TO USE OR NOT TO USE: UNDERSTANDING THE CONCEPT OF NOMINATIVE FAIR USE

Introduction

The core function of a trademark is to act as a source identifier of goods and services, whereas the core benefit of a trademark enjoyed by a Registered Proprietor is the negative right that it acquires to stop others from using an identical with and/or deceptively similar trademark. However, this benefit accorded to trademark owners is not absolute. In today’s competitive global world, we often come across the use of trademarks by third parties across various platforms such as during advertisement campaigns, parodies, comparative product marketing, media etc., all under the garb of ‘nominative fair use’.

In the simplest of words, nominative fair use of a trademark is a legal doctrine that acts as a defence in certain types of trademark infringement situations – when a registered trademark is used by another to refer to the mark owner’s goods or services. This use is deemed nominative because it “names” the real owner of the mark.

For example, an electronics store may advertise that they sell and fix Samsung products —though it must ensure that the impression to the relevant public does not lead to an assumption that it is an official Samsung retailer or/and has any relationship/sponsorship with Samsung. The user only needs to prove that in its usage of the trademark, it only referred to the trademark owner’s goods or services, at which point, the burden shifts to the trademark owner to show that the alleged use resulted in likelihood of confusion/association amongst the public.

Parameters to be kept in mind while deciding whether use is fair:

Section 30(2) of the Trade Marks Act, 1999[1] deals with the concept of fair use as a defence in trademark infringement cases. Fair use can be categorised into the following types:

i) Descriptive fair use: As per Section 30(2)(a) of the Trade Marks Act, 1999, descriptive fair use allows the use of another’s trademark in the course of trade for the purpose of describing the users goods and services. It is pertinent that the use of the mark should not be as a trademark but for its primary descriptive meaning to describe the ‘kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services or other characteristics of goods or services’. The concept under Section 30(2)(a) of the Trade Marks Act, 1999 tolerates a limited level of confusion between the marks in the interest of free competition.

ii) Nominative fair use: As per Section 30(2)(d) of the Trade Marks Act, 1999, nominative fair use by a third party does not qualify as trademark infringement as long as neither the purpose nor the effect of the use of the mark causes any confusion with respect to trade origin. In other words, the doctrine of nominative fair use allows a defendant to use a plaintiff’s trademark to identify the plaintiff’s goods so long as there is no likelihood of confusion about the source of the defendant’s product or the mark‐holder’s sponsorship or affiliation.[2]

The concept of nominative fair use was initially discussed in New Kids on the Block v. News America Publishing, Inc.[3], wherein a newspaper conducted a survey about a concert by the popular music group “New Kids on the Block,” asking readers their favourite singer and used the name of the group. In turn, the band filed a suit of infringement against the newspaper. The court, while laying down the guidelines of use to qualify as nominative fair use, held that the use by the newspaper was non-infringing nominative fair use as it did not imply vide its survey any sponsorship or endorsement by the trademark owner and also that there was no alternate way to ask people their opinion of the band without using its name. The Court provided the following parameters to be kept in mind before qualifying use as nominative fair use:

i) The trademark owner’s product or service must not be readily identifiable without use of the trademark;

ii) The company must use only as much of the mark as is necessary to identify the product, or service; and

iii) The company must do nothing that would suggest any sponsorship or endorsement by the trademark owner that does not exist.

In Consim Info Pvt. Ltd vs Google India Pvt. Ltd.[4], the Madras High Court discussed the concept of descriptive and nominative fair use of trademarks. In this case, the Plaintiff owned trademarks containing a combination of an Indian state/race in addition with the word Matrimony, for example, Bharat Matrimony, Tamil Matrimony, Punjabi Matrimony etc. for providing online matrimonial services. The suit was initiated due to the competitors use of AdWords which were identical with and/or deceptively similar to the plaintiff’s registered trademarks. The court observed that parts of the marks in question were highly descriptive and considering the field of business in question, a complete prohibition from using the alleged words would reduce the choice of words available to describe the services rendered by the Defendants. The court observed that ‘it is not possible for a search engine to be aware of all the trademarks registered in the jurisdictions and that the key word suggestion tools automatically generates its list by considering the number of hits counted by the term/trademark; that there is no human intervention in the process of selection of the term/trademark by the search engine.’ Further, it observed that ‘there cannot be a presumption that the inclusion of those names in the keyword suggestion tool, happened with the knowledge of the search engine (that these names were registered trademarks). Thus, the use of the marks of the Plaintiff was not use in the sense of trademark with an intention to trade upon the goodwill of the Plaintiff amounting to infringement or passing off. The court also went ahead to discuss the concept of nominative fair use and laid out guidelines for any unauthorized use of the trademark to be considered as 'nominative fair use':

(i) the product or service in question must be one not readily identifiable without use of the trademark;

(ii) only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and

(iii) the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the proprietor of the trademark.

