Trademarks in Open Source

• Introduction
• Cases
  • Unmanaged Trademarks: Naked Licensing
    • FreecycleSunnyvale v. Freecycle Network
      • Discussion
  • Common Law Trademarks
    • Planetary Motion, Inc. v. Techsplosion, Inc.
      • Discussion
  • Fair Use Defense to Trademark Infringement: Nominative Use
    • Playboy Enters. v. Welles
      • Discussion
• License Terms’ Bearing on Trademark Use
  • MIT
    • Discussion
  • BSD-3-Clause
    • Discussion
  • PHP-3.0
    • Discussion
  • Apache 2.0
    • Discussion
  • GNU GPL v.3
    • Discussion
• Trademark Usage Guidelines and Enforcement Policies
  • Wikimedia Foundation Trademark Policy
    • Discussion
  • Linux Foundation Trademark Usage Guidelines
    • Discussion
  • Pokemon Legal Information Notice
    • Discussion
• Notes

Introduction

Many people have misconceptions about how to license and enforce trademarks – even some intellectual property attorneys. This chapter will use U.S. case law to illuminate the relationship between open source licenses and trademark rights. This shared basis of understanding should help dispel common trademark licensing and enforcement myths that circulate in discussion boards for open source developers without citation to primary sources. For example, some people believe that releasing a project under an open source license gives the licensor the right to prevent anyone else from using the name of the project under any circumstances.¹ Others assume that trademarks can only be enforced if they are formally registered,² or that trademark rights can be licensed in exactly the same way that copyrights and patents are licensed.

Trademarks serve a different purpose from copyrights and patents and can be licensed differently. Unlike copyright and patent laws, which were designed to incentivize creative works and useful inventions, trademark law’s purpose is to protect consumers by guaranteeing the source of a product or service.³ Copyrights and patent rights are property rights, whereas trademarks are fundamentally concerned with consumer protection. As such, an open source author may choose to openly license her project’s copyrights and patents while still enforcing her trademarks. Trademark enforcement is not inconsistent with open source principles: it restricts how a brand identifier can be used, rather than restricting what you can do with the open source code.⁴ Even Richard Stallman, the founder and president of the Free Software Foundation, recognizes that trademark enforcement is reasonable as long as software freedom is not restricted.⁵

How courts have applied the logic and tension of trademark law in these cases illustrates the nature of trademarks and their rich interplay with software and technology. The reasoning from these cases is contextualized with discussion questions and an examination of how popular open source licenses have struggled to address trademark rights, as well as several organizations’ trademark policies.

Cases

Unmanaged Trademarks: Naked Licensing

When evaluating how to manage your trademarks, consider the default behavior: what happens if nothing is done to protect a trademark in an open source project? In this context, “doing nothing” to protect a trademark could mean choosing a license which explicitly disavows any grant of trademark rights, but undermining that provision over email by freely allowing anyone to use the trademark. This type of activity might be seen as an implied license – or worse – naked licensing.

As we will see in the following case’s discussion of naked licensing, doing nothing to control the quality associated with a licensed trademark risks losing the enforceability of a trademark altogether. FreecycleSunnyvale v. Freecycle Network summarizes the heart of the issue:⁶

[T]rademark owners have a duty to control the quality of their trademarks. It is well-established that a trademark owner may grant a license and remain protected provided quality control of the goods and services sold under the trademark by the licensee is maintained. “Naked licensing” occurs when a licensor “fails to exercise adequate quality control over the licensee.” Naked licensing may result in the trademark’s ceasing to function as a symbol of quality and a controlled source.

Just as with waiving copyright to a work or publishing an invention before patenting it, overly permissive trademark licensing without quality control risks diminishing the enforceability of the trademark.

As you read Freecycle, consider the open source applications of the court’s analysis of the types of control a licensor may have over licensed trademarks. For example, what would happen if a project wishes to explicitly permit the use of the project’s trademarks in some circumstances? How could the licensor maintain contractual or actual control?

When crafting a trademark enforcement strategy consider what the value of a trademark could be to your open source project. Does the unique brand of the project attract contributions or bolster widespread adoption? How much of a priority is the unique identity of the project to the core contributors? Would the project want to retain exclusive rights to certify compliant sub-projects or sell project-related merchandise? The value of a trademark can vary from project to project.

Although the Freecycle case does not concern software, The Freecycle Network’s structure of loose franchising arrangements was central to the holding and could be analogous to many open source collaborations. The Freecycle Network leveraged online communities to unite passionate contributors around a shared goal, progressing with a democratized structure and little apparent interest in trademark protection. Due to the organization’s lack of contractual or actual control over the quality associated with the use of the term “Freecycle,” the Court held that The Freecycle Network had engaged in naked licensing and abandoned its trademarks.

FreecycleSunnyvale v. Freecycle Network

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626 F.3d 509 (9th Cir. 2010)⁷

CALLAHAN, Circuit Judge:

FreecycleSunnyvale (“FS”) is a member group of The Freecycle Network (“TFN”), an organization devoted to facilitating the recycling of goods. FS filed a declaratory action against TFN arising from a trademark licensing dispute, alleging noninfringement of TFN’s trademarks and tortious interference with FS’s business relations. FS moved for partial summary judgment on the issue of whether its naked licensing defense to trademark infringement allowed it to avoid a finding of infringement as a matter of law.⁸ TFN argued that it had established adequate quality control standards over its licensees’ services and use of the trademarks to avoid a finding of naked licensing and abandonment of its trademarks. The district court granted summary judgment to FS. We hold that TFN (1) did not retain express contractual control over FS’s quality control measures, (2) did not have actual controls over FS’s quality control measures, and (3) was unreasonable in relying on FS’s quality control measures. Because we find that TFN engaged in naked licensing and thereby abandoned its trademarks, we affirm.

I

A

In March 2003, Deron Beal (“Beal”) founded TFN, an umbrella non-profit Arizona corporation dedicated to “freecycling.” The term “freecycling” combines the words “free” and “recycling” and refers to the practice of giving an unwanted item to a stranger so that it can continue to be used for its intended purpose, rather than disposing of it.⁹ As practiced by TFN, freecycling is primarily a local activity conducted by means of internet groups, which are created by volunteers through online service providers like Yahoo! Groups and Google Groups.¹⁰ Although not required to do so, most TFN member groups use Yahoo! Groups as a forum for members to coordinate their freecycling activities. TFN also maintains its own website, www.freecycle.org, which provides a directory of member groups as well as resources for volunteers to create new groups. The website also includes a section devoted to etiquette guidelines.

TFN asserts that it maintains a “Freecycle Ethos”—a democratic leadership structure, in which decisions are made through a process of surveys and discussions among volunteer moderators. Local volunteer moderators are responsible for enforcing TFN’s rules and policies, but the moderators have flexibility in enforcement depending on the moderators’ assessment of their local communities.

Since May 2003, TFN has been using three trademarks, FREECYCLE, THE FREECYCLE NETWORK, and a logo (collectively “the trademarks”) to identify TFN’s services and to identify member groups’ affiliation with TFN. Federal registration of the trademarks is currently pending in the United States, but the trademarks have been registered in other countries. TFN permits member groups to use the trademarks. When TFN first started, Beal personally regulated the use of the trademarks but, as TFN has grown, it has relied on local moderators to regulate member groups’ use of the trademarks.

Lisanne Abraham (“Abraham”) founded FS on October 7, 2003, in Sunnyvale, California, without TFN’s knowledge or involvement. She established the group by entering into a service contract with Yahoo! Groups and becoming the group’s moderator. Upon establishing FS, Abraham adapted etiquette guidelines and instructions for how to use FS from either TFN’s or one of TFN’s member group’s website. On October 7, 2003, Abraham emailed Beal directly asking for a logo for FS, and they spoke over the phone within days of the email communication. After the phone conversation, Beal emailed Abraham on October 9, 2003, stating: “You can get the neutral logo from www.freecycle.org, just don’t use it for commercial purposes or you [sic] maybe Mark or Albert can help you to do your own fancy schmancy logo!”¹¹ This email is the only record of a direct communication between FS and TFN regarding the use of any of the trademarks.

Between October 7, 2003, and October 9, 2003, FS was added to TFN’s list of online freecycling groups displayed on TFN’s website. Then, on October 9, 2003, Abraham received an email from Beal addressed to nineteen moderators of new freecycle Yahoo! Groups which, among other things, welcomed them to TFN. The email did not discuss or include any restrictions or guidance on the use of TFN’s trademarks. On October 13, 2003, Abraham received another email from TFN, this time an invitation to join the “freecyclemodsquad” Yahoo! Group (“modsquad group”), an informal discussion forum exclusively for the moderators of freecycle Yahoo! Groups to share ideas.

Before 2004, TFN had only a few suggested guidelines in the etiquette section of its website, including a “Keep it Free” rule. Then, on January 4, 2004, Beal sent an email to the modsquad group, asking whether TFN should also limit listed items to those that were legal. Ultimately, Beal proposed the adoption of a “Keep it Free, Legal & Appropriate for All Ages” rule and asked “that all moderators vote on whether they feel this is the one rule that should apply to ALL local groups or not.” Between January 4 and January 11, 2004, a majority of the modsquad group voted to require all local groups to adopt the rule and, on January 11, Beal informed the group that “I’m glad to say . . . we now have one true guiding principle.” Although the moderators adopted the “Keep it Free, Legal & Appropriate for All Ages” rule, following its adoption, they frequently discussed what the actual meaning of the rule was and, ultimately, its definition and enforcement varied from group to group.

Although the underlying reason is not evident from the record or the parties’ briefs, on November 1 and November 14, 2005, TFN sent emails to FS ordering the group to cease and desist using the Freecycle name and logo and threatening to have Yahoo! terminate FS’s Yahoo! Group if FS did not comply. On November 5, FS emailed Yahoo! and disputed TFN’s ability to forbid the use of the trademarks by informing Yahoo! of the license that TFN allegedly had granted FS in October 2003 (i.e., Beal’s October 9, 2003 email authorizing Abraham to use the logo). On November 21, Yahoo! terminated the FS Yahoo! Group at TFN’s request, after receiving a claim from TFN that FS was infringing on TFN’s trademark rights.

B

On January 18, 2006, FS filed a declaratory judgment action against TFN in the U.S. District Court for the Northern District of California, alleging noninfringement of TFN’s trademarks and tortious interference with FS’s business relations. TFN brought counterclaims for trademark infringement and unfair competition under the Lanham Act and California Business and Professions Code section 17200.

FS then moved for summary judgment on the issue of whether its naked licensing defense to trademark infringement allowed it to avoid a finding of infringement as a matter of law. FS argued that TFN had abandoned its trademarks because it engaged in naked licensing when it granted FS the right to use the trademarks without either (1) the right to control or (2) the exercise of actual control over FS’s activities. On March 13, 2008, the district court granted summary judgment in favor of FS, holding that TFN engaged in naked licensing and therefore abandoned its rights to the trademarks. The parties stipulated to dismiss the remaining claims, and final judgment was entered on May 20, 2008. TFN thereafter timely filed its appeal.

II

[. . . .]

Here, we need not decide which standard of proof applies because, even applying the higher standard of proof—clear and convincing—and viewing the evidence in the light most favorable to TFN as the non-moving party, FS has demonstrated that TFN engaged in naked licensing and consequently abandoned the trademarks.

