Century 21 Real Estate Corporation Coldwell Banker Real Estate Corporation Era Franchise Systems, Inc. v. Lendingtree, Inc.

OPINION OF THE COURT

This case presents an opportunity for us to consider the contours of the traditional test for trademark infringement where the defendant asserts the defense of “nominative fair use.” More specifically, we must determine what role likelihood of confusion plays in a trademark infringement case where the defendant claims that its use was nominative and fair.

Appellees, Century 21, Coldwell Banker and ERA (“CCE”) complain that Appellant Lending Tree (“LT”), in the process of marketing its mortgage services, improperly referenced CCE’s trademarked services. LT contends that its use was nominative and fair, and permitted as a matter of law.

“Nominative” fair use is said to occur “when the alleged infringer uses the [trademark holder’s] product, even if the alleged infringer’s ultimate goal is to describe his own product. Nominative fair use also occurs if the only practical way to refer to something is to use the trademarked term.” KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 328 F.3d 1061, 1072 (9th Cir.2003) (rev’d. on other grounds) (quotations omitted). By contrast, “classic” fair use occurs where the defendant uses the plaintiffs mark to describe the defendant’s own product. New Kids on the Block v. News America Pub., Inc., 971 F.2d 302, 308 (9th Cir.1992).

The use of the term “Volkswagen” by a car mechanic in an ad describing the types of cars he repairs has been held to constitute a nominative fair use. See id. at 307 (citing Volkswagenwerk Aktiengesellschaft v. Church, 411 F.2d 350 (1969)). Clearly, the mechanic is referring to another’s product, but does so in order to describe what he does. On the other hand, the use of the term “micro-colors,” a registered trademark of one make-up company, referring to the pigments of the product of a different and competing make-up company that it used in its own product, was classified as a classic fair use. See KP Permanent Make-Up, Inc., 328 F.3d at 1072. There, the reference to the mark of another was made in describing its own product and its attributes.

Traditionally, we have looked to whether a trademark is likely to cause confusion in order to determine whether a violation of the Lanham Act has occurred and, thus, whether the use should be enjoined and prohibited. However, it is unclear what role “likelihood of confusion” plays in the analysis when “fair use” is asserted as a defense. Recently, the United States Supreme Court provided guidance to the courts regarding the test for classic fair use in KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 125 S.Ct. 542, 160 L.Ed.2d 440 (2004). The issue before us is the extent to which its reasoning applies to the nominative fair use analysis as well.

I. Factual and Procedural Background

Appellees Century 21 and ERA have each been in business for over 30 years. Coldwell Banker has been in business for almost 100 years. Each of these real estate companies oversees a system of fran *215 chisees who operate by reference to the franchisor’s trademark (e.g., Century 21 Smith Realty). Franchise agreements permit those brokerage companies to provide realty services under trademarks held by Cendant Corporation. Every franchisee is granted a license to use its franchisor’s trademark only in connection with its “d/b/a” name. (Thus, a franchisee could only refer to itself as Century 21 Smith Realty and not just Century 21). There are over 8,200 franchisees in CCE’s collective systems in the U.S.

Appellant LendingTree describes itself as a diversified consumer-oriented Internet business that helps consumers identify and select qualified lenders, real estate brokers, auto insurers, and other financial service companies. It has a real estate referral service that consumers can access by visiting its website and inputting the location and characteristics of the house they are seeking to buy or sell. LT then selects and transmits information about up to four real estate companies participating in LT’s referral network that service that community. If consumers ultimately use an LT referred broker, they receive rewards, such as airline frequent flier miles and gift cards. LT also has an established mortgage referral program based on contractual relationships with participating financial institutions identified on its website.

At the time of this action, LT’s real estate referral network consisted of more than 650 real estate broker member companies in the U.S., which collectively operated more than 2,500 offices. More than 9,000 real estate agents in those offices were registered participants in LT’s network. At least 257 of the approximately 650 real estate broker member companies participating in the LT network operated a Century 21, Coldwell Banker, or ERA franchise.

LT’s real estate referral network was formed in 1998 by HomeSpace, a company from which LT acquired certain assets in August 2000. As early as 1999, HomeS-pace publicly advertised its real estate referral network in printed materials as “including brokers representing the nation’s leading franchises, such as Coldwell Banker, Century 21 ... and ERA.”

