But it’s positively nerve-wracking reading the commentary of someone like Evan Brown! 😉
I wrote a couple of days ago — and once again got hit hard by a learned commenter who disagrees with my view of the matter — about the Second Circuit’s ruling in the Rescuecom v. Google case that keyword advertising can be trademark use giving rise to an action to infringement. That decision is dated the same day as my blog post, April 6th. I wrote, “[U]ntil now, district courts in the Second Circuit have held that the use of trademarks as a term was not ‘trademark use.'”
Not quite right, it turns out. For on March 26th, I learned yesterday via the New York Law Journal, Judge Thomas P. Griesa in the Southern District of New York anticipated the Second Circuit, at least insofar as acknowledging the limitations of that broad rule, and rejected a motion to dismiss based on the “keywords aren’t not trademark use” argument.
Ruling in a case with the felicitious caption of Romeo & Juliette Laser Hair Removal, Inc. v. Assara I LLC, Judge Griesa did not anticipate the Second Circuit’s legal ruling, however. Rather, he focused on another often-overlooked point: The difference between a keyword that generates a competitor’s otherwise inoffensive ad, and one that results in an ad that is it itself potentially confusing because it uses the keyword itself in a way not justifiable as a fair use.
According to the opinion, when a user searched for “romeo & juliette laser,” presumably the first search someone looking for romance-enhancing hair removal would make, the result came up with an ad like this:
Needless to say, neither the Capulets or the Montagues authorized this use of their trademark by their competitor, Assara. Nor is their any obvious justification for it under trademark law or otherwise. This kind of use, Judge Griesa easily determined, was not immunized even under the then-current understanding of the Second Circuit’s 1-800 decision:
Defendants argue that they are entitled to summary judgment because any use of the mark in this context was non-infringing. In support of this argument, they invoke the Second Circuit’s holding that a “company’s internal utilization of a trademark in a way that does not communicate it to the public” is non-infringing. 1-800 Contacts, 414 F. 3d at 109. Thus if defendants had paid Google to display Assara’s advertisement in response to a search for “Romeo & Juliette,” without having the advertisement itself contain a reference to Romeo & Juliette, that would not have been a ‘use’ of the mark. . . . In this case, however, plaintiff alleges that the use of its mark was in Assara’s advertisement itself, as well as on the face of Assara’s website. Therefore, the cases approving of the “internal utilization” of a trademark are inapposite.
So they are, and, by virtue of the Circuit’s decision earlier this week, they may be more — or less — than that, too. The Romeo & Juliette decision is here.
Remember the GEICO v. Google case? My former law partner and long-time spouse Jane Coleman does. She’s writing a chapter on secondary trademark infringement liability for the second edition of a book on trademark counterfeiting now being edited by our colleague Brian Brokate, a partner at Gibney Anthony & Flaherty. wrote the definitive reference work on secondary trademark infringement. (Brian is one of the leading anti-counterfeiting lawyers in the country. ) Her conclusion is one that Google and its lawyers doubtless know well: Having no trademark monitoring policy may be trouble, but a little policing may be worse than none at all.
The standard is set by a leading case in this area, Inwood Labs. Under Inwood, in a contributory trademark infringement case, a court will find contributory liability if the defendant has either (1) intentionally induced a third party to infringe the plaintiff’s mark or (2) supplied a product to a third party with actual or constructive knowledge that the product is being used to infringe the mark. The GEICO lawsuit, like most such cases, is a Prong Two case.
So, on to Prong Two, then: supplying a product to a third party with knowledge that the product is being used to infringe the mark. Product? Here there is no product; Google provides a service. But based on the principles synthesized in a later decision, Lockheed Martin v. Network Solutions from what are known as the “flea market cases,” the second prong of this definition of contributory infringement can apply to services, too. Then the court applies a modified version of the Inwood standard: It considers the extent of monitoring and control the defendant has over the infringing activity.
So, what happened in the GEICO case? GEICO, a discount insurance company, sued Google for using GEICO’s trademarks to sell advertising on Google’s search engine, alleging contributory trademark infringement. Two practices of Google were at issue:
- The sale by Google of GEICO’s marks as search terms or “keywords,” and
- The advertisements or “sponsored links” which contained GEICO’s marks in their text, generated by customers who selected those terms.
Regarding the sponsored links, GEICO had argued earlier that Google was contributorily liable, saying, “the advertisers themselves [made] ‘trademark use’ of the GEICO marks by incorporating them into the advertisements, which are likely to deceive customers into believing that the advertisers provide accurate information about GEICO products or are somehow related to GEICO.” GEICO also claimed — remember the “direct control and monitoring” standard of Lockheed — that Google in fact exercised significant control over the content of advertisements that appeared on its search result pages.
Last December, Google asked the U.S. District Court to grant judgment as a matter of law in its favor. It argued that GEICO could not win its contributory liability claim, because it could not prove that “Google affirmatively encouraged or knowingly assisted in violation of trademark law by the alleged infringers.” Google urged that its own internal trademark enforcement policy bans the infringing advertisements at issue, though “some ads occasionally slip through.” It insisted that the “inability to achieve perfect enforcement of that policy” did not give rise to contributory liability, and that there was no evidence that Google condoned or encouraged infringement.
But this would only matter if Prong One — intentional inducement– were at issue. Apparently, it’s not. Google understandably would have the court focus on its good intentions, but this is a Prong Two case such as Lockheed — where, again, the courts ask whether the defendant exercises a level of monitoring and control that Google acknowledges it does effect via its trademark enforcement policy. Google’s argument regarding its internal trademark policing policy may, in fact, prove too much.
