Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-07-55344/USCOURTS-ca9-07-55344-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

TOYOTA MOTOR SALES, U.S.A., 

INC., a California corporation,

Plaintiff-counterdefendant-Appellee, No. 07-55344

v. D.C. No.  CV-03-08506-DSF FARZAD TABARI; LISA TABARI,

California residents, d/b/a FAST OPINION

IMPORTS,

Defendants-counter-claimants

Appellants. 

Appeal from the United States District Court

for the Central District of California

Dale S. Fischer, District Judge, Presiding

Argued and Submitted

July 8, 2009—Pasadena, California

Filed July 8, 2010

Before: Alex Kozinski, Chief Judge, Ferdinand F. Fernandez

and N. Randy Smith, Circuit Judges.

Opinion by Chief Judge Kozinski,;

Concurrence by Judge Fernandez

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COUNSEL

Jens B. Koepke (argued), Robin Meadow, Greines, Martin,

Stein & Richland LLP, Los Angeles, California; Alan S. Cooper, Howrey, LLP, Washington, DC, for the plaintiff, counterdefendant, appellee. 

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Lisa Tabari (argued), Farzad Tabari, pro se, Mission Viejo,

California, for the defendants, counter-claimants, appellants.

OPINION

KOZINSKI, Chief Judge: 

In this trademark infringement case, we consider the application of the nominative fair use doctrine to internet domain

names.

Facts

Farzad and Lisa Tabari are auto brokers—the personal

shoppers of the automotive world. They contact authorized

dealers, solicit bids and arrange for customers to buy from the

dealer offering the best combination of location, availability

and price. Consumers like this service, as it increases competition among dealers, resulting in greater selection at lower

prices. For many of the same reasons, auto manufacturers and

dealers aren’t so keen on it, as it undermines dealers’ territorial exclusivity and lowers profit margins. Until recently, the

Tabaris offered this service at buy-a-lexus.com and buyorleaselexus.com. 

Toyota Motor Sales U.S.A. (“Toyota”) is the exclusive distributor of Lexus vehicles in the United States, and jealous

guardian of the Lexus mark. A Toyota marketing executive

testified at trial that Toyota spends over $250 million every

year promoting the Lexus brand. In the executive’s estimation, “Lexus is a very prestigious luxury brand and it is an

indication of an exclusive luxury experience.” No doubt true.

Toyota objected to the Tabaris’ use on their website of

copyrighted photography of Lexus vehicles and the circular

“L Symbol Design mark.” Toyota also took umbrage at the

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Tabaris’ use of the string “lexus” in their domain names,

which it believed was “likely to cause confusion as to the

source of [the Tabaris’] web site.” The Tabaris removed

Toyota’s photography and logo from their site and added a

disclaimer in large font at the top. But they refused to give up

their domain names. Toyota sued, and the district court found

infringement after a bench trial. It ordered the Tabaris to

cease using their domain names and enjoined them from using

the Lexus mark in any other domain name. Pro se as they

were at trial, the Tabaris appeal.

Nominative Fair Use

When customers purchase a Lexus through the Tabaris,

they receive a genuine Lexus car sold by an authorized Lexus

dealer, and a portion of the proceeds ends up in Toyota’s bank

account. Toyota doesn’t claim the business of brokering

Lexus cars is illegal or that it has contracted with its dealers

to prohibit selling through a broker. Instead, Toyota is using

this trademark lawsuit to make it more difficult for consumers

to use the Tabaris to buy a Lexus. 

The district court applied the eight-factor test for likelihood

of confusion articulated in AMF Inc. v. Sleekcraft Boats, 599

F.2d 341, 348-49 (9th Cir. 1979), and found that the Tabaris’

domain names—buy-a-lexus.com and buyorleaselexus.com—

infringed the Lexus trademark. But we’ve held that the Sleekcraft analysis doesn’t apply where a defendant uses the mark

to refer to the trademarked good itself. See Playboy Enters.,

Inc. v. Welles, 279 F.3d 796, 801 (9th Cir. 2002); New Kids

on the Block v. News Am. Publ’g, Inc., 971 F.2d 302, 308 (9th

Cir. 1992).1 The Tabaris are using the term Lexus to describe

1This is no less true where, as here, “the defendant’s ultimate goal is to

describe his own product.” Cairns v. Franklin Mint Co., 292 F.3d 1139,

1151 (9th Cir. 2002) (emphasis omitted). In Welles, for instance, we

applied our nominative fair use analysis to a former playmate’s use of the

Playboy mark to describe herself and her website. 279 F.3d at 801. We

observed that, in those circumstances, “application of the Sleekcraft test,

which focuses on the similarity of the mark used by the plaintiff and the

defendant, would lead to the incorrect conclusion that virtually all nominative uses are confusing.” Id.