III

An introduction to “naked licensing” of trademarks is in order, as this issue has seldom arisen in this circuit or in our sister circuits. Our only discussion of this subject is in Barcamerica, 289 F.3d at 598 (holding that Barcamerica, a vintner, engaged in naked licensing and abandoned its trademark by failing to retain or otherwise exercise adequate quality control over the trademark it had licensed to another company), and that decision informs and guides our discussion here.

As a general matter, trademark owners have a duty to control the quality of their trademarks. McCarthy § 18:48. “It is well-established that ‘[a] trademark owner may grant a license and remain protected provided quality control of the goods and services sold under the trademark by the licensee is maintained.’ “ Barcamerica, 289 F.3d at 595-96 (quoting Moore Bus. Forms, Inc. v. Ryu, 960 F.2d 486, 489 (5th Cir. 1992)).

“Naked licensing” occurs when the licensor “fails to exercise adequate quality control over the licensee.” Id. at 596. Naked licensing may result in the trademark’s ceasing to function as a symbol of quality and a controlled source. Id. (citing McCarthy § 18:48). We have previously declared that naked licensing is "inherently deceptive and constitutes abandonment of any rights to the trademark by the licensor.” Id. at 598. “Consequently, where the licensor fails to exercise adequate quality control over the licensee, ‘a court may find that the trademark owner has abandoned the trademark, in which case the owner would be estopped from asserting rights to the trademark.’” Id. at 596 (quoting Moore, 960 F.2d at 489).

A

At issue here is whether there is clear and convincing evidence, viewed in the light most favorable to TFN, that TFN allowed FS to use the trademarks with so few restrictions as to compel a finding that TFN engaged in naked licensing and abandoned the trademarks. TFN contends that disputed issues of material fact remain as to whether TFN’s quality control standards, during the relevant time period, were sufficient. Although TFN concedes that it did not have an express license agreement, it alleges that a reasonable jury could find that it had adequate quality control measures in place when FS was authorized to use the trademarks, making summary judgment inappropriate.

1

When deciding summary judgment on claims of naked licensing, we first determine whether the license contained an express contractual right to inspect and supervise the licensee’s operations. See Barcamerica, 289 F.3d at 596. The absence of an agreement with provisions restricting or monitoring the quality of goods or services produced under a trademark supports a finding of naked licensing. Id. at 597; see also Stanfield v. Osborne Indus., Inc., 52 F.3d 867, 871 (10th Cir. 1995) (granting summary judgment where license agreement lacked right to inspect or supervise licensee’s operations and gave the licensee sole discretion to design the trademark).

TFN concedes that it did not have an express license agreement with FS regarding FS’s use of the trademarks. Without an express license agreement, TFN necessarily lacks express contractual rights to inspect and supervise FS. However, TFN argues that the October 9, 2003 email, in which Beal advised Abraham that: “You can get the neutral logo from www.freecycle.org, just don’t use it for commercial purposes . . . .”, reflects an implied license. Emphasis added.

Even assuming that Beal’s emailed admonition to Abraham not to use the trademarks for commercial purposes constitutes an implied licensing agreement, it contained no express contractual right to inspect or supervise FS’s services and no ability to terminate FS’s license if FS used the trademarks for commercial purposes. See Barcamerica, 289 F.3d at 597 (determining that a license agreement lacking similar controls was insufficient). We therefore hold that, by TFN’s own admission, there is no disputed issue of material fact as to whether TFN maintained an express contractual right to control quality.

2

TFN next contends that, despite its lack of an express contractual right to control quality, a material issue of fact remains as to whether TFN maintained actual control over its member groups’ services and use of the trademarks when FS was granted use of the trademarks in October 2003. “The lack of an express contract right to inspect and supervise a licensee’s operations is not conclusive evidence of lack of control.” Barcamerica, 289 F.3d at 596. However, where courts have excused the lack of a contractual right to control quality, they have still required that the licensor demonstrate actual control through inspection or supervision. See, e.g., Stanfield, 52 F.3d at 871 (“The absence of an express ¹²contractual right of control does not necessarily result in abandonment of a mark, as long as the licensor in fact exercised sufficient control over its licensee.”).

TFN asserts that it exercised actual control over the trademarks because it had several quality control standards in place, specifically: (1) the “Keep it Free, Legal, and Appropriate for all Ages” standard and TFN’s incorporation of the Yahoo! Groups’ service terms; (2) the non-commercial services requirement (expressed in Beal’s October 9, 2003 email); (3) the etiquette guidelines listed on TFN’s website; and (4) TFN’s “Freecycle Ethos” which, TFN contends, establishes policies and procedures for member groups, even if local member groups are permitted flexibility in how to apply those policies and procedures. In addition, TFN cites Birthright v. Birthright, Inc., 827 F. Supp. 1114 (D.N.J. 1993) for the principle that loosely organized non-profits like TFN and FS that share “the common goals of a public service organization” are subject to less stringent quality control requirements.

First, we disagree with TFN’s contentions that the “Keep it Free, Legal, and Appropriate for all Ages” standard and its incorporation of the Yahoo! Groups’ service terms constituted actual controls over its member groups. The undisputed evidence showed that TFN’s licensees were not required to adopt the “Keep it Free, Legal, and Appropriate for all Ages” standard, nor was it uniformly applied or interpreted by the local groups. Similarly, FS was not required to use Yahoo! Groups and was not asked to agree to the Yahoo! Groups’ service terms as a condition of using TFN’s trademarks. Moreover, the Yahoo! Groups’ service terms, which regulate generic online activity like sending spam messages and prohibiting harassment, cannot be considered quality controls over TFN’s member groups’ services and use of the trademarks. The service terms apply to every Yahoo! Group, and do not control the quality of the freecycling services that TFN’s member groups provide. Thus, the “Keep it Free, Legal and Appropriate for All Ages” standard and the Yahoo! Groups’ service terms were not quality controls over FS’s use of the trademarks.

Second, we conclude that TFN’s non-commercial requirement says nothing about the quality of the services provided by member groups and therefore does not establish a control requiring member groups to maintain consistent quality. Thus, it is not an actual control in the trademark context. Third, because member groups may freely adopt and adapt TFN’s listed rules of etiquette and because of the voluntary and amorphous nature of these rules, they cannot be considered an actual control. For example, FS modified the etiquette that was listed on TFN’s website and TFN never required FS to conform to TFN’s rules of etiquette. Fourth, TFN admits that a central premise of its “Freecycle Ethos” is local enforcement with local variation. By definition, this standard does not maintain consistency across member groups, so it is not an actual control.

Even assuming that TFN’s asserted quality control standards actually relate to the quality of its member groups’ services, they were not adequate quality controls because they were not enforced and were not effective in maintaining the consistency of the trademarks. Indeed, TFN’s alleged quality controls fall short of the supervision and control deemed inadequate in other cases in which summary judgment on naked licensing has been granted to the licensee. See, e.g., Barcamerica, 289 F.3d at 596-97 (finding no express contractual right to inspect and supervise the use of the marks coupled with licensor’s infrequent wine tastings and unconfirmed reliance on the winemaker’s expertise was inadequate evidence of quality controls to survive summary judgment); Stanfield, 52 F.3d at 871 (granting summary judgment to the licensee where the license agreement lacked a right to inspect or supervise licensee’s operations, and alleged actual controls were that the licensor examined one swine heating pad, looked at other pet pads, and occasionally reviewed promotional materials and advertising).

Moreover, even if we were inclined to accept the premise allegedly set forth in Birthright, that loosely organized non-profits that share common goals are subject to less stringent quality control requirements for trademark purposes, the result would be the same. In Birthright, the court held that the license was not naked because the licensor “monitored and controlled” its licensees’ use of the trademarks. 827 F. Supp. at 1139-40; see also Barcamerica, 289 F.3d at 596 (holding that a licensor may overcome the lack of a formal agreement if it exercises actual control over its licensees). Here, TFN exercised no actual control over its licensees, so even under a less stringent standard, TFN has not raised a material issue of fact as to whether it exercised actual control over FS’s use of the trademarks. See Barcamerica, 289 F.3d at 598.

3

TFN contends that even if it did not exercise actual control, it justifiably relied on its member groups’ quality control measures. Although “courts have upheld licensing agreements where the licensor is familiar with and relies upon the licensee’s own efforts to control quality,” Barcamerica, 289 F.3d at 596 (internal quotation marks and brackets omitted), we, like the other circuits that have considered this issue, have required that the licensor and licensee be involved in a “close working relationship” to establish adequate quality control in the absence of a formal agreement, id. at 597; accord Stanfield, 52 F.3d at 872; Taco Cabana Int’l, Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1121 (5th Cir. 1991). In Barcamerica, we cited four examples of “close working relationships” that would allow the licensor to rely on the licensee’s own quality control: (1) a close working relationship for eight years; (2) a licensor who manufactured ninety percent of the components sold by a licensee and with whom it had a ten year association and knew of the licensee’s expertise; (3) siblings who were former business partners and enjoyed a seventeen-year business relationship; and (4) a licensor with a close working relationship with the licensee’s employees, and the pertinent agreement provided that the license would terminate if certain employees ceased to be affiliated with the licensee. 289 F.3d at 597.

Here, TFN and FS did not enjoy the type of close working relationship that would permit TFN to rely on FS’s quality control measures. TFN had no long term relationship with Abraham or the FS group. In fact, the October 9, 2003 email between Beal and Abraham, which mentions using the TFN logo, was the parties’ first and only written communication about the trademarks prior to TFN’s requests to stop using them in November 2006. In addition, TFN had no experience with FS that might have supported its alleged confidence in FS’s quality control measures. Thus, even considered in a light most favorable to TFN, no evidence showed the type of close working relationship necessary to overcome TFN’s lack of quality controls over FS. See id.

Furthermore, we have held that, while reliance on a licensee’s own quality control efforts is a relevant factor, such reliance is not alone sufficient to show that a naked license has not been granted.¹³ See Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1017-18 (9th Cir. 1985) (noting that, although the licensor had worked closely with the licensee for ten years, the licensor did not rely solely on his confidence in the licensee, but exercised additional control by, inter alia, periodically inspecting those goods and was consulted regarding any changes in the product). Because sole reliance on a licensee’s own control quality efforts is not enough to overcome a finding of naked licensing without other indicia of control, see id. at 1017-18, and because TFN lacked a close working relationship with FS and failed to show any other indicia of actual control, we conclude that TFN could not rely solely on FS’s own quality control efforts.

B

TFN’s three remaining arguments also fail to raise a material issue of fact that precludes a grant summary of judgment for FS. First, TFN asserts that it should be subject to a lesser level of quality control standard because its services are not dangerous to the public and the public expects local variation in services so the probability of deception is low. We have stated that the “standard of quality control and the degree of necessary inspection and policing by the licensor will vary.” Barcamerica, 289 F.3d at 598. The licensor need only exercise “control sufficient to meet the reasonable expectations of customers.” McCarthy, § 18:55. However, because TFN did not establish any quality control requirements for its member groups, we do not need to decide what efforts to oversee a licensee’s performance might meet a low standard of quality control.

TFN’s remaining two arguments—(1) that FS must show both naked licensing and a loss of trademark significance, and (2) that FS is estopped from supporting its naked licensing defense with evidence that demonstrates that TFN did not adequately control the services offered by FS when using the trademarks— are both raised for the first time on appeal, so we decline to reach them. [. . .]

