Seattle Trademark Lawyer

The Ninth Circuit tweaked its approach to the nominative fair use doctrine last week.

On July 8, it found that the burden of establishing nominative fair use does not rest with the defendant, as it previously had held. Instead, it is the plaintiff’s burden to prove the defendant’s use is not nominative fair use.

Toyota Motor Sales, U.S.A., Inc., sued independent auto brokers Farzad and Lisa Tabari for trademark infringement based on the defendants’ use of “lexus” as part of their domain names, including buy-a-lexus.com and buyorleaselexus.com.

Following a bench trial, the Central District of California found for Toyota and enjoined the defendants (who proceeded pro se) from using “Toyota” in any domain name. The defendants (still pro se) appealed to the Ninth Circuit.

After a lengthy discussion about nominative fair use, the court found the district court erred in analyzing the doctrine as an affirmative defense after Toyota had established its case of infringement. Instead, the court found that the test replaces the likelihood of confusion test.

It’s made that finding before. Here’s the wrinkle.

On remand, it found that Toyota should have the burden of establishing that defendants’ use of its mark was not nominative fair use.

“A finding of nominative fair use is a finding that the plaintiff has failed to show a likelihood of confusion as to sponsorship or endorsement. And, as the Supreme Court has unambiguously instructed, the Lanham Act always places the ‘burden of proving likelihood of confusion … on the party charging infringement.’ In this case, that party is Toyota. ‘[A]ll the [Tabaris] need[ ] to do is to leave the factfinder unpersuaded.’

“We have previously said the opposite: ‘[T]he nominative fair use defense shifts to the defendant the burden of proving no likelihood of confusion.’ But that rule is plainly inconsistent with [KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 118 (2004)] and has been ‘effectively overruled.’ A defendant seeking to assert nominative fair use as a defense need only show that it used the mark to refer to the trademarked good, as the Tabaris undoubtedly have here. The burden then reverts to the plaintiff to show a likelihood of confusion.”

The case cite is Toyota Motor Sales, U.S.A., Inc. v. Tabari, __ F.3d __, 2010 WL 2680891, No. 07-55344 (9th Cir. July 8, 2010).