The alleged infringement here is based on the following uses of CCE’s marks:

(1) A Coldwell Banker “For Sale” sign with a woman, purporting to be a real estate agent, next to it, on which the blue and white Coldwell Banker logo was somewhat obscured by the word “SOLD.” LT’s phone number was at the bottom. This scene was depicted at the bottom of LT’s homepage on its website.

(2) A statement by LT on its “Find a Realtor” homepage stating that LT will “give you access to a national network of brokers representing the country’s leading real estate companies, including Coldwell Banker, ERA and Century 21.” These three names headed a bullet-pointed list of all such realtors to whom LT promised access. The marks on those pages were in block letter format.

(3) LT’s statement on its website’s Help Center that LT is “Represented by large independent real estate companies and members of major franchises — Coldwell Banker, Century 21, Prudential, ERA, Re-MAX, GMAC (formerly Better Homes & Gardens), and Realty Executives.”

(4) LT’s use of printed marketing materials that stated that “LT is affiliated with more than 700 certified brokers such as Coldwell Banker, Century 21, Prudential, ERA and RE/MAX.”

In January 2003, Kathryn Geib, in-house counsel for CCE’s parent company responsible for the enforcement of its trademarks, wrote to LT to demand that it stop *216 using CCE’s “marks” on its website in any manner in the operation of its business. At that time, LT was using CCE’s logos on its website. After receipt of the letter, LT stopped using the logos (or any other of CCE’s marks) on that webpage, but continued to use CCE’s marks in block letter form on other webpages. In March 2003, Geib learned that LT was using a marketing coupon containing the “affiliated language” described above. Geib sent a letter asking LT to stop such use. In May 2003, CCE discovered that LT was using CCE’s marks, but in block letters, on its webpage. Geib again wrote, asking LT to stop such use.

Not satisfied with the response from LT, CCE commenced this action and applied for a preliminary injunction against LT’s use of its marks, claiming unfair competition and trademark infringement in violation of §§ 32 and 43(a) of the Lanham Act, 15 U.S.C. §§ 1114(1) and 1125(a). At issue in the case before the District Court was the use of CCE’s marks in block form in bullet points on LT’s webpage, marketing materials using the “affiliated with” language described above, and the Coldwell Banker “For Sale” sign.

After oral argument before the District Court, LT voluntarily implemented certain modifications to its website. It changed the background color of the “For Sale” sign from blue to red and removed the phone number at the bottom of the sign, moved the position of the bullet points with plaintiffs’ names on them from first to last in its “Find a Realtor” list, and added a disclaimer to its real estate homepage that “LT is not sponsored by or affiliated with the parent franchisor companies of any of the participating members of its network.” LT also added a note to a pop-up screen saying that “A particular franchisee in your geographic area may not be available to you through the LendingTree network if that franchisee is not a participating member of the network. In addition, it is possible that the network may not include any franchisee of a particular national company in a given area.” (Text from www.LendingTree.com at JA689.) LT notified the District Court of these changes and represented that all of the language allegedly giving rise to CCE’s motion had been permanently removed from LT’s website and would not be used in the future.

The District Court issued its ruling with respect to the language used by LT at the time the complaint was filed, as well as the modified language. The District Court determined that LT’s use of Appellees’ names was likely to cause consumer confusion, that the nominative use defense did not shield LT in this instance, and thus, granted CCE’s motion for a preliminary injunction as to the use of CCE’s marks and the “affiliation” language, but not the “For Sale” sign. The District Court’s analysis did not separate out the original language from the later modified language, as the District Court seemed to conclude that the revisions did not alleviate the problem. LT now appeals this issuance of the preliminary injunction.

On appeal, we must first decide whether the case was moot when the District Court issued its ruling, given the fact that LT had made several changes to the allegedly infringing language and the picture on its website. If the case was not moot, we must then determine the proper test to apply in the situation where a defendant is asserting a nominative fair use defense to claims of unfair competition and trademark infringement under the Lanham Act.

II. Jurisdiction

The District Court had jurisdiction to hear this case pursuant to 28 U.S.C. §§ 1331 and 1338. We have jurisdiction *217 over this interlocutory appeal of a preliminary injunction under 28 U.S.C. § 1292(a)(1).

