Three Interesting Trademark Decisions

Thursday and Friday last week must have been the circuits’ annual “Get Out Your Trademark Opinions Already Festival™”. There were three decisions of note.

9th Circuit (Kozinski, J.) Nominative Fair Use Decision

The Ninth Circuit upheld the use of the domain names “buy-a-lexus.com” and “buyorleaselexus.com” by personalized auto shoppers (a/k/a auto brokers) who specialize in Lexi. In Toyota Motor Sales, U.S.A., Inc. v. Tabari, No. 0755344 (9th Cir. July 8, 2010), Judge Kozinski’s panel opinion is an interesting read, but the main take-away appears to be:

(1) nominative fair use is not an affirmative defense, but instead replaces the traditional multi-factor likelihood of confusion test in cases where the accused infringer asserts that he is indeed referring to the plaintiff’s mark; and

(2) the trademark owner bears the burden of proving that the asserted nominative use will cause confusion (i.e., is not “fair”) under the familiar three-part test that asks whether: (a) the product or service is readily identifiable without using the mark; (b) the defendant used more of the mark than was needed; and (c) the defendant falsely suggested affiliation or endorsement.

10th Circuit Reverses Award of Attorney’s Fees to Successful Counterfeiting Defendant

Plaintiff sues for counterfeiting, seeking TRO. Plaintiff gets TRO, but it’s vacated because a search by U.S. Marshalls finds no counterfeit goods. Plaintiff then unsuccessfully seeks preliminary injunction. Plaintiff appeals. No dice. Plaintiff petitions for cert. Denied. Plaintiff then voluntarily dismisses the case without prejudice, before the answer is filed. Is the defendant a “prevailing party”?

Nope. Not when the vacatur of the TRO and the denial of the preliminary injunction were based on failure to demonstrate irreparable harm and the dismissal was without prejudice. So holds Lorillard Tobacco Co. v. Engida, No. 08-1037 (10th Cir. July 9, 2010).

3d Circuit Reverses Bench Trial Finding of No Likelihood of Confusion

The Third Circuit came down hard on the district judge in Sabsina Corp. v. Creative Compounds, LLC, No. 08-3255 (3d Cir. July 9, 2010). The district judge’s oral findings and conclusions after a bench trial ignored several of likelihood of confusion factors and contained clearly errors on others, according to the appeals court. The panel noted that this is the second case in which they’ve reviewed trademark bench trial findings and conclusions from this particular judge and that he did the same thing (and was reversed) the first time. The analysis itself isn’t that noteworthy, except where the 3d Circuit points out that “intent is largely irrelevant” to the likelihood of confusion analysis because advertising history “suggests that consumer reactions usually are unrelated to manufacturer intentions.” (Those of you who have heard me rant on the relevance of intent know that this statement is music to my ears.)