Supreme Court to Hear Fair Use Case

Article originally appeared in Thomson & Thomson on 08/01/04

The Supreme court has accepted certiorari on the question of whether the defense of fair use trumps a showing of likelihood of confusion. The case, KP Permanent Make-Up Inc., arises from the Ninth Circuit decision reported at 328 F.3d 1061 (2003) that held the fair use defense inapplicable when a likelihood of confusion is present. the Court has accepted the case for its October 2004 term and is likely to hear oral argument in the fall.

the question presented to the Court is, "Does the classic fair use defense to trademark infringement requite the party asserting the defense to demonstrate an absence of likelihood of confusion, as is the rule in the 9th Circuit, or is Fair Use an absolute defense, irrespective of whether or not confusion may result, as is the rule in other Circuits?"

The parties to this case are competitors in the field of micro pigmentations, commonly known as permanent make-up. Lasting Impression Inc. ("Lasting") owns a federal trademark registration for a composite mark. micro colors and design. Lasting sent KP Permanent Make-up Inc. 9KP) a cease and desist letter objection to its use of the term "micro color" did not infringe Lasting's trademark right. Lasting counterclaimed for infringement. The parties filed cross motions for summary judgment. The District Court granted KP's motion for summary judgment and denied Lasting's motion. In its unpublished decision, the District Court found that KP satisfied all three prongs of the fair use defense set forth in 15 USD 1115b because

1. it  did not use the term "micro color" as a trademark

2. it used the term "fairly and in good faith"

3. it used the term is its descriptive sense to describe its pigmentation goods.

The District Court did not analyze whether likelihood of confusion was present in this case because it held KP's use of the term "micro color" to be fair and thus, not an infringement of Lasting's rights. the Ninth Circuit reversed, holding that "KP can only benefit from the fair use defense if there is no likelihood of confusion between KP's use of the term micro color and Lasting's mark."

This case highlights a circuit split that exists as to whether the fair use defense is available when likelihood of confusion is present. In contract to the Ninth Circuit view, other circuits have held that the fair use defense may prevail even against a showing that confusion is likely. according to the Fourth Circuit, " it defies logic to argue that a defense may not be asserted in the only situation where it even becomes relevant .. A defense which can be considered only when the proma facie case has failed is not defense at all." Shakespeare Co. v. Silstar Corp of America, Inc.  Although other circuits evaluate evidence of confusion within the fair use analysis, they do not view such evidence as necessarily fatal to the defense.

Various groups have filed amicus briefs with the court including INTA and AIPLA, both of which argue against the Ninth Circuit's bright-line rule.

Another holding in the ninth Circuit's decision adds importance to the Supreme Court's grant of certiorari in this case, even though it is not being directly reviewed by the Court. The Ninth Circuit held, to the surprise of many trademark practitioners, that a composite mark's incontestability extends not only to the mark as a whole, but also to the salient portion of the mark (in this case the word "micro color"). Should the benefits of a composite mark's registration, such as incontestability, extend to arguably descriptive words therein, many more companies will need to rely upon the fair use defense when discussing their goods and services in the marketplace,

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