What are “Brand Bullies”?
On top of today’s extremely competitive market, small businesses may be also dealing with a “brand bully.” Also known as a trademark bully, a brand bully is a company that resorts to litigation and uses its trademark rights to harass and intimidate another business without a sound legal basis. These companies often file oppositions against marks or the use of their alleged mark that would not directly or substantially damage them. The brand bullies primarily rely on their “fame” or “strength” of their marks, and the smaller business’s lack of resources for prolonged litigation. Typically, these brand bullies are overly aggressive, especially to smaller companies and trademark applicants. It can be intimidating if you have found yourself in such a position; however, it is important to know there are several defenses available that may help your company prevail in opposition to a brand bully, an important one being the doctrine of nominative fair use.
The Doctrine of Nominative Fair Use
In the field of trademarks, “fair use” is the term given to the use of another’s trademark in a way that will not subject the user to liability for infringing the owner’s rights. More specifically, nominative fair use is a category of trademark fair use which permits certain uses of a trademark to refer to the trademarked product. This occurs when (1) the alleged infringer uses the trademark holder’s mark to describe the trademark holder’s product, even if the goal of the accused infringer is to describe its own product; or (2) if the only practical way to refer to something is to use the trademarked term. For example, Apple might want to compare one of their products to that of its competitor, Microsoft. An individual may want to use their former company’s name on their website to show future employers where they gained experience beforehand. Nominative fair use can also be seen in parodies, noncommercial uses, and news reporting.
The doctrine of nominative use is not written into a statute nor is it universally recognized in a certain test or definition. Rather, nominative use has only been developed through cases in the different circuit courts and has differed between them. The Ninth Circuit has the most developed body of case law on this doctrine and has employed a three-factor test for evaluating whether use of a mark is a nominative fair use. Under this test, a defendant seeking to assert this defense “need only show that it used the mark to refer to the trademarked good…[and] [t]he burden then reverts to the plaintiff to show a likelihood of confusion.” Toyota Motor Sales, U.S.A, Inc. v. Tabari, 610 F.3d 1171, 1183 (9th Cir. 2010).
The 3 Factor Test for Nominative Fair Use
To elaborate, the three-factor test created in the Ninth Circuit was delineated from New Kids on the Block v. News America Publishing, Inc. In this case, a popular musical group sued two newspapers which ran a charity fundraiser by asking its newspaper readers which member of the group was the most popular. The musical group more specifically claimed that the defendant news-media organizations created a likelihood of confusion regarding the musical group’s relationship to the charity event under the Lanham Act. In assessing the claim, the court held that a defendant is entitled to a nominative fair use defense if he or she meets the following three requirements: (1) the product or service in question must be one not readily identifiable without use of the trademark; (2) only so much of the mark may be used as is reasonably necessary to identify the product or service; and (3) the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder. New Kids on the Block v. News America Publishing, Inc., 971 F.2d 302, 308 (9th Cir. 1992). The court ultimately held that the defendants’ use of the musical group’s trademarked name fell outside of trademark law because the use of the name was the only practical way to refer to the group. The newspapers only used as much of the name necessary to refer to the group and nothing in the newspaper announcements suggested joint sponsorship or endorsement by the group.
Trademark defenses are wide-ranging and not always applicable in a given situation; however, brand bullies are aggressive and persistent, and do have a legitimate legal obligation to protect their brand. Yet, when you feel they’ve overstepped, sometimes it’s best to challenge their overreach. If you feel you are being accused of infringing and wish to see if any defenses are available to you or even to see what your options are, our office can guide you through these options. We are your Orange County trademarks, copyright, and business litigation attorneys, here to help.