“TM-compliant” ads not shown to be nominative fair use

World Axe Throwing League, Inc. v. Cold Steel Inc., 2023 WL
2372059, No. 2:20−cv−11407 JAK (Ex) (C.D. Cal. Feb. 14, 2023)

Plaintiffs sued defendants for state and federal trademark
infringement and related claims. Plaintiff WATL is allegedly the preeminent
governing body and league for the sport of axe throwing and uses the trademark
“WATL” to market and publicize the axe throwing league. Cold Steel allegedly “marketed,
advertised and sold substantial sums of axes which were clearly labeled ‘WATL
Compliant’ or ‘Meets WATL regulations.’ ”

The court found that this was close enough to saying “WATL approved”
that it wouldn’t grant summary judgment on nominative fair use, which is yet
another way that trademark is just much more expansive than false advertising
(compare treatment of “FDA
,” for example).

First, nominative fair use permits only the “truthful use of
a mark.” Toyota, 610 F.3d at 1177. Defendants contended that one axe “meet[s]
WATL Regulations” and that another “meets WATL Regulations with a slight
modification that is commonly made.” But WATL argued that wasn’t true, creating
a disputed issue of fact. As to one axe whose compliance was undisputed, the
defense was still disputed.

NFU factors: (1) WATL wasn’t readily identifiable without
use of the mark (the current ad claim “Meets most axe throwing association
requirements for tournament play,” was an insufficient substitute). (2) Defendants
didn’t use any distinctive features of the mark, such as logo or stylized
lettering; although the WATL mark was displayed more prominently than the Cold
Steel mark in some instances, that wasn’t important given the lack of
distinctive font or logo; defendants only used what was reasonably necessary.

The problem was (3): whether defendants did anything that
would, in conjunction with the mark, suggest sponsorship or endorsement. Use of
the mark with the words “compliant,” “legal,” and “meets … regulations” could
have done so because there was evidence of consumer confusion. An axe-throwing
business owner testified that, in 2019, he and two other league members
believed that WATL worked with Cold Steel to manufacture axes, based on
advertisements on Cold Steel’s website. “Although it is not clear whether the
phrase ‘WATL approved” appeared on Cold Steel’s website, [his] testimony
demonstrates that axe purchasers could reasonably and mistakenly believe that
the Competition Thrower was either approved by or made with WATL, and that this
belief arose due to the use of the WATL mark on Cold Steel’s website.” Another
business owner testified similarly; though his belief “stemmed from assumptions
and inferences,” his testimony supported “the view that Defendants’ use of the
WATL mark on social media and through a sales representative, contributed to
confusion about the relationship between WATL and Cold Steel within the
community of competitive axe throwers.” Thus, a reasonably prudent consumer
could be confused, and another putative defense dies as it is reduced merely to

“Further, internal Cold Steel communications support the
inference that Cold Steel intended to use the WATL trademark to increase sales.”
In another case, statements by a manager of a band that recommended the use of
a trademark to “create or enhance marquee value,” was evidence that the band
used the trademark to suggest sponsorship. Cold Steel’s use could have
contributed to the impression that Cold Steel’s Competition Thrower would be
“the next big thing in WATL,” causing throwers to buy it. [None of that depends on confusion. NFU was born because USA Today polled on New Kids on the Block,
not some unknown band, which it did because that would be more profitable than
polling about an unknown, but that’s not the same thing as intending or desiring confusion.

Contributory infringement: There was a genuine issue as to
whether defendants intentionally caused any other person to infringe on the
WATL mark or continued to supply axes to any person while knowing that the
person was using the axe to engage in trademark infringement, based on the “common
practice for retailers, including Amazon, to copy and paste product
descriptions from the website of the manufacturer.”

from Blogger http://tushnet.blogspot.com/2023/03/tm-compliant-ads-not-shown-to-be.html

This entry was posted in Uncategorized and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s