On March 11, 2008, European regulators cleared
Google's proposed $3.1 billion acquisition of DoubleClick. The EU
Commission’s in-depth investigation, opened in November 2007, "concluded that
the transaction would be unlikely to have harmful effects on consumers, either
in ad serving or in intermediation in online advertising markets. The Commission
has therefore concluded that the transaction would not significantly impede
effective competition within the European Economic Area (EEA) or a significant
part of it." The Commission did not believe that themerged entity
would have the ability to engage in strategies aimed at marginalising Google's
competitors, mainly because of the presence of credible ad serving alternatives
to which customers can switch, in particular companies such as Microsoft, Yahoo!
I mentioned a proposed law in Utah (Utah
SB 236, the "Trademark Protection Act,") that inter
alia effectively prohibits the use of trademarked terms as keyword advertising
triggers. The Trademark Protection Act was heavily criticized for being
unconstitutional, because it would hurt free speech, with citizens
being unable to run ads in protest of certain company's business practices,
for example. Comparative advertising would also be prohibited under the Act.
In March 2008, the Utah legislature finally amended the bill and removed
the provisions of the law which prohibited this type of keyword advertising.
For more information on the bill, check out Eric
Goldman's blog entries on" the Utah legislature, the Dr. Frankenstein of
3. Google AdWords Lawsuits in the USA - Where do we stand at the beginning of 2008?
a. The Lanham Act
To prevail on a trademark infringement claim under
§ 32(1) of the Lanham Act, 15 U.S.C. § 1114(1)2, a plaintiff must establish that
(1) it has a valid mark that is entitled to
protection under the Lanham Act; and that
(2) the defendant used the mark,
(3) in commerce,
(4) ‘in connection with the sale . . . or
advertising of goods or services,’ 15 U.S.C. § 1114(1)(a),
(5), without the plaintiff's consent.”
The plaintiff must also show that the defendant's
use of that mark “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].” 15 U.S.C. § 1125(a)(1)(A).
b. "Use in Commerce"
Courts in the USA are split on the threshold
question of whether the sale and purchase of another's trademark as a keyword
constitutes a commercial use of the mark.
Courts in the Second Circuit have uniformly
held that the use of a trademark in keywords, where the use is strictly internal
and not communicated to the public, does not constitute a Lanh
The court had held that the use of a trademarked term to trigger
browser pop-up advertising was not an actionable use of the mark in commerce: "A
company's internal utilization of a trademark in a way that does no communicate
it to the public is analogous to a individual's private thoughts about a
trademark. Such conduct simply does not violate the Lanham Act, which is
concerned with the use of trademarks in connection with the sale of goods or
services in a manner likely to lead to consumer confusion as to the source of
such goods or services."
"In 1-800 Contacts, the Second Circuit emphasized that
commercial use is not the equivalent of “use in commerce” for trademark purposes.
It observed that, “while any number of activities may be ‘in commerce’ or create
a likelihood of confusion, no such activity is actionable under the Lanham Act
absent the ‘use’ of a trademark.” 414 F.3d at 412. Trademark use “ordinarily”
involves placing a trademark on goods or services to indicate that the goods or
services emanate from or are authorized by the owner of the mark. Id. at 408.
Here, in the search engine context, defendants do not “place” the ZOCOR marks on
goods, containers, displays, or associated documents, nor do they use the marks
to indicate source or sponsorship. Rather, the marks are used only in the sense
that a computer user’s search of the keyword “Zocor” will trigger the display of
sponsored links to defendants' websites. This internal use of the keyword “Zocor”
is not use of the mark in the trademark sense; rather, this use is more akin to
the product placement marketing strategy employed in retail stores, where, for
example, a drug store places its generic products alongside similar national
brand products to capitalize on the latter's name recognition. See id. at 411.
The sponsored link marketing strategy is the electronic equivalent of product
placement in a retail store."
In 2004 the Ninth Circuit held - without
adressing the "use in commerce" question - that the use of trademarks to trigger
the display of banner advertising creates initial interest confus
("First, the alleged purchase of the keyword was a commercial transaction
that occurred “in commerce,” trading on the value of Plaintiff’s mark.
