Liability for Search Engine Triggering of Trademarked Keywords After Rescuecom
| Citation | Vol. 5 No. 1 |
| Publication year | 2008 |
Abstract
"Trademark keying" is the practice of buying and selling trademarked terms as keywords in search engine advertising campaigns. In September 2006, a federal district court in Rescuecom Corp. v. Google, Inc. held that the practice does not constitute trademark use, a threshold criterion in a trademark infringement claim. Since Rescuecom, the focus of trademark keying litigation has shifted, giving some guidance to potential litigants. In addition, the U.S. Court of Appeals for the Second Circuit has diverged from other circuits. While federal courts within the Second Circuit have fashioned the emerging rule that an advertiser's internal use of trademarked terms as search engine keywords, without more, is not a trademark use within the meaning of the Lanham Act, courts in other circuits have consistently held that such internal use does constitute trademark use. This Article evaluates the diverging lines of recent cases giving rise to these two approaches, explores what implications the split holds for potential litigants, and provides general guidelines for businesses wishing to avoid infringement claims for trademark keying.
Introduction
The recent decision in Rescuecom Corp. v. Google, Inc.(fn2) marks a turning point in trademark keying litigation. Trademark infringement lawsuits against search engines for trademarked keyword sales have given way to litigation against plaintiffs' direct business competitors concerning their purchases of trademarked keywords. In addition to marking a shift in plaintiffs' typical choice of defendants, Rescuecom heralded a divergence in judicial approaches to infringement claims over trademarked keywords. As of this writing, a split has developed between Second Circuit courts and district courts in other circuits in applying federal trademark law to the practice of trademark keying on search engines.
To have committed trademark infringement, a trademark keying defendant must have made use in commerce of the plaintiff's mark in a manner likely to cause consumer confusion. While district courts within the Second Circuit have uniformly held that mere internal use of a trademarked term as a paid keyword, without more, is not a "use in commerce,"(fn3) all other district court decisions have held that such internal use alone does constitute trademark use.(fn4) However, courts on both sides of the question have agreed that unless the plaintiff's mark appears in the defendant's advertisements triggered by the trademarked keyword, as a matter of law, there is no use in commerce.(fn5) This latter rule regarding likelihood of confusion will help businesses avoid litigation over using trademark keying in their search engine advertising efforts.
The Practice of Trademark Keying
"Trademark keying" refers to the purchase and sale of trademarked terms as keywords in an advertising campaign on a search engine such as Google or Yahoo!(fn6) When a user enters a search query containing the trademarked term, a keyword purchaser's ad appears in the search results.(fn7) Search engine ad campaigns are vital to both the search engines themselves(fn8) and to many of the businesses that advertise on them.(fn9)
Trademark keying constitutes an important portion of those campaigns. The high volume of searches that contain trademarked keywords and the efficacy of targeting ads to the users performing those searches make trademark keying a valuable marketing strategy.(fn10) Since many businesses rely on the strength of their trademarked brands, some companies sue for trademark infringement in an attempt to prevent their marks' use as paid keywords.
The search engines themselves have tried to minimize the incidence of trademark infringement problems arising from their advertising programs. Google(fn11) and Yahoo!(fn12) have provided some protection for trademark owners' rights through advertising policies regulating how their clients may use trademarked terms.(fn13) Nonetheless, because the law around trademark keying is not yet settled, these policies have not stopped some trademark holders from suing search engines and their clients.
