark or marks
may be used as is reasonably necessary
to identify the product or service.”
• “The user must do nothing that would, in
conjunction with the mark, suggest spon-
sorship or endorsement by the trademark
holder.”
This three-part test has been applied to
evaluate trademark owners’ challenges
when their trademarks are used in domain
names, in metatags, and in other ways on-
line. Some courts have focused more on
whether the use is likely to cause confusion
and whether any infringement can be based
on a viewer’s initial confusion (referred to
as “initial interest confusion”) if the initial
confusion is dispelled once the viewer vis-
its the site.
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In 2002, in an early case of online use,
the Ninth Circuit applied its New Kids test
to find that the former Playmate of the Year
1981 could promote her title on her website
and in the site’s metatags (see sidebar with
cases that have considered whether fair use
applies to various online uses of another’s
mark). The defendant’s site did not pres-
ent the “Playmate of the Year” title in the
same font as the Playboy magazine title,
nor did it display the Playboy bunny logo.
By the time of trial, the site also posted a
nonendorsement disclaimer. However, the
repeated, stylized use of “PMOY #81” on
the site’s wallpaper, or background, did not
qualify as fair use.
Although the Ninth Circuit upheld the use
of Playboy trademarks as metatags in the
Challenges to Use of Others’
Marks in Metatags, Domain
Names, Keyword Purchases,
Website Text
Playboy Enterprises, Inc. v. Welles, 279
F.3d 796 (9th Cir. 2002) (fair use pro-
tected use of plaintiff’s marks in domain
name, in website text and metatags,
but did not protect use in website’s
wallpaper)
Promatek Industries, Ltd. v. Equit-
rac Corp., 300 F.3d 808, 812 (7th Cir.
2002) (upholding preliminary injunc-
tion enjoining competitor’s use of mis-
spelled mark in metatags, citing initial
confusion)
PACCAR Inc. v. Telescan Techs., 319
F.3d 243 (6th Cir. 2003) (upholding
preliminary injunction against use of
domain namespeterbiltnewtrucks.com,
kenworthnewtrucks.com, and other do-
mains containing PACCAR trademarks
even though the websites in fact sold
PACCAR vehicles and disclaimed affili-
ation with PACCAR, faulting Telescan’s
use of PACCAR’s marks in wallpapeand
in mimicking fonts that went beyond
what was “reasonably necessary” to
identify PACCAR products)
Audi AG v. D’Amato, 469 F.3d 534
Published in Business Law Today, February 2016. © 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
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case of the former Playmate of the Year, other
cases have reached a variety of conclusions
based on the facts of the case, on whether
the doctrine of initial interest confusion was
recognized by the court, and whether the
doctrine applied to the facts. If the trademark
in question is actually used on the website it-
self, and in a legitimate way, as was the case
with the Playmate of the Year 1981, then use
of the trademark in metatags is likely to be
defensible. On the other hand, if the website
does not refer to the trademark that is hidden
in metatags, or if the website does refer to the
trademark but in a way that does not qualify
as fair use, then use of the term in metatags is
less likely to qualify as fair use.
Use of another’s mark in a domain name,
like use as a metatag, may be an infringement
(6th Cir. 2006) (affirming summary
judgment, including attorney fee award,
for Audi; holding defendant’s use of
Audi mark in domain name constituted
infringement, dilution and cybersquat-
ting; rejecting fair use defense due to
“clear likelihood of confusion”)
Toyota Motor Sales, U.S.A., Inc. v.
Tabari, 610 F.3d 1171, 1175-76 (9th
Cir. 2010) (domain names buy-a-lexus.
com and buyorleaselexus.com qualify as
nominative fair use unless plaintiff estab-
lishes likelihood of confusion)
Rosetta Stone Ltd. v. Google, Inc., 676
F.3d 144 (4th Cir. 2012) (Google poten-
tially liable for use of Rosetta Stone’s
mark in keyword advertising and ad text)
Network Automation, Inc. v. Advanced
Sys. Concepts, Inc., 638 F.3d 1137 (9th
Cir. 2011) (competitor’s use of another’s
mark to trigger Google Adword hits not
create likelihood of confusion where
mark not used in ad text or on the com-
petitor’s landing page)
College Network, Inc. v. Moore Edu-
cational Publishers, Inc., 2010 WL
1923763 (5th Cir. 2010) (not for publica-
tion decision upholding jury verdict that
purchase of competitor’s trademark from
Google and Yahoo as search-engine key-
word to summon sponsored link ads did
not infringe)
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February 2016
or it may be non-infringing, depending on the
likelihood of confusion. If the domain con-
taining the other’s trademark is registered or
used with a bad faith intent to profit from the
mark, the use of the mark in the domain con-
stitutes cybersquatting, even in the absence of
likelihood of confusion. Fair use is not a de-
fense to cybersquatting, but if the website ac-
cessible from the domain name uses the mark
in a way deemed to be a fair use, then the bad
faith element of the cybersquatting offense
may not be met.
Trademark owners have challenged unau-
thorized use of their trademarks not only in
domain names and metatags, but also in search
engine advertising campaigns and keyword
purchases. Typically, marketing advisors rec-
ommend these campaigns as a way to direct
traffic to the advertiser’s website, to achieve a
higher ranking in search results, and perhaps
also to divert traffic from a competitor’s web-
site. If the advertiser uses a trademark belong-
ing to its competitor in a sponsored ad, it is
likely to be infringing. However, the unauthor-
ized use of another’s mark can be legitimate
fair use, such as in comparative advertising
that compares the advertiser’s product to the
product of the trademark owner, or a gripe site
that criticizes the products or services of the
trademark owner.
Unauthorized use of another’s mark in
search engine keyword purchases, however,
will survive an infringement challenge, de-
spite the absence of fair use, if the trademark
owner cannot persuade the court or jury of
likelihood of confusion.
