In early January 2012, Electronic Arts (“EA”), creators of Battlefield 3 (“BF3”), filed a Complaint for Declaratory Relief in the Northern District of California against military helicopter manufacturer Textron. Textron is the owner and manufacturer of military helicopters that are depicted in BF3, including the UH-1Y, V-22 Osprey, and AH-1Z helicopters (the “Helicopters”). In late 2011, Textron notified EA in a cease and desist letter to remove any imagery of the Helicopters from BF3 because EA did not ask for permission or receive a license to use Textron’s trademarks or Helicopter’s trade dress in BF3.  Assuming any argument under the First Amendment fails, for whatever reason, would EA’s use of Textron’s trademarks and depiction of the Helicopters violate any of Textron’s federal rights? First, the court will have to decide whether EA violated any rights involving any registered trademarks. Second, the court will have to decide whether EA has infringed on Textron’s trade dress rights.

A quick search shows that V-22, UH-1Y, and AH-1Z are all federal trademarks (Registration #’s 3063307, 2908650 and 2928806) owned by Textron (the “Trademarks”). Therefore, use of these Trademarks on a similar product which may cause consumer confusion may qualify as an infringement of Textron’s rights. In BF3, these Trademarks are used directly in connection with the Helicopter’s virtual depiction. Usually, the plaintiff has the burden to show that there is consumer confusion and would do so by applying the factors for the likelihood of confusion (which varies throughout each federal circuit).

However, this is a complaint for declaratory relief. EA is asking the Court to affirm EA’s assertion that the use of the Trademarks in BF3 constitutes nominative fair use and, therefore, there is no need to go through infringement litigation. The doctrine of nominal fair use allows EA to use the Trademarks to identify the Helicopters without being subject to liability for infringement. Unfortunately, there is disagreement between the federal circuits on which standard to use when a party claims the doctrine of nominal fair use. Some circuits, including the Third Circuit, believe that Textron would have to satisfy the factors for likelihood of confusion prior to going through a nominal fair use analysis. However, the Ninth Circuit, the circuit where this case is being tried, sees nominative fair use as a modification to the likelihood of confusion analysis of Textron’s infringement claim. Nominative fair use appears to be EA’s only counter regarding trademark liability because other methods of challenging Textron, including cancellation of the Trademarks, is not feasible. The Trademarks are now incontestable and do not satisfy any the requirements for cancellation under 15 USC §1064(3).

Applying the Ninth Circuit’s version of the nominative fair use doctrine to the case at hand, the doctrine is met when three elements are satisfied: 1) The Helicopter in question must be one not readily identifiable without use of the Trademark; 2) Only so much of the Trademark may be used as is reasonably necessary to identify the Helicopter; and 3) EA must do nothing that would, in conjunction with the Trademark, suggest sponsorship or endorsement by Textron.

Using known facts, it appears that EA will satisfy these elements. It is difficult to readily identify the Helicopter without use of its associated Trademark; for example, EA could have described the V-22 Osprey as the “multi-mission tilt-rotor military aircraft,” but this descriptive designation could refer to a multitude of aircrafts. In addition, EA used the Trademarks in order to reasonably necessary to identify the Helicopter; use of a fanciful logo would not qualify as reasonable. Finally, EA used the trademarks to accurately describe the Helicopters in BF3 and none of EA’s uses suggest that Textron affiliated itself with EA/BF3 or endorsed the sale of BF3. Although BF3’s starting sequence does not disclaim any sponsorship, endorsement or affiliation with Textron, EA has not done anything to affirmatively suggest Textron’s sponsorship or endorsement of BF3.

Trade Dress can also be protected by federal law. The design of a product may acquire a distinctiveness which serves to identify the product with its manufacturer or source; and a design which acquires this secondary meaning is a trade dress which may not be used in a manner likely to cause confusion as to the origin or spondorship. Secondary meaning suggests that in the minds of the public, the primary significance of a product feature is to identify the source of the product, not the product itself. Assuming that Textron can prove that the Helicopter’s design has gained secondary meaning, the burden remains on Textron to show that the Helicopter designs are not functional. Functional designs cannot be protected by trade dress. Functionality exists if such design is essential to the use or purpose of the article or affects the cost or quality of the article.

Using the V-22 as an example, it is difficult to argue that the V-22’s design, including the tilt rotors, the twin tail vertical stabilizer, multi-function cockpit displays, loading ramp, and patented ice management system, tilt-rotor wing fold mechanism, tilt-rotor’s drive system,  and pylon conversion system are not functional; each design element allows it to perform to its desired specifications and improves the stability, pilots ergonomics, aerodynamics and performance of the Helicopter. Further, some design elements are patented, which provides strong evidence of functionality.  Unless Textron can prove that the Helicopter’s design are purely aesthetic, it appears that Textron will have a difficult time proving that the Helicopter is entitled to trade dress protection.

This is not the first time these parties have had this dispute. As stated above, it seems that Textron will have a difficult road ahead to show any form of trademark infringement within BF3. However, this case highlights Textron’s desire to raise revenue through a trademark licensing business. A court victory by Textron could stipulate one of two things: that EA will stop using the Trademarks and Helicopters in BF3, or that BF3 will have the Trademarks and Helicopters available at an additional cost to be incurred  by the consumer. Such costs could be in the form of additional downloadable content featuring officially licensed products or a higher initial purchase price of future released games. The gaming industry would then hit a crossroad at which it must decide whether a game which utilizes real vehicles, brands or items is economically feasible. Clearly the appeal of driving a Ferrari in a game is greater than driving a no-name vehicle, but whether consumers would be willing to pay more for a brand name is an important consideration for publishers.