Nissan v. Nissan Computer: Trademarks

The Ninth Circuit holds FTDA fame must exist before the defendant's first arguably diluting use, moving the date to 1991 and unsettling Nissan's win.

In Nissan Motor Co. v. Nissan Computer Corp., 378 F.3d 1002 (9th Cir. 2004), the Ninth Circuit answered a question that decides many federal dilution cases before any blurring or tarnishment analysis begins: as of what moment must the plaintiff’s mark have been famous? Judge Pamela Ann Rymer, writing for a panel that included Judges Trott and Thomas, held that fame under the Federal Trademark Dilution Act (FTDA) must be measured at the defendant’s first arguably diluting commercial use of the mark, not at the later use the plaintiff finds most objectionable. For Nissan Motor, that meant proving its NISSAN mark was famous in 1991, when a North Carolina computer retailer named Uzi Nissan incorporated Nissan Computer Corp., rather than in 1994, when he registered the domain name nissan.com.

Decided August 6, 2004, on cross-appeals from the Central District of California, the opinion did three consequential things at once. It fixed the timing rule for fame, it cataloged why fame is a demanding standard reserved for household names, and it struck down, on First Amendment grounds, an injunction that barred links to criticism of the automaker. Two decades later it remains the leading citation for the proposition that a dilution plaintiff cannot pick its own measuring date.

At a glance

Case: Nissan Motor Co. v. Nissan Computer Corp., 378 F.3d 1002 (9th Cir. 2004)
Decided: August 6, 2004, before Judges Trott, Rymer, and Thomas; opinion by Judge Rymer
Holding: Any commercial use of a famous mark in commerce is arguably a diluting use that fixes the time by which fame must be measured, so the NISSAN mark’s fame had to be assessed as of Nissan Computer’s 1991 first use, not its 1994 registration of nissan.com; the dilution judgment was reversed and remanded.
Status: Final as to the appellate holdings; infringement affirmed in part for auto-related advertising, dilution reversed and remanded, and the injunction against links to disparaging commentary reversed in part as a First Amendment violation.

A man named Nissan and the domain everyone wanted

The facts read like a law school hypothetical, except that every detail is real. Uzi Nissan, an Israeli-born entrepreneur, had used his surname in business since 1980, first for Nissan Foreign Car Mobile Repair Service, then for an import-export firm called Nissan International, Ltd., and in 1991 for Nissan Computer Corp., a computer sales and service company in North Carolina. On June 4, 1994, Nissan Computer registered nissan.com and used the site to advertise computer goods and services. It added nissan.net in 1996 for its internet service provider business.

Nissan Motor Co., the Japanese automaker, had registered the NISSAN mark in the United States in 1959 but sold cars here under the Datsun name until 1983, when it began the transition to Nissan branding. It sent Uzi Nissan a letter of “great concern” in 1995, then did nothing for four years. The dispute ignited in August 1999, when Nissan Computer redesigned nissan.com to sell banner advertising, including, by late September, automobile-related ads that paid per click. Purchase negotiations failed, and Nissan Motor sued in December 1999 for dilution under the FTDA, 15 U.S.C. § 1125(c), and its California analogue, and for infringement under 15 U.S.C. § 1114.

The district court granted summary judgment to Nissan Motor on both theories, finding initial interest confusion as to the auto-related advertising and dilution as of 1994, and it permanently enjoined Nissan Computer from posting any commercial content at nissan.com and nissan.net, and even from linking to sites containing disparaging remarks about Nissan Motor. Both sides appealed.

The FTDA frame: protection reserved for household names

The panel began from the FTDA’s architecture. Injunctive relief required a plaintiff to show that its mark is famous, that the defendant is making commercial use of the mark in commerce, that the defendant’s use began after the mark became famous, and, following Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003), actual harm to the mark. Dilution differs from infringement because neither confusion nor competition is required and protection is nationwide. Precisely because the right comes close to a right in gross, the Ninth Circuit had already held in Avery Dennison Corp. v. Sumpton, 189 F.3d 868 (9th Cir. 1999), that dilution is “reserved for a select class of marks” and, in Thane International, Inc. v. Trek Bicycle Corp., 305 F.3d 894 (9th Cir. 2002), that the plaintiff’s mark must be a “household name.”

That framing made the timing question decisive. The statute protected famous marks only against uses beginning “after the mark has become famous.” The earlier the defendant’s relevant use, the harder the plaintiff’s proof.

”Such use”: fixing fame at the first arguably diluting use

Nissan Motor argued that the relevant use was the first use it actually challenged: the 1994 registration of nissan.com, where “Nissan” stood alone rather than inside the composite name Nissan Computer Corp. It invoked the anti-dissection rule, under which composite marks are evaluated as a whole, to argue that “Nissan Computer” was a different mark altogether. The district court ultimately agreed, measuring fame as of 1994 and finding the NISSAN mark famous by then.

The Ninth Circuit rejected that approach. “Such use” under § 1125(c), the court held, means any use that, if it occurred after the mark became famous, would arguably dilute it. Because dilution doctrine treats KODAK pianos and BUICK aspirin as actionable even though the famous word appears with another identifier, “Nissan Computer” was itself an arguably diluting use of NISSAN. The court drew support from Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894 (9th Cir. 2002), where “Barbie Girl” diluted the BARBIE mark, and from the Federal Circuit’s decision in Enterprise Rent-A-Car Co. v. Advantage Rent-A-Car, Inc., 330 F.3d 1333 (Fed. Cir. 2003), which had rejected the same plaintiff-selects-the-use reading of the statute. Letting the mark owner choose its measuring date, the panel warned, quoting a district court decision it found persuasive, would mean that “[o]wners of famous marks would have the authority to decide when an allegedly diluting use was objectionable, regardless of when the party accused of diluting first began to use the mark.” The Network Network v. CBS Inc., 54 U.S.P.Q.2d 1150, 1153 (C.D. Cal. 2000).

