While trademark owners may state a cognizable claim for trademark infringement over keyword ads and survive a motion to dismiss, see, e.g., Romeo & Juliette Laser Hair Removal, Inc. v. Assara I LLC, 2014 WL 4723299, at *3 (S.D.N.Y. Sept. 23, 2014) (denying motion to dismiss trademark owner’s infringement claim), they may have more difficulty substantiating those claims on the merits. See, e.g., EarthCam, Inc. v. OxBlue Corp., 49 F. Supp. 3d 1210, 1241 (N.D. Ga. 2014) (granting summary judgement in favor of an alleged infringer); Coll. Network, Inc. v. Moore Educ. Publishers, Inc., 378 F. App'x 403, 414 (5th Cir. 2010) (upholding a jury verdict in favor of an alleged infringer). No claim based the use of keywords alone has been resolved in favor of the trademark owner on summary judgment or at trial. See 2 E-Commerce and Internet Law 9.11 (2016 update). However, courts have held that keyword advertising combined with trademark usage in other contexts, such as domain names or advertisement text, can cause a likelihood of confusion. See, e.g., Digby Adler Grp. LLC v. Image Rent a Car, Inc., 79 F. Supp. 3d 1095, 1102 (N.D. Cal. 2015) (granting summary judgement for a trademark owner where defendants registered a domain name with plaintiff’s mark and purchased the mark as a keyword).
Even when courts hold parties liable for the use of trademarks as keywords, they are reluctant to award damages or injunctive relief. See, e.g., Mary Kay, Inc. v. Weber, 661 F. Supp. 2d 632, 645 (N.D. Tex. 2009) (refusing to permanently enjoin the purchase of trademarked keywords). For some parties, the relatively low value of keyword advertisements as compared with the high cost of litigation makes settlement an attractive option. Trademark owners have settled with search engines as well as with private companies. In 2012, for example, Google and Rosetta Stone, the education technology company that develops language-learning software, reached a settlement agreement after the Fourth Circuit reversed a summary judgement ruling in favor of Google. Rosetta Stone Ltd. v. Google, Inc., 676 F.3d 144 (4th Cir. 2012). Rosetta Stone’s general counsel called the settlement “a significant victory for consumer protection” that “goes a long way toward advancing our goal to strengthen the Rosetta Stone brand and trademarks around the world.” See Ronald C. Goodstein et. al., Using Trademarks As Keywords: Empirical Evidence of Confusion, 105 Trademark Rep. 732, 755 (2015). Though the terms of the settlement are confidential, a Google search for “Rosetta Stone” now only reveals an advertisement for the official Rosetta Stone website.
We may learn more about the continuing viability of settlement in keyword cases through the FTC’s 1-800 Contacts suit. Closing arguments in that case are set for July 27, 2017.