INTELLECTUAL PROPERTY LAW: Internet-Related Trademark Infringement

Vol. 29 No. 3

By

Uli Widmaier is a partner in the intellectual property law firm of Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP in Chicago, Illinois.

 

Trademark practitioners have received irate messages from clients about sponsored links on search engines that appeared in response to a search for the clients’ trademarks. The “culprits” are online advertising programs such as Google’s AdWords and similar programs by Yahoo! and Bing. The search engines sell keywords to customers and provide “sponsored links” to the customers’ websites in response to searches that include these keywords. The keywords are often trademarks belonging to competitors.

Starting around 2003, several trademark infringement lawsuits based on sponsored links have been brought against the competitor, the search engine, or both. The plaintiffs faced an uphill battle on a preliminary yet potentially dispositive issue—whether keyword use of the plaintiff’s trademark is “use in commerce” under the Lanham Act. If not, the Lanham Act would not apply. This issue was largely resolved with Rescuecom Corp. v. Google, Inc. (562 F.3d 123 (2d Cir. 2009)), which found that keyword use qualifies as use in commerce under the Lanham Act. But this did not answer the ultimate issue of trademark infringement law: Was there a likelihood of confusion?

Brookfield. Things were simpler in the days before keywords, when metatags controlled the ranking of websites on search result lists. Spotting a client’s trademark as a metatag in a competitor’s website provided solid ground for a trademark infringement lawsuit. The seminal case was Brookfield Communications, Inc. v. West Coast Entertainment Corp. (174 F.3d 1036 (9th Cir. 1999)). Brookfield eschewed the traditional multi-factor test for likelihood of confusion, substituting a new and simplified test in domain name and metatag cases—the famed “Internet Troika.” The plaintiff merely had to show (1) similarity of its trademark to the defendant’s domain name, (2) relatedness of the parties’ goods or services, and (3) use by both parties of the Internet as a marketing channel. The initial interest confusion doctrine would take care of the rest. According to that doctrine, the defendant infringes the plaintiff’s trademark if the defendant uses it to attract consumers’ “initial interest” in the defendant’s goods or services, even if any confusion is dispelled by the time the consumer actually makes the purchase.

Brookfield’s doctrinal innovation substantially eased the plaintiff’s burden of proof in domain name and metatag cases, giving rise to a significant body of case law imposing liability under the Internet Troika and the initial interest confusion doctrine in the Internet context.

Playboy and the Berzon concurrence. Within a few years, the doctrinal underpinnings of Brookfield were being applied to a new technology: keywords. Keywords are functionally similar to metatags (which were technologically superseded by 2003)—both operate unseen by the ordinary Internet user and present the user with advertisements for the defendant’s website in response to the user’s search for the plaintiff’s products. In 2004 the Ninth Circuit decided Playboy Enterprises, Inc. v. Netscape Communications Corp. (354 F.3d 1020 (9th Cir. 2004)), an early keyword case. At issue were third-party banner ads for adult entertainment triggered by a consumer’s use of the plaintiff’s mark (such as PLAYBOY) as a search term. The court, relying on Brookfield, found that this practice created initial interest confusion under the Internet Troika: The plaintiff’s marks were strong, the parties’ services were related, and both parties used the Internet as a marketing channel.

In her concurrence in Playboy, Judge Marsha Berzon noted a possible overbreadth in Brookfield’s analysis. According to Judge Berzon, the combination of the Internet Troika and the initial interest confusion doctrine served to impose liability for trademark infringement almost automatically and without a showing of any cognizable likelihood of consumer confusion. This criticism was to bear fruit several years later, in the Ninth Circuit’s Tabari and Network Automation decisions.