IV

We determine, viewing the record in the light most favorable to TFN, that TFN (1) did not retain express contractual control over FS’s quality control measures, (2) did not have actual control over FS’s quality control measures, and (3) was unreasonable in relying on FS’s quality control measures. Therefore, we conclude that TFN engaged in naked licensing and consequently abandoned the trademarks. The district court’s grant of summary judgment in favor of FS and against TFN is AFFIRMED.

Discussion

1. What would be the possible detriments to an open source project or community if a court found that the project’s trademarks had been abandoned due to evidence of naked licensing? Would the benefits of attempting to freely license all trademarks to the open source community at large outweigh the project’s loss of enforcement rights?

2. Freecycle found that the absence of an agreement with provisions “restricting or monitoring the quality of goods or services produced under a trademark supports a finding of naked licensing”¹⁴ and cited Stanfield v. Osborne Indus., Inc., 52 F.3d 867, 871 (10th Cir. 1995). In Stanfield, the court granted summary judgment where a license agreement lacked the right to inspect or supervise a licensee’s operations and gave the licensee sole discretion to design the trademark. What would a right to inspect or supervise quality look like in the context of software? Can a boilerplate provision be enough to resolve trademark enforcement concerns? Do any of the most popular open source licenses specifically protect the licensor’s right to enforce trademark rights against downstream users? What role could a project maintainer’s discretion play when it comes to accepting pull requests?

3. Absent any express contractual right to inspect or supervise the quality of the goods or services associated with a trademark, what would “actual control” look like for open source software? Stanfield notes that the “absence of an express contractual right does not necessarily result in abandonment of a mark, as long as the licensor in fact exercised sufficient control over its licensee.”¹⁵ If an open source project chooses to licenses its trademarks, how can quality control standards be set? How should they be enforced?

4. Although the Freecycle court noted that the existence of a “close working relationship” between a licensor and licensee may not be sufficient to “overcome a finding of naked licensing without other indicia of control,”¹⁶ the court cited numerous examples of the types of close working relationships that could help to support a finding of actual control over the quality associated with a mark. Would these types of close working relationships be likely to arise in open source collaborations? If a project author and a contributor had been working together closely for eight years, could that support a finding that there qas adequate control? What if the close collaborator then fell out with the main project owner and forked the project. Would the project owner still be able to enforce the mark against the contributor?¹⁷

Common Law Trademarks

In the United States and countries with similar common law legal systems, a trademark does not have to be formally registered to be enforceable.¹⁸ However, in the United States a “common law” trademark must meet the requirements set out by the courts in order to be enforceable. Primarily, an unregistered mark must be: (1) used in commerce, and (2) used prior to the alleged trademark infringement.¹⁹

It may be counterintuitive that the “use in commerce” requirement does not necessarily mean a profitable or profit-seeking use. In fact, as the following case clarifies, the term “use in commerce” is used as a reference to Congress’s authority to regulate trademarks under the U.S. Constitution’s Commerce Clause rather than an intent to limit trademarks to profit-making activity.²⁰ Where a developer released open source software under the name Coolmail, the court rejected the argument that the lack of direct profit from releasing software under the GNU General Public License rendered the original Coolmail name unenforceable as a trademark, holding that distributing software for end-users over the Internet satisfies the “use in commerce” requirement.

The second prong of unregistered trademark analysis, “prior use,” is a fact-based determination.²¹ Planetary Motion restates the test for whether sufficient “prior use” of a mark has been proven to establish trademark ownership rights:²²

first, adoption, and, second, use in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark, is competent to establish ownership, even without evidence of actual sales.

In Planetary Motion the successful party bought the trademark rights from the earliest author of the email software called “Coolmail.” As you read the following case, consider: how is use in commerce defined? Which of Byron Darrah’s actions were taken into consideration by the court as evidence of trademark ownership rights? What is the reasoning behind permitting non-profit organizations to enforce their trademarks? What benefits does the Court attribute to the original author releasing software under the GPL?

Planetary Motion, Inc. v. Techsplosion, Inc.

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261 F.3d 1188 (11th Cir. 2001)²³

Appeal from the United States District Court for the Southern District of Florida. Before TJOFLAT and WILSON, Circuit Judges, and RESTANI, Judge.²⁴

RESTANI, Judge:

Planetary Motion, Inc. (“Planetary Motion” or “Appellee”) sued Techsplosion, Inc. and Michael Gay a/k/a Michael Carson (respectively “Techsplosion” and “Carson”; collectively “Appellants”) for infringement and dilution of an unregistered trademark under Section 43(a) and (c) of the Federal Trademark Act, 15 U.S.C. § 1051 et seq. (1994) (“Lanham Act”), and for violation of Florida’s unfair competition law. Fla. Stat. Ann. § 495.151 (West 2000). Finding that Planetary Motion had established priority of use and a likelihood of confusion, the United States District Court for the Southern District of Florida entered summary judgment in favor of Planetary Motion. We affirm the judgment and vacate the award of attorney fees.

Facts

I. Development and Distribution of the “Coolmail” Software

In late 1994, Byron Darrah (“Darrah”) developed a UNIX-based program (the “Software”) that provides e-mail users with notice of new e-mail and serves as a gateway to the users’ e-mail application. On December 31, 1994, Darrah distributed the Software over the Internet by posting it on a UNIX user site called “Sunsite,” from which it could be downloaded for free. Darrah had named the Software “Coolmail” and this designation appeared on the announcement sent to the end-users on Sunsite as well as on the Software user-manual, both of which accompanied the release.

The Software was distributed without charge to users pursuant to a GNU General Public License that also accompanied the release. A GNU General Public License allows users to copy, distribute and/or modify the Software under certain restrictions, e.g., users modifying licensed files must carry “prominent notices” stating that the user changed the files and the date of any change. After the release of the Software, Darrah received correspondence from users referencing the “Coolmail” mark and in some cases suggesting improvements. In 1995, Darrah released two subsequent versions of the Software under the same mark and also pursuant to the GNU General Public License.

In early 1995, a German company named S.u.S.E. GmbH sought permission from Darrah to include the Software in a CD-ROM package sold as a compilation of Unix-based programs. Darrah consented and, pursuant to the GNU licensing agreement, S.u.S.E. distributed the Software in its compilation product and in subsequent versions thereof. S.u.S.E. sold and continues to sell the software compilation in stores in the United States and abroad, as well as over the Internet.

II. Launch of Techsplosion’s “CoolMail” E-mail Service

In 1998, Appellant Carson formed Techsplosion, for the purpose of operating a business based on an e-mail service that he had developed. On April 16, 1998, Techsplosion began offering the e-mail service on the Internet under the mark “CoolMail.” Two days later, Techsplosion activated the domain name “coolmail.to” Techsplosion delivered an e-mail solicitation under the “CoolMail” mark to approximately 11,000 members of the Paramount Banner Network, an Internet advertising network, also created and operated by Carson. Techsplosion charged no fee to subscribe to the service and generated revenues through the sale of banner advertisements on its web site.

III. Planetary Motion’s E-mail Service & Application for Trademark Registration

Appellee Planetary Motion is a computer software and telecommunications company that developed and owns an electronic mail service called “Coolmail.” As part of its service, Planetary Motion enables a person to check e-mail via telephone without logging onto a computer. On April 24, 1998, Planetary Motion filed three intent-to-use applications to register the mark “Coolmail” with the United States Patent and Trademark Office. Though Planetary Motion was aware that Darrah’s Software also bore the mark “Coolmail,” it represented in its applications that it was not aware of any mark upon which its proposed registered mark would infringe. Planetary Motion launched its Coolmail e-mail service to subscribers on June 8, 1998.

IV. Planetary Motion’s Complaint and Subsequent Acquisition of Darrah’s Rights

On April 22, 1999, Planetary Motion filed a complaint against Techsplosion. In the complaint, Planetary Motion alleged infringement of the alleged mark “Coolmail” for use in connection with e-mail services. Planetary alleged federal trademark infringement and unfair competition under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125 (a), as well as injury to business reputation and dilution under Florida Statute § 495.151.

On June 10, 1999, Techsplosion filed an Answer, Affirmative Defenses, and Counterclaims. The counterclaims alleged infringement of the mark “Coolmail” for use in connection with e-mail services. Techsplosion alleged unfair competition, false designation, description, and representation under the Lanham Act, common trademark infringement, common law unfair competition, and injury to business reputation and dilution.

In July of 1999, Planetary Motion purchased from Darrah all rights, title, and interest to the Software including all copyrights, trademarks, patents and other intellectual property rights.²⁵ On August 31, 1999, Planetary filed an Amended Verified Complaint, adding a claim for dilution under Section 43(c) of the Lanham Act, 15 U.S.C. § 1125 (c), and alleging violation of trademark rights assigned from Darrah.

V. Disposition of Planetary Motion’s Complaint

On January 31, 2000, the district court entered an Order granting Planetary Motion’s motion for summary judgment and denying Carson’s and Techsplosion’s motion for summary judgment. The district court based the Order on two findings: (1) that the alleged mark was affixed to Darrah’s software, and that Darrah’s distribution of the software over the Internet constituted a “transport in commerce,” resulting in the creation of trademark rights and priority, and (2) there was a likelihood of confusion because the marks “are essentially the same.” The district court did not reach the issue of whether Techsplosion’s use of “CoolMail” in connection with its e-mail service diluted Planetary Motion’s mark.

[. . . .]

Standard of Review

Review of a district court’s grant of summary judgment is de novo, with all facts and reasonable inferences therefrom reviewed in the light most favorable to the non-moving party. Carnival Brand Seafood Co. v. Carnival Brands, Inc., 187 F.3d 1307, 1309 (11th Cir. 1999).

Discussion

Section 43(a) of the Lanham Act forbids unfair trade practices involving infringement of trade dress, service marks, or trademarks, even in the absence of federal trademark registration.²⁶ Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 120 L. Ed. 2d 615, 112 S. Ct. 2753 (1992). Section 43(a) is remedial in nature and should be interpreted and applied broadly so as to effectuate its remedial purpose. Montgomery v. Noga, 168 F.3d 1282, 1300 & n. 29 (11th Cir. 1999) (citing Warner Bros., Inc. v. Gay Toys, Inc., 658 F.2d 76, 79 (2d Cir. 1981)). To prevail under this section, a claimant must show (1) that it had prior rights to the mark at issue and (2) that the defendant had adopted a mark or name that was the same, or confusingly similar to its mark, such that consumers were likely to confuse the two.²⁷ Lone Star Steakhouse & Saloon, Inc. v. Longhorn Steaks, Inc., 106 F.3d 355, 360 (11th Cir. 1997) (citing Conagra Inc. v. Singleton, 743 F.2d 1508, 1512 (11th Cir. 1984)), modified, 122 F.3d 1379 (1997). Appellants argue that the district court erred in finding that Planetary Motion had established both elements. Appellants also dispute the scope of injunctive relief, as well as the award of attorney fees and costs.

I. Prior Use in Commerce

Under common law, trademark ownership rights are “appropriated only through actual prior use in commerce.” Tally-Ho, Inc. v. Coast Cmty College Dist., 889 F.2d 1018, 1022 (11th Cir. 1989) (citation omitted). Under the Lanham Act,²⁸ the term “use in commerce” is defined in relevant part as follows:

the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. . . . A mark shall be deemed to be in use in commerce . . . on goods when (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce . . . .

