What Every Business Owner Should Know Before Using a Competitor’s Trademarks
By Bill (William) Honaker
Intellectual Property Attorney/Speaker at IP Guy
July 19, 2024
You can use them, but you need to be careful!
Earlier this week, a client asked if they could use another’s trademark to advertise their new product; a replacement part for the competitor’s product. Think, blades to be used in a particular razor. The actual money is in the blades, and to sell them, you must let customers know what razor they fit, necessitating the use of their trademark. I get this question a lot, and the answer depends upon how you use the competitors trademarks.
Sometimes you need to use a competitors’ trademark to sell your own products or services. This is particularly true when you are selling, for example, replacement parts, and need to say that your replacements are compatible with the trademark owners’ products. It can also be important when providing services, such as repair. If you repair BMW automobiles, you need to let others know. Fortunately, if you do it properly, you can use other’s trademarks and avoid trademark infringement.
When you compare your product, offer replacement parts, or offer repair services, and properly use another’s trademarks, it’s called nominative fair use.
The general test is:
1. Is the product or service of the trademark owner one which is readily identifiable without the use of the trademark? (If it isn’t, then use of their trademark is likely permissible.)
2. Has the mark been used more than is reasonably necessary to identify the trademark owner? (The less the trademark is used, the better.)
3. Has the user falsely suggested sponsorship or endorsement with the trademark owner? (You don’t want to suggest any connection with the trademark owner.)
Some Real-World Examples
The classic case of nominative use is comparative advertising, such as “Coca-Cola tastes better than Pepsi,” or vice versa. To be reasonable, you must use the marks to identify the products. There’s no over-mentioning of the other trademark, and there is clearly no sponsorship or endorsement suggested.
Another example is repair services for automobiles. Volkswagen sued Donald Church for using the trademarks Volkswagen and VW in advertisements for Church’s repair services. His ads always used “Independent” whenever the terms “Volkswagen” or “VW” were used. The court held that his advertising was sufficient to distinguish his business in the eye of the customer. Church made no false suggestion of sponsorship or endorsement from Volkswagen. Consumers would understand that independent means no sponsorship or endorsement.
An example of fair use with respect to replacement parts is Keurig® compatible coffee pods. To sell replacement pods, coffee makers must indicate that the pods can be used in Keurig machines, but it’s important to not suggest sponsorship or endorsement.
Keurig sued Strum Foods for using the Keurig trademark on their Grove Square Coffee. The Grove Square packaging stated, “For use by owners of Keurig coffee makers,” and stated, “Strum Foods has no affiliation with Keurig, Incorporated.” The court focused on these statements as supporting nominative fair use in dismissing Keurig’s motion for summary judgment. The court also suggested that using language such as, “Compatible with Keurig coffee makers” was likely a better alternative.
The key is to let the consuming public know that you are not associated with the trademark owner. One of the best ways is to use a disclaimer statement that clearly spells this out. Using your own trademark on your products, and words like compatible, with will also help.
My Advice
My advice to clients, when they must use a competitor’s trademark in advertising, is to do the following:
1. Prominently use their own trademarks in the advertisement.
2. Use the competitor’s trademark as little as possible.
3. If you’re selling a replacement part, state that it is compatible with the original product.
4. Add a clear disclaimer disavowing any association with the competitor.
The Takeaway
Using your competitors’ trademarks is not for the faint of heart. Your competitors will likely take notice. This is a sensitive area for them. Don’t be surprised if you get a letter demanding that you stop. Unfortunately, there’s no bright-line test for what determining fair use of another’s trademark, so great care must be taken.
As my final advice, have the advertisement reviewed by trademark counsel before you launch. You want to be sure that all the necessary steps have been taken to avoid being sued. If the correct steps are taken and this is explained to the offended trademark owner, it is my experience that no lawsuit will be filed.
About the Author:
Bill Honaker, “The IP Guy” is a former USPTO Examiner, a partner with Dickinson-Wright, and author of the forthcoming book, "Invisible Assets – How to Maximize the Hidden Value in Your Business." Email Bill@IPGuy.com, or call me at 248-433-7381.
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