Second Circuit makes descriptive fair use more confusing

Kelly-Brown v. Winfrey, No. 12-1207-cv (2d Cir. May 31, 2013)

Kelly-Brown owns a motivational services business, Own Your Power Communications, Inc., that holds events and puts out publications under the registered service mark “Own Your Power,” which promote the concept of “owning” one’s power. The main defendants were involved in producing a magazine, event, and website also using that phrase. The district court dismissed her claims as barred by descriptive fair use; the court of appeals reversed, though it upheld the dismissal of her claims for vicarious and contributory infringement against various collateral defendants. (You can find the images available online at the Second Circuit’s site too.)

Her registered mark (design/color claimed as part of the mark):

About the same time Kelly-Brown sought registration, the Oprah Winfrey-related defendants sought to register a mark for the Oprah Winfrey Network, to be known as “OWN.” Winfrey’s production company “arranged for the transfer” of a mark in “OWN ONYX WOMAN NETWORK” to avoid an infringement action. Kelly-Brown pled that defendants would have been aware of the pending application for “Own Your Power” since they’d have to have searched to find the other mark.

Kelly-Brown alleged infringement based on a “bevy” of publications, events, and online content. For example, an issue of O, Winfrey’s magazine, featured “Own Your Power” on its front cover:

Underneath those words were subheadings, “How to Tap Into Your Strength”; “Focus Your Energy”; and “Let Your Best Self Shine,” and on the right side, “THE 20O POWER LIST! Women Who Are Rocking the World.” Each person on the list exemplified a “kind” of power, such as the power of “living large.”

In another instance, O, along with other businesses (including the other defendants), held an “Own Your Power” event at which celebrities posed for promotional photographs in front of an “Own Your Power” backdrop that also contained trademarks for Chico’s, Wells Fargo, Clinique, and O magazine. The event featured a seminar and workshop with motivational advice using the theme “Own Your Power.” It was described in a later issue of O as the “FIRST-EVER OWN YOUR POWER EVENT.” Defendants’ website also had video clips of the event and used “Own Your Power” banners and content on several different individual webpages:

The banner had “Own Your Power!” in large font, surrounded by circles containing text: “The Power of . . .” “. . . heart,” “. . . vision,” “. . . one voice,” and “. . . seizing the moment.” The October issue had pages with a similar format: “the power of . . .” surrounded by various concepts written in colored circles, each beginning with an ellipsis.  Webpages with the “Own Your Power” banner included articles such as, “How to Tap Into Your True Power,” “Motivation: One Entrepreneur’s Fabulous Story,” and “The Secrets of Success.” The event and the cover of the October issue were also displayed/promoted in other ways by Winfrey.

Kelly-Brown alleged that she received numerous inquiries from people who confused her services with Winfrey’s.

The district court held that Winfrey’s use of “Own Your Power” was descriptive because it described an action that it hoped that Magazine readers would take after reading the Magazine, and that Kelly-Brown hadn’t plausibly pleaded bad faith intent to capitalize on her good will.  In addition, there was no likelihood of consumer confusion because the font, color, and formatting of the defendants’ use was significantly different from that protected by Kelly-Brown’s registered service mark.

The court of appeals reversed, noting first that this was a reverse confusion case.  Then it rejected defendants’ argument that trademark use was a threshold requirement for infringement.  See, in the Second Circuit, unlike in the Sixth, plaintiffs only have to show “use in commerce,” not “use as a mark,” even though both are called “trademark use.”  And defendants definitely used “Own Your Power” in commerce, which happens when the mark is affixed to the goods “in any manner.”  (Now, explain the rationale in Louboutin without using the phrase “use as a mark.”  I’ll wait.  Of course, this case does not mention Louboutin, because that would be awkward.)

The analysis of use in commerce is not the same as whether defendant used a competitor’s mark “as a mark.”  (N.B. Or a noncompetitor’s, which is why this decision is, as the concurrence partially recognizes, such terrible news.)  Analyzing use “as a mark” asks whether the defendant is using the “term as a symbol to attract public attention.”  JA Apparel involved an eponymous clothing line where the designer sold the line, then started a new one and ran ads for the new line that included his name.  The Second Circuit “suggested, without deciding, that our conclusion as to whether defendant was using his own name as a mark would differ depending on the content of the ad he ran.”  Thus, use of his name in small text as part of a description of the product wouldn’t be use as a mark, whereas putting his name in larger text than the name of the new brand would be.  Use “as a mark” requires “a close examination of the content and context of the use,” which is a more detailed determination than use in commerce.  While showing use in commerce is a plaintiff’s threshold burden, “use as a mark” is not. 

