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The Supreme Court unanimously held 12/8/04 that the possibility of consumer confusion does not preclude the fair-use defense to a claim of trademark infringement, and a party who raises this defense does not have the burden of negating the likelihood of confusion. In an opinion by Justice Souter, the Court reasoned that the Lanham Act places the burden of proving infringement (including the likelihood of confusion) on the trademark holder. See 15 U.S.C. §§ 1114(1), 1115(b). The elements of the fair-use defense, by contrast, do not refer to likelihood of confusion. See id. § 1115(b)(4). Because a party asserting this defense has no independent duty to show that confusion is unlikely, the Court concluded that some possibility of confusion must be compatible with fair use. Although “mere risk” of confusion will not foreclose the fair-use defense, the Court declined to decide whether the extent of likely confusion is relevant to the availability of the defense. Thus, this decision does not resolve the split between the First and Second Circuits, on the one hand, which have held that the fair-use defense can stand regardless of any underlying likelihood of confusion, and the Fourth and Seventh Circuits, on the other hand, which consider the extent of actual or likely confusion. This decision is important to all businesses that could become involved in trademark disputes.

Decision Below: 328 F.3d 1061 (9th Cir. 2003).