15 U.S.C. § 1127.²⁹ The district court found that because the statute is written in the disjunctive (i.e., “sale or transport”), Darrah’s wide distribution of the Coolmail software over the Internet, even absent any sales thereof, was sufficient to establish ownership rights in the “CoolMail” mark. Appellants contend that “transport in commerce” alone – here, Darrah’s free distribution of software over the Internet “with no existing business, no intent to form a business, and no sale under the mark” – is insufficient to create trademark rights. Appellants’ Brief at 13. Appellants’ argument lacks merit.

The parties do not make clear the two different contexts in which the phrase “use in commerce” is used. The term “use in commerce” as used in the Lanham Act “denotes Congress’s authority under the Commerce Clause rather than an intent to limit the Lanham Act’s application to profit making activity.” United We Stand Am., Inc. v. United We Stand, Am. N.Y., Inc., 128 F.3d 86, 92-93 (2d Cir. 1997) (citation omitted), cert. denied, 523 U.S. 1076, 140 L. Ed. 2d 673, 118 S. Ct. 1521 (1998); U.S. Const., Art. I, § 8, cl. 3. Because Congress’s authority under the Commerce Clause extends to activity that “substantially affects” interstate commerce, United States v. Lopez, 514 U.S. 549, 559, 131 L. Ed. 2d 626, 115 S. Ct. 1624 (1995), the Lanham Act’s definition of “commerce” is concomitantly broad in scope: “all commerce which may lawfully be regulated by Congress.” 15 U.S.C. § 1127. See also Steele v. Bulova Watch Co., 344 U.S. 280, 283-84, 97 L. Ed. 319, 73 S. Ct. 252 (1952); Larry Harmon Pictures Corp. v. Williams Rest. Corp., 929 F.2d 662, 666 (Fed. Cir.) (allowing registration for an intrastate provider of restaurant services with an undefined interstate clientele), cert. denied, 502 U.S. 823, 116 L. Ed. 2d 58, 112 S. Ct. 85 (1991). The distribution of the Software for end-users over the Internet satisfies the “use in commerce” jurisdictional predicate. See, e.g., Planned Parenthood Fed’n of Am., Inc. v. Bucci, 1997 U.S. Dist. LEXIS 3338, 42 U.S.P.Q.2D (BNA) 1430, 1434, 1997 WL 133313 (S.D.N.Y. 1997) (“The nature of the Internet indicates that establishing a typical home page on the Internet, for access to all users, would satisfy the Lanham Act’s ‘in commerce’ requirement.”), aff’d, 152 F.3d 920 (2d Cir.), cert. denied, 525 U.S. 834, 142 L. Ed. 2d 71, 119 S. Ct. 90 (1998).

Nevertheless, the use of a mark in commerce also must be sufficient to establish ownership rights for a plaintiff to recover against subsequent users under section 43(a). See New England Duplicating Co. v. Mendes, 190 F.2d 415, 417-18 (1st Cir. 1951) (after finding “use in commerce” jurisdiction predicate satisfied, court noted that “the question remains whether the plaintiff has established that he was the ‘owner’ of the mark, for under 15 U.S.C. § 1051 only the ‘owner’ of a mark is entitled to have it registered.”). The court in Mendes set forth a two part test to determine whether a party has established “prior use” of a mark sufficient to establish ownership:

Evidence showing, first, adoption,³⁰ and, second, use in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark, is competent to establish ownership, even without evidence of actual sales.³¹

Id. at 418. See also New West, 595 F.2d at 1200.³²

Courts generally must inquire into the activities surrounding the prior use of the mark to determine whether such an association or notice is present. See, e.g., Johnny Blastoff, Inc. v. L.A. Rams Football Co., 188 F.3d 427, 433 (7th Cir. 1999) (“The determination of whether a party has established protectable rights in a trademark is made on a case by case basis, considering the totality of the circumstances.”), cert. denied, 528 U.S. 1188, 146 L. Ed. 2d 100, 120 S. Ct. 1241 (2000). Under the “totality of circumstances” analysis, a party may establish “use in commerce” even in the absence of sales. “Although evidence of sales is highly persuasive, the question of use adequate to establish appropriation remains one to be decided on the facts of each case . . . .” New West, 595 F.2d at 1200 (quoting Mendes, 190 F.2d at 418). The court in New West recognized that “mere advertising by itself may not establish priority of use,” but found that promotional mailings coupled with advertiser and distributor solicitations met the Mendes “public identification” ownership requirement. 595 F.2d at 1200. Thus, contrary to Appellants’ assertions, the existence of sales or lack thereof does not by itself determine whether a user of a mark has established ownership rights therein.³³ Compare Marvel Comics Ltd. v. Defiant, 837 F. Supp. 546, 549 (S.D.N.Y. 1993)(finding announcement of “Plasmer” title to 13 million comic book readers and promotion at annual trade convention sufficient to establish trademark ownership rights, notwithstanding lack of any sales) with Warnervision Entm’t Inc. v. Empire of Carolina Inc., 915 F. Supp. 639, 645-46 (S.D.N.Y.) (finding toy manufacturer’s promotional efforts insufficient to establish priority of use where only a few presentations were made to industry buyers, even though one resulted in a sale to a major toy retailer), aff’d in part, vacated in part, 101 F.3d 259 (2d Cir. 1996).³⁴

Similarly, not every transport of a good is sufficient to establish ownership rights in a mark. To warrant protection, use of a mark “need not have gained wide public recognition,” but “secret, undisclosed internal shipments are generally inadequate.” Blue Bell, Inc. v. Farah Mfg. Co., 508 F.2d 1260, 1265 (5th Cir. 1975).³⁵ In general, uses that are de minimis may not establish trademark ownership rights. See, e.g., Paramount Pictures Corp. v. White, 31 U.S.P.Q.2D (BNA) 1768, 1772-73 (Trademark Tr. & App. Bd.1994) (finding no bona fide use in ordinary course of trade where mark was affixed to a game consisting of three pieces of paper and distributed for the purpose of promoting musical group).

We find that, under these principles, Darrah’s activities under the “Coolmail” mark constitute a “use in commerce” sufficiently public to create ownership rights in the mark. First, the distribution was widespread, and there is evidence that members of the targeted public actually associated the mark Coolmail with the Software to which it was affixed. Darrah made the software available not merely to a discrete or select group (such as friends and acquaintances, or at a trade show with limited attendance), but to numerous end-users via the Internet. The Software was posted under a filename bearing the “Coolmail” mark on a site accessible to anyone who had access to the Internet. End-users communicated with Darrah regarding the Software by referencing the “Coolmail” mark in their e-mails. Appellants argue that only technically-skilled UNIX-users made use of the Software, but there is no evidence that they were so few in number to warrant a finding of de minimis use.

Third, the mark served to identify the source of the Software. The “Coolmail” mark appeared in the subject field and in the text of the announcement accompanying each release of the Software, thereby distinguishing the Software from other programs that might perform similar functions available on the Internet or sold in software compilations.³⁶ The announcements also apparently indicated that Darrah was the “Author/Maintainer of Coolmail” and included his e-mail address. The user manual also indicated that the Software was named “Coolmail.”³⁷ The German company S.u.S.E. was able to locate Darrah in order to request permission to use his Software in its product under the mark “Coolmail.” Appellants do not assert that S.u.S.E. was unaware that the Software was called “Coolmail” when it contacted Darrah.

Fourth, other potential users of the mark had notice that the mark was in use in connection with Darrah’s Software. In investigating whether the mark Coolmail existed before submitting its trademark registration application for its e-mail service, Planetary Motion was able to discover that Darrah was using the mark to designate his Software product.

Fifth, the Software was incorporated into several versions of a product that was in fact sold worldwide and specifically attributed ownership of the Software to Darrah under the “Coolmail” mark. Any individual using the S.u.S.E. product, or competitor of S.u.S.E., that wanted to know the source of the program that performed the e-mail notification function, could do so by referring to the user manual accompanying the product.³⁸ There is no support for the argument that for a trademark in software to be valid, the mark must appear on the box containing the product incorporating it, that the mark must be displayed on the screen when the program is running, or that the software bearing the mark be a selling point for the product into which it is incorporated. There is no requirement that the public come to associate a mark with a product in any particular way or that the public be passive viewers of a mark for a sufficient public association to arise.

Sixth, software is commonly distributed without charge under a GNU General Public License. The sufficiency of use should be determined according to the customary practices of a particular industry. See S. Rep. 100-515 at 44 (1988) (“The committee intends that the revised definition of ‘use in commerce’ see note 13, supra be interpreted to mean commercial use which is typical in a particular industry.”) (emphasis added). That the Software had been distributed pursuant to a GNU General Public License does not defeat trademark ownership, nor does this in any way compel a finding that Darrah abandoned his rights in trademark. Appellants misconstrue the function of a GNU General Public License. Software distributed pursuant to such a license is not necessarily ceded to the public domain and the licensor purports to retain ownership rights, which may or may not include rights to a mark.³⁹

Appellants cite Heinemann v. General Motors Corp., 342 F. Supp. 203 (N.D. Ill. 1972), aff’d, 478 F.2d 1405 (7th Cir. 1973), for the proposition that Darrah was a “hobbyist” unworthy of common law trademark protection. Heinemann is factually distinguishable from the case at hand. The plaintiff in Heinemann used a mark in connection with his automobile before an automobile manufacturer independently had adopted the same name for a new model. The court held that the plaintiff had not established common law ownership rights based on two findings. First, the court found that because Heinemann’s purpose in using the mark was to “open at a later date an automobile equipment shop which would have capitalized upon the slogan,” he merely attempted to “reserve a trade or service mark pending the creation of a trade or business . . . .” 342 F. Supp. at 207. The court reasoned as follows:

While the law does not require a nationwide business; an old, established business; or even a profitable business for the acquisition of property interests in trade or service marks, it does require a presently existing trade or business for such acquisition. The exhibits disclose that Plaintiff had only a desire to open a business in futuro. To hold otherwise would make a trade mark a property right in gross, instead of a right appurtenant.

Id. (emphasis in original). The Heinemann court also found that plaintiff Heinemann’s activities consisted merely of occasionally racing or displaying the automobile at fairs as a hobby, as evidenced by his testimony that he was employed at an oil company. Id. Here, Darrah did not attempt to “warehouse” the mark by promoting a product he merely intended to develop and distribute at a later date. Darrah’s use of the mark to designate the distributed Software and each subsequent version thereof indicates that his use was not mere sporadic or token use.⁴⁰ Furthermore, unlike Heinemann, Darrah activities pertained to his chosen profession. Darrah is employed as a computer systems administrator, which entails the management and oversight of computer networks and systems as well as the development of software in support thereof.