The Sixth Circuit has decided that consumers won’t be confused without use as a mark, but that’s not how the Second Circuit multifactor test works, since it’s “a fact-intensive inquiry that depends greatly on the particulars of each case. To elevate one particular consideration, which is not even one of the eight Polaroid factors, above all of the other factors would be inconsistent with this Circuit’s approach to Lanham Act cases.”  And the Second Circuit has allowed claims to proceed even without use as a mark. EMI Catalogue P’ship v. Hill, Holliday, Connors, Cosmopulos Inc., 228 F.3d 56 (2d Cir. 2000) (holding that material issues of fact existed as to whether use of the slogan “Swing Swing Swing,” playing off of the trademarked song title “Sing Sing Sing (with a Swing),” was fair use, notwithstanding holding that the slogan was not used as a mark); Louis Vuitton Malletier v. Burlington Coat Factory Warehouse Corp., 426 F.3d 532 (2d Cir. 2005) (holding that defendant’s handbag meant to evoke Louis Vuitton’s trademarked handbags could create consumer confusion even in the absence of an allegation that the defendant was attempting to establish its design as a competing mark).  Mark McKenna will love this: “The Sixth Circuit’s test would lead to the dismissal of these claims without addressing what is beyond doubt the central question in considering consumer confusion: whether consumers were actually confused by the allegedly infringing product.”  Well, yes, that’s tautological.  But the Lanham Act prohibits trademark infringement, not consumer confusion; the question to be decided is what that means (and relatedly what kind of presumptions, rebuttable and not, make sense).

Turning now to fair use, this requires the defendant to prove use (1) other than as a mark, (2) in a descriptive sense, and (3) in good faith.  As an affirmative defense, it will often require consideration of facts outside the complaint, though sometimes it can be resolved on a motion to dismiss.  Plaintiffs must simply plausibly plead infringement to proceed.

Kelly-Brown plausibly alleged that defendants used “Own Your Power” “as a symbol to attract public attention,” because they used it “in several unique instances” that “collectively constitute use as a mark.” These included the use on the October cover; the “first ever” Own Your Power event; promotion of the event through social media; and the online video from the Event and other motivational articles provided on an “Own Your Power” section of Winfrey’s website.  At this stage of the case, these uses were enough to infer a “pattern of use,” plausibly alleging that Winfrey was attempting to “build a new segment of her media empire around the theme or catchphrase ‘Own Your Power,’ beginning with the October Issue and expanding outward from there.”  After all, trademarks and sub-brands can coexist.

Defendants argued that Packman v. Chicago Tribune Co., 267 F.3d 628 (7th Cir. 2001), should control.  The Chicago Tribune published the headline “The Joy of Six” after the Bulls won their sixth NBA championship, and then reproduced this front page on various promotional items.  The court concluded that this was use as a headline, not use as a mark, because the masthead clearly identified the source and the memorabilia at issue was more readily identifiable with the Tribune brand name than with “Joy of Six.”  But here, the use of “Own Your Power” “was far more wide-ranging and varied.” The website content wasn’t merely derivative of the October issue the way that the promotional items in the Tribune case were derivative of the original headline by directly reproducing the front page at issue.  Here, the website contained unique content not previously published in the October issue of the Magazine, and didn’t even directly reference it.  A viewer could read the webpages without realizing that the Magazine had ever used the phrase. 

As for the event, it was called the “first-ever,” “suggesting that it was not directly tied to a particular issue of the Magazine, but instead was to be a recurring enterprise within the Oprah media empire.”  Recurring themes or devices are more likely to be entitled to protection as a mark.  “Repetition is important because it forges an association in the minds of consumers between a marketing device and a product. When consumers hear a successful slogan, for example, they immediately think of a particular product without even being prompted by the product’s actual name.”  So too with titles. The complaint adequately alleged that defendants were trying to create, through repetition across media, a similar association between Winfrey and “Own Your Power.” Each of the uses involved separate content and context, “and thus it is plausible that the defendants were attempting to build up a line of wide-ranging content all denoted by the phrase ‘Own Your Power.’”  Further information might undermine Kelly-Brown’s theory that Winfrey was trying to create a sub-brand, but the allegations were sufficient to survive a motion to dismiss.

