MediaTech Law

An automobile brokerage operating online under the web domains “buy-a-lexus.com” and “buyorleaselexus.com” got sued by Toyota Motor Sales for trademark infringement, first losing in trial court on a trademark “fair use” argument, then winning on appeal.  The case opinion can be found here.

The domain name question in trademark is whether and how one can use established trademarks in domain names, in other words using the “LEXUS” trademark in your website URL when the use is anything but incidental but rather intentionally drawing on the value of the valuable brand.

Toyota, owner of the Lexus car brand, had sued to stop the auto brokerage from using the “LEXUS” trademark in the brokerage’s websites listed under “buy-a-lexus.com” and “buyorleaselexus.com”.  The brokerage defended its actions by arguing that the use of “LEXUS” was permitted (that is, non-infringing) as a fair use of the trademark.  Or as Judge Alex Kozinski explained in his appeals court opinion, the trademark was used to “refer to the trademarked good itself”.

This is the “nominative fair use” doctrine of trademark law.  In (hopefully) plain English, the defendant makes no argument to counter a trademark owner’s typical claims of trademark infringement such as likelihood of confusion or dilution of trademark and so forth.  Instead, the use of the trademark is permitted as a fair use since the use simply (and only) identifies the trademark.  Toyota did not dispute the legality of the brokerage’s business nor its authority to broker and sell Lexus vehicles.  The Lexus auto brokerage could therefore successfully argue that use of the “Lexus” was necessary to identify the product being sold.