Use of another party’s trademark, in connection with the sale of your goods, is likely trademark infringement. What about use of another party’s trademark as part of your internet domain name – is that an infringement? Maybe not. (Toyota Motor Sales, USA v. Farzad Tabari and Lisa Tabari d/b/a Fast Imports)
The Tabaris, husband and wife, are auto brokers. They contact various auto dealers, soliciting price quotes on behalf of their clients. This has the effect of increasing competition between the dealers and, hence, reducing their profit margins. This, of course, did not endear them to the dealers. The bulk of their business pertains to brokering the sale of Lexus automobiles. The Tabaris promoted their business through two websites, buy-a-lexus.com and buyorleaselexus.com.
Toyota Motor Sales, the exclusive U.S. distributor of Lexus automobiles, professed to believe that the Tabaris’ use of “lexus” in their domain names “was likely to cause confusion as to the source of the web site.” They sued, seeking an injunction barring the Tabaris from the use of any domain name including the string “lexus,” but not seeking any damages.
The Tabaris defended themselves pro se – and lost. The District Court granted Toyota Motor Sales their requested injunction and the Tabaris appealed – again, pro se.
The appellate court, the Ninth Circuit Court Of Appeals, vacated the judgment and remanded the case back to the district court on the grounds that the Tabaris had made out a good defense of “nominative fair use:” “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.”
Interestingly, Toyota’s counsel “grudgingly conceded” at oral argument that the injunction granted by the District Court was “plainly overbroad,” but nevertheless argued that Toyota was entitled to the exclusive use of the string “lexus” in domain names “because it spends hundreds of millions of dollars every year making sure that everyone recognizes and understands the word ‘Lexus’.” The Court did not buy this argument, holding that “a large expenditure of money does not in itself create legally protectable rights.” The Court went on to chastise said counsel for “selective memory [which] exceeds the bounds of zealous advocacy” (this was characterized by a concurring judge as a “gratuitous slap at counsel”).
In a final dig at Toyota, the appellate court wrote, “[m]any of the district court’s errors seem to be the result of unevenly-matched lawyering, as Toyota appears to have taken advantage of the fact that the Tabaris appeared pro se. To avoid similar problems on remand, the district court might consider contacting members of the bar to determine if any would be willing to represent the Tabaris at a reduced rate or on a voluntary basis.”
Take that, you Toyota fat cats!
THE LESSON TO BE LEARNED: Don’t count on finding such a sympathetic appellate court; pro se representation is generally a road to ruin.