Lessons from the trademark use debate

Iowa Law Review

Volumn 92, Issue 5, 2007, Pages 1703-1721

  Dinwoodie, Graeme B ^a,b,c   Janis, Mark D ^a,d  

^a Department of Law ^*

^b CHICAGO KENT COLLEGE OF LAW   (United States)

^c QUEEN MARY UNIVERSITY OF LONDON   (United Kingdom)

^d UNIVERSITY OF IOWA COLLEGE OF LAW   (United States)

Author keywords

[No Author keywords available]

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EID: 34948867374     PISSN: 00210552     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (116)

1. Stacey L. Dogan & Mark A. Lemley, Grounding Trademark Law Through Trademark Use, 92 IOWA L. REV. 1669 (2007)
2. (responding to Graeme B. Dinwoodie & Mark D.Janis, Confusion Over Use: Contextualbm in Trademark Law, 92 IOWAL. REV. 1597 (2007)).
3. Dogan & Lemley, supra note 1, at 1696 (conceding that some of the concerns expressed in Confusion Over Use "may argue against an expansive approach to trademark use" but asserting that "none of them justifies rejection of the more surgical form of the doctrine" that Dogan and Lemley discuss).
4. Dogan & Lemley, supra note 1, at 1685 & n.69.
5. Id. at 1673 (conceding that the doctrine "has significant limitations that curtail its efficacy" but claiming that those limitations only arise in "marginal cases").
6. Dogan and Lemley's critique implicates important questions about the extent to which the Lanham Act leaves judges free to develop common law defenses, as we discuss in Part I herein. See also Dinwoodie & Janis, supra note 1, at 1615 Sc nn. 79-80, 1616 & nn.82.
7. See infra Part IIA.
8. See infra Part ILB.
9. See infra Part U.C.
10. See, e.g., Dinwoodie & Janis, supra note 1, at 1603-05 & nn.25-36, 1635-39 & nn.17889, 1652-53 & nn.256-61, 1654-56 & nn.268-86, 1658 & nn.290-93.
11. Id. at 1608-15.
12. Dogan and Lemley also argue that the existence of the doctrine of contributory infringement provides implicit support for a trademark use requirement. We respond to that claim separately. See infra Part II.
13. The Lanham Act is replete with drafting inconsistencies. See, e.g., Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894 (9th Cir. 2002), cert, denied, 537 U.S. 1171 (2003) (discussing 1995 dilution laws);
14. Robert A. Christensen, Trademark Incontestability-Time for the Next Step, 18 STAN. L. REV. 1196, 1196 (1966) (discussing incontestability provisions);
15. Graeme B. Dinwoodie & Mark D. Janis, Dilution's (Still) Uncertain Future, 105 MLCH. L. REV. FIRST IMPRESSIONS 98-102 (2006) (discussing inconsistencies relating to the 2006 revision of the law of dilution).
16. Dogan & Lemley, supra note 1, at 1688;
17. accord Dinwoodie & Janis, supra note 1, at 1610-11, As we pointed out in Confusion Over Use, the legislative history indicates that the "use in commerce" definition relates to the establishment of trademark rights, not to infringement.
18. See Dinwoodie & Janis, supra note 1, at 1611 n.62.
19. Dogan & Lemley, supra note 1, at 1688;
20. accord Dinwoodie & Janis, supra note 1, at 1611-14.
21. Dogan & Lemley, supra note 1, at 1688. Given Dogan and Lemley's claim that this proposition is in accord with Confusion Over Use, we assume they mean to argue that the range of uses that can interfere with consumer understanding is greater than the range of uses that can create it.
22. See id. at 1676, 1687-88 (suggesting this reading);
23. see also Dinwoodie & Janis, supra note 1, at 1612, 1624-25. However, in one passage of their article, Dogan and Lemley note that "the scope of use sufficient to establish a trademark as a source-identifier in the minds of the public is greater than the scope of use sufficient to tamper with that role and thus commit infringement."
24. Dogan & Lemley, supra note 1, at 1688. If that (inverted) proposition is in fact what Dogan and Lemley intended to assert, then we remain in disagreement; but the balance of references in their Article leads us to believe that we are, as they suggest, in agreement on this point.
25. Dogan & Lemley, supra note 1, at 1676.
26. Id.
27. The Second Circuit's 1-800 Contacts opinion encourages such an analysis. See 1-800 Contacts v. WhenU.com, Inc., 414 F.3d 400, 407-08 (2d Cir. 2005) (reciting the section 45 definition);
