## Facts

- The Navajo Nation and related entities alleged long-standing commercial use of NAVAJO marks on goods and services and ownership of numerous federal trademark registrations incorporating “Navajo.”
- Plaintiffs alleged the NAVAJO marks were widely recognized, supported by substantial sales and efforts to advertise and police the marks.
- Urban Outfitters and related entities allegedly marketed and sold numerous consumer products using “Navajo” and “Navaho” in product names and marketing, often paired with patterns and designs associated with Navajo-style aesthetics.
- After receiving a cease-and-desist letter, defendants allegedly removed “Navajo” from certain online listings and substituted “Printed,” while continuing to use “Navajo” on in-store tags and materials.
- Plaintiffs asserted federal trademark infringement, false designation of origin, false advertising, dilution, claims under the Indian Arts and Crafts Act (IACA), and state-law unfair practices theories.
- Defendants moved to dismiss under Rule 12(b)(6).

## Issues

1. Whether plaintiffs plausibly alleged ownership and protectability of the NAVAJO marks and a likelihood of confusion sufficient to state Lanham Act infringement and false designation claims.
2. Whether plaintiffs plausibly alleged that the NAVAJO marks were “famous” and that defendants’ use stated a federal dilution claim.
3. Whether defendants’ asserted descriptive or stylistic use of “Navajo” warranted dismissal on fair-use grounds at the pleading stage.
4. Whether plaintiffs stated an IACA claim by alleging marketing that could mislead consumers into believing goods were Indian-produced or affiliated with the Navajo Nation.
5. Whether dilution-by-tarnishment theories based on alcohol-related products and theories characterizing “Navaho” as “scandalous” were sufficiently pleaded.
6. Whether plaintiffs could pursue a claim under the New Mexico Unfair Practices Act (NMUPA), including whether they had standing.

## Decision

- The court granted the motion to dismiss in part and denied it in part.
- The court held plaintiffs plausibly pleaded Lanham Act infringement and false designation claims based on alleged use of “Navajo” in product naming/marketing and allegations supporting likely consumer confusion.
- The court held plaintiffs plausibly pleaded a federal dilution claim at the Rule 12(b)(6) stage based on allegations of fame and defendants’ use on consumer goods, while recognizing fame would be addressed on a fuller record.
- The court declined to dismiss on fair-use grounds because fair use is an affirmative defense and was not established on the face of the complaint.
- The court allowed the IACA claim to proceed because the alleged use of “Navajo” on products with tribal-associated designs could plausibly imply Indian production or tribal affiliation.
- The court dismissed certain dilution-by-tarnishment theories, including allegations tied solely to alcohol-related items, and rejected the theory that using the “Navaho” spelling alone was actionable as “scandalous.”
- The court narrowed or reserved ruling on the NMUPA claim pending further development, including briefing related to standing.

## Legal Principles

- On a Rule 12(b)(6) motion, the court accepts well-pleaded factual allegations as true and asks whether the complaint states a plausible claim for relief.
- Likelihood of confusion and related Lanham Act elements are commonly fact-dependent and may be plausibly alleged through assertions about defendants’ use of the same designation on similar goods and marketing that implies affiliation.
- Federal dilution claims may survive a motion to dismiss where the complaint plausibly alleges statutory fame and use likely to impair distinctiveness or harm the mark, even if fame ultimately requires proof.
- Fair use is an affirmative defense that generally cannot support dismissal unless it is apparent from the complaint itself.
- The IACA is violated when marketing or labeling falsely suggests goods are Indian-produced or the product of, or affiliated with, a particular tribe; plausibility may be supported by use of a tribal name in marketing of goods presented as Indian-identified styles.
- Dilution-by-tarnishment requires plausible allegations of reputational harm; conclusory or weakly connected allegations (including those tied only to product category) may be dismissed.

## Conclusion

The court permitted the Navajo Nation’s core trademark and IACA claims to proceed past the pleading stage, rejecting dismissal based on fair use and accepting allegations of protectable marks, likely confusion, and plausible statutory fame, while trimming particular tarnishment and “scandalous” theories and leaving parts of the state unfair-practices claim unresolved pending further proceedings.


Navajo Nation v. Urban Outfitters, Inc., 935 F. Supp. 2d 1147 (D.N.M. 2013)