KOZINSKI, Circuit Judge.
The individual plaintiffs perform professionally as The New Kids on the Block, reputedly one of today's hottest musical acts. This case requires us to weigh their rights in that name against the rights of others to use it in identifying the New Kids as the subjects of public opinion polls.
No longer are entertainers limited to their craft in marketing themselves to the public. This is the age of the multi-media publicity blitzkrieg: Trading on their popularity, many entertainers hawk posters, T-shirts, badges, coffee mugs and the like — handsomely supplementing their incomes while boosting their public images. The New Kids are no exception; the record in this case indicates there are more than 500 products or services bearing the New Kids trademark. Among these are services taking advantage of a recent development in telecommunications: 900 area code numbers, where the caller is charged a fee, a portion of which is paid to the call recipient. Fans can call various New Kids 900 numbers to listen to the New Kids talk about themselves, to listen to other fans talk about the New Kids, or to leave messages for the New Kids and other fans.
The defendants, two newspapers of national circulation, conducted separate polls of their readers seeking an answer to a pressing question: Which one of the New Kids is the most popular? USA Today's announcement contained a picture of the New Kids and asked, "Who's the best on the block?" The announcement listed a 900 number for voting, noted that "any USA Today profits from this phone line will go to charity," and closed with the following:
The Star's announcement, under a picture of the New Kids, went to the heart of the matter: "Now which kid is the sexiest?" The announcement, which appeared in the middle of a page containing a story on a New Kids concert, also stated:
Readers were directed to a 900 number to register their votes; each call cost 95 cents per minute.
Fearing that the two newspapers were undermining their hegemony over their fans, the New Kids filed a shotgun complaint in federal court raising no fewer than ten claims: (1) common law trademark infringement; (2) Lanham Act false advertising;
While the district court granted summary judgment on First Amendment grounds, we are free to affirm on any ground fairly presented by the record. Jackson v. Southern Cal. Gas Co., 881 F.2d 638, 643 (9th Cir.1989); Pelleport Inv., Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 278 (9th Cir.1984). Indeed, where we are able to resolve the case on nonconstitutional grounds, we ordinarily must avoid reaching the constitutional issue. In re Snyder, 472 U.S. 634, 642-43, 105 S.Ct. 2874, 2879-80, 86 L.Ed.2d 504 (1985); Schweiker v. Hogan, 457 U.S. 569, 585, 102 S.Ct. 2597, 2607, 73 L.Ed.2d 227 (1982). Therefore, we consider first whether the New Kids have stated viable claims on their various causes of action.
A. Since at least the middle ages, trademarks have served primarily to identify the source of goods and services, "to facilitate the tracing of `false' or defective wares and the punishment of the offending craftsman." F. Schechter, The Historical Foundations of the Law Relating to Trademarks 47 (1925). The law has protected trademarks since the early seventeenth century, and the primary focus of trademark law has been misappropriation — the problem of one producer's placing his rival's mark on his own goods. See, e.g., Southern v. How, 79 Eng.Rep. 1243 (K.B. 1618). The law of trademark infringement was imported from England into our legal system with its primary goal the prevention of unfair competition through misappropriated marks. See, e.g., Taylor v. Carpenter, 23 F.Cas. 742 (C.C.D.Mass. 1844) (Story, J.). Although an initial attempt at federal regulation was declared unconstitutional, see the Trade-Mark Cases, 100 U.S. 82, 25 L.Ed. 550 (1879), trademarks have been covered by a comprehensive federal statutory scheme since the passage of the Lanham Act in 1946.
Throughout the development of trademark law, the purpose of trademarks remained constant and limited: Identification of the manufacturer or sponsor of a good or the provider of a service.
A trademark is a limited property right in a particular word, phrase or symbol.
A related problem arises when a trademark also describes a person, a place or an attribute of a product. If the trademark holder were allowed exclusive rights in such use, the language would be depleted in such the same way as if generic words were protectable. Thus trademark law recognizes a defense where the mark is used only "to describe the goods or services of [a] party, or their geographic origin." 15 U.S.C. § 1115(b)(4). "The `fair-use' defense, in essence, forbids a trademark registrant to appropriate a descriptive term for his exclusive use and so prevent others from accurately describing a characteristic of their goods." Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir.1980). Once again, the courts will hold as a matter of law that the original producer does not sponsor or endorse another product that uses his mark in a descriptive manner. See, e.g., Schmid Laboratories v. Youngs Drug Products Corp., 482 F.Supp. 14 (D.N.J.1979) ("ribbed" condoms).
