DEVELOPMENTS IN KEYWORD ADVERTISING JURISDICTION REPORT: US—TRADEMARKS
Robert Kenney and Katie Peden Birch, Stewart, Kolasch & Birch, LLP
US courts have not yet found the sale of trademarks as search engine keywords by Google and related Internet search engines to infringe on those marks; however, the case law in connection with the purchase of trademarks as keywords by competitors continues to evolve. Recent case law from the 9th Circuit offers some clarification of the relevant factors to be considered in these cases, but provides conflicting results.
Most recently, on March 8, the 9th Circuit overturned a preliminary injunction prohibiting the purchase of a competitor’s trademark as a keyword issued by the District Court for the Central District of California in Network Automation, Inc. v Advanced Systems Concepts, Inc.
Both Network Automation and Advanced Systems sell job scheduling and management soſtware and advertise on the Internet. Network Automation purchased the ‘ActiveBatch’ trademark of Advanced Systems as a keyword on search engines, including Google AdWords and Microsoſt Bing. Following a cease and desist demand from Advanced Systems, it brought this action for declaratory judgment of non-infringement. Advanced Systems filed counterclaims for infringement under the Lanham Act. Te District Court found a likelihood of success on the merits with regard to ‘initial interest confusion’ in favour of Advanced Systems, and enjoined Network Automation’s purchase of the ‘ActiveBatch’ mark as a keyword.
In overturning the district court’s order on appeal, the 9th Circuit criticised the lower court’s emphasis on the ‘Internet trinity’ of likelihood of confusion factors as too rigid an examination in the context of keyword advertising. Tese factors include the similarity of the marks, the relatedness of the goods or services, and the simultaneous use of the web as a marketing channel. Emphasising a more flexible approach, the 9th Circuit’s analysis contained a broader range of factors including: the strength of the mark; the evidence of actual confusion; the type of goods and degree of care likely to be exercised by the purchaser; and the labelling and appearance of the advertisements and the surrounding context on the screen displaying the results page. Under this analysis, the court found that the plaintiff’s showing of likelihood of confusion was insufficient for injunctive relief.
In January, aſter the district court had issued the preliminary injunction in Network Automation, but before the 9th Circuit’s decision on appeal, the District Court for the Central District of California issued another injunction against a competitor’s purchase of the plaintiff’s trademark as a keyword in Binder v Disability Group, Inc. Te plaintiff, a disability law firm, alleged trademark infringement based on the defendant’s purchase of its mark ‘Binder and Binder’ as a Google AdWord. Unlike in Network Automation, the injunction in Binder was issued following a trial on the issues and thus the evidence was fully developed.
74 World Intellectual Property Review May/June 2011
“US COURTS HAVE NOT YET FOUND THE SALE OF TRADEMARKS AS SEARCH ENGINE KEYWORDS BY GOOGLE AND RELATED INTERNET SEARCH ENGINES TO INFRINGE ON THOSE MARKS; HOWEVER, THE CASE LAW IN CONNECTION WITH THE PURCHASE OF TRADEMARKS AS KEYWORDS BY COMPETITORS CONTINUES TO EVOLVE.”
Te Binder court again relied on the Internet trinity of factors, but also focused on the evidence of actual confusion presented at trial. Tis included a survey as well as individual deposition testimony of consumers. Te court found likelihood of confusion based on the evidence of actual confusion and its findings that the plaintiff’s mark is strong, that the parties’ services are competing, that the defendant intentionally chose the plaintiff’s mark based on its strength and market appeal revealed by marketing research conducted by the defendant, and that both parties market their services through the Internet.
In addition to likelihood of confusion, the court found the defendant’s conduct to be wilful and doubled the damages awarded, and further, found the case to be exceptional and awarded attorney’s fees and costs.
It is also important to note that the Binder court found strong evidence of likelihood of confusion and did not address the claims under the ‘initial interest confusion’ theory relied upon in Network Automation.
Given the timing of the decision, it is unclear whether the Binder ruling will hold up if appealed to the 9th Circuit in light of Network Automation' s. If appealed, the Binder case would allow for a more fully developed discussion of the weight given to evidence of ‘actual confusion’ as well as the relative strength of the available theories of infringement.
Tese cases make it apparent that the law remains unsettled in this area. Advertisers should be mindful of the appearance and context of their Internet advertisements, and trademark owners should continue to monitor online use of their marks.
Robert Kenney is a partner at Birch, Stewart, Kolasch & Birch, LLP. He can be contacted at:
rjk@bskb.com
Katie Peden is an associate at Birch, Stewart, Kolasch & Birch, LLP. She can be contacted at:
katherine.m.peden@
bskb.com
www.worldipreview.com
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