It wasn’t enough that Winfrey’s name was also attached to all the content, because slogans and brands can serve as co-existing marks. True, the Second Circuit has previously given weight to the prominent use of a defendant’s own mark. Cosmetically Sealed Indus., Inc. v. Chesebrough-Pond’s USA Co., 125 F.3d 28 (2d Cir. 1997) (finding “Seal it with a Kiss!!” descriptive on a display for lipsticks with complimentary postcards used to test the lipsticks).  But there’s no rule that all use is other than “as a mark” if the defendants also use their own mark in close proximity; it’s a fact-intensive analysis.  It was also crucial there that “[t]he challenged phrase [did] not appear on the lipstick itself, on its packaging, or in any other advertising or promotional materials related to [the defendant’s] product,” so it was limited to a single ad campaign, while the use here wasn’t similarly “tangential.”

The next element of descriptive fair use is use in a descriptive sense.  Defendants argued that “Own Your Power” was descriptive of the publications’ content; for example, on the magazine it “served as an exhortation for readers to take action to own their power and described a desired benefit of reading the Magazine Issue.”  The court first noted that this wasn’t an ordinary descriptive phrase; phrases are more readily found descriptive when they’re in common use.  “Sealed with a kiss,” for example, is a fixture of the language, and “The Joy of Six” was a play on “The Joy of Sex” and had been used to describe positive feelings associated with six of anything.  “Swing, swing, swing,” by contrast, wasn’t descriptive because golfers swing their clubs, not “swing, swing, swing” them.  Discovery might reveal that “own your power” has wider currency than apparent from the complaint. And there’s no requirement that a use must be immediately recognizable as a popular phrase to be descriptive.  But here, “Own Your Power” didn’t describe the contents of the Magazine. They were prominently displayed in the center of the cover with subtitles, and specific headlines for articles along the side.  “Own Your Power” wasn’t meant to describe the contents of a particular item.  The “Power List” didn’t provide specific advice about how readers could become more powerful.  The table of contents didn’t list any article corresponding to the phrase.  At this stage, defendants didn’t meet their burden of showing descriptiveness.

Finally, defendants didn’t meet their burden of showing good faith. Lack of good faith is usually an intent to trade on the good will of the trademark owner by creating confusion.  Defendants argued that it was implausible that Oprah Winfrey would attempt to trade on the goodwill of a relative unknown, and that the use of the Winfrey marks meant no consumer would be confused as to the origin of Winfrey’s goods.  True, the Second Circuit has found good faith where a defendant prominently displayed its own marks.

But good faith may also be absent when a junior user had knowledge or constructive knowledge of the senior user’s mark and chose to adopt a similar mark.  Kelly-Brown plausibly alleged that defendants must have searched for “Own” because they bought the rights to a different “Own” mark for Winfrey’s broadcast endeavor, and that such a search would have turned up her then-pending service mark application.  “We agree that these allegations do plausibly suggest that the defendants had knowledge of Kelly-Brown’s mark, liked it, and decided to use it as their own.”  (This wouldn’t bother me so much if false advertising plaintiffs got the same benefit of the doubt.  Even if an application gave constructive knowledge, the same as a registration does, different parts of a media empire are doing different things; I have no doubt that there was an “Own” search, but also find it implausible that the editorial staff of the Magazine would have been involved with that.)  So a lack of intent to trade on Kelly-Brown’s goodwill wouldn’t be enough to preclude a finding of bad faith.  At the very least, this couldn’t be resolved on a motion to dismiss.

Finally, the court declined to consider defendants’ First Amendment defense in the first instance, because what really avoids chilling effects is extended litigation.

The secondary trademark infringement claims against the sponsors of the Own Your Power event didn’t survive, however.  Kelly-Brown didn’t properly allege a partnership or agency relationship as required for vicarious infringement.  Nor did allegations that the sponsor defendants were sponsors plausibly suggest intentional inducement of infringement.  And the complaint didn’t allege that they supplied a product to an infringer with the knowledge that the infringer was mislabeling the product, so the dismissal of the contributory infringement claims was also affirmed.