Appellants also rely on DeCosta v. Columbia Broad. Sys., Inc., 520 F.2d 499, 513 (1st Cir. 1975), cert. denied, 423 U.S. 1073 (1976), to argue that Darrah is an eleemosynary individual and therefore unworthy of protection under unfair competition laws. [. . .] Common law unfair competition protection extends to non-profit organizations because they nonetheless engage in competition with other organizations.⁴¹ See Girls Clubs of Am., Inc. v. Boys Clubs of Am., Inc., 683 F. Supp. 50 (S.D.N.Y. 1988), aff’d, 859 F.2d 148 (2d Cir.). Thus, an eleemosynary individual that uses a mark in connection with a good or service may nonetheless acquire ownership rights in the mark if there is sufficient evidence of competitive activity.⁴²

Here, Darrah’s activities bear elements of competition, notwithstanding his lack of an immediate profit-motive. By developing and distributing software under a particular mark, and taking steps to avoid ceding the Software to the public domain, Darrah made efforts to retain ownership rights in his Software and to ensure that his Software would be distinguishable from other developers who may have distributed similar or related Software. R2-47-Exh. 3 at 67. Competitive activity need not be fueled solely by a desire for direct monetary gain. Darrah derived value from the distribution because he was able to improve his Software based on suggestions sent by end-users. Just as any other consumers, these end-users discriminate among and share information on available software. It is logical that as the Software improved, more end-users used his Software, thereby increasing Darrah’s recognition in his profession and the likelihood that the Software would be improved even further.

In light of the foregoing, the use of the mark in connection with the Software constitutes significant and substantial public exposure of a mark sufficient to have created an association in the mind of public.

II. Likelihood of Confusion

The district court supported its determination of “likelihood of confusion” with the following findings: (1) the mark used by Planetary Motion(“Coolmail”) is “essentially the same” as that used by Techsplosion (“CoolMail”)⁴³; (2) both marks are used in connection with e-mail services; (3) both plaintiff and defendants serve e-mail customers via the Internet; and (4) both use the Internet to promote their services. R2-62-7.⁴⁴ Appellants do not dispute the accuracy of these findings. Rather, Appellants claim the district court improperly based its analysis on a comparison of the parties’ respective e-mail services, rather than on a comparison of Techsplosion’s “CoolMail” e-mail service to the “Coolmail” Software. Appellants argue that the latter comparison is required because Planetary Motion acquired its rights to the “Coolmail” mark by assignment of rights in Darrah’s Software, and under the “natural expansion” doctrine this is a use unrelated to Planetary Motion’s current use of e-mail services. Thus, Appellants’ argument in essence goes to whether the scope of trademark protection enjoyed by Planetary Motion extends from the initial use (in connection with the Software) to the current use (in connection with Planetary Motion’s e-mail services).

The scope of protection enjoyed by a trademark owner is not restricted to the owner’s original use. The “natural expansion” doctrine is applied to determine the proper scope of protection where a mark owner’s previous use differs from its current use, and the junior use intervenes. Under this doctrine, the first trademark owner’s rights are limited to goods on which the mark has already been used or that lie within the realm of natural expansion; “this appears to be no more than a specific application of the familiar ‘related goods’ test.” J. McCarthy, § 24:20.⁴⁵ See also Carnival, 187 F.3d at 1310-11.

The court in Tally-Ho explained that a senior user’s rights “may extend into uses in ‘related’ product or service markets (termed the ‘related goods doctrine’),” and that “an owner of a common law trademark may use its mark on related products or services and may enjoin a junior user’s use of the mark on such related uses . . . .” 889 F.2d at 1023 (citing J. McCarthy, § 24:1 to 24:12). This rule is limited by equitable considerations. The court in Carnival noted that “ A trademark owner cannot by the normal expansion of its business extend the use or registration of its mark to distinctly different goods or services not comprehended by its previous use . . . where the result could be a conflict with valuable intervening rights established by another through extensive use . . . of the same or similar mark for like or similar goods and services.” 187 F.3d at 1310-11 (citations and internal quotation marks omitted) (emphasis added).

Courts determine the proper scope of protection of a mark in the context of intervening uses by applying the “source or sponsorship” test. Under this test, a trademark owner has “protection against use of its mark on any product or service which would reasonably be thought by the buying public to come from the same source, or thought to be affiliated with, connected with, or sponsored by, the trademark owner.” J. McCarthy, § 24:6. The public perception in this regard is determined at the time the junior user first used the mark on the product or service to which the allegedly infringing mark is affixed.⁴⁶ Carnival, 187 F.3d at 1312. The court in Tally-Ho explained that “related use” is “merely a facet of the likelihood of confusion test and therefore requires an inquiry into the seven factors affecting the likelihood of confusion . . . .”⁴⁷ 889 F.2d at 1027.

We find that the relatedness between e-mail notification software and a service that allows users to check e-mail via telephone line is not so attenuated that the district court mistakenly failed to limit Planetary Motion’s rights in the mark to its use in connection with the Software. Consumers reasonably could attribute the Software and an e-mail service under the same name to the same source for several reasons.⁴⁸ Both the Software and the e-mail service belong to the same general field of commerce, i.e., information technology, and both deal more specifically with e-mail.⁴⁹ Appellants do not dispute Planetary Motion’s contention that major firms in this field sell e-mail software as well as provide e-mail service.⁵⁰ See Darrah Affidavit, R2-46-Exh. 2 at P 34. Both the Software and the e-mail service involve sending messages over the Internet: the former provides a functionality that enables a user with e-mail capability to receive notification of new mail, and the latter enables subscribers to the service to send and receive e-mail. Both the Software and the e-mail service were promoted over the Internet to those who make use of e-mail.

Furthermore, the equities do not necessarily favor Techsplosion.⁵¹ Techsplosion’s “CoolMail” e-mail service had not been in operation for an extended period of time before Planetary Motion entered the market under the name “Coolmail,” and Planetary Motion is not merely attempting to reserve the mark for a future business endeavor. Accordingly, we sustain the district court’s finding of “likelihood of confusion.”

[. . . .]

Conclusion

Accordingly, the district court’s order and final judgment are AFFIRMED, except that the order adopting the magistrate judge’s report and recommendation, with respect to the award of attorney fees, is VACATED.

Discussion

1. At what point did Darrah begin using the mark “Coolmail” in commerce? What needs to be done with open source software in order to constitute “sale or transport in commerce”? Is it enough to publish the code publicly? To publish the code publicly under an open source license? To email the code privately? Does the court suggest that affirmative steps are required to avoiding ceding software to the public domain when publicly distributing software for free?

2. What does it mean to purchase trademark rights in an unregistered trademark? Planetary Motion began using Coolmail after Techsplosion, and purchased rights from Darrah only after the filing of its claims and Techsplosion’s counterclaims. What effect does this have in the analysis?

Fair Use Defense to Trademark Infringement: Nominative Use

In trademark law, nominative use is one of the most important balances between consumer protection and free expression. Nominative use permits the use of a trademark – even in commercial contexts – if it is the most accurate way to refer to a good or service without misleading consumers as to its source.

The three-part test for nominative use was first laid out in New Kids on the Block:⁵²

[W]here the defendant uses a trademark to describe the plaintiff’s product, rather than its own, we hold that a commercial user is entitled to a nominative fair use defense provided he meets the following three requirements: First, the product or service in question must be one not readily identifiable without the use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.

In an open source context, an example of a possible nominative use could be listing the name of a library as a dependency of software you are distributing.

Project forking’s naming conventions are another area of possible nominative use, although it remains a gray area. ⁵³ Consider how, when you fork an original project on GitHub, the result is that you have a different version of the source code from that project copied into your own account at a URL which probably reads “github.com/[yourusername]/[originalprojectname].” The original project name could conceivably be trademarked. Does this mean that all other users should be prevented from forking that project, or that they should have to fork it with a changed project name?

Concern and confusion abounds on discussion boards about the issue of using trademarks in project forking. In one thread a non-attorney’s top-voted answer recommends that a user register their project name as a trademark “because then people are required to get your permission before re-using the name.”⁵⁴ While there is no definitive case law on trademarks and project forking conventions, the concept of nominative use can provide more general guidance as to the permissionless use of trademarked names.

Nominative use prevents trademark holders from depleting general language by monopolizing every use of a word.⁵⁵ Nominative use has many parallels to the fair use doctrine in copyright law, and is sometimes referred to as nominative trademark fair use. Both trademark nominative use and copyright fair use permit context-specific use of intellectual property without the IP owner’s permission in order to balance the interests of IP owners against necessary and natural uses.⁵⁶ The Ninth Circuit Court of Appeals provided an illustrative example in New Kids: “one might refer to the ‘two-time world champions’ or ‘the professional basketball team from Chicago,’ but it’s far simpler (and more likely to be understood) to refer to the Chicago Bulls.”⁵⁷

Playboy Enters. v. Welles applies nominative use analysis to 1981 Playmate of the Year model Terri Welles’s use of Playboy Enterprise’s trademarked terms on her website and its metadata tags. As you read, consider: did Playboy have the right to prevent her from accurately proclaiming that she has received the designation of Playmate of the Year? Was Ms. Welles permitted to use their trademarks to promote her own competing website without authorization?

Playboy Enters. v. Welles

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279 F.3d 796 (9th Cir. 2002)⁵⁸

Appeal from the United States District Court for the Southern District of California. D.C. No. CV-98-00413-JNK. Judith N. Keep, Chief District Judge, and Robert J. Bryan, District Judge, Presiding.

T.G. NELSON, Circuit Judge:

Playboy Enterprises, Inc. (PEI), appeals the district court’s grant of summary judgment as to its claims of trademark infringement, unfair competition, and breach of contract against Terri Welles; Terri Welles, Inc.; Pippi, Inc.; and Welles’ current and former “webmasters,” Steven Huntington and Michael Mihalko. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm in part and reverse in part.

[. . . .]

I.

Background

Terri Welles was on the cover of Playboy in 1981 and was chosen to be the Playboy Playmate of the Year for 1981. Her use of the title “Playboy Playmate of the Year 1981,” and her use of other trademarked terms on her website are at issue in this suit. During the relevant time period, Welles’ website offered information about and free photos of Welles, advertised photos for sale, advertised memberships in her photo club, and promoted her services as a spokesperson. A biographical section described Welles’ selection as Playmate of the Year in 1981 and her years modeling for PEI. After the lawsuit began, Welles included discussions of the suit and criticism of PEI on her website and included a note disclaiming any association with PEI.⁵⁹

PEI complains of four different uses of its trademarked terms on Welles’ website: (1) the terms “Playboy “and “Playmate” in the metatags of the website;⁶⁰ (2) the phrase “Playmate of the Year 1981” on the masthead of the website; (3) the phrases “Playboy Playmate of the Year 1981 “and “Playmate of the Year 1981” on various banner ads, which may be transferred to other websites; and (4) the repeated use of the abbreviation “PMOY ‘81” as the watermark on the pages of the website.⁶¹ PEI claimed that these uses of its marks constituted trademark infringement, dilution, false designation of origin, and unfair competition. The district court granted defendants’ motion for summary judgment. PEI appeals the grant of summary judgment on its infringement and dilution claims. We affirm in part and reverse in part.

[. . . .]

A. Trademark Infringement

Except for the use of PEI’s protected terms in the wallpaper of Welles’ website, we conclude that Welles’ uses of PEI’s trademarks are permissible, nominative uses. They imply no current sponsorship or endorsement by PEI. Instead, they serve to identify Welles as a past PEI “Playmate of the Year.”⁶²

We articulated the test for a permissible, nominative use in New Kids On The Block v. New America Publishing, Inc.⁶³ The band, New Kids On The Block, claimed trademark infringement arising from the use of their trademarked name by several newspapers. The newspapers had conducted polls asking which member of the band New Kids On The Block was the best and most popular.⁶⁴ The papers’ use of the trademarked term did not fall within the traditional fair use doctrine. Unlike a traditional fair use scenario, the defendant newspaper was using the trademarked term to describe not its own product, but the plaintiff’s.⁶⁵ Thus, the factors used to evaluate fair use were inapplicable.⁶⁶ The use was nonetheless permissible, we concluded, based on its nominative nature.

