On June 11, 2015, the Seventh Circuit affirmed a district court’s summary judgment ruling that WD-40 Company’s use of the term “inhibitor” on its Long-Term Corrosion Inhibitor product was a descriptive fair use of the term, and therefore did not infringe a rust-prevention company’s trademark.

Plaintiff Sorensen produces a line of rust-inhibiting products under the federally registered and incontestable word mark “THE INHIBITOR.”  WD-40’s Specialist product line includes a product called “Long-Term Corrosion Inhibitor,” packaged in a metal aerosol spray bottle with the WD-40 yellow shield above the SPECIALIST trademark, and the wording “Long-Term Corrosion Inhibitor” below.

Click here to view the image.

(Source: court opinion)

To prevail on a descriptive fair use defense, WD-40 had to show that: (1) it did not use the term as a trademark; (2) the term was descriptive of its goods or services; and (3) it used the term fairly and in good faith.  Though the Seventh Circuit agreed with the district court’s ultimate finding, it disagreed with much of the district court’s reasoning.

Concluding that there was no genuine factual dispute that WD-40’s use of “inhibitor” was a non-trademark use, the district court reasoned that: (1) the word “inhibitor” could not function as a source indicator on WD-40’s product because WD-40’s Long Term Corrosion Inhibitor bottle also displayed the famous WD-40 yellow shield; (2) WD-40 used the word “inhibitor” on its product, not “theinhibitor”; (3) there were competing products on the market that also used the word “inhibitor” to describe their products; and (4) the term only appeared on one of the products in its Specialist line.  The Seventh Circuit found this reasoning flawed.

As an initial matter, the Seventh Circuit recognized that a given product can contain more than one source indicator and, thus, the mere fact that the WD-40 product included the WD-40 Logo and SPECIALIST mark did not mean that its use of the challenged term was not a trademark use.  And that WD-40 used the term “inhibitor” rather than “the inhibitor” was probative only of whether Sorensen’s trademark was infringed, but not whether WD-40 used the word as a mark.  Third-party use of the term was probative of the term’s descriptiveness, not of the nature of WD-40’s use.  And finally, the mere fact the term appeared on only one product in the line was not determinative.

Nonetheless, the Seventh Circuit agreed with the district court’s conclusions that the placement and format of the word “inhibitor” on the product packaging supported the conclusion that it was not being used as a source identifier (i.e., the term appeared towards the bottom of the can in small white block lettering in contrast to the prominent treatment of the bright, eye-catching WD-40 shield, the stylized and colored word “Specialist,” and the colorful crosshair mark).

In addressing the issue of the term’s descriptiveness, the Seventh Circuit observed that whether a term is descriptive “depends not only on the term itself, but also on the product for which it serves as a source indicator.”  On WD-40’s bottle, the word “inhibitor” follows the word “corrosion” and describes a characteristic of WD-40’s product.  The Seventh Circuit rejected Sorensen’s argument that the word “inhibitor” is suggestive rather than merely descriptive, stating: “It takes no operation of the imagination to make a connection between the term ‘Corrosion Inhibitor’ and a product that inhibits rust and other forms of corrosion.”

On the issue of bad faith, the district court found there was no evidence that WD-40 had knowledge of Sorensen’s product and word mark.  The Seventh Circuit disagreed, noting multiple documents in the record from which a jury could reasonably infer that WD-40’s marketing department, or someone with final decision making authority, knew of Sorensen and his mark.  But mere knowledge of Sorensen’s mark was an insufficient basis for finding WD-40 acted in bad faith.  Sorensen offered no evidence suggesting subjective bad faith other than the fact that WD-40 conducted no trademark search prior to using the word “inhibitor” on its product.  If WD-40 believed that it was not using the word as a trademark, it had no reason to conduct a search.  And if, as Sorensen argued, WD-40 already knew that Sorensen owned a trademark for THE INHIBITOR, a trademark search would have been useless.

Because the Seventh Circuit agreed with the district court’s conclusion on all three elements, it affirmed the grant of summary judgment in favor of WD-40.