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their business of brokering Lexus automobiles; when they say

Lexus, they mean Lexus. We’ve long held that such use of the

trademark is a fair use, namely nominative fair use. And fair

use is, by definition, not infringement. The Tabaris did in fact

present a nominative fair use defense to the district court.

[1] In cases where a nominative fair use defense is raised,

we ask whether (1) the product was “readily identifiable”

without use of the mark; (2) defendant used more of the mark

than necessary; or (3) defendant falsely suggested he was

sponsored or endorsed by the trademark holder. Welles, 279

F.3d at 801 (quoting New Kids, 971 F.2d at 308-09). This test

“evaluates the likelihood of confusion in nominative use

cases.” Id. It’s designed to address the risk that nominative

use of the mark will inspire a mistaken belief on the part of

consumers that the speaker is sponsored or endorsed by the

trademark holder. The third factor speaks directly to the risk

of such confusion, and the others do so indirectly: Consumers

may reasonably infer sponsorship or endorsement if a company uses an unnecessary trademark or “more” of a mark than

necessary. But if the nominative use satisfies the three-factor

New Kids test, it doesn’t infringe. If the nominative use does

not satisfy all the New Kids factors, the district court may

order defendants to modify their use of the mark so that all

three factors are satisfied; it may not enjoin nominative use of

the mark altogether.2

[2] A. The district court enjoined the Tabaris from using

“any . . . domain name, service mark, trademark, trade name,

meta tag or other commercial indication of origin that

includes the mark LEXUS.” A trademark injunction, particularly one involving nominative fair use, can raise serious First

Amendment concerns because it can interfere with truthful

communication between buyers and sellers in the market2

If defendants are unable or unwilling to modify their use of the mark

to comply with New Kids, then the district court’s order to modify may

effectively enjoin defendants from using the mark at all. 

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place. See Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 763-64 (1976).

Accordingly, “we must [e]nsure that [the injunction] is tailored to eliminate only the specific harm alleged.” E. & J.

Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1297 (9th

Cir. 1992). To uphold the broad injunction entered in this

case, we would have to be convinced that consumers are

likely to believe a site is sponsored or endorsed by a trademark holder whenever the domain name contains the string of

letters that make up the trademark.

In performing this analysis, our focus must be on the “ ‘reasonably prudent consumer’ in the marketplace.” Cf. Dreamwerks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129

(9th Cir. 1998) (describing the test for likelihood of confusion

in analogous Sleekcraft context). The relevant marketplace is

the online marketplace, and the relevant consumer is a reasonably prudent consumer accustomed to shopping online; the

kind of consumer who is likely to visit the Tabaris’ website

when shopping for an expensive product like a luxury car.

See, e.g., Interstellar Starship Servs., Ltd. v. Epix, Inc., 304

F.3d 936, 946 (9th Cir. 2002). Unreasonable, imprudent and

inexperienced web-shoppers are not relevant. 

[3] The injunction here is plainly overbroad—as even

Toyota’s counsel grudgingly conceded at oral argument—

because it prohibits domain names that on their face dispel

any confusion as to sponsorship or endorsement. The Tabaris

are prohibited from doing business at sites like independentlexus-broker.com and we-are-definitely-not-lexus.com,

although a reasonable consumer wouldn’t believe Toyota

sponsors the websites using those domains. Prohibition of

such truthful and non-misleading speech does not advance the

Lanham Act’s purpose of protecting consumers and preventing unfair competition; in fact, it undermines that rationale by

frustrating honest communication between the Tabaris and

their customers. 

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Even if we were to modify the injunction to exclude

domain names that expressly disclaim sponsorship or

endorsement (like the examples above), the injunction would

still be too broad. The Tabaris may not do business at lexusbroker.com, even though that’s the most straightforward,

obvious and truthful way to describe their business. The nominative fair use doctrine allows such truthful use of a mark,

even if the speaker fails to expressly disavow association with

the trademark holder, so long as it’s unlikely to cause confusion as to sponsorship or endorsement. See Welles, 279 F.3d

at 803 n.26. In New Kids, for instance, we found that use of

the “New Kids on the Block” mark in a newspaper survey did

not infringe, even absent a disclaimer, because the survey said

“nothing that expressly or by fair implication connotes

endorsement or joint sponsorship.” 971 F.2d at 309. Speakers

are under no obligation to provide a disclaimer as a condition

for engaging in truthful, non-misleading speech. 