Further, in Hawkins Cookers Ltd. vs Murugan Enterprises[5], which involved use of the registered trademark 'HAWKINS' on gaskets by the defendant, the Court held that use of the trademark by the defendant with respect to spare parts and accessories adapted for use with the goods of the proprietor may not amount to infringement, if the defendant establishes, (1) that the use of the mark is reasonably necessary for describing that the article is adapted for use with the plaintiff's goods; (2) that the use was bona fide, and (3) that the effect of the use complained of is not likely to deceive the public as to the trade origin. However, in appeal, in Hawkins Cookers vs. Murugan Enterprises[6], it was held that the defendant while writing 'Suitable for Hawkins Pressure Cookers', had given undue importance to the word "HAWKINS", by printing it in the same font and color as used by its Registered Proprietor in the original trademark, and thus, dismissed the defence of nominative fair use under Section 30(2)(d).

Keeping the Hawkins case in mind, it can be interpreted that to qualify the use of another’s trademark as nominative fair use, the use of the trademark should not resemble the actual trademark of the other with respect to stylization, color, device elements etc. It should be used in a regular manner and should not be highlighted so as to become the dominant element that catches the attention of the public and results in confusion with respect to the source of origin of the goods/services.

Conclusion

In view of the above, it can be said that when a person cannot convey what they want to convey about their own trademark, without using a trademark or a part of a trademark of another, then such a use of a trademark comes under the concept of nominative fair use. However, it is important to note that the line between nominative fair use and trademark infringement is very thin. It is essential to ensure that the unauthorized use of another’s trademark does not at any point suggest sponsorship and/or endorsement and/or association with the trademark owner, in order for it to qualify as nominative fair use.

[1] Section 30 (2): A registered trade mark is not infringed where—

(a) the use in relation to goods or services indicates the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services or other characteristics of goods or services;

(b) a trade mark is registered subject to any conditions or limitations, the use of the trade mark in any manner in relation to goods to be sold or otherwise traded in, in any place, or in relation to goods to be exported to any market or in relation to services for use or available or acceptance in any place or country outside India or in any other circumstances, to which, having regard to those conditions or limitations, the registration does not extend;

(c) the use by a person of a trade mark—

(i) in relation to goods connected in the course of trade with the proprietor or a registered user of the trade mark if, as to those goods or a bulk or which they form part, the registered proprietor or the registered user conforming to the permitted use has applied the trade mark and has not subsequently removed or obliterated it, or has at any time expressly or impliedly consented to the use of the trade mark; or

(ii) in relation to services to which the proprietor of such mark or of a registered user conforming to the permitted use has applied the mark, where the purpose and effect of the use of the mark is to indicate, in accordance with the fact, that those services have been performed by the proprietor or a registered user of the mark;

(d) the use of a trade mark by a person in relation to goods adapted to form part of, or to be accessory to, other goods or services in relation to which the trade mark has been used without infringement of the right given by registration under this Act or might for the time being be so used, if the use of the trade mark is reasonably necessary in order to indicate that the goods or services are so adapted, and neither the purpose nor the effect of the use of the trade mark is to indicate, otherwise than in accordance with the fact, a connection in the course of trade between any person and the goods or services, as the case may be;

(e) the use of a registered trade mark, being one of two or more trade marks registered under this Act which are identical or nearly resemble each other, in exercise of the right to the use of that trade mark given by registration under this Act.

[2] https://www.jdsupra.com/legalnews/nominative-fair-use-the-second-circuit-97807/

[3] 971 F.2d 302 (9th Cir. 1992).

[4] Consim Info Pvt. Ltd vs Google India Pvt. Ltd (2010(6) CTC 813)

[5] Hawkins Cookers vs. Murugan Enterprises (2008) 36 PTC 290 (Del).

[6] Hawkins Cookers vs. Murugan Enterprises (92012) (50) PTC 389 (Del-DB).

The article was originally published on www.lexology.com on August 18, 2020 and can be accessed here.