Trademark Law | Fair Use Law

Everything You Need to Know About Trademarks and Fair Use

Robert Kleinman is an experienced licensed attorney.
He earned an LL.M. in Intellectual Property from the
Benjamin N. Cardozo School of Law.
robert[at]austintrademarklaw.com

Trademarks are one of those things in life that nearly no one understands, but that just about everyone is unwilling to admit. So I’ll make it easy: Trademarks simply designate a product’s source of origin. If I say “Diet Coke” you probably think of a silver and red aluminum can, or a tall glass of ice filled with dark bubbling beverage. You can probably taste it, too. In any case, the trademark has successfully designated what it is and, and “it” is a particular low-calorie drink from the Coca-Cola Company folks.

As a trademark attorney, I have had the pleasure of protecting the goodwill and reputation my clients have worked so hard to create for their enterprises on dozens of occasions. No ifs, ands or buts, trademarks are a devastatingly effective commercial tool. Whether it’s a local specialty hardware store or a global internet search engine, eventually, just about every business has trademark issues. And I know, because I represent them all. But one of the biggest misconceptions I find among my clients — and lay people in general — is that trademarks are somehow absolute. That is, that once someone puts the letters “TM” or ® next to a trade name, that that name is somehow off-limits to all uses whatsoever–that’s just not the case.

Think about it, Coca-Cola is often considered to be the world’s most recognized and valuable trademark. In fact, it is so well established that many folks simply overlook that it is actually a registered trademark (U.S. Trademark Registration No. 2843235, inter alia). Yet not every time another entity uses the words, “Coke” , “Coca-Cola” or even “Diet Coke” are they necessarily butting up against the Coca-Cola Company trademark’s rights.

And that’s mainly because of the doctrine of “fair use,” of which there are two varieties: nominative and classic. When I go to a hot-dog stand, for example, and see the words “Diet Coke” scrawled on the chalkboard that serves as a menu, I can be reasonably sure that the stand’s owner hasn’t cleared this use of the Diet Coke trademark with the Coca-Cola Company. However, neither do my trademark-infringement sensors fire at this blatant unauthorized trademark appropriation. And that makes sense. After all, how else could the hot-dog stand’s owner communicate to me that I can purchase a Diet Coke there without identifying it as such? It wouldn’t be reasonable to expect the stand’s owner to write, “Now Available: Low Calorie Carbonated Cola Beverage, Made by Famous Georgia-Based Company!” The easiest, clearest and simplest way to identify Diet Coke is, well, by calling it Diet Coke, and this principal — instant identification — that is the soul of nominative fair use.

And that’s what keeps us all out of Trademark Prison. OK, I’m still at the hot-dog stand. Only this time there is no Diet Coke offered on the menu. Instead, under beverages, appears, “Debbie’s ‘Scarsdale’ Soda.” Naturally, I’m curious. What is Scarsdale soda? Then I notice that in parentheses beneath it there’s a friendly explanation: “Like Diet Coke.” At first blush, that appears to be a major trademark no-no. After all, in this example the hot-dog stand does not even sell Diet Coke, yet is being extremely cavalier with the Diet Coke trademark. But since this use of Diet Coke is entirely descriptive — to communicate taste, color, caloric count, and other properties Scarsdale soda possesses — this is permissible, and a classic fair use of the Diet Coke trademark.

A simple way to remember the difference between the two fair uses is that when you are using a trademark to identify the trademark holder’s product, that is a nominative fair use. When you are using a trademark to describe a something other than the trademark holder’s product, that is a classic fair use. Still confused? Don’t feel bad. This distinction drives even Federal Judges to distraction, but it’s important. Good thing there isn’t a Trademark Death Row in Trademark Prison. Yet, anyway.

by Robert Kleinman,
Austin Trademark Attorney
Austin, TX
robert.kleinman [@] gmail.com

Michael Spadaccini

Michael Spadaccini is the author of 8 books on self-help legal matters such as, Ultimate LLC Compliance Guide: Covers All 50 States (Ultimate Series), Ultimate Book of Forming Corps, LLCs, Partnerships & Sole Proprietorships, and Ultimate Guide to Forming an LLC in Any State, Second Edition (Ultimate Series).

You can view his Amazon Author Profile Here.