Although our opinion in Volkswagenwerk Aktiengesellschaft v. Church remarked on that defendant’s “prominent use

of the word ‘Independent’ whenever the terms ‘Volkswagen’

or ‘VW’ appeared in his advertising,” 411 F.2d 350, 352 (9th

Cir. 1969), it isn’t to the contrary. The inclusion of such

words will usually negate any hint of sponsorship or endorsement, which is why we mentioned them in concluding that

there was no infringement in Volkswagenwerk. Id. But that

doesn’t mean such words are required, and Volkswagenwerk

doesn’t say they are. Our subsequent cases make clear they’re

not. See Welles, 279 F.3d at 803 n.26; New Kids, 971 F.2d at

309.3

3The Sixth Circuit enjoined a domain name in part because it did “not

include words like ‘independent’ or ‘unaffiliated,’ ” but in that case there

were additional factors indicating sponsorship or endorsement, including

the use of stylized versions of the plaintiff’s marks on the site. PACCAR

Inc. v. TeleScan Techs., L.L.C., 319 F.3d 243, 256-57 (6th Cir. 2003).

Where these or other factors suggest that nominative use is likely to cause

confusion, a disclaimer may well be necessary. But a disclaimer is not

required every time a URL contains a mark. 

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[4] The district court reasoned that the fact that an internet

domain contains a trademark will “generally” suggest sponsorship or endorsement by the trademark holder. When a

domain name consists only of the trademark followed by

.com, or some other suffix like .org or .net, it will typically

suggest sponsorship or endorsement by the trademark holder.

Cf. Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1327

(9th Cir. 1998).4 This is because “[a] customer who is unsure

about a company’s domain name will often guess that the

domain name is also the company’s name.” Id. (quoting

Cardservice Int’l v. McGee, 950 F. Supp. 737, 741 (E.D. Va.

1997)) (internal quotation marks omitted); see also Brookfield

Commc’ns, Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036,

1045 (9th Cir. 1999). If customers type in trademark.com and

find the site occupied by someone other than the trademark

holder, they may well believe it is the trademark holder,

despite contrary evidence on the website itself. Alternatively,

they may become discouraged and give up looking for the

trademark holder’s official site, believing perhaps that such a

website doesn’t exist. Panavision, 141 F.3d at 1327.

4Of course, not every trademark.com domain name is likely to cause

consumer confusion. See Interstellar Starship, 304 F.3d at 944-46. For

instance, we observed in Interstellar Starship that an apple orchard could

operate at the website apple.com without risking confusion with Apple

Computers, in light of the vast difference between their products. Id. at

944. “If, however, the apple grower . . . competed directly with Apple

Computer by selling computers, initial interest confusion probably would

result,” as the apple grower would be using the apple.com domain to

appropriate the goodwill Apple Computer had developed in its trademark.

Id.

When a website deals in goods or services related to a trademarked

brand, as in this case, it is much closer to the second example, where

apple.com competes with Apple Computers. If a company that repaired

iPods, iPads and iPhones were to set up at apple.com, for instance, consumers would naturally assume that the company was sponsored or

endorsed by Apple (or, more likely, that it was Apple). Where a site is

used to sell goods or services related to the trademarked brand, a trademark.com domain will therefore suggest sponsorship or endorsement and

will not generally be nominative fair use. 

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[5] But the case where the URL consists of nothing but a

trademark followed by a suffix like .com or .org is a special

one indeed. See Brookfield, 174 F.3d at 1057.5 The importance ascribed to trademark.com in fact suggests that far less

confusion will result when a domain making nominative use

of a trademark includes characters in addition to those making

up the mark. Cf. Entrepreneur Media, Inc. v. Smith, 279 F.3d

1135, 1146-47 (9th Cir. 2002). Because the official Lexus site

is almost certain to be found at lexus.com (as, in fact, it is),

it’s far less likely to be found at other sites containing the

word Lexus. On the other hand, a number of sites make nominative use of trademarks in their domains but are not sponsored or endorsed by the trademark holder: You can preen

about your Mercedes at mercedesforum.com and mercedestalk.net, read the latest about your double-skim-no-whip latte

at starbucksgossip.com and find out what goodies the world’s

greatest electronics store has on sale this week at fryselectronics-ads.com. Consumers who use the internet for

shopping are generally quite sophisticated about such matters

and won’t be fooled into thinking that the prestigious German

car manufacturer sells boots at mercedesboots.com, or homes

at mercedeshomes.com, or that comcastsucks.org is sponsored

or endorsed by the TV cable company just because the string

of letters making up its trademark appears in the domain. 

When people go shopping online, they don’t start out by

typing random URLs containing trademarked words hoping to

5Citing our refusal to distinguish between “Golden Door,” a spa, and a

competing “Golden Door for Hair,” the district court treated buyorleaselexus.com as legally indistinguishable from lexus.com. Golden Door,

Inc. v. Odisho, 646 F.2d 347, 350 (9th Cir. 1980); see also PACCAR Inc.,

319 F.3d at 252. According to Toyota, such “legally identical” phrases in

a domain name can never be fair use. But there is no such rule; we look

to context to determine how much weight to give the words accompanying

a mark. See, e.g., Brother Records, Inc. v. Jardine, 318 F.3d 900, 908 (9th

Cir. 2003). In Golden Door, we noted that the defendant answered the

phone “Golden Door,” not “Golden Door for Hair,” and featured the

words “Golden Door” prominently in its signs. 646 F.2d at 350. 

