KP Permanent v. Lasting Impression: Fair Use Need Not Negate Confusion

KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004), resolved a fundamental question about the architecture of trademark litigation: who must prove what when a defendant says it merely used a descriptive term for its ordinary descriptive meaning. Both companies sold permanent-makeup pigment and both used some form of the phrase “micro color.” One had registered it as a trademark; the other claimed it was only describing the product. The Ninth Circuit had held that the defendant could win on the statutory fair-use defense only if it showed there was no likelihood of confusion — effectively folding the plaintiff’s burden into the defendant’s defense. A unanimous Supreme Court, in an opinion by Justice Souter, reversed that allocation. The defendant asserting descriptive fair use, the Court held, carries no burden to negate confusion; proving likelihood of confusion is, and remains, the plaintiff’s job.

At a glance

• Case: KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004), Docket No. 03-409
• Court: Supreme Court of the United States, on certiorari to the Ninth Circuit
• Decided: December 8, 2004 (argued October 5, 2004); unanimous
• Opinion: Justice Souter, for the Court (Justices Scalia and Breyer declining to join certain footnotes)
• Subject matter: The classic/descriptive fair-use defense to trademark infringement under 15 U.S.C. § 1115(b)(4) and its relationship to likelihood of confusion
• Holding: A party raising the statutory affirmative defense of descriptive fair use has no burden to negate any likelihood that its use will confuse consumers; the burden of proving likelihood of confusion stays with the plaintiff

The facts and the split below

The parties were competitors in the market for permanent makeup — pigment injected under the skin to simulate cosmetics or camouflage scars. KP Permanent Make-Up had used the term “microcolor” to describe its pigment since around 1990. Lasting Impression I later registered the mark “Micro Colors” with the Patent and Trademark Office and, in time, that registration became incontestable. When Lasting Impression demanded that KP stop, KP filed suit seeking a declaratory judgment that its use did not infringe; Lasting Impression counterclaimed for trademark infringement.

KP asserted the classic fair-use defense codified at 15 U.S.C. § 1115(b)(4), which preserves the right to use a term “otherwise than as a mark… which is descriptive of and used fairly and in good faith only to describe” one’s goods. The district court granted KP summary judgment on that defense. The Ninth Circuit reversed, holding that a defendant cannot establish fair use without also showing an absence of likelihood of confusion — reasoning that because confusion is the gravamen of infringement, a use that confuses cannot be “fair.” That holding conflicted with the approach of other circuits and teed up the question for the Supreme Court: does the fair-use defense require the defendant to disprove confusion?

The Court’s reasoning: burdens and the statute’s silence

Justice Souter’s opinion grounded the answer in the structure of the Lanham Act. To make out infringement of an incontestable mark, a plaintiff must prove — as part of its case — that the defendant’s use is likely to cause confusion. Section 1115(b)(4), by contrast, lists the elements of the fair-use defense: that the term is used other than as a mark, that it is descriptive of the defendant’s goods, and that it is used fairly and in good faith. Conspicuously, that list says nothing about confusion. “Since the burden of proving likelihood of confusion rests with the plaintiff,” the Court reasoned, “and the fair use defendant has no free-standing need to show confusion unlikely, it follows… that some possibility of consumer confusion must be compatible with fair use, and so it is.”

The logic is one of statutory inference. Congress presumably understood that a descriptive term can serve simultaneously as one seller’s trademark and as an accurate description of another seller’s goods, and that this overlap will sometimes confuse consumers. If Congress had wanted the fair-use defense to require the defendant to eliminate confusion, it would not have created the defense at all — because a plaintiff who had already proven a likelihood of confusion would leave the defendant nothing to negate, rendering § 1115(b)(4) a dead letter. The Court refused to read the statute so as to make the defense self-defeating. It rejected the Ninth Circuit’s rule and made clear that a defendant may prevail on descriptive fair use even when the plaintiff has shown some likelihood of confusion.

What the Court left for another day

Having decided that the defendant need not disprove confusion, the Court was careful about what it was not deciding. It expressly declined to hold that the extent of likely confusion is irrelevant to fairness. As the opinion put it, the Court did not “rule out the pertinence of the degree of consumer confusion under the fair use analysis” — it held only that confusion is not something the defendant must negate as a threshold matter. The degree of confusion, along with factors like the commercial justification for the use and the strength of the plaintiff’s mark, might still bear on whether a use is objectively “fair” within the meaning of the statute. The Court vacated the Ninth Circuit’s judgment and remanded so the lower courts could apply the correct allocation of burdens and consider the fairness question afresh.

On remand, the Ninth Circuit took up that invitation, treating the likelihood of confusion as one of several considerations relevant to whether KP’s use was objectively fair, alongside the strength of the mark and the descriptive purpose of the use. That treatment reflects the settled post-KP Permanent understanding: confusion is not a burden the defendant must defeat, but neither is it wholly banished from the fairness inquiry.

Open questions

KP Permanent fixed the burden of proof but left the substantive content of “fairness” underdetermined. How much weight should courts give to a high degree of proven confusion when assessing whether a descriptive use is fair? What role do the defendant’s good faith, the availability of alternative descriptors, and the manner and prominence of the use play? The decision also did not resolve how its logic interacts with nominative fair use — the distinct doctrine, developed in the Ninth Circuit, that governs using another’s mark to refer to the mark owner’s own goods. Lower courts continue to work out how the classic fair-use defense operates once some confusion is conceded, and the line between permissible descriptive use and infringement remains fact-intensive.

Implications

• The plaintiff keeps the confusion burden. Likelihood of confusion is an element of the infringement claim; a defendant invoking descriptive fair use does not have to disprove it.
• Some confusion is compatible with fair use. A defendant can prevail on the statutory defense even where the trademark owner has shown a likelihood of confusion, because descriptive overlap inevitably produces some.
• Focus the defense on the statutory elements. To establish fair use, show that the term was used descriptively, other than as a mark, and in good faith — not that consumers were never confused.
• Degree of confusion may still matter. The Court left open whether the amount of likely confusion bears on objective fairness, so a heavy showing of confusion can still cut against a defendant on the merits of the defense.

Frequently asked questions

What did KP Permanent v. Lasting Impression decide? The Supreme Court held that a defendant asserting the statutory descriptive fair use defense under the Lanham Act does not have to prove the absence of a likelihood of consumer confusion. The burden to prove likelihood of confusion stays with the trademark owner as part of its infringement claim.

Can there be trademark fair use even if some confusion exists? Yes. The Court reasoned that because a descriptive term can be both a protected mark and a fair descriptive use, some possibility of consumer confusion is compatible with fair use. A defendant need not eliminate all confusion to prevail on the defense.

Does the amount of confusion matter to the fair use defense? The Court expressly left that open. It held only that a defendant need not negate confusion, and declined to decide whether the degree of likely confusion is a factor relevant to whether a use is objectively “fair.” On remand, the Ninth Circuit treated confusion as one relevant consideration.

Authorities and sources

• KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004), Docket No. 03-409 (decided December 8, 2004; Souter, J.). Justia; Cornell Legal Information Institute.
• Oral argument and case summary via Oyez.
• Unanimous vote, Souter authorship, and burden-of-proof holding corroborated by Wikipedia: KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc.
• Fair-use defense statute: 15 U.S.C. § 1115(b)(4) (Cornell Legal Information Institute).