Unfair or Deceptive Online Trademark
Use Also Violates the Federal Trade
Commission Act
While Section 43(a) of the Lanham Act pro-
vides a private right of action for false or mis-
leading advertising, the FTC regulates advertis-
ing by its rules and guidelines and by bringing
enforcement actions under the Federal Trade
Commission Act, which bars “unfair or decep-
tive acts or practices.” Use of another party’s
trademark or reference to another company in
advertising can result in unintended violation of
Section 5 of the FTC Act, 15 U.S.C. § 45.
In 2000, the FTC issued the Dot Com Dis-
closures, addressing how Section 5 of the
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FTC Act applies to online advertising. The
guidance addressed the requirement to make
affirmative disclosures when an ad would be
deceptive or unfair without the affirmative
disclosure. In 2013, the FTC updated the
Dot Com Disclosures in a 53-page guide
that illustrates how and when to make the
disclosures on digital devices and otherwise
online. The guidelines reaffirm that disclo-
sures that are required to avoid evoking de-
ception law must be presented clearly and
conspicuously. If a smartphone’s screen size
prevents a disclosure from being clear and
conspicuous, then the ad should not be run
in that medium.
The FTC’s “Guide Concerning the Use of
Endorsements and Testimonials in Advertis-
ing” is also relevant to advertising that refers
to another company. An endorsement is de-
fined as any advertising message, including
the “name or seal of an organization . . . that
consumers are likely to believe reflects the
opinions, beliefs, findings, or experiences of
a party other than the sponsoring advertiser.”
As a general matter, the endorsement
must reflect honest opinions of the endorser
and may not convey express or implied rep-
resentations that would be deceptive if made
by the advertiser. If the advertisement states
that the endorser uses the product, the en-
dorser must have been a bona fide user of
it. If there is a material connection between
the endorser and the seller of the advertised
product that might materially affect the
weight or credibility of the endorsement,
such that the audience does not reasonably
expect the connection, the guidelines advise
that the connection should be disclosed.
Endorsements by consumers are addressed
separately from endorsements by experts
and by organizations.
Social Media Sites’ Terms of Use Prohibit
Trademark Misuse
Social media platforms’ terms of use typi-
cally prohibit content that violates rights of
others and reserve the right to deny access
to infringers. Sites typically also provide a
takedown procedure for persons to request
that site content, including user-generated
material, be taken down. Due to enactment
of the Digital Millenium Copyright Act in
Published in Business Law Today, February 2016. © 2016 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any
portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
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1998, U.S. copyright law affords a safe har-
bor for online service providers who com-
ply with the statute’s takedown procedure.
17 U.S.C. § 512. The Lanham Act does not
have a comparable safe harbor provision for
trademark infringement. Nonetheless, social
media platforms and other service providers
commonly post a notification procedure for
takedown requests based on alleged trade-
mark infringement, as well as based on
copyright infringement.
YouTube, for example, states that, as a
courtesy to trademark owners, it has cre-
ated trademark complaint procedures with
respect to use of trademarked terms in con-
nection with YouTube Promoted Videos pro-
motions, which enable trademark owners to
submit complaints via a link. A separate
link is available for complaints about use of
trademarks in a Sponsored Video. YouTube
encourages trademark owners to resolve
complaints directly with the YouTuber, but
YouTube offers to perform a limited investi-
gation of reasonable complaints, and may re-
move content in cases of clear infringement.
Twitter’s trademark policy prohibits the use of
business names or logos with intent to mislead.
Twitter reserves the right to reclaim usernames
on behalf of businesses whose trademarks are
used in usernames. Users are allowed to create
news feed, commentary, and fan accounts, but
the username and profile name should not be
the trademark of the subject or company and
the biography should include a statement to dis-
tinguish it from the company.
Facebook also reserves the right to re-
move or reclaim a username when a trade-
mark owner has complained that the user-
name does not closely relate to the user’s
actual name. The terms of use permit a user
to create a page to express brand support,
provided that it is unlikely to cause confu-
sion with the brand’s official page or violate
another party’s rights.
Instagram warns that, when appropriate,
it will disable accounts of users who “re-
peatedly infringe other people’s intellectual
property rights.”
Conclusion
If an online ad, post, domain name, or even
hidden text is misleading, deceptive or likely
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February 2016
to cause confusion, or if it threatens to dilute a
famous trademark, it will and should be chal-
lenged. All organizations should monitor on-
line unauthorized uses of their valued trade-
marks. In addition, if an organization hosts
an interactive website that invites customers
to post endorsements or other comments, the
terms of use should prohibit inappropriate
content and the organization should monitor
postings for improper trademark uses.
Linda A. Friedman is a partner in
the Birmingham office of Bradley
Arant Boult Cummings, where she
works with clients in the development,
protection and enforcement of their
intellectual property assets, primarily
trademarks, copyrights and trade
secrets. She regularly negotiates IP
transactions and the resolution of IP
disputes.
ADDITIONAL RESOURCES
For other materials related to this
topic, please refer to the following.
The Business Lawyer
Trademarks in Cyberspace: 2013 in
Review
By Eran Kahana
Vol. 70, No. 1 Winter 2014–2015
* * *
ABA Web Store
Intellectual Property Deskbook for the
Business Lawyer, Third Edition
A valuable and practical “go-to” ref-
erence for general practitioners, busi-
ness lawyers, and corporate counsel.
Updated and expanded to include sig-
nificant changes brought by the Leahy-
Smith America Invents Act.
* * *
Business Law Section Program
Library
Cutting Edge Issues in Intellectual
Property Litigation (PDF) (Audio)
Presented by: Business and Corporate
Litigation Committee
Location: 2014 Annual Meeting
4