III. Mootness

Although a case may become moot “if the defendant can demonstrate that there is no reasonable expectation that the wrong will be repeated, this burden is a heavy one ...” and has not been met here. United States v. W.T. Grant Co., 345 U.S. 629, 633, 73 S.Ct. 894, 97 L.Ed. 1303 (1953) (quotation omitted). The modified language that LT employed still referenced CCE’s marks and, thus, is potentially infringing and it cannot be said that LT’s voluntary discontinued use of certain language completely obviates the need for injunctive relief. See Lyons Partnership v. Morris Costumes, Inc., 243 F.3d 789, 800 (4th Cir.2001) (citation omitted). For instance, the use of CCE’s marks in block letter format could constitute trademark infringement in certain circumstances. Whether these circumstances are present in this case is still a question that needs to be resolved.

Furthermore, were we to hold that LT’s voluntary cessation of the alleged infringing activities rendered the case moot, this would potentially mean that LT would “simply be free to return to [its] old ways after the threat of a lawsuit had passed.” Iron Arrow Honor Soc. v. Heckler, 464 U.S. 67, 72, 104 S.Ct. 373, 78 L.Ed.2d 58 (1983) (quotation omitted). Therefore, the case is not moot and we will proceed to analyze the substantive claims of trademark infringement and unfair competition.

IV. Fair Use

It must be recognized at the outset that “fair use” presents a fact pattern different from that of a normal infringement suit. The typical situation in a trademark case involves the defendant’s having passed off another’s mark as its own or having used a similar name, confusing the public as to precisely whose goods are being sold. Likelihood of confusion is the sole issue. But the fair use defense, by reason of the circumstances giving rise to its applicability, alters the premise somewhat. The defendant is not purporting to be selling goods or services that the plaintiff has trademarked, but, rather, is using plaintiffs mark in order to refer to defendant’s own goods or to the goods of the trademark owner in a way that might confuse the public as to the relationship between the two. See Cairns v. Franklin Mint Co., 292 F.3d 1139, 1151 (9th Cir.2002). Accordingly, the legal framework still involves a showing that A’s reference to B’s mark will likely confuse the public, but the analysis does not end there, for the use may nonetheless be permissible if it is “fair.”

In KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 125 S.Ct. 542, 545-46, 160 L.Ed.2d 440 (2004), the Supreme Court rejected the notion that, in the context of classic fair use, the party asserting the fair use defense to a claim of trademark infringement had any burden to negate the likelihood that the practice complained of will confuse consumers about the origin of the services or goods affected. Instead, plaintiff has the exclusive burden to demonstrate likelihood of confusion, and then defendant’s burden is only to show the affirmative defense of fair use. The Supreme Court stated, “[s]ince the burden of proving likelihood of confusion rests with the plaintiff, and the fair use defendant has no free-standing need to show confusion unlikely ... it follows that some possibility of consumer confusion must be compatible with fair use.... ” Id. at 550, 125 S.Ct. 542. Thus, consumer confusion and fair use are not mutually exclusive. The *218 latter will in essence rebut or excuse the former so that the use is permissible.

Before the Supreme Court spoke on the issue of classic fair use, the Court of Appeals for the Ninth Circuit had charted a path through a different fair use analysis — nominative fair use. In New Kids on the Block, 971 F.2d at 308, the Court of Appeals for the Ninth Circuit adopted its own test governing the nominative fair use analysis where the marks are used, as they are here and in the case of the mechanic’s ad described above that referenced Volkswagen, to refer to the plaintiff trademark owner’s product in order to help better describe the defendant’s product or service. Thereafter, it refined the test and clarified its application. See, e.g., Playboy Enterprises, Inc. v. Welles, 279 F.3d 796 (9th Cir.2002) (holding that the use of the terms “Playboy,” “Playmate,” and “Playmate of the Year 1981” on the website masthead and banner ads and in the meta-tags of the website of a former Playmate of the Year were nominative fair uses because they served to identify the defendant and did not imply current sponsorship or endorsement); Cairns v. Franklin Mint Co., 292 F.3d 1139 (9th Cir.2002) (holding that the sale of collectibles bearing the name and likeness of Princess Diana was a nominative fair use).

