January 2005

Intellectual Property Bulletin

The Intellectual Property Bulletin is published by the Intellectual Property Practice Group at Arthur, Chapman, Kettering, Smetak & Pikala, P.A. to keep our clients informed on the ever-changing complexities of intellectual property and business law.

The United States Supreme Court delivered a trademark infringement opinion on December 8, 2004, discussing the burden of proof in "fair use" affirmative defense cases. Parties sued for trademark infringement have a number of available affirmative defenses including the doctrine of fair use. Parties suing for trademark infringement on the other hand must generally prove they have a valid and protectable mark and that the alleged infringer’s subsequent use of the trademark is likely to cause confusion, mistake, or deception among potential customers about the origin of the goods or services in question.

The fair use affirmative defense allows alleged infringers to use another’s trademark to describe the alleged infringer’s goods. The fair use doctrine is found in 15 U.S.C. § 1115(b)(4). That statute states that registered marks are subject to several defenses including "that the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark, of the party’s individual name in his own business....or of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party..." Or put another way, the statute allows a party to use another’s trademark in a non-trademark capacity.

In the KP Permanent Make-Up, Inc., case, competitors Lasting Impression I, Inc. and KP Permanent Make-Up, Inc. both marketed and sold permanent cosmetic makeup. The makeup was a mixture of pigment and liquid for injection under the skin to camouflage injuries. Lasting owned the registered trademark "micro colors"and felt KP was infringing its mark by using "micro color" and "MICROCOLOR" to market its makeup. After KP refused to stop using these marketing terms, it sued Lasting seeking a declaratory judgment that Lasting did not have an exclusive right to "micro colors" and Lasting’s trademark was generic and incapable of protection.¹ Lasting counterclaimed against KP alleging trademark infringement to which KP raised the fair use affirmative defense. KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 2004 WL 280491 (U.S. 2004).

The Court focused on whether a party who raises the fair use defense has an obligation to disprove consumers were likely confused by its conduct or whether the party alleging infringement must prove a likelihood of consumer confusion. The Court felt this issue was important because lower federal appeals courts from around the country disagreed if the fair use defense could be used if there was any likelihood of confusion. Id. at 3.

The Court noted the party seeking to prove trademark infringement (Lasting in this case) has the burden of proving likelihood of confusion. Defendants like KP do not have to show confusion is unlikely and can either rebut plaintiff’s evidence or raise an affirmative defense like fair use to shield themselves completely from liability. Id. at 5 and 6. The Court also held a certain degree of consumer confusion is acceptable in fair use situations and that the Lanham Act was not intended to deprive commercial speakers of the ordinary use of descriptive words. Id. at 6. Companies like KP have the right to describe their goods by descriptive terms even if the terms are trademarked. This right is why descriptive terms qualify for trademark registration only after achieving secondary meaning (words that acquire distinctiveness over time and come to signify the source of the good or service). Id. Plaintiffs who choose to identify their products with trademarks using well known descriptive terms accept a certain level of risk consumers will be confused by a subsequent fair use of those terms.

The Court did not say in KP Permanent Make-Up, Inc. how much confusion is acceptable in fair use cases but seemed to hold there is a limit although it would determine this limit at a later date. It was enough in the Court’s opinion to rule that defendants have no independent burden to negate the likelihood of any confusion in raising the affirmative defense that a term is used descriptively, not as a mark, fairly, and in good faith under §1115(b)(4). Id. at 7.

Please contact Arthur Chapman’s intellectual property litigation attorneys for more information about this case or trademark or intellectual property law. Arthur Chapman would also like to thank those who attended its 2004 half day intellectual property law seminar on December 7.