There is no question that digital marketing of products and/or services are integral to the success of any business. There are myriad ways and places to advertise, including websites, social media, mobile applications, and the like. Oftentimes, companies will either intentionally, or inadvertently, use a registered trademark that belongs to a third party in its marketing efforts. When this happens, there is a strong possibility that the trademark owner will take action to curb and/or prevent such continued use. Trademark owners may send a cease-and-desist letter as a first course of action. However, this is not a guarantee that the unauthorized use will end, and many trademark owners may outright sue the infringing party without the courtesy of prior notice.
When is the use of a Third-Party’s Trademark a Big Deal?
First off, the use of another’s trademark in marketing should always involve thoughtful consideration and action. Typically, one would seek the rights to do so prior to such use. As we described in an earlier blog, a trademark is a word, phrase, symbol, or design, or a combination thereof, that identifies and distinguishes the source of goods/services. This is a significant concept, because using a third-party’s trademark (in a way that may confuse the source of goods/services) in marketing materials could land you in hot water. Remember, for a marketing campaign to be effective and safe, it must comply with applicable state and federal laws and regulations.
Are All Uses of a Third-Party’s Trademark in Marketing Illegal?
The quick answer is “no.” But the longer answer is complicated. Federal trademark law (the “Lanham Act”) affords many protections for trademark owners, including the ability to sue for infringement where trademarks are used in ways that will likely confuse consumers about the source of goods/services. The key to determine whether the unauthorized use of a trademark in marketing is permissible depends, in part, on whether such use will result in a “likelihood of confusion.” Under the Lanham Act, a plaintiff that can prove that trademark infringement occurred, may recover: (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action. The court shall assess such profits and damages or cause the same to be assessed under its direction.
Keep in mind, however, that there are certain uses of third-party trademarks that are considered “fair use” under the law and are, therefore, lawful. According to an American Bar Association article (“ABA”), [t]he fair use doctrine, consistent with the First Amendment, allows a person to use another’s trademark either in its non-trademark, descriptive sense to describe the user’s own products (classic, or descriptive, fair use) or in its trademark sense to refer to the trademark owner or its product (nominative fair use).”
Additional Legal Recourse for Use of a Third-Party’s Trademark in Marketing:
Beyond an action for traditional trademark infringement, Section 43(a) of the Lanham Act enables parties to bring civil causes of action for false advertising. The ABA article mentioned above also explains that such a claim may be brought by anyone likely to have been damaged under the following circumstances:
1. [Where] [a]ny person . . . uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which
- is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or
- in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities.
Additionally, as readers of this blog know, the Federal Trade Commission Act (“FTC Act”) bars “unfair or deceptive acts or practices.” Use of another party’s trademark or reference to another company in marketing can result in an unintended violation of Section 5 of the FTC Act.
Should You Use Third-Party Trademarks in Your Marketing Materials?
Every marketing scenario is different and will require unique legal analysis. It should be clear that the unauthorized use of third-party trademarks can be the subject of various causes of action. Using such trademarks in marketing campaigns without a license to do so is risky business. To be sure that you are appropriately using another’s mark, it is essential that you consult with an experienced trademark marketing attorney.
If you require assistance in connection with designing marketing creative and/or replying to a cease and desist letter from a competing brand, please e-mail us at: info@kleinmoynihan.com, or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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