Summary Judgment 'Disfavored' For Resolving Fair Use Trademark Defense

Examining the issue of trademark fair use, the US Court of Appeals for the Ninth Circuit reversed a district court grant of summary judgment in favor of a promotional products company and remanded the case for reconsideration of the lower court's finding that the company's use of a competitor's trademarks was wholly protected by the fair use defense. Marketquest Group, Inc. v. BIC Corp.; BIC USA, Inc.; Norwood Promotional Products, LLC, Case No. 15-55755 (9th Cir., July 7, 2017) (Smith, J).

In 2011, promotional products company Marketquest sued BIC and its promotion company, Norwood, for trademark infringement after Marketquest's registered ALL-IN-ONE mark appeared on Norwood's promotional products catalog, which combined the company's various categories of hard goods "in one" resource, and after Marketquest's THE WRITE CHOICE trademark appeared on BIC's 30th anniversary packaging for its pens. After the parties filed cross-motions for summary judgment, the district court determined that Norwood's use of the trademarks created "some likelihood of confusion and therefore the potential for trademark infringement liability." However, the district court conducted no further analysis on the issue of confusion in finding that Norwood provided a "complete defense" to the claims of trademark infringement by alleging fair use of the marks. Marketquest appealed.

The Ninth Circuit first touched on the general disfavor toward summary judgment in trademark cases given the "intensely factual" nature of trademark infringement disputes. Turning to the merits of the case, the Court outlined the difference between forward and reverse confusion in the context of trademark infringement.

Forward confusion occurs when consumers believe that goods bearing a junior mark come from, or are affiliated with, a senior mark owner. Reverse confusion occurs when consumers that encounter the senior mark holder believe that they are actually doing business with the junior mark user, or that the parties are affiliated.

Marketquest argued that the dispute with BIC and Norwood qualified as reverse confusion, since customers began to associate Marketquest's registered trademarks with the defendants. The Ninth Circuit agreed and rejected Norwood's argument that Marketquest failed to specifically plead reverse confusion and thus was foreclosed from advancing such a claim. Instead, the Court explained that "when reverse confusion is compatible with the theory of infringement...