New other courts have spoken on the precise issue of how nominative fair use is successfully invoked. Indeed, it seems that only the Second, Fifth, and Sixth Circuits have referenced the nominative fair use defense by name and even on these occasions have done so only to refer to what district courts had done with the issue or to decline to adopt the Ninth Circuit’s test as a whole. See Chambers v. Time Warner, Inc., 282 F.3d 147, 156 (2d Cir.2002) (noting that the district court had applied the standard for nominative fair use as articulated by the Ninth Circuit, but finding that the court had erred in its application); see also Pebble Beach Co. v. Tour 18 I Ltd., 155 F.3d 526, 546 n. 13 (5th Cir.1998) (adopting the Ninth Circuit’s nominative fair use test in part); Interactive Products Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d 687, 698 n. 6 (6th Cir.2003) (footnoting why a district court case involving the nominative fair use defense was distinguishable from the case before it); PACCAR Inc. v. TeleScan Technologies, L.L.C., 319 F.3d 243, 256 (6th Cir.2003) (declining to follow the Ninth Circuit’s analysis (formulated prior to the Supreme Court’s holding in KP Permanent Make-Up) and applying the likelihood of confusion test instead).

Furthermore, this issue is one of first impression in our Court. See Basic Fun, Inc. v. X-Concepts, 157 F.Supp.2d 449, 456 (E.D.Pa.2001) (stating that “the Third Circuit does not recognize the ‘nominative’ fair use defense, which is utilized as a defense solely in the Ninth Circuit”). The United States District Court for the District of New Jersey did venture into the area of nominative fair use defense in Liquid Glass Enterprises, Inc. v. Dr. Ing h.c.F. Porsche AG and Porsche Cars North America, Inc., 8 F.Supp.2d 398 (D.N.J.1998). That case involved the use of Porsche’s trademarks by Liquid Glass, a corporation that sold car care products. Liquid Glass used Porsche’s trademarks in its advertisements for car polish — in particular, an ad involving a provocatively dressed woman polishing a Porsche 911 with the trademark “PORSCHE” plainly visible. The court initially analyzed the case under the nominative fair use defense articulated by the Ninth Circuit Court of Appeals in New Kids On The Block, however, it conflated the test with the plaintiffs burden of proving likelihood of confusion. See Liquid Glass, 8 F.Supp.2d at 403 (finding that Liquid Glass’ fair use defense was defeated, in part, because *219 Porsche would “likely prevail in demonstrating that the use of Porsche’s trademarks ... in Liquid Glass’s advertisements would likely confuse consumers as to Porsche’s connection with Liquid Glass”). The Court reviewed each of the traditional factors used to determine the likelihood of confusion, though this analysis is not even a part of the New Kids On The Block test. This court’s difficulty in applying the traditional test for likelihood of confusion together with the nominative fair use defense highlights the need to clarify the proper analysis in this area of the law. Given the paucity of the case law on this subject from every court other than the Court of Appeals for the Ninth Circuit, and that Court’s extensive study of this issue, we will consider the opinions of that Court.

In New Kids On The Block, the Court of Appeals for the Ninth Circuit considered whether two separate newspapers that had conducted polls asking readers to vote for their favorite New Kid On the Block, and charging money for each telephone vote cast, had employed the “New Kids” trademark in such a way as to violate the Lanham Act. The trademarked name was very valuable to the New Kids, as it had been used to sell over 500 different products, the profits of which partially inured to the benefit of the New Kids. New Kids alleged that the use of the name in conducting the polls implied that the New Kids were sponsoring the polls.

The Court began with a discussion of the history of trademark law, noting that:

[a] trademark is a limited property right in a particular word, phrase or symbol. And although the English language is a language rich in imagery, we need not belabor the point that some words, phrases or symbols better convey their intended meanings than others ... Thus, trademark law recognizes a defense where the mark is used only to describe the goods or services of [a] party, or their geographic origin. 15 U.S.C. § 1115(b)(4). The ‘fair-use’ defense, in essence, forbids a trademark registrant to appropriate a descriptive term for his exclusive use and so prevent others from accurately describing a characteristic of their goods.

