This week we are discussing ways you can use a third party’s mark to identify the third party’s goods or services while advertising your own. For example, a dental office wants to let potential patients know that it uses a specific brand of dental veneers. The law allows XYZ Dental to factually state “XYZ Dental specializes in the fitting and application of ABC® brand veneers.” This type of use is known as nominative fair use and as with comparative advertising and descriptive fair use, there are rules that need to be followed.
To qualify as proper nominative fair use, the use must not create a likelihood of confusion and the use cannot imply sponsorship or endorsement by the trademark owner where none exists.
The courts have set out a three part test to determine if a use is likely to fall within the rubric of nominative fair use.
The trademark owner’s product or service must not be readily identifiable without use of the trademark. It is recognized that there are times when it is necessary for a company to refer to a third-party product or service by its trademark. In those circumstances the law does not require individuals or companies to use “absurd turns of phrase” simply to avoid trademark liability. XYZ Dental does not need to state that it fits and applies the dental veneers identified by the first three letters of the alphabet. It can simply factually state it fits and applies ABC dental veneers.
The company must use only as much of the mark as is necessary to identify the product, or service. PDQ physical therapists can state that they utilize Bowflex® fitness equipment. However, unless they have a specific agreement with the trademark owner (Nautilus, Inc.), it cannot use any logos, tag lines or catch phrases used in connection with those products. It also cannot make repeated reference to the trademark or use it in a font or size that is designed to make the third party’s mark stand out from the remainder of the ad.
The company must do nothing that would suggest any sponsorship or endorsement by the trademark owner that does not exist. Use of the third party’s mark must accurately portray the relationship between the user and the trademark owner. If there is no direct relationship then the advertisement must not imply anything different. For example it would be problematic to state:
PDQ works with Bowflex® to provide you with excellent results.
This implies that PDQ has a relationship with Bowflex and that Bowflex is involved in the services themselves. The correct statement would be:
PDQ uses quality equipment, including Bowflex® equipment, to provide you with excellent results.
Our Insight. Your Advantage. As with the other examples of properly using the trademarks of other, the law allows you to accurately and factually identify the products or services that you are using in your business. Just do not go further and try to link the reputation of these products to your business. Keep a clear line between the reputations of each company. One way to be prudent and greatly assist in this is to provide a disclaimer. A disclaimer can help make it clear that there is no relationship between the companies. An example of a suitable disclaimer would be:
Bowflex® is the registered trademark of Nautilus, Inc. PDQ is not associated with or sponsored by Nautilus, Inc.
By following the guidelines above, you can use a third party’s mark to identify the third party’s goods or services while advertising your own.
Join us next week for a discussion about using your trademarks consistently.
Here are the other installments in this series: