(This article was originally featured in Modern Practice, Findlaw’s Law and Practice Technology Magazine, in January 2005.)
Following a three day trial, a recent decision by the Eastern District of Virginia gave new life to the practice of trademark keying. In Geico v. Google (No. 1:04CV507), Judge Brinkema ruled from the bench that Geico "has not established that the mere use of [Geico's] trademark by Google as a search word or keyword or even using it in [Google's] AdWord program standing alone violates the Lanham Act."[1] This ruling counters a year-old Ninth Circuit decision in Playboy v. Excite case [2], which found that material issues of fact based on initial interest confusion precluded the search engines' motion for summary judgment regarding their trademark keying practices. Although there are now two major (opposing) decisions regarding the legality of trademark keying, as with other areas of Internet law, there still exists no uniform rule of law to guide those advertising on the Internet.
Until this recent decision, Google was waging an uphill battle in the Eastern District of Virginia, attempting to defend its right to practice trademark keying. First, Google moved to dismiss Lanham Act claims, arguing that trademark keying did not make use in commerce of Geico's trademark. Second, Google moved the court for summary judgment. In both instances, the court denied Google's motion, siding instead with Geico. At the close of Geico's case-in-chief during trial, however, Google moved the court for judgment as a matter of law. Under Rule 52(c) of the Federal Rules of Civil Procedure:
If during a trial without a jury a party has been fully heard on an issue and the court finds against the party on that issue, the court may enter judgment as a matter of law against that party with respect to a claim or defense that cannot under the controlling law be maintained or defeated without a favorable finding on that issue, or the court may decline to render any judgment until the close of all the evidence. Such a judgment shall be supported by findings of fact and conclusions of law as required by subdivision (a) of this rule.
The Court granted Google's motion in part, and denied it in part. Most significantly, the court held that there existed insufficient evidence of a trademark violation to bar Google from displaying banner ads for competitive insurers when Internet users search using the term "Geico." In other words, the court ruled as a matter of law that using trademarks as keywords to trigger advertising does not constitutes trademark infringement. This was a clear victory for Google and all Internet companies that provide keyword advertising programs.
The court denied, however, Google's motion for judgment regarding whether Google is liable for those sponsored ads using Geico's name in the title of the banner ads themselves or in the text accompanying such ads. The court found that that Geico "presented enough evidence [of confusion] at this point to avoid a motion for judgment as a matter of law." Moreover, since Google could offer no counter evidence, the court found that "the evidence before this Court does establish that those sponsored sites that contain 'GEICO' either in the title or in the text are likely to confuse for the purposes of the Lanham Act requirements." Therefore, in order to write a more detailed legal opinion, and to give the parties time to settle, Judge Brinkema stayed trial until sometime in early January. The only issues remaining, however, would be whether Google is contributorily liable for the infringing sponsored sites-despite Google's express policy prohibiting such practice.
Emboldened by Judge Brinkema's ruling, Google warned its many other adversaries, chiefly, American Blind,[3] that "this is a clear signal to other litigants that our keyword policy is lawful." Over a year ago, Google sought a declaratory judgment from the Northern District of California that its trademark keying policy does not amount to trademark infringement. Although the Northern District of California has not yet decided the case, obviously, the court will be called upon to consider Judge Brinkema's forthcoming analysis of legal issues implicated by Google's trademark keying practices.
Beyond this one legal dispute, Judge Brinkema's decision is likely to have far-reaching affects not only on future trademark keying decisions, but also on various other innovative advertising practices that continue to challenge intellectual property rights in the digital domain (e.g., pop-up advertising).
Endnotes:
1. A transcript of the oral decision is available at http://patentlaw.typepad.com/patent/files/geico1215.txt.
2. The Ninth Circuit opinion is available at http://caselaw.lp.findlaw.com/data2/circs/9th/0056648p.pdf.
3. Among several suits against the Internet Search Engine icon, Google has recently been named as defendant in actions by the American Chemical Society (No. 1:2004CV659) for trademark infringement, and by Perfect 10 (No. 2:2004CV9484), primarily for copyright-related claims.
Showing posts with label keyword. Show all posts
Showing posts with label keyword. Show all posts
4.01.2004
Search Engine Comparative AdWare-tising Under Scrutiny
(This article was originally featured in Modern Practice, Findlaw’s Law and Practice Technology Magazine, in April 2004.)
The future of keyword advertising—and by implication, other forms of online advertising—was recently put in jeopardy by the Court of Appeals of the Ninth Circuit. The Ninth Circuit decision, which reversed the lower court, now permits Playboy to pursue its trademark law claims against search engines for using software (adware) to key advertisements to Playboy trademarks without Playboy’s consent. As there is little authority in this area of law, the decision served as a menacing warning to Internet advertisers which will continue to ripple through Internet law waters for some time.
From the trademark owners’ point of view, competitive advertisements keyed to trademarks steal away potential Internet customers by redirecting them to competitors’ websites. In their view, competitors essentially get to free ride on the valuable goodwill that consumers associate with the trademark owners’ marks. Trademark owners obviously want to have a lock on the goodwill that they have created in the marketplace and to preclude undeserving interlopers from interfering with it on the Internet.
On the defense, search engines eschew responsibility for policing which keywords and ad text their advertisers choose to employ in ad campaigns. Relatedly, the advertisers choosing well-known marks to trigger their advertisements believe that they are within their rights to engage in comparative advertising. They argue that using trademarks in such manner ensures a competitive environment where consumers receive timely and relevant information useful to making well-informed purchasing decisions.
In 2000, search engines were temporarily emboldened by a federal district court decision. Playboy Enterprises brought an action against Excite and Netscape alleging trademark infringement and dilution. The search engines were selling to Playboy’s competitors banner advertisements triggered by the key terms “playboy” and “playmate,” which are Playboy trademarks. On the search engines’ motion for summary judgment, the District Court for the Central District of California held that the search engines did not make actionable trademark use of Playboy’s trademarks—i.e., they did not use the marks to identify Playboy’s goods or services. Therefore, the court found that Playboy had no basis on which to allege trademark infringement and dilution.
Four years later, on appeal, the trademark owners experienced victory. The Ninth Circuit reversed and remanded the decision, finding that material issues of fact existed and that a likelihood of (initial interest) confusion precluded summary judgment in favor of the search engines. To wit, the court found that keying comparative ads to trademarks would lead Internet users to initially believe there was an affiliation between search engine advertisers and trademark owners. Even if Internet users realize before making a transaction that no affiliation exists, they visit competing websites based on their initial interest in the well-known trademark. Although one judge was concerned about continuing to rely on the insupportable initial interest confusion doctrine to find trademark liability, at least for now, such confusion remains actionable in the Ninth Circuit.[1]
The Ninth Circuit is the first court of appeals to address this realm of Internet advertising law, and its decision is important for a few reasons. First, should courts universally accept the Ninth Circuit decision, Internet search engines could be forced to significantly change their business models. Even before the Ninth Circuit issued its decision, Internet search engine icon Google asked a federal district court in the northern district of California to declare that its keyword-triggered ad program (AdWords) does not violate trademark law. The posturing of the parties must have changed somewhat when the Ninth Circuit decision came out just two months after Google filed its action.
Second, the Ninth Circuit decision will impact related Internet advertising activities. For example, other courts will soon be hearing pop-up advertising cases on appeal. They will surely look to the Ninth Circuit’s decision for some guidance. Whether they come to the same conclusion is another matter; but, for the foreseeable future, the Ninth Circuit decision will be the standard by which all future Internet advertising disputes will be measured.
Finally, at least according to Circuit Judge Berzon, the initial interest confusion doctrine may have outlived its theoretical cyberlaw utility. Initially, the doctrine was viewed as a panacea for finding trademark liability where courts could not otherwise determine how to hold individuals accountable for their Internet activities. Now, however, the Internet is not so novel, Internet activities are not so obscure, and the doctrine, perhaps, is not so useful as the courts once believed. While the full effect of the Ninth Circuit decision has yet to be realized, it may stall some online advertising practices of Internet search engines, and other Internet advertisers, if left unchecked.
[1] In Judge Berzon’s concurrence, she indicated that the court should consider abolishing the initial interest confusion doctrine. Presumably, Judge Berzon’s concurrence signaled that she would not have found consumer confusion was likely without applying the initial interest confusion doctrine.
The future of keyword advertising—and by implication, other forms of online advertising—was recently put in jeopardy by the Court of Appeals of the Ninth Circuit. The Ninth Circuit decision, which reversed the lower court, now permits Playboy to pursue its trademark law claims against search engines for using software (adware) to key advertisements to Playboy trademarks without Playboy’s consent. As there is little authority in this area of law, the decision served as a menacing warning to Internet advertisers which will continue to ripple through Internet law waters for some time.
From the trademark owners’ point of view, competitive advertisements keyed to trademarks steal away potential Internet customers by redirecting them to competitors’ websites. In their view, competitors essentially get to free ride on the valuable goodwill that consumers associate with the trademark owners’ marks. Trademark owners obviously want to have a lock on the goodwill that they have created in the marketplace and to preclude undeserving interlopers from interfering with it on the Internet.
On the defense, search engines eschew responsibility for policing which keywords and ad text their advertisers choose to employ in ad campaigns. Relatedly, the advertisers choosing well-known marks to trigger their advertisements believe that they are within their rights to engage in comparative advertising. They argue that using trademarks in such manner ensures a competitive environment where consumers receive timely and relevant information useful to making well-informed purchasing decisions.
In 2000, search engines were temporarily emboldened by a federal district court decision. Playboy Enterprises brought an action against Excite and Netscape alleging trademark infringement and dilution. The search engines were selling to Playboy’s competitors banner advertisements triggered by the key terms “playboy” and “playmate,” which are Playboy trademarks. On the search engines’ motion for summary judgment, the District Court for the Central District of California held that the search engines did not make actionable trademark use of Playboy’s trademarks—i.e., they did not use the marks to identify Playboy’s goods or services. Therefore, the court found that Playboy had no basis on which to allege trademark infringement and dilution.
Four years later, on appeal, the trademark owners experienced victory. The Ninth Circuit reversed and remanded the decision, finding that material issues of fact existed and that a likelihood of (initial interest) confusion precluded summary judgment in favor of the search engines. To wit, the court found that keying comparative ads to trademarks would lead Internet users to initially believe there was an affiliation between search engine advertisers and trademark owners. Even if Internet users realize before making a transaction that no affiliation exists, they visit competing websites based on their initial interest in the well-known trademark. Although one judge was concerned about continuing to rely on the insupportable initial interest confusion doctrine to find trademark liability, at least for now, such confusion remains actionable in the Ninth Circuit.[1]
The Ninth Circuit is the first court of appeals to address this realm of Internet advertising law, and its decision is important for a few reasons. First, should courts universally accept the Ninth Circuit decision, Internet search engines could be forced to significantly change their business models. Even before the Ninth Circuit issued its decision, Internet search engine icon Google asked a federal district court in the northern district of California to declare that its keyword-triggered ad program (AdWords) does not violate trademark law. The posturing of the parties must have changed somewhat when the Ninth Circuit decision came out just two months after Google filed its action.
Second, the Ninth Circuit decision will impact related Internet advertising activities. For example, other courts will soon be hearing pop-up advertising cases on appeal. They will surely look to the Ninth Circuit’s decision for some guidance. Whether they come to the same conclusion is another matter; but, for the foreseeable future, the Ninth Circuit decision will be the standard by which all future Internet advertising disputes will be measured.
Finally, at least according to Circuit Judge Berzon, the initial interest confusion doctrine may have outlived its theoretical cyberlaw utility. Initially, the doctrine was viewed as a panacea for finding trademark liability where courts could not otherwise determine how to hold individuals accountable for their Internet activities. Now, however, the Internet is not so novel, Internet activities are not so obscure, and the doctrine, perhaps, is not so useful as the courts once believed. While the full effect of the Ninth Circuit decision has yet to be realized, it may stall some online advertising practices of Internet search engines, and other Internet advertisers, if left unchecked.
[1] In Judge Berzon’s concurrence, she indicated that the court should consider abolishing the initial interest confusion doctrine. Presumably, Judge Berzon’s concurrence signaled that she would not have found consumer confusion was likely without applying the initial interest confusion doctrine.
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