Monday, May 23, 2016

Second Circuit muddies nominative fair use more than 9th Circuit ever has

International Information Systems Security Certification Consortium, Inc. v. Security University, LLC, No. 14-3456-cv (2d Cir. May 18, 2016)
The Second Circuit manages to make its multifactor confusion test worse (and you thought it had already hit rock bottom by considering quality of the goods, which hurts the defendant if there’s a quality difference and hurts the defendant if there’s equal quality).  ISC2 sued Security University and Sondra Schneider, alleging that SU’s use of ISC2’s certification mark constituted trademark infringement and dilution.  The district court’s finding of lack of fame and thus no dilution isn’t challenged on appeal.  The court of appeals reversed the district court’s finding of nominative fair use and remanded both for consideration of the multifactor test, now with three new factors added, and also for consideration of endorsement confusion as well as source confusion.
ISC2 registered a certification mark, CISSP, to denote a “Certified Information Systems Security Professional” who has met certain requirements and standards of competency in the information security field, including passing the CISSP certification examination that ISC2 administers.  Schneider is CISSP-certified, and offers information security training through SU, which used the CISSP mark in connection with certification-specific training courses.  ISC2 doesn’t object to SU using the mark to indicate that its services attempt to prepare students for the CISSP certification examination. SU instructors also may accurately identify themselves as being CISSP-certified, so long as they follow ISC2’s regulations governing the use of the mark.
But ISC2 objected to ads run between 2010 and 2012, which, ISC2 argued, misleadingly suggested that SU’s instructor, Clement Dupuis, had attained some higher level of certification as a “Master CISSP” or “CISSP Master.” E.g., “MASTER THE CISSP DOMAINS with the Master CISSP Clement Dupuis”; “You are taught by CISSP Master Clement Dupuis, the father of website.”  When ISC2 objected, Schneider responded that “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.” (I share Eric Goldman’s distaste for this response.)
The district court found that, applying nominative fair use, there was no source confusion.  Adding “Master” didn’t implicate source confusion or mislead anyone about who was offering the services in question.  It reasoned that, “[b]ecause a certification mark is intended to signal a quality-related characteristic of the good, rather than source or origin, . . . it is hard to imagine a case in which use of a certification mark by a person who has met the requirements for certification would likely lead to confusion as to source or origin, or would not be a nominative fair use.”  Though the district court “asserted” that no reasonable juror could find sponsorship or endorsement, “its conclusion was based entirely on the fact that the advertisements did not ‘suggest[] that (ISC)2 itself is offering the classes.’”  The district court also pointed to disclaimers at the bottom of some of the ads disclaiming endorsement/sponsorship by ISC2.
The court of appeals began by chiding the district court for not applying the standard multifactor test.  “[T]he Polaroid factors are not, of course, ‘exclusive’ and should not be applied ‘mechanically.’ No single factor is dispositive, and cases may certainly arise where a factor is irrelevant to the facts at hand. But it is incumbent upon the district judge to engage in a deliberate review of each factor, and, if a factor is inapplicable to a case, to explain why.” 
Also, confusion over source isn’t the only actionable confusion; confusion over affiliation or sponsorship is also actionable. Weight Watchers International, Inc. v. Luigino’s, Inc., 423 F.3d 137 (2d Cir. 2005) (confusion over endorsement of or other involvement in defendant’s product was actionable); Original Appalachian Artworks, Inc. v. Granada Electronics, Inc., 816 F.2d 68, (2d Cir. 1987) (unauthorized importation and sale of Cabbage Patch dolls manufactured in Spain with the foreign language adoption papers and birth certificate infringed because plaintiff’s “domestic good will is being damaged by consumer confusion caused by the importation of the [Spanish] dolls,” which were materially different from American dolls).
