INTELLECTUAL PROPERTY LAW
Keywords and Trademark “Use”

By Joshua S. Jarvis

The court did not attempt to delve deeper into Lanham Act's language that defines 'use in commerce.'

Recently, courts have encountered trademark infringement actions based on a competitor’s purchase of keywords (referred to by Google as “AdWords”) used in conjunction with search engines to generate sponsored links. These actions come in two flavors. In the first, the plaintiff alleges trademark infringement by the competitor—the purchaser of the keyword, the sponsor of the advertisement, and the owner of the website to which a user is allegedly diverted. In the second, the plaintiff alleges trademark infringement by the search engine operator itself—usually Google—in that, by selling keyword-linked advertisements, it trades on the value of the plaintiff’s protected mark. Both scenarios present novel legal and factual questions with regard to satisfying elements of trademark infringement under the Lanham Act. This article explores the state of the law in both sets of cases, focusing on courts’ various interpretations of “use in commerce.”

Infringement: The language of Lanham. A trademark infringement action under the Lanham Act requires the plaintiff show that the defendant, without the plaintiff’s consent, “used” one of the plaintiff’s protected marks “in commerce” in connection with the sale, distribution, or advertising of goods or services, and that this use was “likely to cause confusion” as to affiliation, sponsorship, or origin. The act defines “use in commerce” as use of a mark—that is, use indicating the source of goods or services—in the ordinary course of trade in one of two situations: first, on goods, meaning placed on the goods themselves, or on containers, tags, labels, or advertisements; or second, on services, meaning used or displayed in the sale or advertising of services. It is not immediately apparent that either the purchase or sale of keywords used to generate sponsored links—when the keywords themselves do not appear in the text of the advertisements—satisfies this definition of use in commerce.

Cautious courts. District courts in the Ninth and Eleventh Circuits have exercised a certain amount of caution. In Google, Inc. v. American Blind & Wallpaper Factory, Inc., Google sought a judicial determination that its AdWords advertising program did not infringe American Blind’s trademarks. American Blind alleged that, under Google’s AdWords program, Google sold to American Blind’s competitors keywords comprised of American Blind’s marks. It further alleged that the resulting confusion and diversion was more likely because, on the search results page, Google failed to explain the significance of sponsored links and failed to display sponsored links using a distinct color, typeface, or font size.

The district court in northern California looked to the Ninth Circuit’s decision in Playboy Enterprises Inc. v. Netscape Communications Corp., where the court held that a genuine issue of material fact precluded summary judgment as to trademark infringement, finding evidence of initial interest confusion in the appearance of unlabeled banner ads, as well as actionable use of the plaintiff’s trademarks. However, the court refrained from determining whether the AdWord sales constituted use, reasoning that this determination, as well as “a likelihood of confusion” determination, would require factual findings and legal conclusions “inappropriate” for a ruling on a motion to dismiss.

Less cautious courts. In Government Employees Insurance Co., Inc. v. Google, Inc., plaintiff alleged that Google and Overture violated the Lanham Act by selling advertising linked to GEICO’s marks and contributed to third parties’ violations of the act. The District Court for the Eastern District of Virginia held that plaintiff GEICO pled facts sufficient to allege trademark use. The court ruled that “the complaint clearly alleges that defendants use . . . plaintiff’s trademarks to sell advertising, and then link that advertising to the results of searches,” and that, “when defendants sell the rights to link advertising to plaintiff’s trademarks, defendants are using the trademarks in commerce in a way that may imply that defendants have permission from the trademark holder to do so.”

Problems, however, abound. First, the court did not attempt to delve deeper into the Lanham Act’s language that defines “use in commerce.” Second, the court’s assertion that “defendants are using the trademarks in commerce in a way that may imply that defendants have permission from the trademark holder” suggests that the court is confusing “use in commerce” with “likelihood of confusion” and improperly basing its “use” conclusion on the latter. Third, there is little practical danger that advertisers would believe that the keywords they associate with their advertisements are available for such use courtesy of the keywords’ trademark owners. Finally, supposing an advertiser did believe it was purchasing a keyword with the permission of the trademark owner, mere permission would not convert the keyword into a source indicator for defendants’ search engines or keyword services.

