Second Circuit Reinstates Trademark Suit Against Oprah, Rejecting SDNY Fair Use Analysis

Practical Law Legal Update 6-530-9029 (Approx. 5 pages)

Second Circuit Reinstates Trademark Suit Against Oprah, Rejecting SDNY Fair Use Analysis

by PLC Intellectual Property & Technology

Key Litigated Issues

The key litigated issues in Kelly-Brown v. Winfrey were whether the District Court erred in finding on a motion to dismiss that:

The plaintiffs were required to show that the defendants' used the plaintiffs' OWN YOUR POWER mark "as a trademark" in order to state an infringement claim.
The defendants' use of OWN YOUR POWER was a protected fair use.

Background

Plaintiffs, Simone Kelly-Brown and Own Your Power Communications, Inc., operate a self-help motivational services business that holds events and distributes publications under the registered service mark OWN YOUR POWER. In this case, the plaintiffs alleged that the defendants, Oprah Winfrey and various corporate defendants, infringed the plaintiffs' service mark by using it in connection with publications including Oprah's "O" magazine, a promotional event and online content. The plaintiffs asserted trademark infringement and related claims under the Lanham Act and state law. The plaintiffs also asserted secondary infringement claims against various sponsors of the promotional event.

The US District Court for the Southern District of New York granted the defendants' motion to dismiss finding on the infringement claims that the defendants' use of the OWN YOUR POWER phrase was fair use. The District Court further stated that the plaintiffs' claims must fail as a matter of law unless the plaintiffs showed the defendants used the OWN YOUR POWER phrase as a trademark.

In its fair use analysis, the District Court found that:

The defendants engaged in non-trademark use because there was no chance that an observer of Oprah's magazine or the OWN YOUR POWER event would believe that they were created by the plaintiffs because:
- Oprah appeared on the cover of the magazine, indicating to the viewer the source of the magazine; and
- the phrase appeared on the magazine cover simply as a headline describing the magazine's contents.
The defendants' use of OWN YOUR POWER was descriptive because it described an action that it hoped magazine readers would take after reading the magazine.
The plaintiffs had not pleaded any facts to plausibly suggest that the defendants had acted in bad faith in using OWN YOUR POWER.

Outcome

In its May 31, 2013 opinion, the Second Circuit vacated the Southern District's judgment that had dismissed the plaintiffs' trademark infringement claims, and remanded the action to the District Court. The Second Circuit rejected the District Court's:

Finding that a plaintiff in a trademark infringement action must show that the defendant is using the disputed mark as a trademark.
Fair use analysis.

Trademark Use as a Threshold Requirement

The District Court had indicated that the plaintiffs' claims must fail as a matter of law unless the plaintiffs' show that the defendants' used the OWN YOUR POWER phrase as a trademark. On appeal, the Second Circuit rejected this notion, distinguishing the concepts of:

Use of a trademark in commerce.
Use as a trademark.

The court noted that the defendants' use of a mark in commerce is an element of an infringement claim, requiring that the mark be displayed to consumers in connection with a commercial transaction. However, the court noted that there is no requirement that a plaintiff show that the defendant used the mark in any particular way including "as a trademark." The court noted that the defendants had used OWN YOUR POWER in commerce, through the use of the phrase on the cover of OPRAH magazine and on the Oprah website.

The court noted that the Sixth Circuit has held that use of a mark as a trademark is a required element of an infringement claim based on the reasoning that where a defendant does not use a designation as a trademark, consumers are not likely to be confused. The Second Circuit rejected this analysis noting that requiring use as a trademark as a threshold element on trademark infringement would be inconsistent with the court's multi-factor Polaroid likelihood of confusion test.

Fair Use

In vacating the District Court's holding on fair use, the Second Circuit noted that a defendant must prove three elements to assert a successful fair use defense in a trademark infringement action, namely that its use was:

Other than as a mark.
In a descriptive sense.
In good faith.