New Kids On The Block, 971 F.2d at 306 (quoting Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir.1980)).

The court reasoned that nominative fair use cases — “the class of cases where the use of the trademark does not attempt to capitalize on consumer confusion or to appropriate the cachet of one product for a different one” — are not the typical fair use cases. It described the Volkswagen use as an example of this atypical type of fair use:

A good example of this is Volkswagenwerk Aktiengesellschaft v. Church, 411 F.2d 350 (9th Cir.1969), where we held that Volkswagen could not prevent an automobile repair shop from using its mark. We recognized that in “advertising [the repair of Volkswagens, it] would be difficult, if not impossible, for [Church] to avoid altogether the use of the word Volkswagen’ or its abbreviation ‘VW,’ which are the normal terms which, to the public at large, signify appellant’s cars.” Id. at 352. Church did not suggest to customers that he was part of the Volkswagen organization or that his repair shop was sponsored or authorized by VW; he merely used the words ‘Volkswagen” and “VW” to convey information about the types of cars he repaired. Therefore, his use of the Volkswagen trademark was not an infringing use.

New Kids On The Block, 971 F.2d at 307.

The Court then reasoned that such a situation should be viewed as “involving a non-trademark use of a mark ... ”:

*220 Such nominative use of a mark — where the only word reasonably available to describe a particular thing is pressed into service — lies outside the strictures of trademark law: Because it does not implicate the source-identification function that is the purpose of trademark, it does not constitute unfair competition; such use is fair because it does not imply sponsorship or endorsement by the trademark holder.

Id. at 308.

The Court distinguished “nominative” fair use from “classic” fair use, noting that if defendant’s use of the trademark referred to something other than the plaintiffs product, traditional fair use inquiry would continue to govern.

The court then articulated its own test for nominative fair use:

[W]here the defendant uses a trademark to describe the plaintiffs product, rather than its own, we hold that a commercial user is entitled to a nominative fair use defense provided he meets the following three requirements: First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.

Id.

In announcing this new test, New Kids On The Block rejected traditional trademark infringement analysis. It held that this test replaces the “likelihood of confusion” test for trademark cases where nominative fair use is asserted. See Cairns v. Franklin Mint Co., 292 F.3d 1139, 1151 (9th Cir.2002). In a more recent case, the Ninth Circuit Court of Appeals has elaborated on its reasoning for this shift. Application of the likelihood of confusion test, which focuses on the similarity of the mark used by the plaintiff and defendant, “would lead to the incorrect conclusion that virtually all nominative uses are confusing” because “[w]hen a defendant uses a trademark nominally, the trademark will be identical to the plaintiffs mark, at least in terms of the words in question.” Playboy Enters., 279 F.3d at 801. Thus, the likelihood of confusion test as applied in nominative fair use cases would disadvantage the defendant by making confusion an all but foregone conclusion.

While we agree with the Ninth Circuit Court of Appeals that a distinct analysis is needed for nominative fair use cases, we do not accept the legal basis or advisability of supplanting the likelihood of confusion test entirely. First, we do not see nominative fair use as so different from classic fair use as to warrant such different treatment. The Ninth Circuit Court of Appeals believed that the two types of fair use could be distinguished on the basis that nominative fair use makes it clear to consumers that the plaintiff, not the defendant, is the source of the trademarked product or service, while classic fair use does not. Thus, the Ninth Circuit Court of Appeals believed that a different analysis was appropriate for nominative fair use and that it could abandon the need for proof of confusion in these circumstances. New Kids On The Block, 971 F.2d at 307-08. 1 Yet, it is clear to us that even a *221 defendant’s nominative use has the potential of confusing consumers with respect to its products or services. Since the defendant ultimately uses the plaintiffs mark in a nominative case in order to describe its own product or services, Cairns, 292 F.3d at 1151 & n. 8, even an accurate nominative use could potentially confuse consumers about the plaintiffs endorsement or sponsorship of the defendant’s products or services. Thus, we disagree with the fundamental distinction the Ninth Circuit Court of Appeals drew between classic and nominative fair use.