28. id. at 410 (asserting that "[t]he fatal flaw with [the lower court's] holding is that WhenU's pop-up ads do not display the 1-800 trademark").
29. See, e.g., Site Pro-1, Inc. v. Better Metal, LLC, 82 U.S.P.Q.2d (BNA) 1697, 1700 (E.D.N.Y. 2007) ("The key question is whether defendant placed plaintiffs trademark on any goods, displays, containers, or advertisements, or used plaintiffs trademarks in any way that indicates source or origin."); Rescue.com Corp. v. Google, Inc., 456 F. Supp. 2d 393, 403 (N.D.N.Y. 2006) ("Defendant's internal use of plaintiffs trademark to trigger sponsored links is not a use of a trademark within the meaning of the Lanham Act, either because there is no allegation that defendant places plaintiffs trademark on any goods, containers, displays, or advertisements, or that its internal use is visible to the public."); Hamzik v. Zale Corp./Delaware, No. 3:06-cv-1300, 2007 WL 1174863, at *3 (N.D.N.Y. Apr. 19, 2007) (reciting the "display" language but finding trademark use), Other courts that make less of the section 45 definition have instead tended to focus on whether the defendant's activities were commercial in nature. See, e.g., Buying for the Home, LLC v. Humble Abode, LLC, 459 F. Supp. 2d 310, 323 (D.N.J. 2006) (finding trademark use); 800-JR Cigar, Inc. v. Goto.com, Inc., 437 F. Supp. 2d 273, 285 (D.N.J. 2006) (finding trademark use).
30. Dogan and Lemley also have argued that the "use in commerce" phrase additionally should be read to inform the "in connection with" requirement such that, when read together, the phrases support recognition of a Dogan and Lemley trademark use requirement. Dogan & Lemley, supra note 1, at 1676. But that complex interpretation doesn't comport with clear language in the statute.
31. See Dinwoodie & Janis, supra note 1, at 1610-14. For example, the "in connection with" clause doesn't mesh well with the section 45 definition, at least as to goods.
32. See id. at 1610;
33. see also Dogan & Lemley, supra note 1, at 1675-76 (acknowledging that the infringement provisions encompass a defendant's "advertising" but designating such an activity as a section 45 use in commerce would arguably stretch the definition of use in commerce). Moreover, section 43(a)(1) imposes liability on "[a]ny person who, on or in connection with any goods or services . . . , uses in commerce any word . . . which is likely to cause confusion . . . ." 15 U.S.C. §1125(a)(1)(A) (2000) (emphasis added). The Dogan and Lemley definition of trademark use would limit the statute to only a defendant's use of a term to promote its own goods and services.
34. 15 U.S.C. §1115(b)(4) (preserving the defense "[t]hat the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark ... of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services" of the party alleged to infringe).
35. Namely, those non-trademark uses (uses "otherwise than as a mark") that are undertaken in good faith.
36. See Dinwoodie & Janis, supra note 1, at 1615-16;
37. cf. Dogan & Lemley, supra note 1, at 1684 (disagreeing). Dogan and Lemley do make an important concession in this regard, however. They admit that "[i]f the trademark use doctrine became a standard inquiry in every trademark case, including those involving defendants that sell their own products under the mark, then the trademark use doctrine might swallow subsidiary doctrines, including descriptive fair use."
38. Dogan & Lemley, supra note 1, at 1684 n. 66.
39. Dogan & Lemley, supra note 1, at 1684 n.66.
40. Id. at 1684-86.
41. Id.
42. See Dinwoodie & Janis, supra note 1, at 1656-58. Moreover, as we explained in Confusion Over Use, we favor analyzing permitted uses within the scope of the fair use defense, rather than under a threshold assessment of trademark use, because this allows the testing of the defendant's good faith and enables us to differentiate between good and bad actors.
43. See id. at 1616 n.85, 1631-33. Section 33(b)(4), like many of the defenses that courts have developed to permit unauthorized third party uses, contains seeds of the unfair competition and commercial ethics motivation that historically had driven American trademark law.
