Second Circuit Muddies The Trademark Nominative Use Doctrine–ISC2 v. Security University

May 19, 2016 · by Eric Goldman · in E-Commerce, Trademark

The nominative use doctrine allows third party references to trademark owners using the trademarks they chose as their preferred descriptors. Without a robust and well-functioning nominative use doctrine, trademark owners can have too much control over their brands–they can shut down the advertisement of complementary or competitive offerings and potentially even critical scrutiny of the brands. Unfortunately, Congress never adopted a statutory nominative use doctrine for trademark infringement, and the doctrine seemingly baffles the courts. As a result, the circuits have created a patchwork of nominative use doctrines. A ruling this week from the Second Circuit exacerbated this problem.

The lawsuit itself is so ridiculous that it’s hard to discuss with a straight face. The plaintiff owns the certification mark “CISSP” for certifying information security professionals. I’ve blogged about them before (1, 2). The defendant earned the CISSP designation and then ran ads self-referring to itself as “Master CISSP” or a “CISSP Master.” When the certification mark owner challenged the “master” reference, the defendant responded “SU will continue to use the word Master. Master Clement Dupuis is a Male Teacher [and] thus he is a Master according to the dictionary.” Oh come on, this is off the BS charts. Nevertheless, the district court dismissed the lawsuit because the defendant earned the CISSP certification and therefore could make a nominative use of it.

Trademark law isn’t well-equipped to deal with an issue like this. The defendant’s “master” usage implies the defendant has a superior knowledge compared to other CISSP. That’s more of a false advertising issue than a trademark issue, and courts struggle when pressing trademark law to regulate broader advertising law issues. Furthermore, the way certified parties advertise themselves is best addressed by the terms of the certification, i.e., the certification should include restrictions on making superlative claims, forming combination marks or otherwise creating the impression that there are new certification flavors. I think contract principles, incorporated through the certification part of a certification mark, would be more efficacious than primary trademark doctrine.

Still, this case presented itself as a trademark case to the courts, so they address it using the tools of trademark. The Second Circuit reverses the district court’s nominative use determination, remanding the case back to the district court to apply the legal principles it lays out in the opinion.

Regarding the nominative use doctrine, the court makes two major moves. First, the court could have adopted the legal articulation used by other circuits, such as this venerable language from the Ninth Circuit’s New Kids on the Block case from a quarter-century ago:

First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.

Instead, the court chose to re-articulate the doctrine in its own words:

(1) whether the use of the plaintiff’s mark is necessary to describe both the plaintiff’s product or service and the defendant’s product or service, that is, whether the product or service is not readily identifiable without use of the mark; (2) whether the defendant uses only so much of the plaintiff’s mark as is necessary to identify the product or service; and (3) whether the defendant did anything that would, in conjunction with the mark, suggest sponsorship or endorsement by the plaintiff holder, that is, whether the defendant’s conduct or language reflects the true or accurate relationship between plaintiff’s and defendant’s products or services.

You can see similarities to the Ninth Circuit test, but notice the differences. The Second Circuit’s first factor requires a “necessity” of the trademark reference, a seemingly higher bar than the Ninth Circuit’s “not readily identifiable” requirement (a phrase which nevertheless confusingly modifies the word “necessary”). In the second factor, the Second Circuit omits the “reasonably” qualifier from the identification necessity. In the third factor, the Second Circuit requires that the description be “accurate.”

All told, the Second Circuit’s modifications make it just a little harder for defendants to qualify for the nominative use case. Why did the Second Circuit toughen up the nominative use standard compared to the Ninth Circuit? The court provides no explanation, but I suspect it’s an overreaction to the defendant playing semantic games (“bad facts make bad law,” etc.), plus the overall misfit of using trademark law to govern what’s really a false advertising issue.

Second, the Second Circuit addresses when a court should do its nominative use analysis. In the Ninth Circuit, the three-factor nominative use test substitutes for the standard multi-factor likelihood of consumer confusion test. In the Third Circuit, nominative use is an affirmative defense. Rejecting both approaches, the Second Circuit says that, “in nominative use cases,” judges should add the three nominative use factors to the standard eight-factor Polaroid consumer confusion test–in other words, an overlong eight-factor test now becomes an even longer 11-factor test. Any ideas how that’s going to work out? (Recall Judge Walker’s cogent and pithy critique: “Every circuit uses some n-factor test for likelihood of confusion, where n is an integer that is almost certainly too large for the task at hand”).

By adding factors to the multi-factor test, the court makes it effectively impossible for defendants to establish nominative use on a motion to dismiss (a possibility under the Ninth Circuit’s approach, even if unlikely), and it will inhibit judges from ruling for the defense on summary judgment. Judges can resolve consumer confusion analyses on summary judgment, but some judges are reluctant to do so because the factors encode so many factual questions. Adding three more factors to the test, each with additional factual predicates, will make judges that much more reluctant. So the court’s ruling implicitly adds to the costs of a successful nominative use defense.

As I mentioned before, courts can’t figure out how to deal with the nominative use doctrine. This is a problem because the nominative use doctrine plays a critical role in the successful functioning of markets, something I emphasized in my 2005 Deregulating Relevancy article. To facilitate socially beneficial nominative uses, we need doctrinal and procedural fastlanes that provide certainty and cheap resolutions to secondary users. The Second Circuit decision moves us further away from that direction.

A nomenclature note: there is some disagreement about whether to call the doctrine “nominative use” or “nominative fair use.” The Second Circuit opinion uses the term interchangeably but seems to prefer “nominative fair use”–that gets 34 references in the opinion, compared to 11 for “nominative use.”

Case citation: International Information Systems Security Certification Consortium, Inc. v. Security University, LLC, 14‐3456‐cv (2d Cir. May 18, 2016)

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