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get a lucky hit. They may start out by typing trademark.com,

but then they’ll rely on a search engine or word of mouth.6 If

word of mouth, confusion is unlikely because the consumer

will usually be aware of who runs the site before typing in the

URL. And, if the site is located through a search engine, the

consumer will click on the link for a likely-relevant site without paying much attention to the URL. Use of a trademark in

the site’s domain name isn’t materially different from use in

its text or metatags in this context; a search engine can find

a trademark in a site regardless of where exactly it appears.

In Welles, we upheld a claim that use of a mark in a site’s

metatags constituted nominative fair use; we reasoned that

“[s]earchers would have a much more difficult time locating

relevant websites” if the law outlawed such truthful, nonmisleading use of a mark. 279 F.3d at 804. The same logic

applies to nominative use of a mark in a domain name.

[6] Of course a domain name containing a mark cannot be

nominative fair use if it suggests sponsorship or endorsement

by the trademark holder. We’ve already explained why trademark.com domains have that effect. See pp. 9707-08 supra.

Sites like trademark-USA.com, trademark-of-glendale.com or

e-trademark.com will also generally suggest sponsorship or

endorsement by the trademark holder; the addition of “e”

merely indicates the electronic version of a brand, and a location modifier following a trademark indicates that consumers

can expect to find the brand’s local subsidiary, franchise or

affiliate. See Visa Int’l Serv. Ass’n v. JSL Corp., No. 08-

15206 (9th Cir. June 28, 2010). For even more obvious reasons, domains like official-trademark-site.com or we-aretrademark.com affirmatively suggest sponsorship or endorsement by the trademark holder and are not nominative fair use.7

6By “word of mouth” we, of course, refer not merely to spoken recommendations from friends and acquaintances, but to the whole range of

information available to online shoppers, including chat rooms, discussion

forums, feedback and evaluation websites, and the like. 

7Domain names containing trademarks may also be prohibited because

they dilute the value of those marks—for instance, by creating negative

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But the district court’s injunction is not limited to this narrow

class of cases and, indeed, the Tabaris’ domain names do not

fall within it. 

[7] When a domain name making nominative use of a

mark does not actively suggest sponsorship or endorsement,

the worst that can happen is that some consumers may arrive

at the site uncertain as to what they will find. But in the age

of FIOS, cable modems, DSL and T1 lines, reasonable, prudent and experienced internet consumers are accustomed to

such exploration by trial and error. Cf. Interstellar Starship,

304 F.3d at 946. They skip from site to site, ready to hit the

back button whenever they’re not satisfied with a site’s contents. They fully expect to find some sites that aren’t what

they imagine based on a glance at the domain name or search

engine summary. Outside the special case of trademark.com,

or domains that actively claim affiliation with the trademark

holder, consumers don’t form any firm expectations about the

sponsorship of a website until they’ve seen the landing page

—if then. This is sensible agnosticism, not consumer confusion. See Jennifer E. Rothman, Initial Interest Confusion:

Standing at the Crossroads of Trademark Law, 27 Cardozo L.

Rev. 105, 122-24, 140, 158 (2005). So long as the site as a

whole does not suggest sponsorship or endorsement by the

trademark holder, such momentary uncertainty does not preclude a finding of nominative fair use. 

Toyota argues it is entitled to exclusive use of the string

“lexus” in domain names because it spends hundreds of milassociations with the brand. Cf. Playboy Enters., Inc. v. Netscape

Commc’ns Corp., 354 F.3d 1020, 1033 (9th Cir. 2004). For example, the

website People of Walmart, which publishes rude photos of Walmart

shoppers at peopleofwalmart.com, might dilute the Walmart trademark by

associating it with violations of customers’ privacy and the idea that a visitor to Walmart stores risks being photographed and ridiculed on the internet. See Jeffrey Zaslow, Surviving the Age of Humiliation, Wall St. J.,

May 5, 2010, at D1. But Toyota does not allege that the Tabaris’ site has

any such effect. 

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lions of dollars every year making sure everyone recognizes

and understands the word “Lexus.” But “[a] large expenditure

of money does not in itself create legally protectable rights.”

Smith v. Chanel, Inc., 402 F.2d 562, 568 (9th Cir. 1968); see

also Ty Inc. v. Perryman, 306 F.3d 509, 513 (7th Cir. 2002);

Mark A. Lemley, The Modern Lanham Act and the Death of

Common Sense, 108 Yale L.J. 1687, 1714-15 (1999). Indeed,

it is precisely because of Toyota’s investment in the Lexus

mark that “[m]uch useful social and commercial discourse

would be all but impossible if speakers were under threat of

an infringement lawsuit every time they made reference to

[Lexus] by using its trademark.” New Kids, 971 F.2d at 307.8

It is the wholesale prohibition of nominative use in domain

names that would be unfair. It would be unfair to merchants

seeking to communicate the nature of the service or product

offered at their sites. And it would be unfair to consumers,

who would be deprived of an increasingly important means of

receiving such information. As noted, this would have serious

First Amendment implications. The only winners would be

companies like Toyota, which would acquire greater control

over the markets for goods and services related to their trademarked brands, to the detriment of competition and consumers. The nominative fair use doctrine is designed to prevent

this type of abuse of the rights granted by the Lanham Act.