Trademark Infringement under the Lanham Act
The Lanham Act(fn14) sets forth four basic requirements that a plaintiff claiming trademark infringement must establish: (1) the plaintiff owns a valid mark entitled to Lanham Act protection;(fn15) (2) the defendant used the mark in commerce;(fn16) (3) the use is "in connection with the sale, offering for sale, distribution, or advertising of any goods or services;"(fn17) and (4) the manner of use is "likely to cause confusion . . . as to the affiliation, connection, or association of" the defendant with the plaintiff or "as to the origin, sponsorship, or approval of [the defendant's] goods, services, or commercial activities" by the plaintiff.(fn18)
A trademark owner suing for infringement therefore has several hurdles to jump. The threshold issue in a trademark infringement claim is whether trademark keying constitutes a "use in commerce" of the trademark.(fn19) Without use, there can be no infringement.(fn20) Even after establishing trademark use, in order to prevail on the infringement claim, the plaintiff must show that this use caused a likelihood of consumer confusion.(fn21)
In the Second Circuit, the most active circuit for trademark keying cases,(fn22) courts have construed the Lanham Act's trademark infringement requirements differently from most other jurisdictions in two regards. First, courts within the Second Circuit break out "use" and "in commerce" as separate elements,(fn23) rather than treating "use in commerce" as a single element.(fn24) This difference helps explain why analyses in decisions from courts outside of the Second Circuit generally focus on "use in commerce,"(fn25) while Second Circuit decisions frequently do not reach the "in commerce" element since their analysis may conclude there was no "trademark use in the first instance."(fn26) Second, the Second Circuit has added a requirement that a defendant must have used the mark without the plaintiff's consent.(fn27) Courts in other jurisdictions have not explicitly required this element in their trademark keying analyses.(fn28)
Rescuecom's Plunge into Muddy Waters
The plaintiff in Rescuecom was a computer services franchising company which sued Google for permitting Rescuecom's competitors to bid on keywords containing the "Rescuecom" trademark in their AdWords campaigns, and for suggesting the trademark to those competitors as a potential keyword through Google's Keyword Suggestion Tool.(fn29) However, Rescuecom did not allege that the resulting AdWords ads displayed its trademark.(fn30) Google countered that the disputed conduct was not an actionable "trademark use."(fn31) The court agreed with Google, holding that its internal use of Rescuecom's trademark "is not a use of a trademark within the meaning of the Lanham Act"; it therefore granted Google's motion to dismiss the lawsuit.(fn32)
At the time of the Rescuecom decision, courts in various jurisdictions had already begun issuing conflicting opinions on whether trademark keying (purchase or sale) constitutes trademark infringement.(fn33) The earliest case held trademark keying to be trademark use. Government Employees Insurance Company v. Google, Inc.(fn34) considered the defendants'(fn35) practice of letting advertisers bid on GEICO's trademarks as keywords.(fn36) The court ruled that this was a use in commerce of the marks, although users never saw the keywords since they were used only in Google's "internal computer algorithms."(fn37)
Two more early cases followed the GEICO decisions. In 2006, the court in 800-JR Cigar, Inc. v. GoTo.com, Inc. also held in the affirmative on trademark use in a similar fact pattern to GEICO's: while the plaintiff's marks did not appear in competitors' ad text, the defendant search engine had accepted bids on the keyword "jr cigar" and similar terms, and its Search Term Suggestion Tool identified certain of the plaintiff's marks as potential keywords for competitors to use.(fn38) The JR-Cigar decision was issued shortly after another court had held a business's purchase of its competitor's marks as keywords to be trademark use.(fn39) The holding in that case, Edina Realty, Inc. v. TheMLSonline.com, was based "on the plain meaning of the Lanham Act,"(fn40) but the court decided the issue of likelihood of confusion was a matter for a jury.(fn41)
While Rescuecom was pending, only one case had challenged these three courts' broad interpretation(fn42) of "trademark use." In Merck and Co., Inc. v. Mediplan Health Consulting, Inc.,(fn43) Merck sued several Canadian Internet pharmacies in the Second Circuit district court for the Southern District of New York.(fn44) Merck alleged the pharmacies had committed trademark infringement in buying Merck's trademarked term "ZOCOR" as a keyword on Google and Yahoo in order to market the Zocor drug and generic versions thereof to an American audience.(fn45) The court interpreted "trademark use" narrowly,(fn46) holding that buying keywords containing the plaintiff's mark, without placing that mark in the text of the ads, was not a trademark use.(fn47)
Merck relied heavily on an earlier Second Circuit decision, 1-800...
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