Last month, the Ninth Circuit Court of Appeals ruled that an automobile broker’s use of the following five letters “Lexus” was not trademark infringement. It stated that it was actually a “lawful nominative fair use”.
Farzad and Lisa Tabari are independent, online auto brokers in Southern California who formerly used the domain names “buy-a-lexus.com” and “buyorleaselexus.com”. Toyota Motor Sales USA filed a trademark infringement lawsuit against the Tabaris. Toyota also sought an injunction to prevent use of the Lexus mark.
The District Court concluded that the brokers had infringed Toyota’s mark. That court enjoined use of the Lexus mark in any domain name or metatag. The Tabaris appealed these decisions.
On appeal, the Ninth Circuit reversed the lower court’s decisions. The appellate court stated that consumers looking for a Lexus online are sophisticated enough to know an official Lexus website from the Tabaris sites. The court also affirmed that internet searchers are used to trial and error searches, and as such would not be confused.
Lacking any affirmative suggestion of affiliation or sponsorship, the Ninth Circuit reasoned, simple use of the mark in the domain name would not cause Internet users to believe there is sponsorship or affiliation with Toyota/Lexus.
Quoted from the Ninth Circuit decision, which may be viewed HERE : “The Tabaris are using the term Lexus to describe their business of brokering Lexus automobiles; when they say Lexus, they mean Lexus. We’ve long held that such use of the trademark is a fair use, namely nominative fair use. And fair use is, by definition, not infringement.”
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