Yelp Sues Websites for Selling Yelp Reviews
In February 2015, Yelp, Inc. (Yelp) filed a lawsuit in California against three companies offering to post false positive reviews on Yelp’s website. Yelp maintains that these companies engaged in several illegal practices, including trademark infringement, by utilizing Yelp trademarks to advertise their review services.
The pivotal issue in this lawsuit is whether the defendant’s use of Yelp’s trademarks constitutes fair use or violates the plaintiff’s trademark rights. Similar to copyright law, fair use is a legally recognized defense to an infringement action and is rooted in the freedom of speech guarantees granted by the First Amendment. The fair use doctrine establishes limitations for trademark protection in recognition of the fact that most trademarks consist of symbols or words that are commonly used in the public domain and cannot be entirely restricted from ordinary usage.
In the context of using another company’s trademark to refer to that entity or its services, the Ninth Circuit court developed three conditions to determine fair use. If the following “nominative fair use” criteria are met, then a company may refer to a trademarked name: (i) the use of the mark is necessary to distinguish the service, (ii) only a bare minimum reference to the mark is made to identify the service and (iii) the user does not imply that it is affiliated with the trademark owner in any capacity.
Nominative fair use is relied upon in several common scenarios, such as when a business mentions a competing product in an advertisement. However, Yelp claims that the defendants are engaged in practices that go beyond just identifying Yelp by name; rather, Yelp claims, the defendants have appropriated Yelp’s name and design in such a way as to create actual confusion among consumers as to whether these companies are affiliated with or supported by Yelp.
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