Special Alert

Toyota sued Farzad and Lisa Tabari for trademark infringement for using the word LEXUS in domain names that advertised their auto brokerage services (buy-a-lexus.com and buyorleaselexus.com). The district court found trademark infringement and ordered the defendants to cease using the domain names and enjoined them from future use of the LEXUS mark in any other domain name. However, the U.S. Court of Appeals for the Ninth Circuit recently vacated and remanded this decision, holding that the district court's injunction was overbroad because the court failed to properly apply the nominative fair use doctrine. The nominative fair use doctrine provides that the use of a third party's trademark is not an infringement if the plaintiff's product or service is not readily identifiable without use of the mark, no more of the mark is used than is necessary, and the use of the mark does not falsely suggest a sponsorship or endorsement. The Ninth Circuit held that at "the very least, the injunction must be modified to allow some use of the Lexus mark in domain names by the Tabaris."

TIP: When using a third party's trademark to refer to the third party's goods or describe your own goods, be sure that the goods are not readily identifiable without use of the mark, that you use no more of the mark than necessary, and that you do not falsely suggest a sponsorship or endorsement by the trademark holder.