We adopted the following test for nominative use:

First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.⁶⁷

We noted in New Kids that a nominative use may also be a commercial one.⁶⁸

In cases in which the defendant raises a nominative use defense, the above three-factor test should be applied instead of the test for likelihood of confusion set forth in Sleekcraft.⁶⁹ The three-factor test better evaluates the likelihood of confusion in nominative use cases. When a defendant uses a trademark nominally, the trademark will be identical to the plaintiff’s mark, at least in terms of the words in question. Thus, application of the Sleekcraft test, which focuses on the similarity of the mark used by the plaintiff and the defendant, would lead to the incorrect conclusion that virtually all nominative uses are confusing. The three-factor test – with its requirements that the defendant use marks only when no descriptive substitute exists, use no more of the mark than necessary, and do nothing to suggest sponsorship or endorsement by the mark holder –better addresses concerns regarding the likelihood of confusion in nominative use cases.

We group the uses of PEI’s trademarked terms into three for the purpose of applying the test for nominative use. First, we analyze Welles’ use of the terms in headlines and banner advertisements. We conclude that those uses are clearly nominative. Second, we analyze the use of the terms in the metatags for Welles’ website, which we conclude are nominative as well. Finally, we analyze the terms as used in the wallpaper of the website. We conclude that this use is not nominative and remand for a determination of whether it infringes on a PEI trademark.

1. Headlines and banner advertisements.

To satisfy the first part of the test for nominative use, “the product or service in question must be one not readily identifiable without use of the trademark[.]”⁷⁰ This situation arises “when a trademark also describes a person, a place or an attribute of a product”⁷¹ and there is no descriptive substitute for the trademark. In such a circumstance, allowing the trademark holder exclusive rights would allow the language to “be depleted in much the same way as if generic words were protectable.”⁷² In New Kids, we gave the example of the trademarked term, “Chicago Bulls.”⁷³ We explained that “one might refer to the ‘two-time world champions’ or’ the professional basketball team from Chicago,’ but it’s far simpler (and more likely to be understood) to refer to the Chicago Bulls.” Moreover, such a use of the trademark would “not imply sponsorship or endorsement of the product because the mark is used only to describe the thing, rather than to identify its source.”⁷⁴ Thus, we concluded, such uses must be excepted from trademark infringement law.

The district court properly identified Welles’ situation as one which must also be excepted. No descriptive substitute exists for PEI’s trademarks in this context. The court explained:

There is no other way that Ms. Welles can identify or describe herself and her services without venturing into absurd descriptive phrases. To describe herself as the “nude model selected by Mr. Hefner’s magazine as its number-one prototypical woman for the year 1981” would be impractical as well as ineffectual in identifying Terri Welles to the public.⁷⁵

We agree. Just as the newspapers in New Kids could only identify the band clearly by using its trademarked name, so can Welles only identify herself clearly by using PEI’s trademarked title.

The second part of the nominative use test requires that “only so much of the mark or marks may be used as is reasonably necessary to identify the product or service[.]”⁷⁶ New Kids provided the following examples to explain this element: “[A] soft drink competitor would be entitled to compare its product to Coca-Cola or Coke, but would not be entitled to use Coca-Cola’s distinctive lettering.”⁷⁷ Similarly, in a past case, an auto shop was allowed to use the trademarked term “Volkswagen” on a sign describing the cars it repaired, in part because the shop “did not use Volkswagen’s distinctive lettering style or color scheme, nor did he display the encircled ‘VW’ emblem.”⁷⁸ Welles’ banner advertisements and headlines satisfy this element because they use only the trademarked words, not the font or symbols associated with the trademarks.

The third element requires that the user do “nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.”⁷⁹ As to this element, we conclude that aside from the wallpaper, which we address separately, Welles does nothing in conjunction with her use of the marks to suggest sponsorship or endorsement by PEI. The marks are clearly used to describe the title she received from PEI in 1981, a title that helps describe who she is. It would be unreasonable to assume that the Chicago Bulls sponsored a website of Michael Jordan’s simply because his name appeared with the appellation “former Chicago Bull.” Similarly, in this case, it would be unreasonable to assume that PEI currently sponsors or endorses someone who describes herself as a “Playboy Playmate of the Year in 1981.” The designation of the year, in our case, serves the same function as the “former” in our example. It shows that any sponsorship or endorsement occurred in the past.⁸⁰

In addition to doing nothing in conjunction with her use of the marks to suggest sponsorship or endorsement by PEI, Welles affirmatively disavows any sponsorship or endorsement. Her site contains a clear statement disclaiming any connection to PEI. Moreover, the text of the site describes her ongoing legal battles with the company.⁸¹

For the foregoing reasons, we conclude that Welles’ use of PEI’s marks in her headlines and banner advertisements is a nominative use excepted from the law of trademark infringement.

2. Metatags.

Welles includes the terms “playboy” and “playmate” in her metatags. Metatags describe the contents of a website using keywords. Some search engines search metatags to identify websites relevant to a search.⁸² Thus, when an internet searcher enters “playboy” or “playmate” into a search engine that uses metatags, the results will include Welles’ site.⁸³ Because Welles’ metatags do not repeat the terms extensively, her site will not be at the top of the list of search results. Applying the three-factor test for nominative use, we conclude that the use of the trademarked terms in Welles’ metatags is nominative.

As we discussed above with regard to the headlines and banner advertisements, Welles has no practical way of describing herself without using trademarked terms. In the context of metatags, we conclude that she has no practical way of identifying the content of her website without referring to PEI’s trademarks.

A large portion of Welles’ website discusses her association with Playboy over the years. Thus, the trademarked terms accurately describe the contents of Welles’ website, in addition to describing Welles. Forcing Welles and others to use absurd turns of phrase in their metatags, such as those necessary to identify Welles, would be particularly damaging in the internet search context. Searchers would have a much more difficult time locating relevant websites if they could do so only by correctly guessing the long phrases necessary to substitute for trademarks. We can hardly expect someone searching for Welles’ site to imagine the same phrase proposed by the district court to describe Welles without referring to Playboy – “the nude model selected by Mr. Hefner’s organization . . . .” Yet if someone could not remember her name, that is what they would have to do. Similarly, someone searching for critiques of Playboy on the internet would have a difficult time if internet sites could not list the object of their critique in their metatags.

There is simply no descriptive substitute for the trademarks used in Welles’ metatags. Precluding their use would have the unwanted effect of hindering the free flow of information on the internet, something which is certainly not a goal of trademark law.⁸⁴ Accordingly, the use of trademarked terms in the metatags meets the first part of the test for nominative use.

We conclude that the metatags satisfy the second and third elements of the test as well. The metatags use only so much of the marks as reasonably necessary⁸⁵ and nothing is done in conjunction with them to suggest sponsorship or endorsement by the trademark holder. We note that our decision might differ if the metatags listed the trademarked term so repeatedly that Welles’ site would regularly appear above PEI’s in searches for one of the trademarked terms.⁸⁶

3. Wallpaper/watermark.

The background, or wallpaper, of Welles’ site consists of the repeated abbreviation “PMOY ‘81,” which stands for “Playmate of the Year 1981.”⁸⁷ Welles’ name or likeness does not appear before or after “PMOY ‘81.” The pattern created by the repeated abbreviation appears as the background of the various pages of the website. Accepting, for the purposes of this appeal, that the abbreviation “PMOY” is indeed entitled to protection, we conclude that the repeated, stylized use of this abbreviation fails the nominative use test.

The repeated depiction of “PMOY ‘81” is not necessary to describe Welles. “Playboy Playmate of the Year 1981” is quite adequate. Moreover, the term does not even appear to describe Welles – her name or likeness do not appear before or after each “PMOY ‘81.” Because the use of the abbreviation fails the first prong of the nominative use test, we need not apply the next two prongs of the test.

Because the defense of nominative use fails here, and we have already determined that the doctrine of fair use does not apply, we remand to the district court. The court must determine whether trademark law protects the abbreviation “PMOY,” as used in the wallpaper.

B. Trademark Dilution

The district court granted summary judgment to Welles as to PEI’s claim of trademark dilution. We affirm on the ground that all of Welles’ uses of PEI’s marks, with the exception of the use in the wallpaper which we address separately, are proper, nominative uses. We hold that nominative uses, by definition, do not dilute the trademarks. Federal law provides protection against trademark dilution:

The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person’s commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark. . . .⁸⁸

Dilution, which was not defined by the statute, has been described by the courts as “the gradual ‘whittling away’ of a trademark’s value.”⁸⁹ Traditionally, courts have recognized two forms of dilution: blurring and tarnishment. Blurring occurs when another’s use of a mark creates “the possibility that the mark will lose its ability to serve as a unique identifier of the plaintiff’s product.”⁹⁰ Tarnishment, on the other hand, occurs “when a famous mark is improperly associated with an inferior or offensive product or service.”⁹¹ As we recognized in Panavision, dilution may occur through uses on the internet as well as elsewhere.⁹²

Dilution works its harm not by causing confusion in consumers’ minds regarding the source of a good or service, but by creating an association in consumers’ minds between a mark and a different good or service.⁹³ As explained in a First Circuit case, in dilution (as compared to infringement) “an entirely different issue is at stake –not interference with the source signaling function but rather protection from an appropriation of or free riding on the investment [the trademark holder] has made in its [trademark].”⁹⁴ Thus, for example, if a cocoa maker began using the “Rolls Royce” mark to identify its hot chocolate, no consumer confusion would be likely to result. Few would assume that the car company had expanded into the cocoa making business. However, the cocoa maker would be capitalizing on the investment the car company had made in its mark. Consumers readily associate the mark with highly priced automobiles of a certain quality. By identifying the cocoa with the Rolls Royce mark, the producer would be capitalizing on consumers’ association of the mark with high quality items. Moreover, by labeling a different product “Rolls Royce,” the cocoa company would be reducing the ability of the mark to identify the mark holder’s product. If someone said, “I’m going to get a Rolls Royce,” others could no longer be sure the person was planning on buying an expensive automobile. The person might just be planning on buying a cup of cocoa. Thus, the use of the mark to identify the hot chocolate, although not causing consumer confusion, would cause harm by diluting the mark.

Uses that do not create an improper association between a mark and a new product but merely identify the trademark holder’s products should be excepted from the reach of the anti-dilution statute. Such uses cause no harm. The anti-dilution statute recognizes this principle and specifically excepts users of a trademark who compare their product in “commercial advertising or promotion to identify the competing goods or services of the owner of the famous mark.”⁹⁵

For the same reason uses in comparative advertising are excepted from anti-dilution law, we conclude that nominative uses are also excepted. A nominative use, by definition, refers to the trademark holder’s product. It does not create an improper association in consumers’ minds between a new product and the trademark holder’s mark.

When Welles refers to her title, she is in effect referring to a product of PEI’s. She does not dilute the title by truthfully identifying herself as its one-time recipient any more than Michael Jordan would dilute the name “Chicago Bulls” by referring to himself as a former member of that team, or the two-time winner of an Academy Award would dilute the award by referring to him or herself as a “two-time Academy Award winner.” Awards are not diminished or diluted by the fact that they have been awarded in the past.

