International Stamp Art, Inc. v. United States Postal Service
79 U.S.P.Q. 2d (BNA) 1513, 456 F.3d 1270, 2006 U.S. App. LEXIS 17975 (2006)
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Rule of Law:
For a fair-use defense in trademark infringement, the good-faith standard is whether the alleged infringer intended to benefit from the goodwill associated with the trademark owner by creating confusion as to the source of the goods or services.
Facts:
- International Stamp Art, Inc. (ISA), founded in 1985, is a for-profit corporation that produces note cards, greeting cards, posters, and prints.
- ISA has consistently used a perforated border design on most of its products since its inception, which evokes the functional flat-edged perforation of an older postage stamp.
- In 1996, ISA was granted U.S. Registration No. 1,985,086 for this perforated border design as a trademark for use on printed note cards and greeting cards.
- From 1985 to 1997, ISA was a non-exclusive licensee of the Postal Service, licensing the use of its “stamp designs,” which were specified to include all U.S. postage stamps to which the Postal Service owned the copyright, including images with perforated edges.
- ISA made several presentations to the Postal Service and its license management firm, Hamilton Projects, seeking to sell its products in Postal Service locations nationwide, and a few Postal Service stores carried ISA products in the late 1980s and early 1990s.
- In the late 1990s, the Postal Service Retail Division began offering its own line of stamp art cards, most of which incorporated the perforated border as part of the stamp's image.
- The Postal Service's cards include an easily visible imprint of its familiar Eagle trademark on the back, generally accompanied by information about the stamp or stamp art depicted and another smaller image of the entire stamp.
Procedural Posture:
- In September 2002, International Stamp Art, Inc. (ISA) sued the United States Postal Service (Postal Service) in the United States District Court for the Northern District of Georgia, alleging unlawful infringement of its perforated border mark.
- The Postal Service moved for summary judgment, asserting that it did not use the mark, its use fell within the fair-use exception, ISA had abandoned the mark, and damages were precluded based on actual notice.
- The district court granted summary judgment in favor of the Postal Service on the basis of its fair-use defense, finding that the Postal Service had used the disputed border "other than as a mark, in a descriptive manner, and in good faith."
- The district court also found that genuine issues of material fact precluded summary judgment on the Postal Service’s alternative arguments concerning abandonment and actual notice.
- ISA appealed the district court's grant of summary judgment to the United States Court of Appeals for the Eleventh Circuit, arguing that the district court erred in finding no genuine issue of material fact as to the Postal Service’s good faith in using the border.
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Issue:
What is the appropriate legal standard for determining "good faith" in a fair-use defense to trademark infringement, and did the United States Postal Service act in good faith when using International Stamp Art, Inc.'s perforated border mark?
Opinions:
Majority - Per Curiam
Yes, the United States Postal Service acted in good faith because there is no evidence that it intended to benefit from International Stamp Art, Inc.'s goodwill or create confusion as to the source of the goods or services. The Eleventh Circuit adopted the standard for good faith in a fair-use defense as whether the alleged infringer intended to trade on the good will of the trademark owner by creating confusion as to the source of the goods or services, aligning with the Second, Third, Seventh, Ninth, and Fifth Circuits. The court found no record evidence that the Postal Service intended to mislead or confuse consumers into thinking that ISA was the source of its cards. Instead, the Postal Service's own copyrighted and licensed stamp images, which it reproduced, inherently included perforated edges when the original stamps had them. Furthermore, the Postal Service prominently placed its own familiar Eagle trademark on the backs of its stamp art products, clearly identifying itself as the source, which serves as affirmative evidence of good faith. The court rejected ISA's arguments that the availability of non-infringing alternatives, the Postal Service's failure to consult counsel, or mere knowledge of ISA's mark indicated bad faith, concluding that under these specific circumstances, such evidence did not demonstrate an intent to confuse. The court emphasized that the Postal Service's incorporation of the perforated border was a non-trademark, descriptive use, meant to indicate that the image on the card was a postage stamp, and did not attempt to capitalize on consumer confusion.
Analysis:
This case clarifies the standard for "good faith" in the context of a fair-use defense under trademark law for the Eleventh Circuit, adopting the prevailing standard from other circuits. It reinforces that an alleged infringer's mere knowledge of another's trademark or the availability of alternative designs is insufficient to establish bad faith if the primary intent is not to confuse consumers about the source of goods. The decision highlights that affirmative actions by a defendant, such as prominently displaying its own trademark, serve as strong evidence of good faith in descriptive use scenarios, providing a clear precedential framework for assessing subjective intent in such disputes.
