Courts around the U.S. have arrived at very different conclusions
on whether the purchase of a competitor's trademark as a keyword to trigger
search engine advertising constitutes trademark infringement.
The vast majority of the cases thus far are
by trademark proprietors versus the keyword advertisers.
In the minority are cases by trademark
proprietors against the search engines like Google.
As background, in order to prevail on a trademark
infringement claim under the Lanham Act, 15 U.S.C. § 1114(1)2, a plaintiff must
generally establish that:
(1) it has a valid mark that is entitled to protection under the Lanham Act;
(2) the plaintiff owns the mark;
(3) the defendant used its mark in commerce;
(4) “in connection with the sale . . . or advertising of goods or services,” 15 U.S.C. § 1114(1)(a);
(5) without the plaintiff's consent; and
(6) defendant's use of its mark “is likely to cause confusion . . . as to the affiliation, connection, or association of [the defendant] with [the plaintiff], or as to the origin, sponsorship, or approval of [the defendant's] goods, services, or commercial activities by [the plaintiff].” 15 U.S.C. § 1125(a)(1)(A).
Sometimes, the traditional likelihood of confusion analysis
does not apply to keyword cases since consumers might only be confused into
visiting a site without actually making a sale, or that the confusion is
resolved at the moment of sale. In these
types of cases, some courts have applied the initial interest confusion theory. Initial interest confusion refers to a
potential customer’s temporary confusion about the actual source of goods or
services under consideration, even though the confusion is later dispelled
before the sale occurs. The classic
example is where a consumer sets out in search of one trademarked good, but
then is diverted to a competing good, even if he or she is not confused about
the source of the product he or she ultimately purchases. Courts have found that initial interest
confusion violates the Lanham Act because it impermissibly capitalizes on the
goodwill associated with a mark. In
proving initial interest confusion, courts also apply the standard likelihood
of confusion analysis.
In keyword cases, there are two main issues: (1) whether
there was a “use in commerce”; and (2) whether there is a likelihood of
confusion.
A. Use in Commerce
Until last year, plaintiffs in the Second Circuit were generally
able to get cases dismissed on the theory that the purchase of a keyword does
not constitute “use in commerce,” a
required element for a trademark action.
Based on the Second Circuit’s opinion in 1-800 Contacts v. WhenU.com, 414 F.3d 400 (2d Cir. 2005), district courts
in the Second Circuit relied on a very narrow definition of “use in commerce”
found in § 45 of the Lanham Act, 15 U.S.C. § 1127, which states that a mark shall
be deemed to be "used in commerce only when it is used or displayed in the
sale or advertising of services and the services are rendered in commerce,” and
thus excluded any use that did not involve the display of the actual mark. However, the Second Circuit recently held in
2009 that the purchase of a keyword does indeed constitute “use in commerce.” Rescuecom Corp. v. Google Inc., 562 F.3d
123 (2d Cir. 2009). With the Rescuecomm decision, it appears that
“use in commerce” defense will likely no longer be a viable defense.
Outside the Second Circuit, the consensus has been is that the
purchase of trademarks to trigger advertisements does constitute “use” under
the Lanham Act. See, e.g., Australian Gold, Inc. v. Hatfield, 436 F.3d
1228 (10th Cir. 2006); Playboy
Enter. Inc. v. Netscape Communications Corp., 354 F. 3d 1020 (9th Cir.
2004) (holding, without addressing the "use in commerce" question, that
the purchase of trademarks to trigger the display of banner advertising does creates
initial interest confusion); J.G.
Wentworth, S.S.C. Ltd. P'ship v. Settlement Funding LLC, 2007 WL 30115
(E.D. Pa. 2007) (finding trademark use in sponsored linking but allowing
defendant's motion to dismiss on other grounds); Boston Duck Tours, LP v. Super Duck Tours, LLC, 527 F. Supp. 2d
205, 207 (D. Mass. 2007) (finding keyword-purchasing a "use" for
trademark purposes); Buying for the Home,
LLC v. Humble Abode, LLC, 459 F. Supp. 2d 310 (D.N.J. 2006); Gov't Employees Ins. Co. v. Google, Inc.,
330 F. Supp. 2d 700 (E.D. Va. 2004); Hysitron Inc. v. MTS Sys. Corp., 2008 U.S.
Dist. LEXIS 58378 (D. Minn. 2008); Google Inc. v. American Blind &
Wallpaper, 2007 WL 1159950, * 6 (N.D. Cal. 2007); Edina Realty v.
TheMLSOnline.com, 2006 WL 737064, *3 (D. Minn. 2006).
B. Likelihood of
Confusion
Even if there is “use in commerce,” for trademark
infringement to exist such use must be likely to cause confusion. The cases tend to fall into two main
categories: (1) cases where the sponsored ad displays the exact trademarked
phrase, and (2) cases where the sponsored ad does not display the mark.
