Poznak's Legal Update

Trademarks On The World Wide Web

June 6, 2002

Trademarks are words or symbols used by businesses to identify themselves as the source or provider of goods and services. Trademarks are valuable because they help buyers identify and locate unique sources of particular goods or services. Owners of ordinary trademarks can usually prevent others from using similar words or symbols to sell competing goods or services. Owners of famous trademarks can usually prevent others from using similar words or symbols for any purpose.

To protect the value of trademarks and the rights of their owners, trademark laws provide significant monetary penalties for unauthorized uses of trademarks. These unauthorized uses are called infringements, but certain uses are excepted. One of those is the "nominative use" exception, which allows a party to use another‚s trademark without first obtaining permission. This article discusses the extension of the nominative use exception to the world wide web.

Nominative uses of trademarks occur when a trademark owned by someone else describes a person, place, or an attribute of a product or service, and there is no reasonable alternative description. Classic examples of nominative uses include comparative advertisements, such as a Pepsi versus Coke taste test, or signs in store windows naming the brands of goods the shop sells or repairs. Pepsi could not describe the attributes of Coke without specifically naming Coke. Similarly, the shop might be unable to describe the particular products it sells or repairs except by specifically naming them. Now, thanks to a case decided in February 2002, nominative uses of trademarks may also occur on the world wide web.

The case in question arose when Terri Wells, the 1981 Playboy Playmate of the Year, referred to herself as such in web banner ads, in her website's metatags, and on her website‚s wallpaper. The terms "Playboy" and "Playmate" are trademarks owned by Playboy Enterprises Inc (PEI). PEI sued to stop Wells‚s unauthorized use of these trademarks. The court determined that Wells‚s use of the trademarks was nominative in her banner ads and metatags but not on her website‚s wallpaper.

The goods that Wells sold on her website were photographs of herself. In concluding that Wells‚s use of PEI‚s "Playboy" and "Playmate" trademarks was nominative, the court first determined that because Wells is a Playboy Playmate of the Year, she had no other reasonable way to identify or describe herself in connection with her sale of the photographs. Although, the court said, she could have described herself as "a former nude model selected by Mr. Hefner‚s magazine as its supreme prototypical female," that roundabout description, and others like it, in the court‚s view, would be impractical and ineffectual. Therefore, the court allowed Wells‚s use of the "Playboy" and "Playmate" trademarks in her banner ads and metatags.

As mentioned above, the court reached a different conclusion concerning Well‚s wallpaper. Her website‚s wallpaper contained, as a pattern, the repeated abbreviation "PMOY Œ81", which stands for Playmate of the Year 1981. PEI claimed that PMOY is also its trademark. The court determined that because "Playboy Playmate of the Year" sufficiently identified and described Wells, her use of "PMOY Œ81" was unnecessary and, therefore, not nominative.

A nominative use of another‚s trademark must be limited in two respects. First, the trademark must be used only to the extent reasonably necessary to identify the product or service. In our classic example, while an auto repair shop might be permitted to display the name "Volkswagen" to indicate the brand it repairs, the shop probably could not also lawfully use Volkswagen‚s stylized font or the VW logo. The latter two uses would probably be unnecessary to identify the shop‚s services.

In the PEI case, Wells‚s banner ads and metatags were appropriately limited, because they used only the trademarked words and not the font or bunny symbol associated with those trademarks. Although the court did not address this issue, Wells‚s repeated use of PMOY in her website‚s wallpaper, rather than only once on a page, was probably excessive.

The second limitation on nominative uses prohibits suggestions that the trademark owner sponsors or endorses the user. In our classic example, to assure compliance with this requirement, the auto repair shop might indicate somewhere on the premises and in its literature that it is not sponsored or endorsed by Volkswagen. In the Pepsi versus Coke ad, a disclaimer would be unnecessary because no one would assume that Coke endorsed Pepsi. Likewise, although Wells‚s website did not contain any statement disclaiming PEI‚s endorsement, the court determined that because the trademarks "Playboy Playmate of the Year" simply identified and described Wells, no one could reasonably assume that PEI had endorsed the photographs she was selling on her website.

Trademarks are particularly powerful on the world wide web because search engines catalogue and seek key words. Notwithstanding the PEI case, great care should be taken before using another‚s trademark on the web. Determining whether a use is nominative is often somewhat subjective. A favourable outcome in a trademark infringement lawsuit may be problematic, and the potential liability may be significant.

About Jim Poznak

Jim Poznak is a longtime AMC member and legal eagle who generously donates his services to the AMC by reporting on legal developments in the multimedia and Internet industry. For further information you may contact Jim directly at jlp@Poznaklaw.com or visit his web site at Poznaklaw.com.

Previous legal updates can be found in our archives and include the Digital Millenium Copyright Act, the WIPO Copyright Treaties Implementation Act, and the Online Copyright Infringement Liability Limitation Act.

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