44. See Mark P. McKenna, The Normative Foundations of Trademark Law, 82 NOTRE DAME L. REV. 1830, 1848, 1860 (2007), The skepticism that Dogan and Lemley exhibit toward analysis of free riding and commercial ethics,
45. see Dogan and Lemley, supra note 1, at 1692-93, merely highlights the narrowness of law and economics as the lodestar of trademark law. They imply that analysis of search costs is objective but that any concern for commercial ethics reflected in notions of inappropriate free riding will dissolve into unpredictable subjectivity.
46. See id.. Yet, courts are able to make decisions about commercial ethics. They did so historically in the development of trademark and unfair competition law.
47. See McKenna, supra, at 1848, 1860. Foreign courts do likewise. And perhaps American courts are doing something similar when they assess good faith in determining whether a fair use defense has been made out. Developing a "normative baseline" for commercial ethics is not radically harder dian definitively determining the search costs involved in the new use of trademarks in a commercial environment that we do not yet fully understand.
48. See Dinwoodie & Janis, supra note 1, at 1615, 1658.
49. See Shakespeare Co. v. Silstar Corp. of Am., Inc., 9 F.3d 1091, 1099 (4th Cir. 1993), cert, denied, 511 U.S. 1127 (1994). And, of course, given the purpose of incontestability, this is appropriate. See Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189 (1985).
50. Dogan & Lemley, supra note 1, at 1685. Although Dogan and Lemley make the assertion without express reference to incontestability, it is only in the context of alleged infringement of incontestable marks that their assertion raises any substantial issue. In the context of infringement generally, courts have always developed defenses as a matter of common law and still have broad latitude to do so.
51. See supra text accompanying notes 27-28.
52. See Century 21 Real Estate Corp. v. Lendingtree, Inc., 425 F.3d 211, 239 (3d Cir. 2005) (noting the affinity between descriptive and nominative fair use). Moreover, some scholars have speculated that the broad language of the fair use provision in the new dilution law might provide a basis for judicial expansion of the fair use defense in trademark law more generally.
53. See Jane C. Ginsburg, Of Mutant Copyrights, Mangled Trademarks, and Barbie's Beneficence: The Influence of Copyright on Trademark Law, in TRADEMARK LAW AND THEORY: A HANDBOOK OF CONTEMPORARY RESEARCH (Graeme B. Dinwoodie & Mark D.Janis eds., 2008) (forthcoming).
54. See Century 21 Real Estate Corp., 425 F.3d at 239. An alternative way to deal with a concern that defenses might be limited unduly after incontestability is to adapt the likelihood of confusion factors to enable certain permitted uses. Likely confusion has to be proved even with respect to an incontestable mark. This may, to some extent, explain the Ninth Circuit's original formulation of the nominative fair use test, where the court found that the nominative fair use test replaced or complemented the likelihood of confusion factors in a typical infringement case. Cairns v. Franklin Mint Co., 292 F.3d 1139, 1150 (9th Cir. 2002); see also Playboy Enters., Inc. v. Welles, 279 F.3d 796, 801 (9th Cir. 2002) (explaining that a likelihoodof-confusion test would tend to lead to the incorrect conclusion that "virtually all nominative uses are confusing" because when a defendant uses a trademark nominally, a defendant can be expected to use a plaintiffs identical mark). Although there are costs to explaining what is in truth a balance of competing values in terms of mere confusion, see Graeme B. Dinwoodie, Trademark Law and Social Norms 24 (Sept. 5, 2006) (unpublished manuscript, on file with the Iowa Law Review), these cases also show that, in contexts where the standard tests of confusion do not operate well, courts have been willing to adapt them to effectuate the basic purposes of trademark law.
55. See Century 21 Real Estate Corp., 425 F.3d at 239;
56. see also Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989).
57. Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 428 (2003) ("Traditional trademark infringement law is a part of the broader law of unfair competition . . . that has its sources in English common law, and was largely codified in the Trademark Act of 1946.") (citations omitted).
