FAIR USE OF TRADEMARKS: Further Issues

IVAN HOFFMAN, B.A., J.D.


        In “Fair Use of Trademarks”, I discussed a case dealing with the use of the trademarked name of a band, The Beach Boys, by one of its members.  In “Keywords, Meta Tags and Trademarks,” I discussed issues related to the use of trademarks in those contexts.  The within article deals with a case combining these issues.

        In Horphag Research Ltd. vs. Pellegrini and Garcia etc., the same Ninth Circuit Court of Appeals that ruled on The Beach Boys case was called upon to decide whether the use by Garcia of a registered trademark in his web sites and in the meta tags for the web sites constituted a “fair use” of the same. [NOTE: This case has had at least 2 appeals and the quoted portions below are from the 2007 Ninth Circuit opinion and this article is revised from a prior version.]

        These were the relevant facts as discussed by the Court:

Around 1987, Horphag began selling the pine bark extract outside of France under contractual relationship with Masquelier. Thereafter, things between Horphag and Masquelier went sour, and the two parties dissolved their relationship. In 1993, Horphag was granted the United States trademark for the mark Pycnogenol.2 Since then, Horphag has made extensive efforts to control the quality of Pycnogenol and has invested heavily in research and marketing its product. Pycnogenol is now one of the fifteen most sold herbal supplements in the United States. Horphag has not authorized any other entity to use its mark.

Garcia was once a licensed dealer for Horphag and sold Horphag’s products through his Internet site “healthierlife. com.” In February 1999, Garcia stopped distributing products manufactured by Horphag and began selling products manufactured by Masquelier. One of the products Garcia sells is “Masquelier’s Original OPCs,” a supplement derived from grape pits that competes with Horphag’s pine-bark-based supplement. Garcia claims that he stopped distributing for Horphag after he discovered that Masquelier’s product, rather than Horphag’s product, was the “true Pycnogenol.” Horphag contends that Garcia used the mark Pycnogenol as a “bait and switch” to induce customers to purchase his product, Masquelier’s Original OPC. Garcia used the term Pycnogenol as a metatag3 to lure would-be customers to his website. Once at the website, consumers could find information designed to educate prospective users about the debate over the “rightful ownership” of the Pycnogenol patent and trademark. Other parts of Garcia’s website, however, were more problematic.

In several places, Garcia used the term Pycnogenol as a generic term, referring to both Horphag’s product and Masquelier’s product as Pycnogenol. Garcia attributes the results of research conducted on Horphag’s Pycnogenol to Masquelier’s product. For example, Garcia’s website describes Masquelier’s OPC as “a patented peak performance nutrient . . . among the best new weapons . . . to maintain overall good health for longer and longer periods of time.” On the “Safety Factor” section of Garcia’s healthierlife.com website, Garcia states “Pycnogenol studies carried out at the Pasteur Institute in Lyon, France, have shown it to be nontoxic to humans. . . . Pycnogenol should be viewed as a completely safe nutrient.” Both of these statements are direct quotes from Dr. Steven Lamm and Gerald Secor Couzens’ book, Younger at Last (1997), which makes explicit that the health and safety benefits to which it is referring attach to Horphag’s product. Indeed, Lamm and Couzens warn consumers not to purchase Pycnogenol imitators not manufactured by Horphag.

Garcia’s website also contains quotations from scientific literature discussing Horphag’s Pycnogenol that were altered to make them appear as though the quotes were discussing Masquelier’s product. For instance, Garcia altered a quotation taken from Dr. Richard A. Passwater’s book, Pycnogenol: The Super “Protector” Nutrient (1994). On Garcia’s website, the quotation reads: “Masquelier’s Original OPC has not only withstood the test of time (since 1953),4 it was extensively tested before it was made available as a food supplement.” But Passwater’s book actually reads: “Pycnogenol has not only withstood the test of time, it was extensively tested before it was made available as a food supplement.” Pycnogenol: The Super “Protector” Nutrient 99. Passwater’s book makes clear that it intended to refer to Horphag’s product, a fact Garcia’s website does not acknowledge.

Based on these and other alleged misuses of the Pycnogenol trademark by Garcia, Horphag argues that Garcia “has lessened the capacity of Pycnogenol to uniquely identify and distinguish [its] product,” thereby diluting Horphag’s trademark. Garcia, in turn, argues that Horphag’s suit is merely an attempt to stifle the debate on the “true” origins of Pycnogenol.

Fair Use Defenses

        Since there was no issue about the use of the registered trademark, the question was whether such use by Garcia was protected by “fair use.”

Garcia argues that his use of Horphag’s trademark is protected by the fair use doctrine. We disagree. Eligibility for a fair use defense based on “comparative commercial advertising” is conditioned on the challenged use being fair. See McCarthy § 24.97.10. To qualify for a fair use defense, the use must not “create an improper association between a mark and a new product” but must, instead, “merely identify the trademark holder’s products.” See Playboy Enters., Inc. v.
Welles, 279 F.3d 796, 806 (9th Cir. 2002).

Garcia did more than merely identify Horphag’s product as part of an attempt to educate the public on the Pycnogenol debate. Rather, as we found in the previous appeal, Garcia intentionally “spawn[ed] confusion as to sponsorship and attempt[ed] to appropriate the cachet of the trademark Pycnogenol to his product.” Horphag, 337 F.3d at 1041. Garcia’s attempt to capitalize on the popularity of Horphag’s product was not “fair.” We thus agree with the district court that Garcia has not adequately shown a genuine issue of material fact as to his fair use defense.

        Compare if you will the situation discussed in “Keywords, Metatags and Trademarks” in terms of the use of the registered trademark “Playboy” by former playmate Terri Welles.  In that case, cited above by the Court, which was factually quite different from the facts in the Horphag case, the Court found that the use of such trademarks was in fact covered by the fair use defense.

Dilution

        The Court found that under the Federal Trademark Dilution Act (“FTDA”), which was originally interpreted by the Supreme Court in the Moseley case, that the plaintiff had proven the requisite actual dilution of the mark.  [NOTE: the FTDA has subsequently been amended by Congress to eliminate the requirement of actual dilution.  Read “Trademark Dilution: The Victoria’s Secret Case.”   Given this change in the law, this article will not discuss the elements of the within case in regard to the findings about dilution.]

Conclusion

        In analyzing fair use defenses, both in the trademark area as well as in the copyright area (read the several cases in the latter regard on my site.  Click on “Articles for Writers and Publishers”), it is clear that there are no bright line rules.  Each case is unique unto itself and all such matters are very fact-specific.  Accordingly, relying on such defenses, in both areas of the law, is subject to great risk and wherever possible, parties wishing to use another’s intellectual properties should seek licenses to do so.  Read “Respect for the Law.”

Copyright © 2003, 2007 Ivan Hoffman.  All Rights Reserved.

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This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on United States law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

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