Trademark Fair Use and Comparative Advertising

Trademarks of a rival company can be used in comparative advertising, so long as the advertising does not contain misrepresentations or create a reasonable likelihood that purchasers will be confused as to the source, identity, or sponsorship of the advertiser’s product. Under the Lanham Act, a defense to claims of false and misleading comparative advertising is that the advertiser used the other party’s registered trademark fairly and truthfully – known as fair use or nominative fair use.

In the United States, such uses are non-infringing “nominative fair uses” if they do not cause confusion and there is no indication of sponsorship or endorsement.  This nominative fair use “does not try to capitalize on consumer confusion or to appropriate the cachet of one product for a different one.   For example, when it is for purposes of criticism, news reporting or comparison, or as a point of reference, use of a third-party trademark may be fair.

A third-party must use only so much of the plaintiff’s trademark as is reasonably necessary to identify the plaintiff’s goods or services.  The use of a word mark, rather than a corresponding logo or design, may weigh in favor of a finding of fair use.  The defendant in Playboy Enters. used only the trademarked words “Playboy” and “Playmate of the Year 1981” and not the font or symbols associated with the trademarks.  Similarly, a soft drink competitor could use the term “Coke” or “Coca-Cola” to fairly compare its product, but it would not be entitled to use the distinctive lettering.

The use must accurately portray the relationship between the user and the trademark owner.  Although there is no per se rule for when a use is fair under U.S. trademark law, there are certain categories of cases in which a use of a third-party trademark is more likely to be deemed fair.  For example, use of a third-party trademark in truthful comparative advertising, so long as the use is not misleading and does not create confusion among customers, is fair.

Use of Disclaimers or Disclosures

In some cases, disclaimers have been found to be persuasive evidence that a use was fair.  If a disclaimer or disclosure is needed, it must contradict the express text of the ad or be used to correct a misimpression the advertisement would otherwise create. An advertisement will be evaluated based on the overall net impression of the advertisement.  The Federal Trade Commission’s requirements regarding disclosures and disclaimers can be summarized as follows:

  • Prominence: The disclosure must be big enough for consumers to notice and read.
  • Presentation: The wording and format must be easy for consumers to understand.
  • Placement: The disclosure must be in a place where the consumers will look.
  • Proximity: the disclosure must be near the claim it qualifies.

Disclosures and disclaimers are required to prevent deception and must be presented “clearly and conspicuously.”  Whether a disclosure meets this standard is measured by its performance (how the consumer actually perceives and understand the disclosure or disclaimer within the context of the entire advertisement).  The key is the overall net impression of the advertisement – that is whether the claims consumers take from the advertisement are truthful and substantiated.

Contact Our Charleston Trademark Lawyers

Our Charleston trademarks attorneys have over a decade of experience in handling a wide range of trademark matters, both state and federal, in a diverse number of business industries. To schedule a consultation with one of our trademark lawyers today, please contact us online, email or give us a call at 843-564-5115.

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