58. See, e.g., Federal Trademark Dilution Protection Act of 1995, Pub. L. No. 104-98, 109 Stat. 985 (codified at 15 U.S.C. §1125(c) (1996)).
59. See generally Qualitex Co. v. Jacobson Prods., 514 U.S. 159 (1995) (discussing 1988 reforms); Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 784 (1992) (Stevens J., concurring) (discussing trade dress protection).
60. See Dogan and Lemley, supra note 1, at 1685-87.
61. See Wheaton v. Peters, 33 U.S. (8 Pet.) 591 (1834).
62. See Folsom v. Marsh, 9 F. Cas. 342, 344-45 (Cir. Ct. Mass. 1841).
63. See Teleprompter Corp. v. Columbia Broad. Sys., Inc., 415 U.S. 394 (1974); Fortnighdy Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968); White-Smith Music Pub. Co. v. Apollo Co., 209 U.S. 1 (1908). As successive revisions of the Copyright Act have defined the scope of the statute in more general, conceptual terms, see, e.g., 17 U.S.C. §102(a) (2006) (providing that copyright shall subsist in "original works of authorship"), the statutory language has in practice allowed the courts to adapt copyright protection to new technological forms of exploitation.
64. See H.R. REP. No. 64-1476, at 66 (1976).
65. See Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189 (1985) (interpreting incontestability provisions).
66. If developments over time reveal that a particular range of desired conduct cannot be accommodated within the defenses listed in section 33(b), cf. Shakespeare Co. v. Silstar Corp., 110 F.3d 234, 237 (4th Cir. 1997) (discussing treatment of functionality within language of section 33(b)(4)), Congress has acted to affirm the legality of such third party uses. See Trademark Law Treaty Implementation Act, Pub. L. No. 105-330, §201, 112 Stat. 3064 (1998) (adding functionality as a preserved defense).
67. Peaceable Planet, Inc. v. Ty, Inc., 362 F.3d 986, 989-90 (7th Cir. 2004).
68. Of course, for prudential reasons, courts may decide that it's not wordiwhile to tease out a rule that covers ten percent of the cases if the error or enforcement costs of doing so are high. See Dinwoodie & Janis, supra note 1, at 1634 & n.169. While not labeled as such, such prudential concerns appear to inform Dogan and Lemley's latest arguments. Thus, although they first argued that non-trademark uses could not increase search costs, their justification for the doctrine now (1) recognizes that non-trademark uses (i.e., uses that would not be sufficient to establish rights) may confuse,
69. see Dogan & Lemley, supra note 1, at 1687-88 ("If a defendant is using a trademark in a deceptive product advertisement, that use can confuse consumers as to source or affiliation even if the defendant has never shipped a product bearing the mark."); (2) explicitly incorporates a balancing of costs,
70. see id. at 1695 ("Preventing intermediaries from communicating accurate information to consumers interested in that information . . , does sufficient harm to a free market that we think society should be willing to tolerate even a substantial amount of confusion rather than countenance that harm.");
71. id. at 1688 ("The trademark use doctrine in the infringement context serves a quite different objective: it avoids a chill on the speech and commercial activities of parties whose relationship to trademark infringement is, at best, indirect"); and (3) incorporates references to error costs.
72. See id. at 1682.
73. The Supreme Court has, to some extent, adopted a prudential approach to limit the scope of product design trade dress. See Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 214 (2000). However, the Court reached its conclusion in Wal-Mart after substantial experience with litigation over product-design trade dress claims. No such similar experience yet exists for online consumer search practices and trademark litigation regarding those practices.
74. Dogan & Lemley, supra note 1, at 1673;
75. see also Dinwoodie & Janis, supra note 1, at 1647-49.