The holding was crisp: “any commercial use of a famous mark in commerce is arguably a diluting use that fixes the time by which famousness is to be measured.” Nissan Computer’s use began in 1991, so fame had to be measured as of 1991. The court left open, for remand, Nissan Computer’s argument that the date should reach back to 1980, when Uzi Nissan first put his surname on a business.

Fame in 1991: why the record could not carry summary judgment

The court then explained why the 1991 record raised triable issues. Distinctiveness was not the problem: NISSAN was incontestable. But fame requires “more than mere distinctiveness.” Nissan Motor’s evidence included an Allison-Fisher survey showing 65 percent consumer awareness in 1991 and more than $898 million in promotional spending from 1985 to 1991, yet Nissan Computer’s experts attacked the surveys’ methodology, and one key consumer-familiarity survey dated from 1999-2000, shedding no light on 1991 perceptions.

The countervailing evidence was striking. “Nissan” is a common Jewish and Israeli surname, a Biblical calendar month, the Arabic word for April, and part of the trade names of more than 190 unaffiliated American businesses, from Nissan Thermos to Nissan Fire and Marine Insurance. Thousands of domain names contained the word. Under Avery Dennison, widespread third-party use makes fame unlikely, because a mark in widespread use “may not be famous for the goods or services of one business.” Summary judgment on dilution therefore could not stand.

Moseley, remand, and the First Amendment coda

Two further rulings shaped the remand. First, because the district court had decided the case before Moseley, the panel sent the actual dilution question back for first-instance consideration. Second, and most cited outside dilution law, the court reversed the portion of the injunction that barred Nissan Computer from linking to sites with negative commentary about Nissan Motor. That prohibition controlled the communicative message on the website, not the domain name as a source identifier, and it was both content based and viewpoint based, since it singled out disparaging remarks. Following the Fourth Circuit’s CPC International, Inc. v. Skippy Inc., 214 F.3d 456 (4th Cir. 2000), the court held that criticism of the automaker was noncommercial speech within the FTDA’s noncommercial-use exception, and it declined to adopt an “effect on commerce” test for commerciality. The infringement rulings were affirmed as the district court made them: liability for auto-related advertising on an initial interest confusion theory, no liability for everything else.

In the end, Uzi Nissan kept his domain. Nissan Motor never obtained a transfer of nissan.com and markets its vehicles in the United States at nissanusa.com to this day. Uzi Nissan continued operating the site until his death in July 2020.

Open questions

How far back can “first use” reach? The panel declined to decide whether Uzi Nissan’s 1980 surname businesses were the same continuous use, leaving unresolved how courts should treat a defendant’s evolving series of related uses.
What does the timing rule mean for marks that grow famous gradually? Fame rarely arrives on a date certain, and the opinion gives little guidance on proving historical fame decades after the fact with contemporaneous surveys that no longer exist.
How does the rule interact with the TDRA’s niche-fame abolition? The Trademark Dilution Revision Act of 2006 now requires recognition by the general consuming public of the United States, effectively codifying the household-name standard, but it kept the requirement that the defendant’s use begin after fame. Courts continue to apply Nissan’s first-use timing under the new statute, though the interplay with the TDRA’s likelihood-of-dilution standard was not before this panel.

Implications for brands and businesses

Dilution plaintiffs must prove fame as of the defendant’s earliest use, and should build that record from the start. Contemporaneous surveys, advertising spend, and unaided-awareness data keyed to the right historical window are what carried, and ultimately what undermined, Nissan Motor’s motion.
A composite use counts. Adding “Computer,” “Girl,” or “pianos” to a famous word does not restart the clock. Clearance and enforcement teams should treat any commercial appearance of the famous term as the potential measuring date.
Delay is expensive even without laches. Nissan Motor’s four-year silence after its 1995 letter did not bar the suit, but every year of tolerated use pushes the fame inquiry earlier and multiplies proof problems.
Injunctions cannot silence critics. Relief that reaches links to commentary or other noncommercial speech invites reversal. Draft proposed injunctions to control source-identifying commercial uses, not website content expressing a viewpoint.

Frequently asked questions

Why did it matter whether fame was measured in 1991 or 1994? Dilution protection runs only against uses that begin after the plaintiff’s mark becomes famous. Nissan Motor had strong evidence of fame by 1994, when nissan.com was registered, but the 1991 record was contested: surveys showed 65% consumer awareness, while more than 190 unaffiliated businesses also used the word Nissan. Moving the date back three years converted a summary judgment win into triable questions of fact.

Did Uzi Nissan lose the trademark infringement claim entirely? No. The Ninth Circuit affirmed infringement liability only for automobile-related advertising on nissan.com, on an initial interest confusion theory. Non-automotive uses of the site, such as advertising his computer business, did not infringe because the goods differed significantly and Nissan is also a surname and a calendar month.

Is the Nissan fame-timing rule still good law after the Trademark Dilution Revision Act? The core rule survives. The TDRA of 2006 still conditions relief on the defendant’s use beginning after the plaintiff’s mark became famous, so the defendant’s first use remains the measuring date. The TDRA changed other parts of the analysis: it replaced the actual dilution requirement of Moseley with a likelihood of dilution standard and codified a household-name conception of fame by requiring recognition by the general consuming public of the United States.