Fifth Circuit Affirms Stockpiling of Trademarks for Sale by Printer | Practical Law

Fifth Circuit Affirms Stockpiling of Trademarks for Sale by Printer | Practical Law

On February 16, 2012, the US Court of Appeals for the Fifth Circuit held in National Business Forms & Printing v. Ford that when a printing business stockpiles and reproduces trademarks for customers but does not use the marks to identify or distinguish its own goods and services, these activities do not constitute use under the Trademark Dilution Revision Act.

Fifth Circuit Affirms Stockpiling of Trademarks for Sale by Printer

Practical Law Legal Update 7-518-0931 (Approx. 3 pages)

Fifth Circuit Affirms Stockpiling of Trademarks for Sale by Printer

by PLC Intellectual Property & Technology
Published on 21 Feb 2012USA (National/Federal)
On February 16, 2012, the US Court of Appeals for the Fifth Circuit held in National Business Forms & Printing v. Ford that when a printing business stockpiles and reproduces trademarks for customers but does not use the marks to identify or distinguish its own goods and services, these activities do not constitute use under the Trademark Dilution Revision Act.

Key Litigated Issues

In National Business Forms & Printing v. Ford, the key issue before the US Court of Appeals for the Fifth Circuit was whether a commercial printer "uses" a trademark in violation of Section 1125(c)(1) of the Trademark Dilution Revision Act (TDRA) when it reproduces or offers to reproduce the mark for customers as part of its printing business.

Background

NBFP is a small printing company that makes custom signs, stickers, banners and other advertising material. NBFP's website, which allows customers to place orders online, contains a bank of corporate logos that may be used in NBFP's custom design and printing services. Ford's trademark protected logos were included in this bank.
Ford sent a cease and desist letter to stop NBFP from using Ford's trademarks. NBFP responded with an action for declaratory judgment that it was not infringing Ford's trademark rights. Ford raised counterclaims for, among other things, trademark infringement and dilution.
The District Court granted summary judgment to Ford for NBFP's selling, producing and transferring products that embody Ford's marks. At trial, the District Court found that:
  • NBFP did not violate the TDRA because it did not use Ford's marks to identify or distinguish its goods or services.
  • NBFP did not infringe Ford's marks by selling trademarked products to authorized car dealers.
  • NBFP infringed Ford's marks by selling general stickers, banners and other marketing material containing the corporate logos of many car manufacturers, including Ford, to three used car dealerships.

Outcome

On Ford's claim for dilution, the Fifth Circuit affirmed the District Court, holding that because NBFP had not appropriated Ford's mark as its own, NBFP did not use Ford's mark in violation of Section 1125(c)(1) of the TDRA. This was an issue of first impression in the circuit.
The court also upheld the ruling that the sale of materials to authorized dealers did not infringe Ford's marks. It found that Ford's agreement with its authorized dealers permitted the dealers to use printed materials from a third-party vendor of their choosing if the materials complied with the agreement's proper use requirements.
However, the Fifth Circuit reversed the District Court's holding that selling stickers and banners to Ford used car dealerships that contained the Ford trademark along with other car makers corporate logos was an infringement. Focusing on the context in which the marks appeared, the Fifth Circuit held that the likelihood of consumer confusion in these promotional products was negligible.
Last, the Fifth Circuit upheld the District's summary judgment finding that NBFP infringed Ford's trademark rights by offering on its website products for design and sale to which Ford's marks could be attached.

Practical Implications

A printing company may stockpile and reproduce corporate logos and other marks as part of its printing business if it uses those marks to sell, produce or transfer products where there is no likely threat of consumer confusion. Further, a printer's reproduction of marks in a manner that does not identify or distinguish its own goods and services does not constitute use under the TDRA.