Fair is Fair: Trademark Fair use Defense Does not Require Absence of Confusion

The U.S. Supreme Court has now resolved a conflict among federal appeals courts on (1) the role of evidence of likely consumer confusion in the analysis of whether a party accused of trademark infringement is making a "fair use" of a plaintiff's trademark; and (2) whether an accused party who asserts a "fair use" defense must prove that confusion is not likely to result from the concurrent uses of the trademarks. KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., Case No. 03-409 (decided December 8, 2004). The Supreme Court held that an accused party who successfully demonstrates fair use of another party's trademark need not also affirmatively prove that consumer confusion is not likely to result from the concurrent uses; instead, the plaintiff always bears the burden to prove a likelihood of confusion.

Writing for a unanimous Court, Justice Souter explained that a trademark defendant can assert "fair use" even if there is a likelihood that the defendant's mark will be confused with that of the plaintiff:

[S]ome possibility of consumer confusion must be compatible with fair use, and so it is. The common law's tolerance of a certain degree of confusion on the part of consumers followed form the very fact that in cases like this one an originally descriptive term was selected to be used as a mark, not to mention the undesirability of allowing anyone to obtain a complete monopoly on use of a descriptive term simply by grabbing it first.

The ruling clarifies the boundaries of the fair use defense and resolves a circuit split on how the trademark fair use defense should be applied. The Supreme Court's decision upholds rulings from the Second, Fourth, and Seventh Circuits and overturns Ninth Circuit law that would have substantially limited the fair use defense.

Factual and Procedural Background

KP Permanent Make-Up (KP) and Lasting Impression are competitors in the permanent make-up industry, where pigment is injected into the skin to permanently color facial features or to mask scars or tattoos. Petitioner KP first starting using the term "microcolors" on advertising material in 1990 or 1991 and on pigment bottles in 1991. Lasting Impression registered the mark MICRO COLORS in 1993, and the registration became incontestable in 1999. Shortly thereafter, Lasting Impression sent a cease-and-desist letter to KP. In response, KP brought a declaratory judgment action in the U.S. District Court for the Central District of California, seeking...

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