In addition, the approach of the Court of Appeals for the Ninth Circuit would relieve the plaintiff of the burden of proving the key element of a trademark infringement case — likelihood of confusion — as a precondition to a defendant’s even having to assert and demonstrate its entitlement to a nominative fair use defense. The Supreme Court in KP Permanent MakeUp clearly established that it was plaintiffs burden in a classic fair use case to prove likelihood of confusion. There, the Court noted the difference between fair use and other trademark infringement claims, opining, as we stated above, that likelihood of confusion and fair use can coexist. This does not mean that we should remove the need for finding confusion in the first instance. Instead, once the plaintiff proves likelihood of confusion, defendant only had to show that defendant’s use, even if confusing, was “fair.” 2

This view finds support not only in the Supreme Court’s recent opinion, but also in the relevant statutory framework. The very language of the Lanham Act leads us to conclude that likelihood of confusion is an essential indicator of whether or not trademark infringement has occurred. Both §§ 32 and 43(a) of the Lan-ham Act, allegedly violated in this case, forbid use of words or marks in a way which is likely to cause confusion as to the origin, sponsorship, or approval of goods or services. Surely the plaintiffs success in its claim must, rely on a finding in this regard. Given this, we decline to read this requirement out of a case alleging trademark infringement.

We are thus left with the firm conviction that the burden of proving likelihood of confusion should remain with the plaintiff in a trademark infringement case — including one where the defendant claims nominative fair use. As detailed below, we will devise a modified likelihood of confusion test to be employed in nominative fair use cases that takes into account the concerns expressed by the Court of Appeals for the Ninth Circuit. Then, we will determine the extent to which we would adopt the test for nominative fair use that the Ninth Circuit Court of Appeals established in light of our disagreement with that court’s view that nominative fair use is fundamentally different from classic fair use.

*222 V. The Proper Analytical Approach for Nominative Fair Use Cases

A. Overview

Today we adopt a two-step approach in nominative fair use cases. The plaintiff must first prove that confusion is likely due to the defendant’s use of plaintiffs mark. As we discuss more fully below, because our traditional likelihood of confusion test does not apply neatly to nominative fair use cases, we suggest eliminating those factors used to establish confusion in other trademark infringement cases that do not “fit” in the nominative use context. Once plaintiff has met its burden of proving that confusion is likely, the burden then shifts to defendant to show that its nominative use of plaintiffs mark is nonetheless fair. To demonstrate fairness, the defendant must satisfy a three-pronged nominative fair use test, derived to a great extent from the one articulated by the Court of Appeals for the Ninth Circuit. Under our fairness test, a defendant must show: (1) that the use of plaintiffs mark is necessary to describe both the plaintiffs product or service and the defendant’s product or service; (2) that the defendant uses only so much of the plaintiffs mark as is necessary to describe plaintiffs product; and (3) that the defendant’s conduct or language reflect the true and accurate relationship between plaintiff and defendant’s products or services.

As an initial matter, we recognize that our concurring colleague rejects the bifurcated approach that we now adopt. He argues instead that the factors we consider under the fairness test should be incorporated into the likelihood of confusion analysis. In his view, our bifurcated approach places a heavy burden on the defendant to negate confusion and is judicially unmanageable. However, our approach does nothing of the kind.

We conclude that the broad based likelihood of confusion test our concurring colleague proposes is misplaced for several reasons. First, it is largely out of sync with the existing jurisprudence on fair use. The concurrence’s test allows no real possibility of the co-existence of fair use with some likelihood of confusion, yet this is precisely what the Supreme Court’s holding in KP Permanent Make-Up specifically contemplates. See KP Permanent Make-Up, 125 S.Ct. at 550 (“[S]ome possibility of consumer confusion must be compatible with fair use.... ”). In addition, our concurring colleague rejects the notion that nominative fair use could be used as an affirmative defense, viewing it instead as a confusion substitute. Yet, the Supreme Court clearly views fair use (albeit classic fair use) as an affirmative defense. Id. at 548-49 (referring to the affirmative defense of fair use). The concurrence fails to explain why KP Permanent Make-Up should neither control nor inform our analysis here, choosing instead to ignore the Court’s dictates in that case as they apply to nominative fair use. 3 After that deci *223 sion, it seems to us that neither classic or nominative fair use should rise and fall based on a finding of likelihood of confusion. Classic fair use and nominative fair use are different in certain respects, but it is unclear to us why we should ask radically different questions when analyzing a defendant’s ability to refer to a plaintiffs mark in the two contexts. As we have already stated, in both nominative and classic fair use cases the defendant uses the plaintiffs mark descriptively in a way that potentially confuses consumers about the relationship between the plaintiff and the defendant’s product or services. In the classic fair use context, the defendant uses the mark to describe its own product, and in the nominative context, the defendant references plaintiffs product in order to describe its own. The key first inquiry in both situations should be whether there is a likelihood of confusion. 4 The only other court to consider the application of nominative fair use doctrine since KP Permanent Make-Up has embraced this logic. Ty, Inc. v. Publ’ns Int'l, Ltd., No. 99 C 5565, 2005 WL 464688, at *6-8 (N.D.Ill. Feb.25, 2005).

