United States: Good Faith Is Predicate to Fair Use Trademark Defense

Addressing the issue of the good faith requirement as an element of fair use in a trademark infringement matter, the U.S. Court of Appeals for the Eleventh Circuit held that the standard of good faith is the same as in any other trademark infringement matter – specifically, whether the alleged infringer intended to confuse consumers as to the source or origin of the goods or services. International Stamp Art, Inc. v. United States Postal Service., Case No. 05-13492 (Eleventh Cir. July 18, 2006) (Birch, J. and Carnes, J.).

The plaintiff, International Stamp Art (ISA) was a licensee of the U.S. Postal Service and produced a line of cards, posters and prints. ISA incorporated a perforated design border meant to make each item look like an old postage stamp. The perforated border design was registered by ISA as a trademark with the U.S. Patent and Trademark Office. Both parties stipulated that the registration is incontestable.

Subsequent to ISA’s use, the U.S. Postal Service commenced production of its own line of cards which also featured the perforated design/border. The U.S. Postal Service owned the copyrights for some, but not all, of the stamps that were reproduced. In those instances where it did not own the copyright, use of the design was limited to an exact replication of the original stamp, including the perforated border design that was incorporated in the original. ISA brought an infringement action against the U.S. Postal Service claiming trademark infringement based on its prior use and registration of the perforated border design.

The U.S. Postal Service claimed that its use of the border was a fair use (and therefore not an infringement of ISA’s registration). The district court, ruling in favor of the U.S. Postal Service on summary judgment, found that the U.S. Postal Service’s use of the perforated design was a descriptive, not trademark, use and was done in good faith use. ISA appealed.

The Eleventh Circuit found that in order to establish a fair use defense, a defendant must show that its use of a mark is other than as a trademark, i.e., is a good faith, descriptive use. The court noted that the legal standard for good faith is the same as in other trademark infringement contexts, namely, whether the alleged infringed intended to create confusion among consumers as to the source or origin. The Court found that since the U.S. Postal Service merely produced exact replicates of its original stamps, including the perforated borders, its use was in good faith. In addition, the U.S. Postal Service included its own Eagle trademark on its products to identify the source of the goods and did not attempt to confuse consumers into thinking that its products originated from ISA. The Court noted the lack of probative evidence by ISA that the U.S. Postal Service confused consumers as to the source of the goods. Finally, the court found that the U.S. Postal Service had no other commercially viable option but than to use the perforated borders in many of its cards due to the restrictions on how it could use certain stamp designs for which it did not own the copyrights. As such, the Court affirmed the decision of the District Court and found that the U.S. Postal Service’s use of the perforated design border was a fair use.

Although a trademark may be incontestable, there are still circumstances in which a third party may assert a fair use defense to use of the trademark.

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