Plаyboy Enterprises, Inc. (PEI), appeals the district court’s grant of summary judgment as to its claims of trademark infringement, unfair competition, and breach of contract against Terri Welles; Terri Welles, Inc.; Pippi, Inc.; and Welles’ current and former “webmasters,” Steven Huntington and Michael Mihalko. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm in part and reverse in part.
In a separate memorandum disposition, we resolve Welles’ cross-appeal of the district court’s grant of summary judgment as tо her counterclaims for defamation, intentional infliction of emotional distress, unfair competition, and interference with prospective economic advantage. Welles, Huntington and Mihalko also appeal the district court’s denial of their requests for attorney’s fees. We resolve that issue in the memorandum disposition as well.
I.
Background
Terri Welles was on the cover of Playboy in 1981 and was chosen to be the Playboy Playmate of the Year for 1981. Her use of the title “Playboy Playmate of the Year 1981,” and her use of other trademarked terms on her website are at issue in this suit. During the relevant time period, Welles’ website offered information about and free photos of Welles, advertised photos for sale, advertised memberships in her photo club, and promoted her services as a spokesperson. A biographical section described Welles’ selection as Playmate of the Year in 1981 and her years modeling for PEL After the lawsuit began, Welles included discussions of the suit and criticism of PEI on her website and included a note disclaiming any association with PEI.
The district court also granted summary judgment on PEI’s contract claims. Those claims arose from a contract between PEI and a corporation created by Welles, “Piр-pi, Inc.” When Welles agreed to be Playmate of the Year in 1981, Pippi, Inc., signed a contract with PEI. The contract contained a term requiring prior written approval from PEI before Welles made any “non-Playboy use of her name with the designation ‘Playmate of the Year.’ ” Pippi, Inc., was dissolved in 1984. PEI argues that Pippi, Inc., was Welles’ alter ego and that the terms of the contract are currently enforceable against Welles. The district court rejected this argument and granted summary judgment on PEI’s contract claims in favor of Welles. We affirm.
II.
Standard of Review
We review the district court’s grant of summary judgment de novo.
III.
Discussion
A. Trademark Infringement
Except for the use оf PEI’s protected terms in the wallpaper of Welles’ website, we conclude that Welles’ uses of PEI’s trademarks are permissible, nominative uses. They imply no current sponsorship or endorsement by PEI. Instead, they serve to identify Welles as a past PEI “Playmate of the Year.”
We adopted the following test for nominative use:
First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.12
We noted in New Kids that a nominative use may also be a commercial one.
In cases in which the defendant raises a nominative use defense, the above three-factor test should be applied instead of the test for likelihood of confusion set forth in Sleekcraft.
We group the uses of PEI’s trademarked terms into three for the purpose of applying the test for nominative use. First, we analyze Welles’ use of the terms in headlines and banner advertisements. We conсlude that those uses are clearly nominative. Second, we analyze the use of the terms in the metatags for Welles’ website, which we conclude are nominative as well. Finally, we analyze the terms as used in the wall-paper of the website. We
1. Headlines and banner advertisements.
To satisfy the first part of the test for nominative use, “the product or service in question must be one not readily identifiable without use оf the trademark[.]”
The district court properly identified Welles’ situation as one which must also be excepted. No descriptive substitute exists for PEI’s trademarks in this context. The court explained:
[TJhere is no other way that Ms. Welles can identify or describe herself and her services without venturing into absurd descriptive phrases. To describe herself as the “nude model selected by Mr. Hefner’s magazine as its number-one prototypical woman for the year 1981” would be impractical as well as ineffectual in identifying Terri Welles to the public.20
We agree. Just as the newspapers in New Kids could only identify the band cleаrly by using its trademarked name, so can Welles only identify herself clearly by using PEI’s trademarked title.
The second part of the nominative use test requires that “only so much of the mark or marks may be used as is reasonably necessary to identify the product or service[.]”
In addition to doing nothing in conjunctiоn with her use of the marks to suggest sponsorship or endorsement by PEI, Welles affirmatively disavows any sponsorship or endorsement. Her site contains a clear statement disclaiming any connection to PEI. Moreover, the text of the site describes her ongoing legal battles with the company.