Similarly, they are not diminished or diluted when past recipients truthfully identify themselves as such. It is in the nature of honors and awards to be identified with the people who receive them. Of course, the conferrer of such honors and awards is free to limit the honoree’s use of the title or references to the award by contract. So long as a use is nominative, however, trademark law is unavailing.

The one exception to the above analysis in this case is Welles’ use of the abbreviation “PMOY” on her wallpaper. Because we determined that this use is not nominative, it is not excepted from the anti-dilution provisions. Thus, we reverse as to this issue and remand for further proceedings. We note that if the district court determines that” PMOY” is not entitled to trademark protection, PEI’s claim for dilution must fail. The trademarked term, “Playmate of the Year” is not identical or nearly identical to the term “PMOY.” Therefore, use of the term “PMOY” cannot, as a matter of law, dilute the trademark “Playmate of the Year.”⁹⁶

[. . . .]

IV.

Conclusion

For the foregoing reasons, we affirm the district court’s grant of summary judgment as to PEI’s claims for trademark infringement and trademark dilution, with the sole exception of the use of the abbreviation “PMOY.” We reverse as to the abbreviation and remand for consideration of whether it merits protection under either an infringement or a dilution theory. We also affirm as to PEI’s claims for breach of contract. In a separate memorandum disposition, we resolve the issues raised by Welles’ cross-appeal.

AFFIRMED in part, REVERSED and REMANDED in part. Costs to Terri Welles and Terri Welles, Inc.

Discussion

1. Consider how the New Kids on the Block factors apply to a hypothetical project name which uses a trademark. Is the use of the original project name a descriptive reference to the original project? Would the original project would be readily identifiable without the use of the trademark? Does it use more of the trademarked word than is necessary? Would the use of the trademarked word suggest sponsorship or endorsement by the original trademark holder?

2. How relevant is the likelihood of confusion of consumers based on convention? For example, consider to what extent the reuse of a project name in a fork may indicate to others users that the fork is officially affiliated or endorsed by the original project. Arguably the GitHub community at large will be so familiar with the functionality and naming conventions of project forking that reuse of an original project name in a project fork would not confuse users as to any affiliation or endorsement. Is the GitHub community the relevant group of consumers? Would that likelihood of confusion be determinative? Would the balance change if a project has a policy governing when project forks may use the original project name?

3. What are the reasons why a project forker may want to refer back to the original project? As assessed in Welles, are there adequate “descriptive substitutes” or would changing forking norms force users to “use absurd turns of phrases” in a way that would be “particularly damaging” and “have the unwanted effect of hindering the free flow of information on the internet”?⁹⁷ Would a project detriment its own third party contributions by strictly prohibiting the use of its name in project forks?

4. In addition to the nominative use exception to trademark infringement, there are also uses of trademarked words which are not considered “trademark use.” For example, an entirely non-commercial use of trademarked words should not be considered “trademark use.” Additionally, the functionality doctrine limits the enforceability of trademarks in order to curb abuse. Autodesk, Inc. v. Dassault Systemes Solidworks Corp. held that file extensions are functional and could not be trademarked, reasoning:⁹⁸

   [N]o one can have rights to a trademark that is functional, because trademark law is meant to promote competition by protecting a firm’s reputation, and not to inhibit competition by allowing a trademark owner to control and monopolize a useful and functional product feature. Indeed, without the functionality doctrine, trademarks could be abused to provide the protections of patents, but with potentially limitless duration.

   Debate continues to rage over whether hashtags in social media are purely functional objects or source identifiers.⁹⁹ What are other possible functional object uses in open source projects?

License Terms’ Bearing on Trademark Use

This section will provide excerpts of popular open source licenses, ranging from a license that does not address trademark rights, to those that implicitly address them, to those that explicitly disclaim any grant of trademark rights.

MIT

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Excerpt from the MIT License¹⁰⁰

Copyright <YEAR> <COPYRIGHT HOLDER>

Permission is hereby granted, free of charge, to any person obtaining a copy of this software and associated documentation files (the “Software”), to deal in the Software without restriction, including without limitation the rights to use, copy, modify, merge, publish, distribute, sublicense, and/or sell copies of the Software, and to permit persons to whom the Software is furnished to do so, subject to the following conditions:

The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software.

THE SOFTWARE IS PROVIDED “AS IS”, WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN THE SOFTWARE.

Discussion

1. Do you see any terms in this license that explicitly address trademark rights? Could trademarks be implied?

2. A number of message board discussions are concerned about losing trademark rights in a logo if they release a project under an MIT license.¹⁰¹ Could logos also be protected by other intellectual property rights? If an entity added its logo to an open source project it published as an image within the library, and applied the MIT license to the project, what legal ramifications would this have for the logo?

BSD-3-Clause

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Excerpt from the 3-Clause BSD License¹⁰²

Copyright

[. . .]

1. Redistributions of source code must retain the above copyright notice, this list of conditions and the following disclaimer.

[. . .]

3. Neither the name of the copyright holder nor the names of its contributors may be used to endorse or promote products derived from this software without specific prior written permission.

[. . . .]

Discussion

1. In this context, what does the “name of the copyright holder” mean? Could that be the name of the entity releasing the software? If so, based on your reading of Planetary Motion, could the project name also be a trademark? Consider the application of the common law requirements stated by Planetary Motion: use in commerce and priority of ownership.

2. If Company released open source software Project, and Independent Engineer builds on that software to facilitate illegal transactions online, would clause 3 prevent Independent Engineer from using the Company name for his additions?

3. Clause 1 of the BSD 3-clause license requires all redistributions to reproduce the above copyright notice, which could include the original author’s name. How does this requirement interact with Section 3’s prohibition against using the copyright holder to endorse or promote products? Could republishing the license in derivative software itself appear to be endorsement or affiliation?

4. As a practical matter, what would be the most effective way for an open source project to establish acceptable use guidelines for trademarks, assuming that the project owners wish to permit certain uses? Based on your own experiences and your understanding of the cases in this chapter, consider the convenient accessibility of including guidelines in the license itself versus the flexibility of maintaining a separate trademark policy document.

PHP-3.0

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Excerpt from the PHP License, version 3.0¹⁰³

4. Products derived from this software may not be called “PHP”, nor may “PHP” appear in their name, without prior written permission from group@php.net. You may indicate that your software works in conjunction with PHP by saying “Foo for PHP” instead of calling it “PHP Foo” or “phpfoo”

Discussion

1. Based on your understanding of nominative use from Playboy, is it possible for PHP to dictate acceptable use of their name in this manner? Would the use of “PHP” without prior written permission still be legally defensible in some contexts? Would a project named “PHPabulous” be permissible nominative use or trademark infringement? Does nominative use overcome more restrictive license terms?

2. If written permission was granted for one project to use PHP, would all subsequent contributors also require written permission for PHP to appear in forks and patches of the permitted PHP-named project? Is there a separate goodwill value in accepting the preferences of the license author regardless of whether they are enforceable? Consider all of Facebook’s reasons for naming its PHP transpiler “HipHop for PHP” in accordance with the conventions stated in this license.¹⁰⁴

3. How does the PHP license’s naming convention interact with other licenses and naming conventions? Could PHP-licensed software be combined with GPL licensed software and then redistributed? Could this combination be distributed as binary? Could it be combined into software with PHP in its title?

Apache 2.0

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Excerpt from the Apache License, Version 2.0, January 2004¹⁰⁵

6. Trademarks. This License does not grant permission to use the trade names, trademarks, service marks, or product names of the Licensor, except as required for reasonable and customary use in describing the origin of the Work and reproducing the content of the NOTICE file.

Discussion

1. Is it necessary for the Apache license to explicitly permit uses of the names and marks “as required for reasonable and customary use in describing the origin of the Work” or does this necessarily overlap with the legal defense of nominative use? Is this intended as guidance for trademark jurisdictions that lack the nominative use defense?

2. As a practical matter, is there additional information that licensees might want about the trademark permissions granted or not granted under the Apache license? For example, the Apache Foundation itself publishes a trademark policy and describes what it considers to be its trademarks.¹⁰⁶

GNU GPL v.3

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Excerpt from the GNU General Public License, Version 3¹⁰⁷

Notwithstanding any other provision of this License, for material you add to a covered work, you may (if authorized by the copyright holders of that material) supplement the terms of this License with terms:

• a) Disclaiming warranty or limiting liability differently from the terms of sections 15 and 16 of this License; or
• b) Requiring preservation of specified reasonable legal notices or author attributions in that material or in the Appropriate Legal Notices displayed by works containing it; or
• c) Prohibiting misrepresentation of the origin of that material, or requiring that modified versions of such material be marked in reasonable ways as different from the original version; or
• d) Limiting the use for publicity purposes of names of licensors or authors of the material; or
• e) Declining to grant rights under trademark law for use of some trade names, trademarks, or service marks; or
• f) Requiring indemnification of licensors and authors of that material by anyone who conveys the material (or modified versions of it) with contractual assumptions of liability to the recipient, for any liability that these contractual assumptions directly impose on those licensors and authors.

All other non-permissive additional terms are considered “further restrictions” within the meaning of section 10. [. . . .]

Discussion

1. If a license provision is merely optional, as with the trademark section above, does that lead to license proliferation?¹⁰⁸ Could the inclusion of the optional trademark provision complicate license scanning?

2. Apart from section “e,” which explicitly mentions trademark, are there other provisions which could bear on trademark protections?

   • Based on your understanding of Freecycle how might subsection “c” serve a trademark function by protecting the source identifier? Is merely suggesting that a licensor can adopt additional trademark protections adequate control over the uses associated with the licensed marks?

   • Based on your reading of Playboy Enters. v. Welles, how could nominative use interact with the intent of subsection “d” to limit “the use for publicity purposes of names of licensors or authors of the material”?

Trademark Usage Guidelines and Enforcement Policies

There are many reasons for a commercial actor to develop, register, and police its trademarks. The careful selection of a brand name will forestall accusations that its brand infringes another trademark. Consistent, regimented use of the brand in commerce should permit the brand to obtain trademark status. Registration of the brand as a trademark will deter infringement, prevent the registration of similar trademarks, and facilitate enforcement efforts. Policing the manner in which others use the trademark will help retain the strength of the mark. Balanced enforcement of a trademark can preserve the distinctiveness of an exclusive source identifier while allowing for legitimate fair uses.

Organizations often maintain trademark policies that establish the organization’s approach toward trademark enforcement. The Wikimedia Foundation is one such organization, and it has published its trademark enforcement policy publicly at https://wikimediafoundation.org/wiki/Trademark_policy. This policy provides valuable insight into the thinking of an organization engaged in the collaborative production of open content.

Wikimedia Foundation Trademark Policy

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A notable feature of the Wikimedia Foundation’s enforcement policy is that there are very few uses of the trademark that the policy seeks to prevent.¹⁰⁹ The policy explicitly permits uses of the trademarks to create mimicking sites if they are clearly parodies. This enforcement carve-out is consistent with trademark nominative use precedent,¹¹⁰ but is not behavior that every organization would want to encourage.

Excerpt:

3 When you may use the Wikimedia marks without asking us

3.1 Use of trademarks on the Wikimedia sites

You may use and remix the Wikimedia marks on the Wikimedia sites as you please.

