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Second Circuit decision on "Use in Commerce"

In a long awaited decision, the Second Circuit reversed a lower court’s dismissal of a case brought by Rescuecom against Google. Rescuecom alleged trademark violation, because Google - through its Keyword Suggestion Tool - had recommended that a Rescuecom competitor use Rescuecom’s trademark as a keyword. The district court had dismissed the case, accepting Google’s argument that its use of Rescuecom’s trademark was internal and not an infringing “use in commerce.”

So far every single district court outside of the 2nd Circuit found that the purchasing of a competitor’s keyword to trigger ads at least constitutes "use in commerce". Every district court in the 2nd Circuit found otherwise, believing this opinion was compelled by the Second Circuits holding in 1-800 Contacts, Inc. v., Inc., 414 F.3d 400 (2d Cir.192005) (“1-800”). But the 2nd Circuit found these cases to be materially different. In 1-800, the search term that was alleged to trigger the pop-up ad was the plaintiff’s website address, not its mark. Also, the advertiser could not purchase keywords to trigger their ads. Instead they could only choose a category. Google on the contrary, had recommended its advertisers the Rescuecom trademark through its Keyword Suggestion Tool and sold it as a keyword.

 The case is now going back to the trial court. Rescuecom still has to prove that Google's use of the trademark in its AdWords program causes likelihood of confusion or mistake.

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