Use Other Than as a Mark

To assess whether the defendants' were using OWN YOUR POWER as a mark, the court examined whether they were using the term as a symbol to attract public attention. The court found that the defendants' collective uses of the mark satisfied this requirement, including use:

In the center of the cover of Oprah's "O" magazine.
For an OWN YOUR POWER event that was promoted through social media.
In articles provided in an OWN YOUR POWER section of Oprah's website.

Examining the uses in their totality, the Second Circuit found that the plaintiffs had plausibly alleged that Oprah was attempting to build a new segment of her media empire around the OWN YOUR POWER theme and that the defendants had not met their burden of showing that their use of OWN YOUR POWER was other than as a trademark. The court noted that the defendants' repeated use of the phrase was important as it could forge an association in the minds of consumers between the phrase and the defendants' products.

The court rejected the defendants' argument that the use of the OPRAH mark in connection with the OWN YOUR POWER phrase showed that OWN YOUR POWER was not used as a mark. The court noted that a slogan and a single brand name can serve as co-existent marks.

Use in a Descriptive Sense

The defendants argued that the OWN YOUR POWER mark/phrase was descriptive of the publications for which it was used. The court rejected this argument, finding that:

Courts more readily find a phrase descriptive when it is commonly used and, at the pleadings stage, there was no evidence that OWN YOUR POWER was widely used.
The OWN YOUR POWER phrase did not describe the contents of Oprah's magazine, for example, the magazine did not contain specific advice regarding how a reader could become more powerful.

Good Faith

To attempt to satisfy the good faith element, the defendants argued that:

It was implausible that someone as well-known as Oprah would attempt to trade on the goodwill of the lesser-known plaintiffs.
Their use of OWN YOUR POWER was intertwined with other Oprah-related marks, such that consumers would not be confused as to the origin of Oprah's OWN YOU POWER publications and that they were not trading on the plaintiff's goodwill.

In response, the plaintiffs contended that they pled facts sufficient to allege that the defendants knew of the plaintiffs' OWN YOUR POWER mark before they began using it, including facts suggesting that the defendants conducted a trademark search of OWN which may have disclosed the plaintiffs OWN YOUR POWER mark.

In considering the arguments, the court found that the plaintiffs' allegations plausibly suggested that the defendants knew of the plaintiffs' mark and that the defendants' allegations that they did not use OWN YOUR POWER to trade on the plaintiffs' good will did not preclude a bad faith finding.

The court held that its role on a motion to dismiss is not to resolve factual disputes and that the District Court erred in holding that the defendants' had conclusively demonstrated good faith.

Other Claims

The Second Circuit affirmed the District Court's dismissal of secondary infringement claims against the various sponsors of the OWN YOUR POWER event. The court also affirmed the District Court's dismissal of the plaintiffs' counterfeiting claims.

Concurring Opinion

In a concurring opinion, Judge Sack cautioned against construing the court's opinion as suggesting a general limitation on a publisher's ability to use a trademarked term, in good faith, to indicate the contents of its communication. In particular, Judge Sack indicated that he disagreed with any suggestion by the majority opinion that the defendants' use of OWN YOUR POWER on their magazine cover was not fair use and lawful. Judge Sack noted that in his view, the use of a trademark phrase on a magazine cover to refer in a general way to the magazine's contents is, by itself, generally a legitimate case of fair use. Judge Stack distinguished this case where the defendants used the OWN YOUR POWER phrase as part of a campaign across different media, rendering it inappropriate to dismiss the case at the pleadings stage based on fair use.

Practical Implications

The Second Circuit's decision is significant for:

Distinguishing between use of a mark in commerce and use of a mark as a trademark.
Holding that a plaintiff is not required to show that the defendant is using a designation "as a trademark" to state an infringement claim, creating a split with the Sixth Circuit.
Its detailed fair use analysis, which shows that, at least in the Second Circuit, even media defendants seeking to dismiss a trademark action at the pleadings stage based on a fair use defense are unlikely to succeed where the use is extensive across multiple platforms.

Court Document

Kelly-Brown v. Winfrey, No. 12-1207-cv (2d Cir. May 31, 2013).

Second Circuit Reinstates Trademark Suit Against Oprah, Rejecting SDNY Fair Use Analysis | Practical Law