Where the sponsored ad displays the exact trademarked
phrase, courts have been more inclined to find infringement. For example, in Google Inc. v. American Blinds & Wallpaper Factory Inc.,
5:03-cv-05340-JF (N.D. Cal. settled August 31, 2007), the District Court found
that there was no infringement where the claimant’s mark did not appear in the
heading or text of the sponsored ads, but there was infringement where the mark
did appear in the sponsored ads. Google
later settled this case. In another case,
Storus Corp. v. Aroa Marketing Inc.,
2008 WL 449835 (N.D. Cal. Feb. 15, 2008), the court also found trademark
infringement where the sponsored ad displayed the protected mark. Indeed, in the recent case Hearts on Fire Company LLC v. Blue Nile,
2009 WL 794482 (D. Mass. March 27, 2009), defendant Blue Nile did not even
challenge the allegation that its use of plaintiff’s trademark “HEARTS ON FIRE”
alongside Defendant’s sponsored link, if true, constituted trademark infringement.
It should be noted, however, that this category of cases does
not address situations where the mark is used in a nominative manner to refer
to the trademark or its owner, such as where the mark is used to reference the
sale of products relating to the mark, or the advertiser is providing
information about the products sold under the mark. Google’s current policy is to allow such uses
of marks in AdWords advertising.
In situations where the purchased keyword triggers advertising
that does not contain the trademarked phrase, there is far less certainty. At
one extreme, at least one District Court has held that as a matter of law, the
purchase of keywords does not constitute actionable likelihood of
confusion. J.G. Wentworth SSC Ltd v. Settlement Funding LLC, No. 06-0597 (E.D.
Pa. Jan. 4, 2007).
In a fair number of cases, courts were not able to determine
whether a likelihood of confusion existed due to insufficient evidence. See, e.g.,
Fair Isaac Corp. v. Experian Information
Solutions Inc., 2009 WL 4263699 (D. Minn. Nov. 25, 2009) (finding that the
evidence presented was insufficient to prove whether the use of the Adwords in
question was likely to confuse consumers); Fair
Isaac Corp. v. Experian Information Solutions Inc., 2009 WL 4263699 (D.
Minn. Nov. 25, 2009) (finding insufficient proof of consumer confusion).
A few other courts have found a likelihood of confusion
based on a very weak showing.
Essentially, arguably any purchase of a mark by a competitor in a
related industry would be sufficient. See, e.g.,
Soilworks LLC v. Nowcom Corp., 564
F.Supp.2d 1160, 1177 (C.d. Cal 2008) (finding a likelihood of confusion on
applying the “internet trinity”: similarity in the marks, relatedness of goods,
marketing channels used).
Then there are the courts that engage in a far more rigorous
analysis. One such case is Hearts on Fire
Co. v Blue Nile, Inc., 2009 WL 794482 (D. Mass. March 27, 2009). In deciding a motion to dismiss, the court
found that Blue Nile’s purchase of the HEARTS ON FIRE trademark as a keyword did
support a claim for trademark infringement where the ads did not display the
mark. The court found that a key factor
here was the context in which diamonds are sold: a consumer who entered a search for Hearts on
Fire diamonds might easily believe that the sponsored link that was returned was
for an authorized dealer of Hearts on Fire diamonds. Interestingly, the court held that likelihood
of confusion would ultimately turn on the context in which consumers saw the
ads, and outlined a number of case specific factors: (1) the overall mechanics
of web-browsing and internet navigation, in which a consumer can easily reverse
course; (2) the mechanics of the specific consumer search at issue; (3) the
content of the search results webpage that was displayed, including the content
of the sponsored link itself; (4) downstream content on the Defendant's linked
website likely to compound any confusion; (5) the web-savvy and sophistication
of the Plaintiff's potential customers; (6) the specific context of a consumer
who has deliberately searched for trademarked diamonds only to find a sponsored
link to a diamond retailer; and, in light of the foregoing factors, (7) the
duration of any resulting confusion.
The Blue Nile case is a good indication of the way in which
the courts may be heading, at least on the issue of ads that do not contain the
protected mark, taking into account the content and context of each ad in
question.
Allen M. Lee Mr. Lee’s practice
focuses on business, corporate and intellectual property matters, including the
creation, protection and exploitation of intellectual property assets. He counsels clients on business formation,
general corporate matters, trademark, copyright, trade secret, patent,
licensing, internet and domain name issues, among other things. For more information contact: Allen M. Lee, a
Professional Law Corporation, Tel: (650) 254-0758, Fax: (650) 967-1851, Email: allen@allenmlee.com, Internet: www.allenmlee.com.
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