Is using a trademark product in an advertisement infringement? ATANASIO v. WALMART

A trademark is a word, phrase or symbol that signals to consumers the identity of a product manufacturer. Trademark law protects sellers of goods and services that brand their product with a trademark. A trademark owner is granted certain exclusive rights to brand goods with their trademark. In the United States, trademark law grants the first user of a trademark priority over subsequent users of a trademark. A trademark user can register their trademark with the United States Patent and Trademark Office to strengthen the rights associated with the trademark, however, registration is not required to begin using a trademark.

Trademark infringement is when someone, other than the owner of a trademark, uses a trademark in a way that causes consumers to be confused about the identity of the producer of a product. Clearly, if a competitor starts using a trademark to lead consumers to believe that products produced by the competitor came from the trademark owner, that would be trademark infringement. However, there are some instances when a competitor is allowed to mention trademarks it does not own without committing trademark infringement.

Nominative fair use, is a legal doctrine that provides an affirmative defense to trademark infringement, by which a person may use the trademark of another as a reference to describe the other product, or to compare it to their own. The test to determine if a defendant’s use of a trademark is a normative fair use can vary slightly between the different circuit courts but the test boils down to three points. One party may use or refer to the trademark of another if: (1) The product or service cannot be readily identified without using the trademark; (2) The user only uses as much of the mark as is necessary for the identification; and (3) The user does nothing to suggest sponsorship or endorsement by the trademark holder. This applies even if the nominative use is commercial, and the same test applies for metatags in websites.

It is important to remember, fair use is a defense to trademark infringement. Before a Defendant needs to claim that their use of a trademark is a fair use, Plaintiff must show that trademark infringement has occurred. If Defendant is not using Plaintiff’s trademark as a source identifier then trademark infringement infringement has not occurred.

ATANASIO v. WALMAT, INC., 3:20-cv-05853 (N.D.CA 2020) illustrates a case where Defendant’s display of a trademarked product may not rise to the level of trademark infringement or Defendant’s use is a fair use.

Plaintiff in this case is a producer of luxury Tequila. Plaintiff packages its products in a distinctive black bottle which bears the trademark TATTOO TEQUILA. Plaintiff first used the trademark in 2011 and registered the trademark in 2015.

Defendant is one of the largest retailers in the world. Defendant operates an online store which shows pictures of products for sale along with decorative images of products that are not for sale. One of the decorative images on Defendant’s website included Plaintiff’s product. The image was Halloween themed and showed a table with various drinks that brings to mind a table at an adult Halloween Party. A screen capture of the website is shown above.

Plaintiff learned that his product was being featured in promotional pictures on Defendant’s website in September 2019 and attempted to contact Defendant. Plaintiffs attempts to contact Defendant failed. After that Plaintiff filed a complaint with four theories of liability (1) Trademark Infringement (15 U.S.C. Section 1114(1)(A); (2) Common Law Trademark Infringement; (3) False Endorsement Under The Lanham Act (15 U.S.C. Section 1125(A); (4) California Unfair Business Practice.

While it must be frustrating for the Plaintiff to see his trademarked product displayed on the website of a retailer that does not sell his products, it is difficult to argue that this is trademark infringement. Defendant is merely using Plaintiff’s product as a prop in a Halloween themed photograph. Defendant not claiming to sell Plaintiff’s products. Merely displaying a bottle as a decoration does not imply Plaintiff is endorsing the Defendant.

We will have to wait and see how Defendants answer the complaint.

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