Trademark Law and Practice, Pages 213–216

New Kids on the Block v. New America Pub., Inc.

United States Court of Appeals for the Ninth Circuit, 1992
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Facts:

Plaintiffs are a popular music act with many other goods they sell their branding on. One service they have is a 900 number that fans can call for a fee and get info about the group and leave messages for them.

Defendants are two newspapers that ran polls in the paper asking about which member of the group was most popular or the sexiest. They also had 900 numbers to register their votes, charging for each call, although one donated these profits to charity. Plaintiffs sued for ten different claims.

Procedural History:

District court granted summary judgment for defendants.

Issue:

Does nominative fair use apply when in direct competition with the trademark holder?

Rule:

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[W]here the defendant uses a trademark to describe the plaintiff's product, rather than its own, we hold that a commercial user is entitled to a nominative fair use defense provided he meets the following three requirements:

  1. the product or service in question must be one not readily identifiable without use of the trademark;
  2. only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and
  3. the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.

Reasoning:

  • Trademarks are meant to identify the source of goods. Sometimes, these trademarks become the only way to reasonably identify certain goods. In such cases, businesses are allowed to use the trademarks of others to convey information about their services as long as they do not suggest that they are sponsored or authorized thereby.

  • Here, plaintiffs claim that this rule should not apply because they are in direct competition with plaintiff's own 900 lines. While defendants may decrease plaintiffs' own profit, this is a choice for plaintiffs' to make as to what to support. Plaintiffs' trademark rights are simply not able to stop defendants' use of it.

Holding:

Yes, nominative fair use protects even direct competitors. Affirmed.