Orrick Appellate Team Files Cert Petition in U.S. Supreme Court on Major Trademark Issue

September.15.2016

In a case raising vital issues for a host of Internet-related activities, an Orrick appellate team today asked the U.S. Supreme Court to resolve a sharp conflict among the courts of appeals on the proper standard for trademark’s so-called “nominative fair use” doctrine. The cert petition, filed on behalf of defendants Security University and its CEO and founder, Sondra Schneider, urged the Supreme Court to overturn a decision earlier this year by the U.S. Second Circuit Court of Appeals, warning that the standard established by that court undermines the nominative fair use defense.

The nominative fair use doctrine developed to protect the use of another’s trademark for purposes of referring specifically to that trademark or the product it represents—for example, a car mechanic advertising that it can fix a certain make of car, or a cell phone carrier claiming that its 4G coverage is superior to a competitor’s. The petition argues that the proper standard for protecting such uses is the widely-recognized three-factor test first articulated by the Ninth Circuit in a case called New Kids on the Block. Security University and Schneider won under that standard before the district court, but the Second Circuit reversed and adopted a new 11-factor test for nominative fair use cases. The resulting conflict between the circuits is “a mess only this Court can sort out,” the petition explains.

As the petition notes, nominative fair use protections are “more important now than ever before” in an era of online platforms delivering enormous benefits to consumers for comparing and purchasing products. And nominative fair use protects not only advertising and comparative advertising, but also secondary and after-market retailers, websites that allow consumers to compare prices and features and select among products, consumer reviews, gripe sites, and even political commentary, exposé and parody. “A clear and predictable nominative fair use defense is critically important to competition and free speech because it protects the ability to speak good or ill of a brand without fear of liability for trademark infringement,” argues the petition. The Second Circuit’s 11-factor test “dilutes protection for such uses,” and in any event is “so convoluted that most litigants in the Second Circuit won’t know their fate until the jury comes back, if they aren’t pressured into settlement long before.”

Security University, which offers training courses in information security, engaged in a classic nominative fair use when it advertised that it prepares students for plaintiff (ISC)2’s “CISSP” certification exam. As the district court found, Security University had no choice but to use the CISSP mark to communicate what it was offering, used no more of it than necessary, and did nothing to suggest that (ISC)2 was offering, endorsing, or affiliated with the classes. “That has long been thought enough to defeat a trademark suit,” the petition explains, and “this case would almost certainly be over in the Ninth Circuit, Third Circuit, and several others.”

The petition urges the Court to reject the Second Circuit’s standard and side with decades of case law offering a meaningful defense, invoking Justice Holmes’ sage observation that “a page of history is worth a volume of logic.” The petition is available here.

The Orrick team is led by partner and chair of the Supreme Court and Appellate group Josh Rosenkranz, senior counsel Tom Bondy, and associates Chris Cariello and Logan Dwyer.