Introduction

In the landmark case of Solid 21, Inc. v. Breitling U.S.A., Inc., 96 F.4th 265 (2d Cir. 2024), the United States Court of Appeals for the Second Circuit addressed pivotal questions surrounding trademark infringement and the application of the fair use defense under the Lanham Act. The core dispute revolved around Solid 21, Inc.'s claim that Breitling's use of the term "red gold" in its marketing materials infringed upon Solid 21's federally registered trademark, "RED GOLD®." Solid 21, a renowned luxury jewelry and watch business, alleged that Breitling's use of the term was likely to cause confusion and deceive consumers regarding the origin of the products. The case ultimately focused on whether Breitling's descriptive use of "red gold" constituted fair use, thereby nullifying the infringement claim.

Summary of the Judgment

The District Court for the District of Connecticut initially denied summary judgment to Breitling, suggesting that there might be material issues of fact requiring a trial. However, upon reconsideration, the court granted summary judgment in favor of Breitling, determining that the use of "red gold" was descriptive and fell under the fair use defense provided by the Lanham Act. Solid 21 appealed this decision to the Second Circuit, contending that genuine issues of fact precluded summary judgment. The Second Circuit meticulously reviewed the case and ultimately affirmed the District Court's judgment, holding that Breitling had satisfactorily established its fair use defense as a matter of law. The court concluded that Breitling's use of "red gold" was purely descriptive, wasn't intended as a trademark, and was executed in good faith, thereby negating the infringement claims posed by Solid 21.

Analysis

Precedents Cited

The court relied heavily on established precedents to guide its analysis:

• Cosmetically Sealed Indus., Inc. v. Chesebrough-Pond's USA Co.: Affirmed that fair use is a viable defense under the Lanham Act even if the defendant's conduct might otherwise constitute infringement.
• Kelly-Brown v. Winfrey: Outlined the three elements necessary to establish a fair use defense—use other than as a mark, descriptive use, and good faith.
• EMI Catalogue P'ship v. Hill et al.: Addressed the importance of the descriptive purity of a term in fair use defenses.
• PARK Permanent Make-Up, Inc. v. Lasting Impression I, Inc.: Highlighted the complexities surrounding the good faith element in fair use defenses.
• Tiffany & Co. v. Costco Wholesale Corp.: Discussed the assessment of descriptiveness and the significance of consumer perception in trademark disputes.

Legal Reasoning

The court's reasoning centered on dissecting the three critical elements required for a successful fair use defense:

• Descriptive Use, Not as a Mark: The court examined how Breitling used "red gold" in its marketing materials. It was determined that the term was used descriptively to indicate the color composition of the watches, akin to terms like "stainless steel" or "silver." The term was not used as a source identifier or trademark but rather as a descriptor of the product's material characteristics.
• Good Faith: The court evaluated evidence pertaining to Breitling's intent. Factors such as the historical use of "red gold" in the industry, Breitling's lack of intent to deceive, and the contextual placement of the term alongside other descriptive terms supported the conclusion that Breitling acted in good faith.
• Use Other Than as a Mark: The term "red gold" was consistently used in a non-trademark fashion, merely describing the product's hue.

Additionally, the court addressed and refuted Solid 21's arguments regarding the availability of alternative terms like "rose gold" and the timing of Breitling's adoption of "red gold." The Second Circuit maintained that the inherent descriptiveness of "red gold" was sufficient to uphold the fair use defense, irrespective of Breitling's choice of terminology or the existence of synonymous terms.

Impact

This judgment has significant implications for trademark law, particularly in industries where descriptive terms are frequently employed. By affirming that descriptive use in good faith does not constitute infringement, the Second Circuit has reinforced the boundaries of trademark protection. This decision ensures that companies can use commonly descriptive terms to accurately describe their products without overstepping into trademark infringement, provided their usage remains purely descriptive and devoid of intent to confuse consumers about product origins.

Complex Concepts Simplified

Fair Use Defense under the Lanham Act

The fair use defense allows defendants in trademark infringement cases to use a term or phrase that is also a registered trademark, provided the use is descriptive rather than serving as a source identifier. This means that if a term accurately describes a characteristic or quality of the product, its use may be justified even if it is trademarked.

Descriptive Use

A term is considered descriptive if it merely describes an attribute or quality of the goods or services. In this case, "red gold" was deemed descriptive because it accurately conveyed the color and composition of the gold used in the watches, without indicating the watch's brand or source.

Incontestable Status

A trademark gains incontestable status after five years of continuous use, which strengthens the trademark's protections. However, even with this status, the trademark's descriptive use can still be challenged under the fair use defense.

Conclusion

The Second Circuit's affirmation in Solid 21, Inc. v. Breitling U.S.A., Inc. underscores the delicate balance between trademark protection and the freedom to use descriptive terms within an industry. By upholding the fair use defense, the court has clarified that descriptive terms essential to accurately describe a product's characteristics cannot be monopolized through trademark registration. This decision not only reinforces the importance of consumer understanding in trademark disputes but also ensures that industry terminology remains free from undue restrictions, promoting fair competition and clarity in the marketplace.