With many well-known trademarks, such as Jell-O, Scotch tape and Kleenex, there are equally informative non-trademark words describing the products (gelatin, cellophane tape and facial tissue). But sometimes there is no descriptive substitute, and a problem closely related to genericity and descriptiveness is presented when many goods and services are effectively identifiable only by their trademarks. For example, one might refer to "the two-time world champions" or "the professional basketball team from Chicago," but it's far simpler (and more likely to be understood) to refer to the Chicago Bulls. In such cases, use of the trademark does not imply sponsorship or endorsement of the product because the mark is used only to describe the thing, rather than to identify its source.
Indeed, it is often virtually impossible to refer to a particular product for purposes of comparison, criticism, point of reference or any other such purpose without using the mark. For example, reference to a large automobile manufacturer based in
A good example of this is Volkswagenwerk Aktiengesellschaft v. Church, 411 F.2d 350 (9th Cir.1969), where we held that Volkswagen could not prevent an automobile repair shop from using its mark. We recognized that in "advertising [the repair of Volkswagens, it] would be difficult, if not impossible, for [Church] to avoid altogether the use of the word `Volkswagen' or its abbreviation `VW,' which are the normal terms which, to the public at large, signify appellant's cars." Id. at 352. Church did not suggest to customers that he was part of the Volkswagen organization or that his repair shop was sponsored or authorized by VW; he merely used the words "Volkswagen" and "VW" to convey information about the types of cars he repaired. Therefore, his use of the Volkswagen trademark was not an infringing use.
The First Circuit confronted a similar problem when the holder of the trademark "Boston Marathon" tried to stop a television station from using the name:
WCVB-TV v. Boston Athletic Ass'n, 926 F.2d 42, 46 (1st Cir.1991). Similarly, competitors may use a rival's trademark in advertising and other channels of communication if the use is not false or misleading. See, e.g., Smith v. Chanel, Inc., 402 F.2d 562 (9th Cir.1968) (maker of imitation perfume may use original's trademark in promoting product).
Cases like these are best understood as involving a non-trademark use of a mark — a use to which the infringement laws simply do not apply, just as videotaping television shows for private home use does not implicate the copyright holder's exclusive right to reproduction. See Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 447-51, 104 S.Ct. 774, 791-93, 78 L.Ed.2d 574 (1984).
To be sure, this is not the classic fair use case where the defendant has used the plaintiff's mark to describe the defendant's own product. Here, the New Kids trademark is used to refer to the New Kids themselves. We therefore do not purport to alter the test applicable in the paradigmatic fair use case. If the defendant's use of the plaintiff's trademark refers to something other than the plaintiff's product, the traditional fair use inquiry will continue to govern. But, where the defendant uses a trademark to describe the plaintiff's product, rather than its own, we hold that a commercial user is entitled to a nominative fair use defense provided he meets the following three requirements: First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service;
B. The New Kids do not claim there was anything false or misleading about the newspapers' use of their mark. Rather, the first seven causes of action, while purporting to state different claims, all hinge on one key factual allegation: that the newspapers' use of the New Kids name in conducting the unauthorized polls somehow implied that the New Kids were sponsoring the polls.
Also met are the second and third requirements. Both The Star and USA Today reference the New Kids only to the extent necessary to identify them as the subject of the polls; they do not use the New Kids' distinctive logo or anything else that isn't needed to make the announcements intelligible to readers. Finally, nothing in the announcements suggests joint sponsorship or endorsement by the New Kids. The USA Today announcement implies
The New Kids argue that, even if the newspapers are entitled to a nominative fair use defense for the announcements, they are not entitled to it for the polls themselves, which were money-making enterprises separate and apart from the newspapers' reporting businesses. According to plaintiffs, defendants could have minimized the intrusion into their rights by using an 800 number or asking readers to call in on normal telephone lines which would not have resulted in a profit to the newspapers based on the conduct of the polls themselves.
