## Facts

- Toyota Motor Sales, U.S.A., Inc. owned the LEXUS trademark and distributed Lexus vehicles in the United States.
- Farzad and Lisa Tabari operated an auto-brokerage business that arranged purchases of Lexus vehicles from authorized Lexus dealers for customers.
- The Tabaris advertised via the domain names **buy-a-lexus.com** and **buyorleaselexus.com**.
- Toyota objected that the Tabaris’ website used Lexus images and a Lexus logo, and that the inclusion of “lexus” in the domain names was likely to confuse consumers about source or affiliation.
- The Tabaris removed the Lexus images and logo and added a prominent disclaimer stating the site was not affiliated with Toyota, but retained the domain names.
- Toyota sued for trademark infringement and related claims in federal district court.
- After a bench trial, the district court found infringement and entered an injunction barring the Tabaris from using the challenged domain names and broadly prohibiting use of “LEXUS” in any domain name and similar online identifiers.
- The Tabaris, appearing pro se, appealed.

## Issues

1. Whether using “lexus” in the domain names for an independent Lexus-brokering service constituted trademark infringement or was protected as nominative fair use.
2. Whether an injunction categorically prohibiting use of “LEXUS” in any domain name or similar online identifier was overbroad.

## Decision

- The Ninth Circuit held the nominative fair use framework governed because the Tabaris used the mark to refer to the trademarked product itself.
- The court concluded the Tabaris’ use of “lexus” in the domain names was nominative fair use, or at least could be absent misleading presentation suggesting sponsorship or endorsement.
- The court vacated the injunction and remanded for a narrower injunction limited to preventing misleading uses that imply Toyota sponsorship, endorsement, or operation.

## Legal Principles

- When a defendant uses a trademark to refer to the trademarked product itself, nominative fair use—not the standard multi-factor likelihood-of-confusion test—provides the controlling analysis.
- Nominative fair use is evaluated by asking whether: (1) the product or service is readily identifiable without the mark; (2) the defendant used more of the mark than reasonably necessary; and (3) the use falsely suggests sponsorship or endorsement by the mark owner.
- Use of a trademark in a domain name is not automatically infringing; context and presentation determine whether consumers are likely to be misled.
- Injunctive relief in trademark cases must be narrowly tailored; a court may prohibit misleading uses but may not broadly bar truthful, non-misleading nominative references to the trademarked goods or services.

## Conclusion

The Ninth Circuit ruled that independent brokers could use “Lexus” in domain names to describe Lexus-related services when the use is truthful and does not imply Toyota affiliation, and it required any injunction to target only confusing or misleading conduct rather than imposing a blanket prohibition on nominative use.


Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171 (9th Cir. 2010)