Second, while the concurrence worries that a nominative use defendant will be overly burdened under our bifurcated approach, we believe that his approach is actually more burdensome to such a defendant. If the factors for determining fairness were incorporated into the likelihood of confusion test, a plaintiffs showing of confusion might well overwhelm a defendant’s showing of fair use. This would essentially force a defendant asserting nominative fair use to negate all likelihood of confusion to succeed, a proposition that the Supreme Court rejected in KP Permanent Make-Up. Under our approach, the defendant has no duty to negate confusion as such, but rather must merely show that its use of the plaintiffs mark is fair, a burden which, by contrast, is not cumbersome. Thus, it is our view that the bifurcated approach is ultimately less burdensome to a nominative use defendant than the analysis the concurrence proposes.

Finally, we believe that the bifurcated approach that we adopt today is more workable than a unified confusion/fairness test. We leave the now familiar test for likelihood of confusion largely intact and in *224 the form in which district courts are accustomed to applying it. Our test for nominative fair use considers distinct factors that are readily susceptible to judicial inquiry. By contrast, the concurrence would incorporate several new considerations into the already lengthy ten-part test for confusion and ask district courts to balance a plaintiffs showing of confusion against a defendant’s showing of fair use. Because confusion and fairness are separate and distinct concepts that can co-exist, blending them together into one test is, to our mind, a much less manageable approach.

B. The Proper Test For Likelihood of Confusion

As we have noted, and as the Ninth Circuit in New Kids on the Block also stated, the “likelihood of confusion” test does not lend itself nicely to a nominative fair use fact pattern. The traditional likelihood of confusion test has been set forth in our case law, specifically in Scott Paper Co. v. Scott’s Liquid Gold, Inc., 589 F.2d 1225 (3d Cir.1978) and Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir.1983). It is a multi-factor test that assesses the following:

(1) degree of similarity between the owner’s mark and the alleged infringing mark;

(2) strength of the owner’s mark;

(3) price of the goods and other factors indicative of the care and attention expected of consumers when making a purchase;

(4) length of time the defendant has used the mark without evidence of actual confusion;

(5) intent of the defendant in adopting the mark;

(6) evidence of actual confusion;

(7) whether the goods, though not competing, are marketed through the same channels of trade and advertised through the same media;

(8) the extent to which the targets of the parties’ sales efforts are the same;

(9) the relationship of the goods in the minds of consumers because of the similarity of function; and

(10) other facts suggesting that the consuming public might expect the pri- or owner to manufacture a product in the defendant’s market or that he is likely to expand into that market.

589 F.2d at 1229.

We have come to call these factors the “Lapp” factors. Although they are often helpful in determining whether a certain use of a mark is likely to confuse consumers, we have recognized that “the Lanham Act does not require that they be followed precisely so long as the relevant comparisons suggested by the test are made.” A & H Sportswear II, 237 F.3d 198, 207 (3d Cir.2000). In the context of a nominative use of a mark, such as the one we are presented with here, certain Lapp factors are either unworkable or not suited or helpful as indicators of confusion in this context. That is because, by definition, nominative use involves the use of another’s trademark in order to describe the trademark owner’s own product. Further, certain of the Lapp factors applied mechanically would inevitably point towards likelihood of confusion where no likelihood of confusion may actually exist. Thus, we must tailor the test and measure only those factors that are meaningful and probative in the context of nominative fair use.

Specifically, the fi