Likewise, the counterfeiting claims had properly been dismissed.  A counterfeit is “a spurious mark which is identical with, or substantially indistinguishable from, a registered mark.” The font of Winfrey’s uses was different, and differently capitalized, from Kelly-Brown’s stylized powder-blue letters. Kelly-Brown argued that, because she had a service mark, ordinary consumers would have less contact with the physical logo than with the sound of the mark.  That didn’t work with the website and the Magazine, since consumers would interact with them visually and would recognize the differences “from a cursory visual inspection.”  True, an audience member at the “Own Your Power” event might encounter the phrase aurally, but Kelly-Brown alleged that the logo figured prominently in displays featured at the event.  Plus, most audience members weren’t present at the invitation-only event; most encountered it only later through video clips on the website, with its obvious visual differences. There was no plausible counterfeiting claim.

Judge Sack concurred in the result, writing separately in the fear, which he hoped was groundless,

that the Court’s opinion may be misconstrued to suggest a general limitation upon the ability of a publisher in any medium to use a trademarked term, in good faith, to indicate the contents of its own communication -- whether by magazine cover, newspaper headline, “blog” heading, or otherwise.  Allowing a person or entity’s property right arbitrarily to trump the ability of the initiator of a communication effectively to transmit news, information, thoughts, and the like, using vernacular words and phrases that are recognizable because they are also used as trademarks, would be, in my view, legally unwarranted and 99 and 44/100 percent foolish.

(He noted that the Ivory slogan’s Wikipedia entry included references to several uses of the slogan by third parties “for parody, entertainment, communications, and similar purposes under the heading ‘In mass media.’”)

Fair use is animated, at least in part, by the principle that a plaintiff who chooses a mark with descriptive qualities can’t entirely exclude some competing uses; others have as good a right to descriptive uses as the trademark owner.  “It would cripple publishers’ effectiveness if trademark holders could obtain exclusive rights to parts of the language for use as language.”  The balancing of sellers’ needs for identification with society’s need for free communication and discussion is an important principle.

Judge Sack continued by highlighting the allusive meaning of “Own Your Power”:

Taken literally and using the term “own” in [its] traditional sense, … the invocation to “Own Your Power” borders on the absurd. If the “Power” is mine, do I not by definition already “Own” it? What am I being told to do? Or what are the parties telling me that they can do -- doubtless at some price -- to help me?

It was clear that both parties used “own” in a sense closer to “embrace and employ” than to “possess or have legal ownership.”  This sense was hardly novel.  Examples included the final scene of The Birdcage, in which Robin Williams’ character urges Gene Hackman’s character to “Work it. Sell it. Own it.” In that sense, “Own Your Power” was much more common than plaintiffs admitted in their complaint.  “Writers have employed the word ‘own’ in similarly figurative, if not necessarily identical, senses for many years”; Virginia Woolf did so in To the Lighthouse.  “Own Your Power” in particular has an easily findable meaning, and Judge Sack cited a number of examples in the press, online and off.

As a result, the use of “Own Your Power” on the Magazine cover, without more, was plainly and legally fair.  “I have little doubt, more generally, that the use of a trademarked phrase on the cover of a magazine to refer in a general way to its contents is, standing by itself and in most cases, entirely legitimate -- a straightforward and significant case of fair use.” To the extent that the majority analysis implied otherwise, he could not agree.  However, he believed that both he and the majority were reading the complaint not to attack that single use standing alone.  It was only “a campaign of recurring uses, across different media, designed to appropriate the defendants’ source-identifier, or without regard for a high likelihood of that occurring, that defeats their fair use defense.”

He emphasized that the uses together might also constitute fair use, but that this was not an appropriate determination on a motion to dismiss.

Were the case limited to the Magazine cover, Kelly-Brown couldn’t plausibly plead an intent to create on her goodwill by creating confusion about source or sponsorship. But she alleged that the cover use was “only the beginning of a pattern of deliberate and systematic unauthorized use by Defendants and a malicious intent to identify the [Defendants] as the source for the [Plaintiffs’] Services.” The facts alleged raised the plausible inference that the use of the phrase on the Magazine cover was part of a “careful plan” that included the event and the website, and sought to appropriate the “Own Your Power” mark from Kelly-Brown in the knowledge that she owned it. Thus, a finding of good faith with respect to use of the phrase on the Magazine cover was inappropriate on the pleadings.  The evidence, of course, might show something different, such as a reasonable belief on defendants’ part that using “Own Your Power” on the cover or elsewhere wouldn’t be confusing or would be fair, or that there was no calculated plan of appropriation; Second Circuit case law also holds that prior knowledge of a senior user’s mark doesn’t necessarily give rise to an inference of bad faith.