76. For example, Dogan and Lemley argue that "if some unauthorized party sells shirts or shoes emblazoned with the Nike swoosh or the JUST DO IT logo, she is engaged in both trademark use and infringement: she has used Nike's trademark as a device to sell her own product and has done so in a way that is likely to confuse the relevant public." Dogan & Lemley, supra note 1, at 1696. But judges advancing the trademark use theory in other countries might disagree about whether unauthorized merchandizing activity will always amount to trademark use.
77. See Arsenal Football Club v. Reed, (2001) 25 R.P.C. 922, 922-23 (Ch.), later proceeding, Case C-206/01, Arsenal Football Club v. Reed, 2002 E.C.R. 1-10273, at 604 (ECJ) (EU).
78. Dogan & Lemley, supra note 1, at 1682.
79. Id. at 1693 (arguing in favor of "[cjreating a doctrine that can be applied pretrial to short-circuit" claims of trademark infringement that are deemed dubious).
80. Id.
81. Id.
82. As Dogan and Lemley acknowledge, "[s]ometimes it is impossible to determine whether a defendant is using a mark to indicate its products' source or sponsorship without resorting to the type of consumer-perception analysis that sits at the core of the likelihood-ofconfusion test." Dogan & Lemley, supra note 1, at 1673. We wholeheartedly agree; indeed, as we pointed out in Confusion Over Use, a comparative analysis shows that courts confronted with having to assess trademark use have struggled to make that assessment without conducting an inquiry into consumer perception.
83. See Dinwoodie & Janis, supra note 1, at 1643-45 & nn.21222.
84. Dogan & Lemley, supra note 1, at 1697 ("The key question in trademark use cases is whether defendants have used the mark in a way that suggests something about the source or sponsorship of their own products or services.")
85. Dogan & Lemley, supra note 1, at 1696.
86. Id. at 1674 (referring to "the historical balance of trademark law, which aims to prevent specific instances of harmful confusion without casting the net so wide as to inhibit truthful, information-enhancing speech");
87. accord Dinwoodie & Janis, supra note 1, at 1656.
88. Dinwoodie & Janis, supra note 1, at Part III.
89. Dogan Sc Lemley, supra note 1, at 1678-81.
90. Id. at 1689-91.
91. Id. at 1678.
92. The argument also appears in an amicus brief co-audiored by Professor Dogan and filed by a group of law professors in the Rescue.com case. See Brief for Intellectual Property Law Faculty as Amici Curiae in Support of Affirmance, Rescue.com Corp. v. Google, Inc., Appeal No. 06-4881-CV.
93. William R. Warner & Co. v. Eli Lilly & Co., 265 U.S. 526, 529-30 (1924).
94. Id. at 530-31 (devoting two brief sentences to the recitation of the legal rules).
95. Dogan Sc Lemley, supra note 1, at 1689-91.
96. The principle is well-settled-for example, in the law of patent infringement, which has influenced indirect infringement rules in other areas of intellectual property law. See, e.g., Novartis Pharms. Corp. v. Eon Labs Mfg., Inc., 363 F.3d 1306, 1308 (Fed. Cir. 2004) ("When indirect infringement is at issue, it is well settled that there can be no inducement or contributory infringement absent an underlying direct infringement").
97. Indeed, recent case law bears this out. See, e.g., Merck & Co. v. Mediplan Health Consulting, Inc., 425 F. Supp. 2d 402, 415-16 (S.D.N.Y. 2006) (concluding that the purchase of a keyword was not an act of trademark use). And, to the extent that some indirect liability for search engines might flow from the purchaser's direct liability, this too would (under the trademark use theory) only cover a sliver of the conduct that might create confusion for consumers, namely where the defendant's online advertising itself amounted to trademark infringement. This fails to address possible confusion created by search engine conduct that is independent of advertiser conduct. See infra text accompanying notes 66-67.
98. Nor is it likely that the Lanham Act's false advertising provisions would provide a robust alternative for finding liability for search engines. Cf. Stacey L. Dogan & Mark A. Lemley, Trademark and Consumer Search Costs on the Internet, 41 HOUS. L. REV. 777, 821 (2004) [hereinafter Dogan Sc Lemley, Search Costs] (asserting that keyword purchasers might be liable for false advertising under some circumstances), Indeed, a closer reading of the false advertising provision merely confirms the folly of reading "use in commerce" identically in every place that it appears in the Lanham Act.