Further, a certification mark can be infringed in numerous ways. A professional who uses the mark without being certified can infringe, as can a competing certification organization, but it’s also possible to infringe in other ways, even if the party has met all the requirements for certification. The court of appeals pointed to a TTAB ruling that “even where a defendant’s product contains ingredients which have been certified by the owner of a certification mark, the defendant’s incorporation of that certification mark into its own composite trademark might be likely to cause confusion as to sponsorship, affiliation or connection.” Tea Bd. of India v. Republic of Tea, Inc.,  U.S.P.Q.2d 1881 (T.T.A.B. 2006).  Thus, SU  may have infringed on ISC2’s certification mark by identifying its certified instructor as “Master CISSP” and “CISSP Master.”  Just to hammer the point home, the court of appeals noted that it wasn’t necessary that the defendant’s use be use “as a [certification] mark.” Even though neither ISC2 nor SU offers a “Master CISSP” or “CISSP Master” certification, “customers [may] be led to believe [ISC2] has introduced a new line” of certifications. The court could also take into account the lack of such a certification in the proximity of the products/bridging the gap factors.
So what is the proper analysis?  “This Court has repeatedly urged district courts to apply the Polaroid factors even ‘where a factor is irrelevant to the facts at hand.’”  Nominative fair use is a test that replaces the ordinary multifactor test in the Ninth Circuit and thus is used to determine whether confusion is likely.  It’s an affirmative defense in the Third Circuit, which “affords defendants broader protection” because it applies even if confusion is likely. [Note that this is a really weird reading of the defense; in practice the Ninth Circuit version is a ton broader.]  The court of appeals rejected both approaches; nominative fair use isn’t an affirmative defense because it’s not in the statute, unlike descriptive fair use.
And the Ninth Circuit approach is wrong because “we see no reason to replace the Polaroid test in this context,” even though “we also recognize that many of the Polaroid factors are a bad fit here and that we have repeatedly emphasized that the Polaroid factors are non-exclusive.” [This is really, really dumb lumping.  “Bad fit” and “irrelevant” aren’t reasons?  The Second Circuit has doubled down on its initial decision, decades ago, to treat infringement of competing and noncompeting goods with the same test.] 
In Tiffany v. eBay, the Second Circuit already “recognized that a defendant may lawfully use a plaintiff’s trademark where doing so is necessary to describe the plaintiff’s product and does not imply a false affiliation or endorsement by the plaintiff of the defendant.”  [Apparently the court is not overruling its prior decision in Tiffany, even though that decision didn’t apply the Polaroid factors or fulfill its alleged duty to explain why the Polaroid factors didn’t apply, because reasons.  If I were a defendant, I would point to this court’s endorsement of Tiffany to justify sticking with the initial analysis.]
As a result, “district courts are to consider the Ninth Circuit and Third Circuit’s nominative fair use factors, in addition to the Polaroid factors.”  Specifically, courts are to consider:
(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.
In assessing (2), courts are to consider whether the alleged infringer “step[ped] over the line into a likelihood of confusion by using the senior user’s mark too prominently or too often, in terms of size, emphasis, or repetition.”  In assessing (3), “courts must not, as the district court did here, consider only source confusion, but rather must consider confusion regarding affiliation, sponsorship, or endorsement by the mark holder.”  [How would you tell whether the defendant did “anything” other than using the mark that would suggest sponsorship or endorsement?  I will let the classic X-Files episode Jose Chung’s From Outer Space answer for me:]
"How the hell should I know?"
[So, does comparative advertising qualify for the defense in the Second Circuit?  It does in the Ninth Circuit version because using the P’s mark is necessary to identify the P, which is all that the Ninth Circuit requires.  It does not in the Third Circuit version because using the P’s mark is not necessary to identify the D, even if it is necessary to convey the comparative message.  If district courts are to consider both circuits’ factors, as suggested by the Second Circuit’s initial language, then comparative advertising at least has a case for nominative fair use protection, but if courts are to consider only the restatement offered by the Second Circuit here, which tracks the Third Circuit’s version, then comparative advertising should be excluded.]  
Remand “for reconsideration of the Polaroid factors in addition to the nominative fair use factors, keeping in mind the numerous types of confusion that are relevant to an infringement analysis other than mere source confusion and the numerous ways in which a certification mark may be infringed.”  That ought to be fun.

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