[8] B. Toyota asserts that, even if the district court’s

injunction is overbroad, it can be upheld if limited to the

Tabaris’ actual domain names: buyorleaselexus.com and buya-lexus.com. We therefore apply the three-part New Kids test

to the domain names, and we start by asking whether the

8

“Words . . . do not worm their way into our discourse by accident.”

Alex Kozinski, Trademarks Unplugged, 68 N.Y.U. L. Rev. 960, 975

(1993). Trademark holders engage in “well-orchestrated campaigns

intended to burn them into our collective consciousness.” Id. Although

trademark holders gain something by pushing their trademark into the lexicon, they also inevitably lose a measure of control over their mark. 

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Tabaris’ use of the mark was “necessary” to describe their

business. Toyota claims it was not, because the Tabaris could

have used a domain name that did not contain the Lexus

mark. It’s true they could have used some other domain name

like autobroker.com or fastimports.com, or have used the text

of their website to explain their business. But it’s enough to

satisfy our test for necessity that the Tabaris needed to communicate that they specialize in Lexus vehicles, and using the

Lexus mark in their domain names accomplished this goal.

While using Lexus in their domain names wasn’t the only

way to communicate the nature of their business, the same

could be said of virtually any choice the Tabaris made about

how to convey their message: Rather than using the internet,

they could publish advertisements in print; or, instead of taking out print ads, they could rely on word of mouth. We’ve

never adopted such a draconian definition of necessity, and

we decline to do so here. In Volkswagenwerk, for instance, we

affirmed the right of a mechanic to put up a sign advertising

that he specialized in repairing Volkswagen cars, although he

could have used a sandwich board, distributed leaflets or

shouted through a megaphone. 411 F.2d at 352.9 One way or

the other, the Tabaris need to let consumers know that they

are brokers of Lexus cars, and that’s nearly impossible to do

without mentioning Lexus, cf. Monte Carlo Shirt, Inc. v. Daewoo Int’l (Am.) Corp., 707 F.2d 1054, 1058 (9th Cir. 1983),

be it via domain name, metatag, radio jingle, telephone solicitation or blimp. 

9The Seventh Circuit has similarly upheld the right of a seller of Beanie

Babies to operate at “bargainbeanies.com” on the grounds that “[y]ou

can’t sell a branded product without using its brand name.” Ty Inc., 306

F.3d at 512. In a prophetic choice of examples, Judge Posner remarked

that prohibiting such a domain name “would amount to saying that if a

used car dealer truthfully advertised that it sold Toyotas, or if a muffler

manufacturer truthfully advertised that it specialized in making mufflers

for installation in Toyotas, Toyota would have a claim of trademark

infringement.” Id.

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The fact that the Tabaris also broker other types of cars

does not render their use of the Lexus mark unnecessary.10

Lisa Tabari testified: “I in my conviction and great respect for

the company always try to convince the consumer to first purchase a Lexus or Toyota product.” If customers decide to buy

some other type of car, the Tabaris may help with that, but

their specialty is Lexus. The Tabaris are entitled to decide

what automotive brands to emphasize in their business, and

the district court found that the Tabaris do in fact specialize

in Lexus vehicles. Potential customers would naturally be

interested in that fact, and it was entirely appropriate for the

Tabaris to use the Lexus mark to let them know it. 

Nor are we convinced by Toyota’s argument that the

Tabaris unnecessarily used domain names containing the

Lexus trademark as their trade name. See Volkswagenwerk,

411 F.2d at 352. The Tabaris’ business name is not buyorleaselexus.com or buy-a-lexus.com; it’s Fast Imports. Toyota

points out that the Tabaris’ domain names featured prominently in their advertising, but that by no means proves the

domain names were synonymous with the Tabaris’ business.

The Tabaris may have featured their domain names in their

advertisements in order to tell consumers where to find their

website, as well as to communicate the fact that they can help

buy or lease a Lexus. Toyota would have to show significantly more than “prominent” advertisement to establish the

contrary. We therefore conclude that the Tabaris easily satisfy

the first New Kids factor. 