On the pleadings alone, Judge Sack would conclude that “Own Your Power” was used descriptively in connection with the Magazine’s content as a matter of law.  “Seal it with a kiss” was descriptive for lipstick, “even though it in no way described the color, consistency, or long wear of the defendant’s lip gloss.”  Rather, it described “an action that the sellers hope consumers will take, using their product.” Similarly, the court in B & L Sales Associates v. H. Daroff & Sons, Inc., 421 F.2d 352 (2d Cir. 1970), concluded that “Come on Strong” was used in a descriptive sense by ads for a men’s clothing line. The phrase communicated that the defendant’s clothing “would assist the purchaser in projecting a commanding, confident, ‘strong’ image to his friends and admirers.”  Other circuits, Judge Sack noted, may have a more limited view of what counts as “descriptive.” 

But under Second Circuit precedent, “Own Your Power” on the Magazine cover was easily descriptive.  The “Power List” honored celebrities “who embody certain characteristics of power”; the Magazine also had several shorter articles relating to this them, including Dr. Phil’s Personal Power: Rules for How to Harness Yours (providing “strategies for tapping your inner power reserves”) and How to Light Up a Room (theorizing that charisma is the “X factor” possessed by all of the people featured on the 20O Power List). “The descriptive connection is obvious -- indeed, it is difficult to see how any potential reader with whom the defendants are trying to communicate, upon picking up the Magazine and reading the coverline, would not expect to find just these sort of articles inside.” It was implausible that “Own Your Power” was not used in a descriptive sense.  The majority found to the contrary because it thought that the articles inside didn’t contain specific advice about gaining power.  “Even if this were a fair characterization of the Magazine’s contents -- and I doubt that it is -- our law has never required a connection as close and absolute as the majority demands.”  “Fortunately,” the majority allowed for the possibility that the defendants could show the requisite descriptive connection, perhaps either by providing a fuller understanding of likely consumer reception or showing that the phrase or similar phrases were commonly used.  Judge Sack, however, thought neither further showing was necessary.

As for use other than as a mark, if the court were considering individually “the size, location, and context of the defendants’ use of ‘Own Your Power!’ on the cover of the Magazine,” as Judge Sack read the cases to dictate, it would be clear that the defendants didn’t use the phrase as a mark.  The most prominent items on the cover were the O the Oprah Magazine mark and the full-page photo of Winfrey herself.  This was a strong indication of use other than as a mark, as was the size and location of the phrase in the context of a magazine cover.  “A reasonable consumer would therefore expect the phrase to explain something about the nature of the contents of this particular issue, not to denote the source of those contents.”

The majority, however, didn’t consider the use individually, but rather collectively.  “Perhaps this somewhat novel theory is useful at this stage in determining the plausibility of the plaintiffs’ factual allegations,” but it was in some tension with JA Apparel, which called for individualized consideration of each particular use.  The authorities on which the majority relied were writing in an entirely different context: whether a term claimed to be a mark was functioning as a source identifier.  “So although it may be true that the concept is helpful at this stage, when our only task is to identify factual plausibility, I would caution against reading the majority opinion to mean that in all cases and at all stages of litigation unique uses are to be considered ‘collectively.’”

Judge Sack didn’t, however, read the majority to mean that “mere coincidence” of several uses precluded the possibility of use “other than as a mark.”  Rather, if use of “Own Your Power” on the cover was part of an overall plan to appropriate Kelly-Brown’s mark, the use on the Magazine could be actionable.  To prevail as to the Magazine, Kelly-Brown would have to prove this allegation with evidence.

With respect to the website and the event, Judge Sack agreed with the majority that Kelly-Brown pleaded sufficient plausible facts to block the fair use defense on a motion to dismiss.  He simply wanted to emphasize that the allegations relating to the Magazine cover alone couldn’t be read plausibly to describe a use that wasn’t fair as a matter of law.  “A holding to the contrary might endanger the ability of publishers of all stripes accurately and artfully to describe their publications. But I, like the majority, understand the complaint not to attack the defendants’ use of ‘Own Your Power!’ on the Magazine’s cover alone, but as part of an overall campaign by the defendants in several media to wrest from the plaintiffs their rights in the mark.”  The case should be remanded to determine on a full record whether any or all of the multiple uses were fair.