KP Permanent Make-Up v. Lasting Impressions I, 543 U.S. ___ (2004).
FACTS: Both KP Permanent Make-Up and Lasting use the term “micro color” in marketing permanent cosmetic makeup. KP has used a single-word version of the term since 1990 or 1991. In 1992, Lasting registered a trademark that included the words “Micro Colors” under 15 U. S. C. §1051, and, in 1999, the registration became incontestable, §1065. When Lasting demanded that KP stop using the word “microcolor,” KP sued for declaratory relief, asserting the statutory affirmative defense of fair use, §1115(b)(4). The Ninth Circuit ruled consumer confusion is an element of fair use and appeared to place the burden of proof (to show an absence of confusion) on KP.
ISSUE: Does a party raising the defense of fair use to a claim of trademark infringement have a burden to negate any likelihood that the practice complained of will confuse customers about the origin of goods or services affected?
HOLDING: (Souter) A party raising the statutory affirmative defense of fair use to a claim of trademark infringement does not have a burden to negate any likelihood that the practice complained of will confuse consumers about the origin of the goods or services affected.
(a) Even if a mark is incontestable (under §1115(b)), a trademark holder has the burden of showing that the defendant’s actual practice is “likely to cause confusion, or to cause mistake, or to deceive” consumers about the origin of the goods or services in question, see, e.g., Two Pesos, Inc. v. Taco Cabana, Inc., 505 U. S. 763, 780. While cases such as Baglin v. Cusenier Co., 221 U. S. 580, are consistent with taking account of the likelihood of consumer confusion as one consideration in deciding whether a use is fair, they cannot be read to make an assessment of confusion alone dispositive or provide that the defense has a burden to negate it entirely.
(b) Since the burden of proving likelihood of confusion rests with the plaintiff, and the fair use defendant has no free-standing need to show confusion unlikely, the Court recognizes (contrary to the Ninth Circuit’s view) that some possibility of consumer confusion is compatible with fair use. . . . The Court does not rule out the pertinence of the degree of consumer confusion under the fair use defense.
(c) VACATED and REMANDED.