[9] As for the second and third steps of our nominative fair

use analysis, Toyota suggests that use of the stylized Lexus

10Toyota doesn’t suggest that the Tabaris used the Lexus mark to refer

to those other cars, or that the Tabaris used the Lexus mark in order to

redirect customers to those cars. See, e.g., Nissan Motor Co. v. Nissan

Computer Corp., 378 F.3d 1002, 1019 (9th Cir. 2004). Everyone seems to

concede the Tabaris are bona fide Lexus brokers. We therefore do not consider whether the Tabaris used the Lexus mark in conjunction with brokering vehicles other than Lexus, or whether such use would be infringing.

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mark and “Lexus L” logo was more use of the mark than necessary and suggested sponsorship or endorsement by Toyota.

This is true: The Tabaris could adequately communicate their

message without using the visual trappings of the Lexus

brand. New Kids, 971 F.2d at 308 n.7. Moreover, those visual

cues might lead some consumers to believe they were dealing

with an authorized Toyota affiliate. Imagery, logos and other

visual markers may be particularly significant in cyberspace,

where anyone can convincingly recreate the look and feel of

a luxury brand at minimal expense. It’s hard to duplicate a

Lexus showroom, but it’s easy enough to ape the Lexus site.

[10] But the Tabaris submitted images of an entirely

changed site at the time of trial: The stylized mark and “L”

logo were gone, and a disclaimer appeared in their place. The

disclaimer stated, prominently and in large font, “We are not

an authorized Lexus dealer or affiliated in any way with

Lexus. We are an Independent Auto Broker.” While not

required, such a disclaimer is relevant to the nominative fair

use analysis. See Welles, 279 F.3d at 803. Toyota claims the

Tabaris’ disclaimer came too late to protect against confusion

caused by their domain names, as such confusion would occur

before consumers saw the site or the disclaimer. See Brookfield, 174 F.3d at 1057. But nothing about the Tabaris’

domains would give rise to such confusion; the Tabaris did

not run their business at lexus.com, and their domain names

did not contain words like “authorized” or “official.” See pp.

9709-11 supra. Reasonable consumers would arrive at the

Tabaris’ site agnostic as to what they would find. Once there,

they would immediately see the disclaimer and would

promptly be disabused of any notion that the Tabaris’ website

is sponsored by Toyota. Because there was no risk of confusion as to sponsorship or endorsement, the Tabaris’ use of the

Lexus mark was fair. 

[11] This makeover of the Tabaris’ site is relevant because

Toyota seeks only forward-looking relief. In Volkswagenwerk, we declined to order an injunction where the defendant

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had likewise stopped all infringing activities by the time of

trial, 411 F.2d at 352, although we’ve said that an injunction

may be proper if there’s a risk that infringing conduct will

recur, Polo Fashions, Inc. v. Dick Bruhn, Inc., 793 F.2d 1132,

1135-36 (9th Cir. 1986). Even assuming some form of an

injunction is required to prevent relapse in this case, the

proper remedy for infringing use of a mark on a site generally

falls short of entirely prohibiting use of the site’s domain

name, as the district court did here. See Interstellar Starship,

304 F.3d at 948. “[O]nly upon proving the rigorous elements

of cyber-squatting . . . have plaintiffs successfully forced the

transfer of an infringing domain name.” Id. Forced relinquishment of a domain is no less extraordinary. 

[12] The district court is in a better position to assess in the

first instance the timing and extent of any infringing conduct,

as well as the scope of the remedy, if any remedy should

prove to be required. We therefore vacate the injunction and

remand for reconsideration. The important principle to bear in

mind on remand is that a trademark injunction should be tailored to prevent ongoing violations, not punish past conduct.

Speakers do not lose the right to engage in permissible speech

simply because they may have infringed a trademark in the

past.

C. When considering the scope and timing of any infringement on remand, the district court must eschew application of

Sleekcraft and analyze the case solely under the rubric of

nominative fair use. Cairns, 292 F.3d at 1151. The district

court treated nominative fair use as an affirmative defense to

be established by the Tabaris only after Toyota showed a likelihood of confusion under Sleekcraft. This was error; nominative fair use “replaces” Sleekcraft as the proper test for likely

consumer confusion whenever defendant asserts to have

referred to the trademarked good itself. Id. (emphasis omitted); see also Welles, 279 F.3d at 801.

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On remand, Toyota must bear the burden of establishing

that the Tabaris’ use of the Lexus mark was not nominative

fair use. A finding of nominative fair use is a finding that the

plaintiff has failed to show a likelihood of confusion as to

sponsorship or endorsement. See Welles, 279 F.3d at 801;

New Kids, 971 F.2d at 308 (“Because [nominative fair use]

does not implicate the source-identification function that is

the purpose of trademark, it does not constitute unfair competition.”).11 And, as the Supreme Court has unambiguously

instructed, the Lanham Act always places the “burden of

proving likelihood of confusion . . . on the party charging

infringement.” KP Permanent Make-Up, Inc. v. Lasting

Impression I, Inc., 543 U.S. 111, 118 (2004); see also id. at

120-21. In this case, that party is Toyota. “[A]ll the [Tabaris]

need[ ] to do is to leave the factfinder unpersuaded.” Id. at

120. 

