Name That Circuit Split: Nominative Fair Use in the Second Circuit

While we now know the Second Circuit’s test, the case also highlights a notable circuit split between the Ninth, Second, and Third Circuits regarding nominative fair use. As a result, companies intending to rely on a nominative fair use defense may have varying success depending on the jurisdiction.

What’s New?

Nominative fair use refers to the use of a third party’s trademark to describe or “name” the third party’s services (rather than naming the company’s own services). In some courts, most notably the Third Circuit, nominative fair use is treated as an affirmative defense, meaning a defendant that satisfies the nominative fair use factors can avoid liability for trademark infringement, even if there is a likelihood of consumer confusion. In the Ninth Circuit, by contrast, nominative fair use is not an affirmative defense. Instead, the Ninth Circuit adopted a separate test to analyze nominative fair use cases. The Ninth Circuit’s nominative fair use test replaces the standard Polaroid factors used to analyze trademark infringement claims.

What Happened in the Second Circuit

The Second Circuit agreed with the Ninth Circuit, holding that nominative fair use is not an affirmative defense. This means that if there is a likelihood of consumer confusion, the defendant is liable for trademark infringement. However, the Second Circuit rejected the Ninth Circuit’s separate test for nominative fair use cases. Instead, the Second Circuit held that when analyzing the likelihood of confusion in nominative fair uses cases, the nominative fair use factors are considered in addition to the standard likelihood of confusion factors. Specifically, in addition to discussing each of the Polaroid factors, courts are to consider:

1. Whether the use of the plaintiff’s mark is necessary to describe both the plaintiff’s and the defendant’s product or service, that is, whether the product or service is not readily identifiable without use of the mark;
2. Whether the defendant uses only so much of the plaintiff’s mark as is necessary to identify the product or service; and
3. Whether the defendant did anything that would, in conjunction with the mark, suggest sponsorship or endorsement by the plaintiff holder, that is, whether the defendant’s conduct or language reflects the true or accurate relationship between plaintiff’s and defendant’s products or services.

Why It Matters

While it is helpful to know the Second Circuit’s multi-factor test in nominative fair uses cases, what is most notable about this decision is the circuit split between several notable circuits. As a result, companies that wish to refer to a third party’s trademark in advertisements, websites, and marketing materials should proceed with caution, since these actions may result in varying liability depending on the jurisdiction at issue. The safest course is to avoid any references that would result in consumer confusion.