Strict adherence to Lanham. As of this writing, district courts in the Second Circuit have refused to recognize the purchase or sale of keyword-linked advertisements as constituting “use in commerce.” In Merck & Co., Inc. v. Mediplan Health Consulting, Inc., defendants marketed and offered for sale on the Internet generic versions of plaintiffs’ Zocor brand cholesterol medication. Defendants arranged for their sponsored links to be placed “among the first results returned” when a user searched for the keyword “Zocor.” “Zocor” was the subject of two registered trademark’s owned by plaintiff, who filed a complaint alleging Lanham Act claims concerning defendants’ use of the mark in conjunction with the search engines. The court maintained that defendants’ use of the “Zocor” marks was entirely internal—they were “‘used’ only in the sense that a computer user’s search of the keyword ‘Zocor’ will trigger the display of sponsored links to defendants’ websites.” This, the court concluded, was not use of a mark in the trademark sense.

In Rescuecom Corp. v. Google, Inc.,plaintiff alleged Lanham Act claims regarding defendant’s sale of advertisements linked to its “Rescuecom” mark. Defendant moved to dismiss on the basis that the complaint failed to alleged actionable “trademark use.” First, the court addressed plaintiff’s allegation that defendant was capitalizing on the goodwill of plaintiff’s mark and that this would cause consumer confusion. The court explained that although facts may suffice to satisfy the “in commerce” and “likelihood of confusion” requirements, an allegation of trademark use was required “as a threshold matter” to sustain a cause of action for infringement. The plaintiff also alleged that defendant’s activities prevented Internet users from reaching its website, and that it altered search results, thus “diverting and misdirecting” Internet users away from its website. The court found that neither of these activities amounted to trademark use because there was no allegation that any of the links among the search results displayed plaintiff’s trademark.

Thoughts on fairness. In contrast to the cases finding “use” with regard to keyword-triggered advertising, the above “no use” cases demonstrate, in actions involving both advertiser and search engine defendants, stricter adherence to the defined “use in commerce” language of the Lanham Act. The concern, of course, is that advertisers often may seek to profit from a competitor’s mark, may obtain high-ranking sponsored links, and may end up “capturing” a certain percentage of confused users.

Of course, the courts finding “use” in actions against advertisers have largely failed to articulate this, or any other reason why such behavior satisfies “use in commerce,” instead falling back on questionably apposite precedent and language anchored largely in fairness. At the same time, if the District Courts of the Second Circuit are correct in looking to the Lanham Act’s “use” language as a guide, and if keyword-triggered sponsored links are shown to demonstrate the sort of trademark-driven “likelihood of confusion” the Lanham Act seeks to prevent, then aggrieved plaintiffs must look elsewhere for satisfaction.

For More Information About the Section of Intellectual Property Law

- This article is an abridged and edited version of one that originally appeared on page 18 of IPL Newsletter, Spring 2007 (25:3).

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- Website: www.abanet.org/intelprop.

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- Books and Other Recent Publications: Fundamentals of Intellectual Property Valuation: A Primer for Identifying and Determining Value; The Intellectual Property Handbook: A Practical Guide for Franchise, Business and IP Counsel; Patent Litigation Strategies Handbook, 2d ed. Pamphlet series intended for clients, including Marketing Your Invention, Submitting an Idea, What Is a Patent?, What Is a Trademark?, and What Is a Copyright? Extensive course materials in connection with CLE programs are also available.

Joshua S. Jarvis is an associate at Foley Hoag LLP in Boston, Massachusetts. He may be reached at .

Copyright 2008

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