We have previously said the opposite: “[T]he nominative

fair use defense shifts to the defendant the burden of proving

no likelihood of confusion.” Brother Records, Inc., 318 F.3d

at 909 n.5. But that rule is plainly inconsistent with Lasting

Impression and has been “effectively overruled.” Miller v.

Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc); see

also 4 McCarthy on Trademarks and Unfair Competition

§ 23:11 at 82 n.5 (4th ed. 2010). A defendant seeking to assert

nominative fair use as a defense need only show that it used

the mark to refer to the trademarked good, as the Tabaris

undoubtedly have here. The burden then reverts to the plaintiff to show a likelihood of confusion.

11This is necessarily so because, unlike classic fair use, nominative fair

use is not specifically provided for by statute. A court may find classic fair

use despite “proof of infringement” because the Lanham Act authorizes

that result. See 15 U.S.C. § 1115(b)(4). Nominative fair use, on the other

hand, represents a finding of no liability under that statute’s basic prohibition of infringing use. See id. § 1114. 

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Laches

The Tabaris claim Toyota’s case is barred by laches. This

would obviate any need to remand, as it would provide a complete defense to Toyota’s trademark claims. The district court

rejected this defense, and we review for abuse of discretion.

United States v. Marolf, 173 F.3d 1213, 1218 (9th Cir. 1999).

[13] The district court found that Toyota waited six months

before contacting the Tabaris after it became aware of their

domain names. The Tabaris point to no evidence that would

justify overturning that finding on appeal. Nor was it an abuse

of discretion to conclude that short delay was reasonable. An

additional delay of two years ensued before Toyota brought

this suit, but during that period the parties were actively seeking to resolve this matter out of court. It was not unreasonable

for Toyota to attempt to avoid the expense and inconvenience

of a lawsuit. See, e.g., E. & J. Gallo Winery, 967 F.2d at

1285, 1294.

[14] Nor did the relatively brief delay prejudice the

Tabaris. See id. at 1294. The Tabaris note that one witness

answered “I don’t remember” in her deposition, but they present no evidence that the witness’s loss of memory occurred

during the period of delay. We must therefore affirm the district court’s rejection of the Tabaris’ laches defense.

Seventh Amendment

[15] Finally, we consider the Tabaris’ claim that the district court deprived them of their right to a trial by jury when

it failed to empanel a jury to decide Toyota’s trademark

claims. Because Toyota only sought an injunction, the district

court did not err by resolving its claims in a bench trial. See,

e.g., Anti-Monopoly, Inc. v. Gen. Mills Fun Group, 611 F.2d

296, 307-08 (9th Cir. 1979). Nor were the Tabaris entitled to

a jury trial on their equitable defenses to those claims, Danjaq

LLC v. Sony Corp., 263 F.3d 942, 962 (9th Cir. 2001), or their

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counterclaims seeking declarations of trademark invalidity

and non-infringement, Shubin v. U.S. Dist. Ct. for S.D. Cal.,

313 F.2d 250, 251-52 (9th Cir. 1963). 

The Tabaris also claim the district court erred by bifurcating the trademark claims from the Tabaris’ counterclaims for

intentional and negligent interference with prospective economic advantage, as to which the Tabaris undoubtedly did

have a right to trial by jury. After resolving the trademark

claims in a bench trial, the district court granted summary

judgment against the Tabaris on the interference counterclaims. This was proper only if there were no common factual

issues among the bifurcated claims; otherwise, the interference counterclaims should have been addressed first in order

to avoid the risk that findings made in the bench trial would

become the law of the case and prevent a jury from determining the common issues. See Dollar Sys., Inc. v. Avcar Leasing

Sys., Inc., 890 F.2d 165, 170 (9th Cir. 1989). 

[16] There’s no need for an exhaustive inquiry to determine whether there was factual overlap between the claims;

we can take Toyota’s word for it. After the bench trial, Toyota

sought summary judgment on the Tabaris’ counterclaims on

the ground that: 

Much of the testimony and evidence offered at trial

to support or refute Defendants’ affirmative defenses

and . . . counterclaims . . . involve the same issues

of proof necessary to Defendants’ pending tortious

interference counterclaims. For example, the factual

allegations underlying Defendants’ affirmative

defense of inequitable conduct, unclean hands and

trademark misuse are also central to Defendants’ tortious interference counterclaims. 

Toyota claimed there was no longer any need for a jury trial

because the district court’s bench trial findings constituted the

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“law of the case.”

12 Of course, this is precisely the result—

forfeiture of the right to trial by jury—that the rule articulated

in Dollar Systems strives to prevent. Id. Because Toyota never

should have been in a position to make such an argument, the

procedure adopted by the district court was error.

