Can I legally use a competitor's business name on my site to compare products?

Question

Simply put, does a company have any grounds for legal recourse if their name is used on a competitor's website in the following manner?

{Product Title and Description} (Comparable to {Competitor's Name} product).

and in the "Glossary of Terms":

{Competitor's Name}: A company that {... about them blurb ...} Source: http://www.competitor-website.com/about-us-page

The reason for using the competitor's name in the first place is that their brand name is often confused with the actual name of the product being sold - similar to saying "Kleenex" when you really mean "tissues".

The reason for this question is that a representative of the competitor contacted my client threatening legal action.

Jurisdiction: USA.

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My client has since removed the references, this is more of a question of curiosity than a "what should I do now?!?" question.

Answer 1

First, I am not a lawyer and if you continue to receive legal threats then you should definitely lawyer up.

There is nothing wrong with posting direct, measurable facts as a comparison. For example, "our product costs x dollars, whereas Company B's costs y dollars". Stick to that and you'll be fine. Don't forget to add a date disclaimer (e.g. "* All information correct as of October 2011")

Straying into opinionated territory is dangerous though, e.g. "our product is more user friendly that Company B". That kind of thing is basically immeasurable.

Final note: when using your competitor's company name or brand name, make sure to add any trademark symbols, e.g. Microsoft® Windows®. If your competitor is well known enough you could get away with simply saying "the market leader".

Answer 2

First of all, I am also not a lawyer, nor any kind of expert in trademark law in any jurisdiction. For a definitive answer, you really need to consult a local intellectual property lawyer.

That said, according to that fount of all legal knowledge on the Internet, Wikipedia, you should generally be safe, at least under U.S. law, as long as you're only using the competitor's name to identify them, and not in any way that could imply endorsement or generate confusion between your brands:

"Fair use may be asserted on two grounds, either that the alleged infringer is using the mark to describe accurately an aspect of its products, or that the alleged infringer is using the mark to identify the mark owner. [...]

An example of the second type is that Audi can run advertisements saying that a trade publication has rated an Audi model higher than a BMW model, since they are only using "BMW" to identify the competitor. In a related sense, an auto mechanic can truthfully advertise that he services Volkswagens,^[29] and a former Playboy Playmate of the Year can identify herself as such on her website.^[30]"

^{(The superscript numbers are references to prior court cases; specifically, Volkswagenwerk Aktiengesellschaft v. Church, 411 F.2d 350, 352 (9th Cir. 1969) and Playboy Enterprises, Inc. v. Welles, 279 F.3d 796 (9th Cir. 2002).)}

Generally, similar provisions are likely to exist in other parts of the world, too, since it would be highly impractical if one could not legally refer to a company or a brand by the name they use themselves. However, the scope of these "fair use" provisions may vary, in particular when it comes to use of competitors' trade marks in promotional material. As I noted earlier, to be sure, you really should ask a lawyer.