A competitor using your brand to sell the same or similar products/services can be devastating to your business. That is what trademark law is designed to protect, confusion in the marketplace. But what if a company uses your brand in the metadata that directs where their ads show up, while your brand is never shown in the outward facing public part of the ad? Is that allowed? You might be surprised.
Let’s start with what exactly is metadata. Metadata is defined as a set of data that describes and gives information about other data. Clear as mud? A good example is when you take pictures with your cell phone while on vacation. The time, date, and location information of when/where you took the picture is saved within the picture itself. You may not see it, but the image file contains that information, which is called metadata.
The question of whether a person or entity can use another’s registered trademark as a search term on an Internet search engine and in ads on a search results page is an issue the courts have addressed on various occasions. On August 13, 2020, the United States Court of Appeals for the Fourth Circuit decided that it is allowed so long as there is no likelihood of confusion under 15 U.S.C.S. §1114.
In Passport Health, LLC. v. Avance Health Sys., 823 Fed. Appx. 141 (4th Cir. 2020), the court stated that a defendant’s use of a plaintiff’s federally registered mark in its ads were dispelled by the content of the defendant’s site. The Court also looked at the intent of the defendant with regards to its use of the plaintiff’s federally registered mark. Additionally, it was determined that the plaintiff and defendant’s marks were dissimilar, lessening any potential likelihood of confusion.
Prior cases, such as Lamparello v. Farwell, 420 F.3d 309 (4th Cir. 2005), the court held that the doctrine holds a competitor liable under trademark law if the competitor “lures potential customers away . . . by initially passing off its goods as those of the producers, even if confusion as to the source of the goods is dispelled by the time the goods are consummated.” In Lamparello, Reverend Jerry Falwell contended that the use of the defendant’s domain name, www.fallwell.com, infringed his marks and caused confusion since some of his followers often misspelled his name and might go to that site under the assumption that it was his. Because the content of the site was so different from Falwell’s actual site, the Court determined that any likelihood of confusion would be dispelled immediately upon entering the site.
In USA Nutraceuticals Grp., the United States District Court for the Southern District of Florida stated that initial interest confusion occurs when “a customer is lured to a product by the similarity of the mark, even if the customer realizes the true source of the goods before the sale is consummated.” The court further stated that although other courts, including the Second, Seventh and Ninth Circuits, have held that this form of confusion is actionable under the Lanham Act, the Eleventh Circuit has not adopted this standard and finds it unconvincing. USA Nutraceuticals Grp., Inc. v. BPI Sports, LLC, 165 F. Supp. 3d 1256, 1265-66.
When determining whether using another’s registered trademark as a search term on an internet search engine and in ads on a search results page, the courts use 9 factors to determine whether or not the use is infringing on the plaintiff’s registered mark, although the factors used vary depending on the case. Those factors are: (1) the strength or distinctiveness of the plaintiff’s mark as actually used in the marketplace; (2) the similarity of the two marks to consumers; (3) the similarity of the goods or services that the marks identify; (4) the similarity of the facilities used by the holder or the marks; (5) the similarity of advertising used by the holder of the marks; (6) the defendant’s intent; (7) actual confusion; (8) the quality of the defendant’s product; and (9) the sophistication of the consuming public. Passport, 823 Fed. Appx., at 148. Actual confusion is the most significant factor. Id at 153.
Another case to consider is Rosetta Stone Ltd. v. Google, Inc., 676 F.3d (4th Cir. 2012). In this case, the Court considered Rosetta Stone’s allegation that Google’s AdWords policy infringed on its trademark. Google’s policy allowed third parties to use Rosetta Stone’s trademark as an AdWord and in their resulting ads. But under the Rosetta Stone scenario, the Court considered the similarity of the marks of little value since nominative fair use was used as an affirmative defense to infringement. Also, the defendants claimed the use was not meant to pass off their product as that of the plaintiff’s. The Court instead analyzed and considered evidence of consumers that were confused by the results of the search. The Court also considered evidence of consumers that remained confused even after they reached the third party’s site and received the third party’s product.
The main issue with using keywords deals with the initial interest confusion doctrine. This doctrine is mentioned in the case of Hearts on Fire Co., LLC v. Blue Nile, Inc., 603 F. Supp. 2d 274 (D. Mass. 2009). There, the First Circuit developed a list of factors that would be used to determine the likelihood of confusion. Those factors are: (1) the similarity of the marks; (2) the similarity of the goods; (3) relationship between channels of trade; (4) relationship between advertising; (5) classes of prospective consumers; (6) evidence of actual confusion (of internet) consumers; (7) defendant’s subjective intent in using the mark; and (7) overall strength of the mark. Additional likelihood of confusion factors for the internet include: (1) mechanics of web browsing and internet navigation (ability to reverse course); (2) mechanics of the specific consumer search at issue; (3) content of the search results webpage that was displayed, including content of the sponsored link itself; (4) downstream content on the defendant’s linked website likely to compound any confusion; (5) how web-savvy and sophisticated the plaintiff’s potential consumers are; (6) specific context of a consumer who has deliberately searched mark only to find sponsored link of another; and (7) in light of the above factors (1-6), the duration of the resulting confusion. The factors and considerations taken by the of Hearts on Fire Courtare very similar to those of Rosetta Stone.
The answer to whether keywords that infringe on another’s registered trademark can be used to by another to direct consumer traffic to a comparable, related product is that “it depends”. The courts have varying views and outcomes when it comes to this issue and there does not seem to be any new ruling that provides a bright line as to what conduct is allowable and what conduct is not.
This blog article was written by Eva Sarmiento, legal intern at Assouline & Berlowe and JD candidate 2021 at Nova Southeastern University Law School, (reviewed by Greg M. Popowitz, Esq.)
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