Infringement or Identification?: Nominative Fair Use and the Resale of Luxury Goods

November 1, 2022

The market for luxury resale is booming and is predicted to continue its massive growth.  Luxury resellers typically market and describe goods using the luxury brand’s trademarks, including the brand name and logos.  Luxury brands utilize their market power to “bully” smaller resellers and often take issue with third parties using their trademarks in any context, even when the use of the mark does not encroach on the luxury brand’s share of the market.  However, the doctrine of nominative fair use allows the use of a brand’s trademark when referring to that brand’s goods.  An alleged infringer will be found liable for trademark infringement if their use of the trademarks is likely to confuse consumers about the source or the origin of the goods or the nature of the infringer’s relationship with the trademark owner.

The U.S. Supreme Court outlined an early version of the doctrine of nominative fair use in 1924, but it has since declined to endorse any of the various ways that circuit courts have applied the doctrine.  The current nominative fair use landscape leaves both resellers and luxury brands alike unsure as to what nominative fair use analysis will apply and which burdens each party will bear.

This Note presents a solution that allows resellers to use a luxury brand’s trademarks, so long as the goods are authenticated and the resellers’ use does not cause consumer confusion.  This Note’s proposed solution is designed to limit overreach by brand owners and to allow the resale market to flourish—an important goal given that the resale market benefits consumers, resellers, luxury brands, and society alike.

November 2022

No. 2