The New Kids see this as a crucial difference, distinguishing this case from Volkswagenwerk, WCBV-TV and other nominative use cases. The New Kids' argument in support of this distinction is not entirely implausible: They point out that their fans, like everyone else, have limited resources. Thus a dollar spent calling the newspapers' 900 lines to express loyalty to the New Kids may well be a dollar not spent on New Kids products and services, including the New Kids' own 900 numbers. In short, plaintiffs argue that a nominative fair use defense is inapplicable where the use in question competes directly with that of the trademark holder.
We reject this argument. While the New Kids have a limited property right in their name, that right does not entitle them to control their fans' use of their own money. Where, as here, the use does not imply sponsorship or endorsement, the fact that it is carried on for profit and in competition with the trademark holder's business is beside the point. See, e.g., Universal City Studios, Inc. v. Ideal Publishing Corp., 195 U.S.P.Q. 761 (S.D.N.Y.1977) (magazine's use of TV program's trademark "Hardy Boys" in connection with photographs of show's stars not infringing). Voting for their favorite New Kid may be, as plaintiffs point out, a way for fans to articulate their loyalty to the group, and this may diminish the resources available for products and services they sponsor. But the trademark laws do not give the New Kids the right to channel their fans' enthusiasm (and dollars) only into items licensed or authorized by them. See International Order of Job's Daughters v. Lindeburg & Co., 633 F.2d 912 (9th Cir. 1990) (no infringement where unauthorized jewelry maker produced rings and pins bearing fraternal organization's trademark). The New Kids could not use the trademark laws to prevent the publication of an unauthorized group biography or to censor all parodies or satires which use their name.
Summary judgment was proper as to the first seven causes of action because they all hinge on a theory of implied endorsement; there was none here as the uses in question were purely nominative.
The New Kids raise three additional claims that merit brief attention.
A. The New Kids claim that USA Today's and The Star's use of their name amounted to both commercial and common law misappropriation under California law. Although there are subtle differences between these two causes of action, all that's material here is a key similarity between them: The papers have a complete defense to both claims if they used the New Kids name "in connection with any news, public affairs, or sports broadcast or account" which was true in all material respects. See Cal.Civ.Code § 3344(d); Eastwood v.
In this case, USA Today's and The Star's use of the New Kids' name was "in connection with" news accounts: The Star ran concurrent articles on the New Kids along with its 900-number poll, while USA Today promised a subsequent story on the popularity of various members of the singing group. Both papers also have an established track record of polling their readers and then reporting the poll results as part of a later news story. The New Kids' misappropriation claims are barred by California Civil Code section 3344(d).
B. The New Kids' remaining claim is for intentional interference with prospective economic advantage, but they ignore the maxim that all's fair in love, war and the free market. Plaintiffs' case rests on the assumption that the polls operated to siphon off the New Kids' fans or divert their resources away from "official" New Kids products. Even were we to accept this premise, no tort claim has been made out: "So long as the plaintiff's contractual relations are merely contemplated or potential, it is considered to be in the interest of the public that any competitor should be free to divert them to himself by all fair and reasonable means.... In short, it is no tort to beat a business rival to prospective customers." A-Mark Coin Co. v. General Mills, Inc., 148 Cal.App.3d 312, 323, 195 Cal.Rptr. 859 (1983); see B. Witkin, 5 Summary of California Law § 669 at 766 (1988) ("one competitor may induce customers of the other to do business with him"). Because we have already determined that the newspapers' use of the mark was "fair and reasonable," the New Kids do not have a tort claim based on the fact that they may have lost some business to a competitor.
The district court's judgment is
William M. Landes and Richard A. Posner, Trademark Law: An Economic Perspective, 30 J.L. & Econ. 265, 269 (1987).
Sound policies underlie the fair use defense. The copyright holder has a property interest in preventing others from reaping the fruits of his labor, not in preventing the authors and thinkers of the future from making use of, or building upon, his advances. The process of creation is often an incremental one, and advances building on past developments are far more common than radical new concepts. See Lewis Galoob Toys, Inc. v. Nintendo, Inc., 964 F.2d 965 (9th Cir.1992). Where the infringement is small in relation to the new work created, the fair user is profiting largely from his own creative efforts rather than free-riding on another's work. A prohibition on all copying whatsoever would stifle the free flow of ideas without serving any legitimate interest of the copyright holder.