Taxing 'nominative fair-use' issue forces district court to think again

In JK Harris & Company LLC v Kassel, the US District Court for the Northern District of California has reversed its earlier decision and vacated an order granting a preliminary injunction preventing the defendant from using the plaintiff's name on his website. The court re-assessed its initial analysis of the 'nominative fair-use' principle and held that the defendant had met all of its requirements because it had only used the name in visible parts of the website.

The plaintiff, US company JK Harris, and the defendant, an individual called Steven Kassel, both provide tax advisory services on the Internet. JK Harris complained that Kassel had manipulated his website's structure so that consumers using the search term 'JK Harris' would receive search results that included listings both for JK Harris's site and Kassel's site. Kassel's alleged "manipulation" included, among other things, (i) using the trade name 'JK Harris' and permutations thereof as keywords over 75 times on his website, and (ii) creating header tags and underline tags (types of hyperlink) around phrases that included the 'JK Harris' name.

In its original opinion, the district court noted that consumers who visited Kassel's website would realize immediately that they had not reached JK Harris's site. Nevertheless, the court held that initial interest confusion would occur because Kassel's conduct would have the effect of diverting potential JK Harris customers to his site. Kassel responded that he was making a permissible nominative fair use of JK Harris's name on his site, as he was providing accurate information about investigations into JK Harris's business practices. The court held that Kassel had satisfied two of the three requirements for nominative fair use, namely: (i) it was not possible to refer to the investigations into JK Harris's business practices without using its name, and (ii) there was no impression that JK Harris was endorsing Kassel's website. However, the court concluded that Kassel's numerous references to the name 'JK Harris' had fallen foul of the third requirement, that only so much of the name could be used as was reasonably necessary to identify JK Harris.

In its revised decision, the court vacated its earlier order, finding that Kassel's references to the trade name 'JK Harris' occurred in entirely visible portions of his website. The court distinguished cases in which defendants had used plaintiffs' marks or trade names in areas that were not visible, such as in metatags, and concluded that Kassel was making reasonable use of the trade name.

David Fleming, Brinks Hofer Gilson & Lione, Chicago