For the foregoing reasons, we conclude that Welles’ use of PEI’s marks in her headlines and banner advertisements is a nominative use excepted from the law of trademark infringement.
2. Metatags.
Welles inсludes the terms “playboy” and “playmate” in her metatags. Metatags describe the contents of a website using keywords. Some search engines search metatags to identify websites relevant to a search.
As we discussed above with regard to the headlines and banner advertisements, Welles has no practical way of describing herself without using trademarked terms. In the context of metatags, we conclude that she has no practical way of identifying the content of her website without referring to PEI’s trademarks.
A large portion of Welles’ website discusses her аssociation with Playboy over the years. Thus, the trademarked terms accurately describe the contents of Welles’ website, in addition to describing Welles. Forcing Welles and others to use absurd turns of phrase in their metatags, such as
There is simply no descriptive substitute for the trademarks used in Welles’ meta-tags. Precluding their use would have the unwanted effect of hindering the free flow of information on the internet, something which is certainly not a goal of trademark law.
We conclude that the metatags satisfy the second and third elements of the test as well. The metatags use only so much of the marks as reаsonably necessary
3. Wallpaper/watermark.
The background, or wallpaper, of Welles’ site consists of the repeated abbreviation “PMOY '81,” which stands for “Playmate of the Year 1981.”
The repeated depiction of “PMOY '81” is not necessary to dеscribe Welles. “Playboy Playmate of the Year 1981” is quite adequate. Moreover, the term does not even appear to describe Welles — her name or likeness do not appear before or after each “PMOY '81.” Because the use of the abbreviation fails the first prong of the nominative use test, we need not apply the next two prongs of the test.
B. Trademark Dilution
The district court granted summary judgment to Welles as to PEI’s claim of trademark dilution. We affirm on the ground that all of Welles’ uses of PEPs marks, with the exception of the use in the wallpaper which we address separately, are proper, nominative uses. We hold that nominative uses, by definition, do not dilute the trademаrks.
Federal law provides protection against trademark dilution:
The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person’s commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark....33
Dilution, which was not defined by the statute, has been described by the courts as “the gradual ‘whittling away’ of a trademark’s value.”
Dilution works its harm not by causing confusion in consumers’ minds regarding the source of а good or service, but by creating an association in consumers’ minds between a mark and a different good or service.
Uses that do not create an improper association between a mark and a new product but merely identify the trademark holder’s products should be excepted from the reach of the anti-dilution statute. Such uses cause no harm. The anti-dilution statute recognizes this principle and specifically excepts users of a trademark who compare their product in “commercial advertising or prоmotion to identify the competing goods or services of the owner of the famous mark.”
For the same reason uses in comparative advertising are excepted from anti-dilution law, we conclude that nominative uses are also excepted. A nominative use, by definition, refers to the trademark holder’s product. It does not create an improper association in consumers’ minds between a new product and the trademark holder’s mark.
When Welles refers tо'her title, she is in effect referring to a product of PEI’s. She does not dilute the title by truthfully identifying herself as its one-time recipient any more than Michael Jordan would dilute the name “Chicago Bulls” by referring to himself as a former member of that team, or the two-time winner of an Academy Award would dilute the award by referring to him or herself as a “two-time Academy Award winner.” Awards are not diminished or diluted by the fact that they have been awarded in the past. Similarly, they are not diminished or diluted when past reciрients truthfully identify themselves as such. It is in the nature of honors and awards to be identified with the people who receive them. Of course, the conferrer of such honors and awards is free to limit the honoree’s use of the title or references to the award by contract. So long as a use is nominative, however, trademark law is unavailing.
The one exception to the above analysis in this case is Welles’ use of the abbreviation “PMOY” on her wallpaper. Because we determined that this use is not nominative, it is not excepted from the anti-dilution provisions. Thus, we reverse as to this issue and remand for further proceedings. We note that if the district court determines that “PMOY” is not entitled to trademark protection, PEI’s claim for dilution must fail. The trademarked term, “Playmate of the Year” is not identical or nearly identical to the term “PMOY.” Therefore, use of the term “PMOY” cannot, as a matter of law, dilute the trademark “Playmate of the Year.”
