The U.S. Ninth Circuit Court of Appeals in San Francisco on Thursday ruled that an authorized Lexus dealer can use the word "Lexus" in its Internet domain name. It also ruled that the Japanese automaker took advantage of two auto brokers who represented themselves in court.
Toyota sued Lisa and Farzad Tabari, the owners of Fast Imports, in a Los Angeles federal court in 2003 stating that consumers would be confused by the use of the name Lexus in the defendant's Web site domain name and the use of Lexus photos and the Lexus logo.
Toyota objected to the Tabaris' use of copyrighted Lexus photos and the Lexus logo, and to the Internet domain names buy-a-lexus.com and buyorleaselexus.com.
The federal court judge ruled in favor of Toyota and ordered the Tabaris to remove term Lexus from the Web sites.
The Tabaris, who were not represented by counsel, appealed their case. The three-judge panel found that the federal court's injunction was too broad. The panel explained that domain names such as we-are-definitely-not-lexus.com and independent-lexus-broker.com wouldn't confuse a reasonable person into thinking the Japanese automaker sponsored the sites. More specifically, the Tabaris had used the term Lexus to describe their business of brokering Lexus cars.
Chief Judge Alex Kozinski wrote: "[W]hen 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."
"Trademarks are part of our common language, and we all have some right to use them to communicate in truthful, nonmisleading ways," Kozinski wrote. "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."