Fair Use of Your Competitor’s Trademarks

Avoiding Trademark Infringement

Sometimes you need to use your competitors’ trademarks to sell your products or services. This is particularly true when you are selling, for example, replacement parts, and need to say that your replacements are compatible with the trademark owners’ products. It can also be important when providing services such as repair. If you repair BMW automobiles, you need to let others know. Fortunately, if you do it properly, you can use them and avoid trademark infringement. This article discusses fair use of trademarks.

Sometimes you need to use your competitors’ trademarks to sell your products or services. This is particularly true when you are selling, for example, replacement parts, and need to say that your replacements are compatible with the trademark owners’ products. It can also be important when providing services such as repair. If you repair BMW automobiles, you need to let others know. Fortunately, if you do it properly, you can use them and avoid trademark infringement.

What are Trademarks?

Trademarks protect the reputation of a business. They also identify the source of goods for consumers. The test to determine if there is trademark infringement is whether there is a reasonable likelihood that consumers will be confused as to the source of the goods or services. This is also the underlying basis for fair use of trademarks, and the test as to whether a particular use is fair. Will consumers be confused as to the source? If you make it clear that the source of your goods and services are different than the trademark owner, you should be good.

It should be kept in mind that fair use is a defense to trademark infringement. Regardless of how fair your use of a trademark is, there is always a risk in using another’s trademarks—the owner may be motivated to sue to prevent your use.

If you decide to use another’s trademark, consult trademark counsel to get an opinion as to the strength of your fair use defense. The following provides two common types of fair use: descriptive and nominative.

Descriptive Fair Use

Descriptive fair use occurs when you describe your product or service using another’s trademark. You are using the common meaning of the word to describe your product, not actually using the trademark. This applies when the trademark is descriptive of the goods or services or their quality or benefit. Using terms to describe your product is fair use if you use them in good faith as descriptive words, as opposed to trademarks, and they are necessary to adequately describe your product.

Let us look at an example.

Sunmark owned the trademark SweeTARTS for a candy. Ocean Spray used sweet/tart to describe their cranberry juice. One of their ads stated: “Ocean Spray Cranberry Juice adds vibrant color, texture and unique sweet/tart flavor to any dish—with the healthy goodness of fruit!” 

Sunmark sued Ocean Spray for trademark infringement. The court held that Ocean Spray was using sweet/tart to describe the taste of their juice and not as a trademark. They also did it in good faith. Therefore, there was no infringement of the SweeTARTS trademark.

Nominative Fair Use

Nominative fair use is when you identify a trademark owner by its trademarks. It typically occurs when you compare your product, offer replacement parts, or repair services. 

The general test used by the courts is:

1. Is the product or service of the trademark owner one which is readily identifiable without the use of the trademark?
2. Has the mark been used more than is reasonably necessary to identify the trademark owner?
3. Has the user falsely suggested sponsorship or endorsement by the trademark owner?

The classic case of nominative use is comparative advertising such as “Coca-Cola tastes better than Pepsi,” or vice versa. You have to use the marks to identify the products. The use is normally reasonable, there is no over mentioning of the other trademark. And there is clearly no sponsorship or endorsement suggested.

Another example is repair services for automobiles. Volkswagen sued Donald Church for using their trademark Volkswagen and VW in advertisements for his repair services. His advertisements always used “Independent” whenever the terms “Volkswagen” or “VW” were used. The court held that his advertising was sufficient to distinguish his business in the eye of the customer. There was no false suggestion of sponsorship or endorsement by the trademark owner. Consumers would understand that independent means no sponsorship or endorsement.

An example of fair use with respect to replacement parts is the Keurig^® compatible coffee pods. To sell replacement pods, coffee makers must indicate that the pods can be used in Keurig machines. But it is important to not suggest sponsorship or endorsement.

Keurig sued Strum Foods for using the Keurig trademark on their Grove Square Coffee. The Grove Square packaging stated, “For use by owners of Keurig coffee makers,” and stated, “Strum Foods has no affiliation with Keurig, Incorporated.” The court focused on these statements as supporting nominative fair use in dismissing Kuerig’s motion for summary judgment. The court also suggested that using language such as, “Compatible with Keurig coffee makers” was likely a better alternative.

The key is to let the consuming public know that you are not endorsed or sponsored by the trademark owner. One of the best ways is to use a disclaimer statement that clearly spells out that you are not associated with the trademark owner. Also, using your own trademark on your products and words like compatible with will help.

The Takeaway

Using your competitors’ trademarks is not for the faint of heart. Your competitors will likely take notice. Do not be surprised if you get a letter demanding that you stop. Unfortunately, there is no bright-line test for what fair use of another’s trademark is. Great care must be taken and the advice of legal counsel is a must in this rather murky area of the law.

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William H. Honaker, BSME, JD, is an intellectual property attorney with over 30 years of experience. He practices with Dickinson Wright, based out of the firm’s Troy, MI office, and has extensive knowledge and expertise in all aspects of patent, trademark, trade secret, and copyright matters including litigation in a broad range of technologies/industries. For his clients, many of which regularly land on the annual Fortune 500 list, he evaluates patents, trademarks, and copyrights along with advising clients on the protection of inventions, trademarks, and copyrightable subject matter. Mr. Honaker is a highly sought-after IP attorney in part due to his proprietary client communication and project management system, The Harmony System™.

Mr. Honaker can be contacted at (248) 433-7381 or by e-mail to Whonaker@dickinsonwright.com.