C. Contract
The district court granted summary judgment against PEI on its contract claims. We affirm. Although we conclude that PEI advanced sufficient evidence to establish unity of interest, the first prong of the alter ego test,
IV.
Conclusion
For the foregoing reasons, we affirm the district court’s grant of summary judgment as to PEI’s claims for trademark infringement and trademark dilution, with the sole exception of the use of the abbreviation “PMOY.” We reverse as to the abbreviation and remand for consideration of whether it merits protection under either an infringement or a dilution theory. We аlso affirm as to PEI’s claims for breach of contract. In a separate memorandum disposition, we resolve the issues raised by Welles’ cross-appeal.
AFFIRMED in part, REVERSED and REMANDED in part. Costs to Terri Welles and Terri Welles, Inc.
Notes
. The disclaimer reads as follows: “This site is neither endorsed, nor sponsored, nor affiliated with Playboy Enterprises, Inc. PLAYBOY® PLAYMATE OF THE YEAR® AND
. Metatags are hidden code used by some search engines to determine the content оf websites in order to direct searchers to relevant sites.
. PEI claims that “PMOY” is an unregistered trademark of PEI, standing for "Playmate of the Year.”
. Lopez v. Smith,
.Id.
. Ahdul-Jabbar v. General Motors Corp.,
. See New Kids on the Block v. News America Publ’g, Inc.,
.
. Id. at 304.
. The "classic fair use case” is one in which "the defendant has used the plaintiff’s mark to describe the defendant's own product.” Id. at 308 (emphasis in original).
. See New Kids,
. New Kids,
. Id. at 309 ("Where, as here, the use does not imply sponsorship or endorsement, the fact that it is carried on for profit and in competition with the trademark holder’s business is beside the point.").
.
. New Kids,
. Id. at 306.
. Id.
. Id.
. Id.
. PEI v. Welles,
. New Kids,
. Id. at n. 7.
. Id. (quoting Volkswagenwerk Aktiengesellschaft v. Church,
. Id. at 308.
. We express no opinion regarding whether an individual's use of a current title would suggest sponsorship or endorsement.
. By noting Welles’ affirmative actions, we do not mean to imply that affirmative actions of this type are necеssary to establish nominative use. New Kids sets forth no such requirement, and we do not impose one here.
. See Brookfield Communications, Inc. v. West Coast Entertainment,
. We note that search engines that use their own summaries of websites, or that search the entire text of sites, are also likely to identify Welles’ site as relevant to a search for "playboy” or "playmate,” given the content of the site.
. Admittedly, this hindrance would only occur as to search engines that use metatags to dirеct their searches.
. It is hard to imagine how a metatag could use more of a mark than the words contained in it, but we recently learned that some search engines are now using pictures. Searching for symbols, such as the Playboy bunny, cannot be far behind. That problem does not arise in this case, however, and we need not address it.
. PEI asserts that it introduced evidence showing that Welles' site has been listed before PEI’s on occasion. However, an examination of the evidenсe PEI cites shows that Welles' site, although sometimes ranked highly, was still listed below PEI’s in search results.
.“PMOY” is not itself registered as a trademark. PEI argued before the district court that it is nonetheless protected because it is a well-known abbreviation for the trademarked term "Playmate of the Year.” In this court PEI cites one affidavit that supports this argument.
. 15 U.S.C. § 1125(c)(1).
. Academy of Motion Picture Arts & Sciences v. Creative House Promotions, Inc.,
. Panavision Int'l, L.P. v. Toeppen,
. Id.
. Id. at 1326-27.
. See 4 J. McCarthy, Trademarks and Unfair Competition, § 24:70 (4th ed.2001).
. I.P. Lund Trading ApS v. Kohler Co.,
. 15 U.S.C. § 1125(c)(4)(A).
. See Luigino’s, Inc. v. Stouffer Corp.,
.Roman Catholic Archbishop of San Francisco v. The Superior Court of Alameda Coun
. Id. (quoting Associated Vendors, Inc. v. Oakland Meat Co.,
. See William M. Fletcher, FLETCHER CYCLOPEDIA OF CORPORATIONS § 41.10 (perm, ed.2000).