US Ninth Circuit Applies Nominative Use Defence to Domain Names

In a decision that will likely help define the boundaries of trademark owners’ rights in domain names, the Ninth Circuit Court of Appeals recently reversed and remanded a district court’s broad injunction prohibiting any use of the trademark LEXUS in domain names used by an independent auto broker legally helping to sell LEXUS automobiles. In Toyota Motor Sales, U.S.A., Inc. v. Farzad Tabari, et al., No. 07-55344 (9th Cir. July 8, 2010), a unanimous panel robustly applied the doctrine of nominative fair use to domain names. The decision was authored by Chief Judge Alex Kozinski, who invented the nominative use defence in the New Kids on the Block case 18 years ago, write Andrew Baum and Jeffrey A. Kobulnick in this article published on Mondaq, the online IP and technology legal blog.

Nominative fair use, the article notes, “provides protection to those who use another’s trademark for the purpose of identifying the brand without suggesting affiliation or sponsorship with the brand owner.”

The case centred around Toyota claiming that the use of “Lexus” in the domain names and infringed its trademark rights. Originally the district court supported Toyota “that prohibited the Tabaris (the registrants) from using ‘any … domain name, service mark, trademark, trade name, meta tag or other commercial indication of origin that includes the mark LEXUS.’ The Ninth Circuit reversed in light of the nominative fair use doctrine and First Amendment concerns.”

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