[17] Nevertheless, it was harmless, and there’s no need to

revisit the issue on remand. See Kulas v. Flores, 255 F.3d

780, 784 (9th Cir. 2001). When the district court granted summary judgment on the Tabaris’ counterclaims, it didn’t rely on

any factual findings made at the bench trial. It determined that

any reasonable jury would have to hold for Toyota on the

counterclaims: With regard to the Tabaris’ claim of negligent

interference, it held that the Tabaris had failed to provide any

evidence that Toyota owed them a duty of care. See Stolz v.

Wong Commc’ns Ltd. P’ship, 31 Cal. Rptr. 2d 229, 238 (Cal.

Ct. App. 1994). And, with regard to the intentional interference claim, it found that Toyota’s act of bringing suit was

absolutely privileged, Silberg v. Anderson, 786 P.2d 365,

370-72 (Cal. 1990), and that the Tabaris had failed to provide

any other evidence of intentional interference. The Tabaris

don’t challenge the substance of those holdings on appeal.13

12Toyota artfully maneuvered to obscure this factual overlap before trial

and again on appeal. Toyota argued in favor of bifurcation on the grounds

that even “a cursory review” would show “that there are no common

issues of fact between any of these original claims and the counterclaims.”

This was technically correct: The overlap was between the Tabaris’

defenses and counterclaims, not Toyota’s “original claims” and the

Tabaris’ counterclaims. Toyota evidently hoped that the district court

would not notice the careful parsing of its language, and that the Tabaris

(who are defending this case pro se) would not call it to the court’s attention. 

Toyota is playing the same game on appeal: It states that bifurcation

was proper because “[t]here was no factual overlap between Toyota’s

trademark claims and Fast Imports’ interference claims.” But Toyota is

only telling half the story by talking about only half of the relevant claims;

Toyota admitted as much in its motion for summary judgment. Such selective memory exceeds the bounds of zealous advocacy. 

13The Tabaris do challenge the district court’s holding that they failed

to present evidence that they were damaged by Toyota’s alleged tortious

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Because the district court could have granted summary judgment on this basis before the bench trial, it was harmless error

for it to do so after the trial was concluded. See Kulas, 255

F.3d at 784. On remand, the district court therefore need not

disturb its grant of summary judgment on the Tabaris’ interference counterclaims. 

* * *

We vacate and remand for proceedings consistent with this

opinion. At the very least, the injunction must be modified to

allow some use of the Lexus mark in domain names by the

Tabaris. Trademarks are part of our common language, and

we all have some right to use them to communicate in truthful, non-misleading ways. 

Many of the district court’s errors seem to be the result of

unevenly-matched lawyering, as Toyota appears to have taken

advantage of the fact that the Tabaris appeared pro se. See,

e.g., p. 9720 n.12 supra. To avoid similar problems on

remand, the district court might consider contacting members

of the bar to determine if any would be willing to represent

the Tabaris at a reduced rate or on a volunteer basis. 

VACATED AND REMANDED. 

Costs on appeal are awarded to the Tabaris. 

FERNANDEZ, Circuit Judge, concurring:

I concur in the majority’s conclusion that the district court

erred in its handling of the nominative fair use defense. I write

conduct. But the district court also found that no reasonable jury could

find Toyota liable. The Tabaris’ argument that they were damaged is irrelevant in light of this unchallenged holding regarding liability. 

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separately, however, because I cannot concur in all that is said

by the majority.

First, and principally, I feel compelled to disassociate

myself from statements by the majority which are not supported by the evidence or by the district court’s findings. I

simply cannot concur in essentially factual statements whose

provenance is our musings rather than the record and determinations by trier of fact. For example, on this record I do not

see the basis for the majority’s assertion that the “relevant

consumer is . . . accustomed to shopping online”;1 or that

“[c]onsumers who use the internet for shopping are generally

quite sophisticated”

2

 so that they are not likely to be misled;

or that “the worst that can happen is that some consumers

may arrive at [a] site uncertain as to what they will find”;3 or

that, in fact, consumers are agnostic and, again, not likely to

be misled;4 or that “[r]easonable consumers would arrive at

the Tabaris’ site agnostic as to what they would find.”

5

Second, I am unable to join the gratuitous slap at counsel

for Toyota in the majority opinion,6 which I see as entirely

unnecessary to our decision or even to the upholding of the

marmoreal surface of the law. 

Finally, I do not join the final textual paragraph, which

nudges the district court to find pro bono counsel for the

Tabaris, who have neither chosen to retain their own counsel

nor demonstrated that they cannot do so. To the extent that the

majority sees their activities as especially socially worthy and

above reproach, I do not agree.

Thus, I respectfully concur in the result.

1Majority opinion, page 9706. 

2

Id. at 9709. 

3

Id. at 9711. 

4

Id. at 9711. 

5

Id. at 9715. 

6

Id. at 9720 n.12. 

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