Can I use my competitors trademark to advertise my products? NESPRESSO v. JONES

Trademark law protects the commercial identity or brand of a business by discouraging other businesses from adopting a name or logo that is “confusingly similar” to the brand of another business. Traditionally a trademark is thought of as a symbol, word or phrase but anything that a business uses to brand its goods can be eligible for trademark protection. In the United States a trademark owner can register their trademark with the United States Patent and Trademark Office to strengthen the rights associated with the trademark. However, registration of a trademark is not required for a trademark owner to claim priority to a trademark. The first business to use a trademark to brand goods is considered the senior user of the trademark. Subsequent users of the trademark are considered junior users. If a junior user brands products in a way that is likely to cause consumers to confuse the junior users products with the senior users products, that can be considered trademark infringement.

The rights granted to a trademark owner are relatively broad, however there are some limits. Trademark fair use, is a legal doctrine that provides an affirmative defense to trademark infringement. Trademark fair use falls into two general categories, descriptive fair use and nominative fair use. Descriptive fair use allows the use of a competitors trademark, when the trademark has a descriptive property, to describe the qualities of a product. Nominative fair use allows a business to use the trademark of a competitor as a reference to describe the other product, or to compare it to their own. Fair use is a defense which must be plead by a defendant in a trademark infringement lawsuit.

When a court is presented with fair use defense it will apply a test which was first articulated in New Kids on the Block v. News America Publishing, Inc., 971 F.2d 302 (9th Cir. 1992). The nominative fair use test essentially states that one party may use or refer to the trademark of another if:

The product or service cannot be readily identified without using the trademark (e.g. trademark is descriptive of a person, place, or product attribute).
The user only uses as much of the mark as is necessary for the identification (e.g. the words but not the font or symbol).
The user does nothing to suggest sponsorship or endorsement by the trademark holder.

A case which will likely involve a defense of nominative fair use is Nespresso USA, Inc. v. Jones Brothers Coffee Company Distribution, LLC, 1:19-cv-03449 (S.D.NY 2019). The plaintiff in this case is a manufacturer and seller of a single serve coffee maker. The Nespresso machine accepts plastic pods filled with coffee grounds, combines the pod with water and produces a cup of coffee or other beverage. The distinct shape of the Nespresso pods means that only specifically shaped pods will work with Nespresso’s coffee machine. Pods that are a different shape are incompatible with the Nespresso machine. Consumers are not going to buy coffee pods unless they know the pods are compatible with their coffee machine.

The defendant in this case is a coffee company. The defendant produces coffee pods which are a similar shape as the Nespresso coffee pods and will work in Nespresso machines. The defendant advertises these coffee pods as “Nespresso compatible”. The plaintiff took exception to the defendant’s use of its trademark in advertising and filed a lawsuit for trademark infringement. The defendant has not responded to the complaint yet, but it is very likely that the defendant will claim that its use of the plaintiff’s trademark is a nominative fair use. This case will be instructive for other companies that want to advertise their products as compatible with a competitor’s machine.

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