The 9th U.S. Circuit Court of Appeals in San Francisco held that the use of a workers compensation insurer’s name and product name by a publisher was considered fair use and dismissed the lawsuit.

In Applied Underwriters Inc. v. Lichtenegger, et al., filed Thursday, Omaha, Nebraska-based Applied, a Berkshire Hathaway Co., filed a complaint against Providence Publications LLC, of Granite Bay, California, alleging that it diluted and infringed on its trademark when it used its name and the trademarked name of its workers comp financing program in the name and advertising of a webinar.

In November 2015, Providence Publications began advertising an online seminar and DVD using APPLIED UNDERWRITERS and EQUITYCOMP in the title of the webcast. Applied Underwriting had been using both marks by 2002 and trademarked them, as well as stylized marks depicting a St. Bernard, with the U.S. Patent and Trademark Office.

Applied Underwriters alleged that Providence used the marks without its “authority or permission and in reckless disregard of [its] federal trademark registrations and its rights,” and claimed that Providence “specifically and intentionally” targeted its marketing and advertising to brokers and business organizations who use Applied Underwriters’ services. It asserted claims against Providence asserting trademark infringement and dilution, federal and state unfair competition, and filed a temporary restraining order, which was denied.

Providence moved to dismiss the case, arguing it was protected under the First Amendment and that its use of the mark constituted nominal fair use.

In July 2017, a district court granted Providence’s motion to dismiss on the grounds that its use of the marks constituted “nominative fair use.” Applied Underwriters was granted leave to amend, but it failed to file within the 30-day time frame and the court closed the case. Applied appealed, and the circuit court remanded the case to determine whether the complaint was dismissed for failure to state a claim or due to Applied Underwriters’ failure to file an amended complaint, to which the district court clarified was the latter.

The circuit court held that the district court abused its discretion in dismissing the case because it had not issued an order requiring Applied Underwriters to file an amended complaint. However, the circuit court affirmed the district court’s first dismissal for failure to state a claim, concluding that Providence’s use of the trademarks in the webinar was a nominative fair use because Applied Underwriters’ service was not readily identifiable without the use of the trademarks, and that the use of the trademarks did not suggest sponsorship or endorsement. 

The court noted that the webinar exclusively critiqued the EquityComp service, and that the title, “Applied Underwriters’ EquityComp Program Like it, Leave it, or Let it be?” satisfies the court’s test that Providence needed to communicate that it was critiquing the program and that using the mark in the title and description of the event accomplished that goal. Even though Applied argued that using “Applied Underwriters” was unnecessary and redundant, the court disagreed, finding that Providence used the mark to identify the company that offered EquityComp. Providence also did not use the stylized lettering or the St. Bernard in its advertisement of the webinar, and the court found that Providence correctly argued that “any likelihood of confusion is implausible due to the content” of the webinar.

As a result, the circuit court held that district court properly concluded that Applied Underwriters failed to state a claim for which relief could be granted because it was clear that Providence’s alleged infringement constituted nominative fair use.

“What we’ve seen in this lawsuit is another example of Applied’s scorched-earth policy, which also shows in the many lawsuits that [Applied] has had with its own insureds,” said Dale Debber, publisher of Providence Publications.

Applied did not respond to a request for comment.