Tabari. Toyota Motor Sales, U.S.A., Inc. v. Tabari (610 F.3d 1171, 1174–75 (9th Cir. 2010)) addresses the issue of domain names that are allegedly confusingly similar to the plaintiff’s trademark. Toyota objected to buy-a-lexus.com and buyorleaselexus.com domain names used by professional car brokers Farzad and Lisa Tabari. The district court enjoined them from using “any . . . domain name, service mark, trademark, trade name, meta tag or other commercial indication of origin that includes the mark LEXUS” (Id. at 1176). The Court of Appeals reversed the injunction as “plainly overbroad” (Id.) and resolved the case via the nominative fair use doctrine. “The Tabaris are using the term Lexus to describe their business of brokering Lexus automobiles; when they say Lexus, they mean Lexus. We’ve long held that such use of the trademark is a fair use, namely nominative fair use. And fair use is, by definition, not infringement” (Id. at 1175).

Tabari is premised on the assumption that the Internet is no longer novel, and that users have a robust understanding of search engines, domain names, sponsored links, and online advertisements. The court, heeding the advice of Judge Berzon in Playboy, invalidated Brookfield’s premise that the Internet is a strange and alien place where both consumers and trademark owners have to be carefully protected.

Network Automation. Network Automation, Inc. v. Advanced Sys. Concepts, Inc. (638 F.3d 1137, 1142 (9th Cir. 2011)) continues Tabari’s theme of an Internet that has become part of everyday life and, importantly, part of most companies’ marketing efforts. The facts of the case are analogous to the facts of the metatag portion of Brookfield. Network Automation and Advanced Systems Concepts are direct competitors in the job scheduling and management software market. Network purchased Advanced’s trademark ACTIVEBATCH as a keyword for its own sponsored advertising on Google and Bing. The district court, relying on Brookfield’s “Internet Troika” of confusion factors, issued a preliminary injunction against Network’s use of that mark as a keyword.

Relying in substantial part on Judge Berzon’s Playboy concurrence, the Ninth Circuit rejected Brookfield and the Internet Troika. “We did not intend Brookfield to be read so expansively as to forever enshrine these three factors . . . as the test for trademark infringement on the Internet” (Id. at 1148). The court instead offered a new “Internet quartet” of confusion factors, customized for sponsored links and ads: (1) the strength of the mark; (2) the evidence of actual confusion; (3) the type of goods and degree of care likely to be exercised by the purchaser; and (4) the labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page. The fourth factor in particular is intended to permit a realistic assessment of the actual risk of consumer confusion, thereby avoiding Brookfield’s near-automatic imposition of trademark infringement liability that Judge Berzon criticized so effectively in her 2004 concurrence in Playboy. 

 

FOR MORE ABOUT THE SECTION OF INTELLECTUAL PROPERTY LAW

This article is an abridged and edited version of one that originally appeared on page 9 of Landslide® magazine, January/February 2012 (4:3).

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Website: www.americanbar.org/iplaw.

Periodicals: Landslide, a four-color magazine, published six times annually; eNews, timely Section developments; The Legislative Newsletter, by ABA-IPL Washington, D.C., legislative consultant Hayden Gregory.

Books and Other Recent Publications: ADR Advocacy, Strategies, and Practice for Intellectual Property Cases; Preliminary Relief in Patent Infringement Disputes; Annual Review of Intellectual Property Law Developments 2011; Settlement of Patent Litigation and Disputes; The Tech Contracts Handbook; A Legal Strategist’s Guide to Trademark Trial and Appeal Board Practice; Patent Obviousness in the Wake of KSR International Co. v. Teleflex Inc.; Patent Infringement Litigation Handbook: Avoidance and Management; IP Attorney’s Handbook for Insurance Coverage in Intellectual Property Disputes; A Lawyer’s Guide to Section 337 Investigations Before the U.S. International Trade Commission; Computer Games and Virtual Worlds: A New Frontier in Intellectual Property Law; Marketing Your Invention, 3d ed.; What Is a Patent?, 3d ed.; What Is a Trademark?, 3d ed.; What Is a Copyright?, 3d ed.; Distance Learning and Copyright: A Guide to Legal Issues; Drafting Patents for Litigation and Licensing; Patent Litigation Strategies Handbook, 3d ed.; Trademark Infringement Remedies. Downloadable PDF titles include Navigating Recent Developments in Online Security and E-Privacy.

CLE Materials: Audio CD packages and online courses produced from previous live teleconferences.

 

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