The first post in our Building a Brand series focused on explaining what trademark protection is and why businesses should obtain a federal trademark registration. In this follow-up, we cover what others can and cannot do in regard to your trademark. A federal registration instills nationwide protection in your brand, providing you nationwide rights to use that mark in commerce. But what does this mean? What a trademark actually protects is your ability to prohibit others who operate within a similar market from using your mark or one confusingly similar to your own to identify their own goods or services. This is known as trademark infringement. It is key to note that trademark protection is generally limited only to your relevant market (i.e. Dove chocolate does not infringe against Dove soap). The law allows you as the mark holder to protect against unfair competition that arises from the use of your mark by a competitor who would seek to free ride off the goodwill associated with your brand. These rights are not boundless, however, and the doctrine of fair use carves out some exceptions that allow others to use your mark under certain conditions. Here, we discuss trademark fair use and how it affects brand-building.
What is Fair Use and Why is it Beneficial for Trademark Owners?
The free speech protections of the First Amendment protect the public’s right to discuss your brand and review it. Trademark fair use allows others to use your mark in nominative or descriptive ways. Permitting others to use your mark in these ways actually works to your advantage. A trademark acts as a source indicator, meaning your mark tells consumers that they are purchasing your company’s product as opposed to that of some other brand. Everyday people make decisions on what products to buy in the store, and many times they are looking for a specific brand because of that brand’s distinct qualities or reputation, even though there are a variety of similar products available on the shelf. Although people have the right to provide any opinion about your brand, trademark protection enables the distinctions you to protect the name that distinguishes your product or service from others in the market. Nominative fair use allows retailers, repair shops, and others who may service or sell your products to advertise that fact (i.e. a car repair shop advertising that it works on Volkswagens). Descriptive fair use prevents trademark owners from unfairly restricting the use of certain words in non-source identifying ways (i.e. describing a product’s function as “an inhibitor” even though another product is named “The Inhibitor”). As you can see, nominative fair use allows others in complementary markets to use your mark to identify you as the source of your own goods. In this way, fair use can actually increase your brand recognition and helps consumers identify places to purchase or further their continued use of your goods/services.
However, your trademark cannot be used as a source indicator of anyone else in your market or of any type of business closely associated with your brand. No one can use your trademark or a similar mark that is likely to confuse consumers as to the source of the infringing product. This legal protection forbids other companies from capitalizing on your goodwill and helps consumers stay safe from bad actors who would produce low quality goods and sell them under an infringing mark. Fair use carves out an exception, allowing some uses of your mark by others that are both necessary and useful for your business, the other user, and the general consuming public. Nominative and descriptive fair use exceptions, as exemplified above, prevent mark holders from using their marks to inhibit fair competition. However, trademark protection still ensures that your business can police against unfair uses that create consumer confusion and protect the goodwill associated with your brand.
Bad Spaniels, Good Trademark: 2023 SCOTUS ruling favors broader trademark protection
In 2023, the Supreme Court, in Jack Daniels Properties v. VIP Products, clarified the scope of trademark protection, holding that the use of popular trademarks to sell parody or imitating products is not exempt from liability. In Jack Daniels, a dog toy that resembled a Jack Daniel’s whiskey bottle but which instead used dog-related puns (“Bad Spaniels,” “Old No. 2,” and “Tennessee Carpet” instead of “Jack Daniels,” “Old No. 7,” and “Tennessee Whiskey”) was still open to dilution liability because the parody acted to identify VIP Products as the source of the good. The Supreme Court held that, when a parody of a protected mark is used to identify the source of the parody product, the fact that the use was parodic cannot alone defeat a claim of trademark infringement or dilution. Justice Kagan, writing for the majority, noted that undermining source identification is the “cardinal sin” prohibited under trademark law. No business can rely on your brand’s reputation via imitation to incur its own profit. If a parody mark is used for source indication rather than some other expressive purpose, the parody can still infringe the original trademark.
A federal trademark registration grants you nationwide rights to the exclusive use of your mark in relevant markets and places competitors on notice of those rights. While fair use may allow some limited uses of your mark, these exceptions are narrow and are beneficial to both the consuming public and your business. In all other cases, you retain the right to prevent bad actors from using the goodwill associated with your mark to free ride off of your reputation. Understanding your rights is essential in both building and protecting your brand. Consulting a trademark lawyer can help you develop a mark that is effective in its purpose and protected against bad actors.
This post was co-authored by Emily Newman, a law clerk at Darkhorse Attorneys and a second-year law student at the Liberty University School of Law.
If you believe someone is infringing your trademark, if you are interested in obtaining a trademark registration, or if you have questions about protecting/building your brand, reach out to Darkhorse Attorneys today to schedule a consultation.
The contents of this post do not constitute legal advice, and no client-attorney relationship is formed. The contents of this post are offered for educational purposes only. Every situation is unique. If you require legal assistance, submit an inquiry through our website or call our firm at 540-553-8149.