99. See supra Part I. Section 43(a)(1)(B) provides liability where one person misrepresents the nature of another person's goods or services in commercial advertising. But that misrepresentation also must, under the argument advanced by trademark use theorists, qualify as a "use in commerce" because that phrase appears in the preamble of section 43(a)(1).
100. But cf. Dogan & Lemley, Search Costs, supra, at 836 (claiming that "[e]ven if the advertiser manages to mislead without making a trademark use, other doctrines, such as false advertising, may prevent such conduct"). To limit use in commerce in this context to only a defendant's promotion of its own goods or services would nullify the express language of section 43(a)(1)(B), extending liability to misrepresentations about another's goods. See U.S. Healdicare, Inc. v. Blue Cross of Greater Phila., 898 F.2d 914, 921 (3d Cir. 1990) (noting the 1988 statutory revision to ensure that statements about one's own goods or the goods of another could be actionable).
101. Of course, if the advertising practices facilitate trademark infringement by the advertisers, then contributory infringement liability might be appropriate.
102. Dogan & Lemley, supra note 1, at 1690.
103. Id. at 1670.
104. Id. at 1691.
105. See Peter W. Becker et al., Muddy Waters: revolving Law and Policy in Internet Advertising 28 (Paper Presented at Annual Meeting of the International Trademark Association, May 2007) (on file with the Iowa Law Review),
106. Recent experience also tends to refute the exaggerated fears of commercial caution that Dogan and Lemley invoked, suggesting that potential trademark liability has not, in fact, produced a "world in which intermediaries, for fear of liability, fail to use consumer-generated trademark signals at all in designing their business models." Dogan & Lemley, supra note 1, at 1672. We think that this is because, as indicated above, many have in good faith structured their business models to minimize the possibility of confusion. Assessing that conduct as a matter of a defense that includes a good-faith component allows trademark law to encourage such behavior. On the other hand, under a legal regime in which sales of keywords never constitute trademark use, trademark law would provide no impetus to search engines to develop best practices regarding online advertising. And good faith in seeking to avoid confusion would be irrelevant to such analysis.
107. See Dinwoodie & Janis, supranote 1, at 1654-56.
108. Cf. FragranceNet.com, Inc. v. FragranceX.com, Inc., No. 06-CV-225 (JFB)(AKT), 2007 WL 1821153, at *5 n.9 (E.D.N.Y. June 12, 2007) (rejecting plaintiff request to impose a "negative matching" obligation on the defendant purchaser of keywords linked to the plaintiffs trademark).
109. Dinwoodie & Janis, supra note 1, at Part III.C
110. Dogan & Lemley, supra note 1, at 1670-71.
111. Id. at 1692-93.
112. See, e.g., 1-800 Contacts v. WhenU.com, Inc., 414 F.3d 400, 411 (2d Cir. 2005); cf. Google Inc. v. Am. Blind & Wallpaper Factory, Inc., No. 1159950, 2007 WL 1159950, at *6 (N.D. Cal. Apr. 18, 2007) (rejecting Google's trademark use argument but asserting that "Google's analogies to trademark infringements outside the digital realm are attractive").
113. We suspect that this parallels, in many respects, the debate that took place in the context of private label goods.
114. The possibility that consumer and commercial practices might build up around rogue decisions is, however, a fair general concern that trademark law need to address, See Dinwoodie, Trademark Law and Social Norms, supra note 32, at 21. Dogan and Lemley fear not only this outcome, but also worry about a ripple effect.
115. See Dogan & Lemley, supra note 1, at 1672 (worrying that Amazon.com would hesitate to recommend alternative products to shoppers on its website, that critics would be stifled because they would decline to risk using a firm's marks in criticizing that firm, that writers would expunge references to trademarks from their works, and so on).
116. See Dinwoodie &Janis, supra note 1, at 1635 & nn. 176-77.