3.2 Community-focused events

You may use the trademarks for events that promote our mission and are intended to be predominantly attended by Wikimedia community members. These are events like hackathons, editor meetups, photographer excursions, and WikiCons.

For example, you can put the Wikipedia puzzle globe logo on banners and posters at an edit-a-thon you have organized.

GLAM initiatives and photo contests require a Quick License under Section 4.1. This provision does not allow you to use the marks for fundraising.

3.3 Outreach and recruiting new contributors

You may use the marks consistent with our mission to educate people about the Wikimedia sites and to recruit new contributors, as long as you make it clear that you do not work for the Wikimedia Foundation. You can create educational material or banners to decorate a public fair stand or to publicize an edit-a-thon. This provision does not allow you to use the marks for fundraising.

3.4 Community logo use

The Wikimedia Community logo can be used freely. But you may not file trademark applications incorporating the logo. The Wikimedia community wants to ensure that the logo remains available for all to use.

3.5 Discussing something other than Wikimedia sites (fair use)

Wordmarks can sometimes have a primary meaning, in addition to representing a brand (like the words “apple” or “facebook”). Our wordmarks were not real words before our projects were created. But we will interpret fair use broadly to include the use of our wordmarks when you clearly mean to talk about something other than the Wikimedia sites.

3.6 Refer to Wikimedia sites (nominative use)

You can use the non-stylized wordmarks (e.g., “Wikipedia”) to describe: * A Wikimedia site or another aspect of the Wikimedia movement in a text (e.g., “I love reading about coal balls on Wikipedia”). * A derivative work of Wikimedia content in a way that is not misleading (e.g., “the encyclopedic content on this site is derived from Wikipedia”). You may use all Wikimedia marks on your own website as a hyperlink to the Wikimedia sites. The use of logos in hyperlinks should follow the Visual Identity Guidelines (e.g., the marks may be resized, but not modified in any other way).

Here are some other specific cases of nominative use:

3.6.1 News reporting

You may use the Wikimedia marks to make truthful statements about the Wikimedia sites in news reports and commentary.

3.6.2 Personal blogs and social media

You may use the Wikimedia marks to make or illustrate truthful statements about the Wikimedia sites in personal blogs and social media. But please do not do it to imply endorsement by or affiliation with the Wikimedia Foundation. To avoid confusion, do not use the Wikimedia logos in the background, as your profile image, or in the header of your blog, in the name of your blog, or in your social media username. This section is not meant to restrict your use of the Community logo under Section 3.4.

3.6.3 Artistic, scientific, literary, political, and other non-commercial uses

You can use the Wikimedia marks to discuss the Wikimedia sites in artistic, scientific, literary, and political work. But please send us a request if you want to place a Wikimedia mark on the cover of your book, display a Wikimedia mark in a movie, or organize an event or presentation that could be interpreted to be endorsed by the Wikimedia Foundation. For more information, please see Section 4. You may use the marks in satire or jokes. To avoid confusing users that your work is affiliated with the Wikimedia sites, it may be helpful to mark your work as “satire” or “parody.”

4 Special uses that require permission

All uses that are not allowed under Section 3 or prohibited by Section 5 of this policy require a trademark license.

[. . . .]

5 Prohibited uses

5.1. Misleading mirrors and mimicking sites

Please do not create a website that mimics the “look and feel” of a Wikimedia site. This especially applies to imitated Wikipedia articles. If you have a good reason to create a mimicking site, please contact us at trademarks@wikimedia.org.

You do not need to contact us if you just want to use the MediaWiki software to create a wiki or if your mimicking site is clearly a parody.

If you create a mirror, make sure to comply with the relevant licenses for the content. Avoid copying links to Wikimedia policies and contact details. Please do not use the Wikimedia marks in a mirror of a Wikimedia site.

5.2 Linking to non-Wikimedia sites

You may use Wikimedia marks to link to Wikimedia sites only. Please refer to Links to Wikimedia sites if you want to link to a Wikimedia site from your website.

5.3 Misrepresentation

When you use a Wikimedia mark under this policy, please use it to represent only the project for which it stands. Please do not create the impression that your use is in any way endorsed, sponsored by, or is part of the Wikimedia Foundation. This section also applies when you are granted a license to use a mark that doesn’t permit you to suggest such an endorsement.

6 Trademark Misuse

6.1 Reporting misuse

Fighting trademark misuse is very important. We put a lot of effort into going after cases of trademark infringement because we want to protect the valuable trademark rights the community has created. If you see a mark being used in any way that could be infringing, please tell us! Just send an email to legal-tm-vio@wikimedia.org or fill in this form. We really appreciate your help!

6.2 Revoking permission for misuses

We may revoke the right to use the Wikimedia marks under this policy at any time by providing notice in any manner if we determine that a trademark use is inconsistent with our mission or could harm community members, movement organizations, or the Wikimedia Foundation.

Discussion

1. Section 4 of the Trademark Enforcement Policy states that any uses not expressly permitted in Section 3 require a license. Is this enforceable? How well does Section 3 capture nominative fair uses?

Linux Foundation Trademark Usage Guidelines

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The Linux Foundation does not publicly elaborate on its trademark enforcement philosophy but does maintain Trademark Usage Guidelines.¹¹¹ In a similar fashion to Wikimedia, the Linux Foundation includes in its Guidelines an overview of the rights and responsibilities one has when using someone else’s trademarks. This portion of the Guidelines includes admonishments of activities that could be detrimental to the trademarks being used, but is also similar to Wikimedia in that it specifically addresses fair use, including the fact that the law authorizes certain uses of others’ trademarks without permission.

Excerpt:

Rules that Apply to Trademarks In General

There are some basic rules that apply to any use of any trade or service mark that you do not own, including any mark of The Linux Foundation, without the express permission of the owner.

• A trademark should never be used as a verb or noun. A trademark should be used only as an adjective followed by the generic name/noun.
• A trademark should not be used in the plural or possessive form.
• A trademark should not be altered or amended in any way. A mark should not be combined with any other mark, hyphenated, abbreviated or displayed in parts. A trademark that is depicted as two or more words should not be compressed into one word. A logo should not be displayed with color variations, or with other elements superimposed on top of the logo.
• A trademark should not be used as your domain name or as part of your domain name.
• A trademark should not be used as part of your product name.
• A trademark should not be incorporated into your company’s logos or designs.
• A trademark notice should be used on the most prominent and/or first appearance of each mark of The Linux Foundation, and a trademark notice should not be changed. In particular, a ™ should not be changed to an ® in a trademark notice by anyone other than the owner. If you are unsure about whether a mark of The Linux Foundation is registered in your country, please contact us for additional guidance as to what trademark symbol you should use.

There are also some basic rights that everyone has to use any trademark, which are often referred to as “fair use,” and The Linux Foundation does not intend to restrict those rights. You may make fair use of word marks to make true factual statements. But fair use does not permit you to state or imply that the owner of a mark produces, endorses, or supports your company, products, or services. Even when making fair use of a trademark, you should acknowledge the owner of the trademark with a trademark notice, such as the notice displayed on The Linux Foundation project websites.

Rules and Policies Applicable to Marks Owned by The Linux Foundation

In addition to the generally applicable rules discussed above, there are a few specific rules that we ask everyone to follow when using trademarks owned by The Linux Foundation.

• Use the full form of any trademarks (e.g., “The Linux Foundation”) in the first reference in all documents of mass communication, including marketing collateral and web pages. You may then use any abbreviated or short form references (e.g. “TLF”) within the same the document where the full form has already been used.
• Use The Linux Foundation’s trademarks in a form that distinguishes them from the text around them, such as by capitalization, bold or italic fonts, or with quotation marks. Any use of registered trademarks listed above should include the ® symbol immediately after the first usage (e.g., “The Linux Foundation® projects develop open source….”). Any use of unregistered trademarks listed above should include a TM immediately after the first usage (e.g., “The Core Infrastructure Initiative TM community seeks to secure….”)
• Do not use The Linux Foundation trademarks in a manner that would disparage The Linux Foundation or its projects (e.g., untruthful advertising, false/misleading promotional materials, etc.).
• Do not use a The Linux Foundation logo on the cover of a book or magazine without written permission from The Linux Foundation.
• Do not use The Linux Foundation trademarks more prominently than your own company, product or service name.
• Do not use a logo of The Linux Foundation on posters, brochures, signs, websites, or other marketing materials to promote your events, products or services without written permission from The Linux Foundation.
• Do not refer to a product or service as being certified under any of The Linux Foundation’s marks unless your company has successfully undergone the requisite compliance testing and has explicit authorization to use such terms from The Linux Foundation.
• Do not attempt to claim or assert any ownership rights in any mark of The Linux Foundation and do not attempt to register any The Linux Foundation trademark as a trademark, trade name, domain name, or “doing business as” name, alone or (unless specifically licensed) in combination with your own trademarks.

Discussion

1. If someone were to use the Wikimedia Foundation or Linux Foundation’s trademarks with permission, would they be contractually bound to observe the rules the foundations have placed on how their trademarks may be used?

2. Would all of the actions proscribed by the Linux Foundation’s Usage Guidelines constitute prima facie grounds for a trademark infringement suit?

3. The Mozilla Foundation is another organization focused on producing open source software that maintains a public trademark policy, available at https://www.mozilla.org/en-US/foundation/trademarks/policy/. In what ways are these three foundations’ policies similar? In what ways are they distinct? Do the commonalities in these three organizations’ policies establish a consensus for how trademarks should be approached by open source communities?

Pokemon Legal Information Notice

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The Pokemon Company has a trademark policy embedded in a concise Legal Information notice on its website.¹¹² The policy goes further than advertising that the company will police its trademarks aggressively. It asserts a compulsory license scheme whereby a commercial licensee’s distribution of anything containing or derived from the Pokemon Company’s trademarks triggers a royalty-free license of that content to The Pokemon Company.

Legal Information

© 2017 Pokémon. © 1995–2017 Nintendo/Creatures Inc./GAME FREAK inc. Pokémon, Pokémon character names, Nintendo 3DS, Nintendo DS, Wii, Wii U, and Wiiware are trademarks of Nintendo. The YouTube logo is a trademark of Google Inc. Other trademarks are the property of their respective owners.

Distribution in any form and any channels now known or in the future of derivative works based on the copyrighted property trademarks, service marks, trade names and other proprietary property (Fan Art) of The Pokémon Company International, Inc., its affiliates and licensors (Pokémon) constitutes a royalty-free, non-exclusive, irrevocable, transferable, sub-licensable, worldwide license from the Fan Art’s creator to Pokémon to use, transmit, copy, modify, and display Fan Art (and its derivatives) for any purpose. No further consideration or compensation of any kind will be given for any Fan Art. Fan Art creator gives up any claims that the use of the Fan Art violates any of their rights, including moral rights, privacy rights, proprietary rights publicity rights, rights to credit for material or ideas or any other right, including the right to approve the way such material is used. In no uncertain terms, does Pokémon’s use of Fan Art constitute a grant to Fan Art’s creator to use the Pokémon intellectual property or Fan Art beyond a personal, noncommercial home use.

Discussion

1. Are the terms of the Pokemon Company’s Legal Information notice enforceable? What significance does the distinction between copyright and trademark play, if any?

2. Must a creator of Pokemon “Fan Art” be aware of this policy in order to be bound by it in any way?

Notes

Except as otherwise noted, the content of this page is licensed under the CC-BY-4.0 license.