Second, Defendants’ alleged use was both “in commerce” and “in connection
with any goods or services” in that Plaintiff’s mark was allegedly used to
trigger commercial advertising which included a link to Defendants’
furniture retailing website. Therefore, not only was the alleged use of
Plaintiff’s mark tied to the promotion of Defendants’ goods and retail
services, but the mark was used to provide a computer user with direct
access (i.e., a link) to Defendants’ website through which the user could
make furniture purchases. The Court finds that these allegations clearly
satisfy the Lanham Act’s “use” requirement.")
The parties settled their case (LLC,
No. 03-CV-2783 (JAP) (D. N.J.
Stipulation and Order of Settlement filed Feb. 16, 2006).
use is not analogous to “an individual’s private thoughts” as defendant
suggest. By establishing an opportunity to reach consumers via alleged
purchase and/or use of a protected trademark, defendant has crossed the line
from internal use to use in commerce under the Lanham Act.")
Boston Duck Tours, LP v. Super Duck Tours, LLC, 2007 WL 4465464 (D. Mass.
Dec. 5, 2007)
These courts distinguished the adwords cases from
he pop-up software cases the
advertisers were only allowed to bid on categories of terms, not specific marks
("Such conduct is qualitatively different from the pop-up advertising context,
where the use of trademarks in internal computer coding is neither communicated
to the public nor for sale to the highest bidder.")
c. Likelihood of Confusion
Even if there is a use in commerce, the use
also must b
e likely to cause confusion. Likelihood of confusion requires that “‘an
appreciable number of ordinarily prudent purchasers are likely to be misled, or
indeed simply confused, as to the source of the goods in question, or “are likely to believe that the mark’s owner sponsored,
endorsed, or otherwise approved of the defendant’s use of the mark,” Tommy
Hilfiger Licensing, Inc. v. Nature Labs, LLC, 221 F. Supp. 2d 410, 414 (S.D.N.Y.
2002) (citing Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604
F.2d 200, 204-05 (2d Cir. 1979)).
No likelihood of confusion:
rnment Employee Ins. Co. v. Google Inc., E.D. Va., No. 1:04cv507 (LMB/TCB),
bench ruling 12/15/04: insufficient evidence
s evidence of confusion Edina Realty offered a handful of e-mails
and phone calls received by MLSonline from consumers inquiring about Edina
Realty: "It is unclear whether the phone calls and emails identified by
plaintiff are evidence of actual consumer confusion caused by defendant’s use of
plaintiff’s mark. A survey that could demonstrate actual confusion is
unnecessary, however, because plaintiff need only show a likelihood of confusion.
The Court determines that the phone calls and emails are sufficient to raise a
genuine issue of material fact for the purposes of summary judgment.")
d. Pending lawsuits:
JP Enterprises Inc. v. Yahoo! Inc. et al, D.Colo.,
No. 1:06-cv-01046, 6/6/06
American Airlines Inc. v. Google Inc., N.D. Tex.,
No 4:07cv487, 10/24/07): The U.S. District Court for the Northern District
denied Google Inc.'s motion to dismiss plaintiffs ellegations. For more
court documents click here!
1-800 Contacts, Inc. v. LensWorld.com,
Inc., 2:08-cv-00015-SA (D. Utah
Jan. 8, 2008). For more informatio
According to the Court of Appeal of Aix en Provence
(2nd Chamber), 6 December 2007, TWD Industries v. Google France, Google Inc., the
use of trademark protected terms as keywords is a trademark infringement. The
court also held Google Inc. and Google France liable under trademark law.
Brad Spitz writes about this decision:
"They are supposed to verify that
the commercial links do not infringe any rights of third parties. Moreover, they
may not allege that prior verification is impossible for supposedly material,
legal and economic reasons. The Court adds that even if it were established that
it is impossible to verify, Google Inc and Google France would have to either
simply abandon this activity or bear the consequences."