It’s not clear that Google can get out of responsibility for ads that “slip through,” given its awareness of the existence of infringing ads. If it can police a little, perhaps it can police a lot. Judge Brinkema’s oral opinion did not address this, but a final written decision by her or an appellate court might. [UPDATE: As of early May, there is still no written decision. It’s a good bet that there won’t be one and the parties will settle…]
The court granted in part and denied in part Google’s motion, allowing the case to go forward on the question of whether Google was contributorily liable for trademark infringement arising out of the sponsored advertisements containing GEICO’s marks. The incentive to settle is high — and maybe that’s why it’s so quiet.
This is why I have argued that auction websites (read: eBay) should be subject to contributory liability for the sale of counterfeit or other infringing merchandise — because they (and other web auctioneers) do have control over the auctions. Courts have repeatedly found contributory infringement where a defendant claims “willful blindness.” Well, it’s certainly a sort of willful blindness to do some kinds of monitoring and not others.
Would it add to the cost of search engines and auctions to do more policing? Yes, of course it would: More fighting over rent. Considering the profits involved, and the tremendous costs imposed on brand owners to try and keep up with counterfeits and online infringers, an outcome that required more policing to protect the IP that contributes to those profits doesn’t seem like an unreasonable one.
MarketWatch reports this story about an opinonated gent who’s suing Wal-Mart for a declaratory judgment:
Smith said he was making a point by comparing the giant retail company to the Nazis by creating T-shirt designs that played off the Bentonville, Ark., firm’s familiar logo, including “I (heart) WAL*OCAUST. They have family values and their alcohol, tobacco and firearms are 20% off,” the newspaper reported.
Wal-Mart launched a legal battle by writing a cease-and-desist demand that led Smith to file suit Monday in federal court in Atlanta. Former presidential hopeful Ralph Nader’s legal aid group, Public Citizen, is helping Smith, the report said.
Smith should be ashamed of himself for comparing a damned variety store to the Third Reich. It demonstrates a real lack of moral judgment on his part.
But the stupid party here is Wal-Mart, which should get its clock cleaned and which has given a platform for publicity to a bitter, if morally blind, adversary. Whether it will in this trademark-owners-take-all environnment is, however, anyone’s guess.
UPDATE: Hm. Maybe Wal-Mart had it coming?
UPDATE: The Pierce IP News Blog has it that Wal-Mart will claim its trademark is being besmirched by Smith. In other words, its claim will probably hinge on a trademark dilution count. You know, dilution — the infringement that never has to say “I’m confused.”
Paul Alan Levy has brought my attention to this development, which he rounds up at the Consumer Law & Policy Blog:
Corynne McSherry and Eric Goldman have posted a timely joint warning about an effort within the Trademark Litigation Committee of the American Bar Association to put forward a series of resolutions that are apparently designed to revive the hitherto unsuccessful litigation efforts by trademark owners to prevent their competitors (and occasionally critics) from using keyword advertising and similar techniques to promote comparative and critical advertising on search engines. Because of the important consumer benefits from rules that protect the ability of businesses to engage in truthful comparative advertising, Public Citizen has litigated that right over the years in a line of cases running from Virginia Pharmacy Bd. v. Virginia Consumers Council to our current cases challenging bar rules that unduly limit lawyer advertising in Florida and New York. . . .
I have participated in a number of bar meetings related to this issue, and the trademark owner interests on the plaintiff side of these cases admit that newspaper ads, billboards, and product placement would not violate anybody’s trademark. They have had a great deal of trouble, however, explaining why keyword advertising is any different from a trademark perspective.
Owners of “high equity” intellectual property including trademarks want nothing more or less than ownership of trademarks as rights in gross, European-style, meaning in part that nominative fair use or any fair use at all would be written out of American trademark law — along with some pretty important parts of the First Amendment. And that, of course, is the explanation.
Attributor is a new program that online publishers can and do use to trace their verbal content across the Internet and see who is using how much of their stuff without paying or attributing.
Reading the articles (this one sent to me by my brother, software engineeer Glenn Coleman) it seems clear that most media outlets are interested in getting credit, and links back to their sites, for typical use of their materials, i.e., use that is defensible as “fair use” under the Copyright Act:
CEO Jim Brock gave me a demo of Attributor last week in the lobby of the Waldorf Astoria.
Attributor is already indexing 100 million Web pages a day (15 billion total so far), but it is not a keyword index. It looks for bigger blocks of content. Right now, it can handle only text. Images are in beta. And video matching will go into beta early next year. If you are a publisher that is a customer of Attributor, it ingests all your content and comes up with matches. Attributor splits up the world between sites that exhibit extensive copying (more than half of an article, for instance) and just some copying. It shows which sites have linked back to the original source and which have not. “Often, that’s all they want—a link,” says Brock.
That last sentence is key, and tracks the advice I give inquirers in my professional role (including my job as general counsel of the [now-defunct] Media Bloggers Association): If you help generate traffic to the media site that produced content that you’ve excerpted, you far more often than not have inoculated yourself against an infringement claim, if only from a business (as opposed to legal) point of view.
Now Attributor is here to enforce that eminently reasonable deal. It would be eminently reasonable, if you’re a blogger or other Internet publisher utilizing other people’s content, to be very aware of it.
It may or may not be true that sooner or later, everyone in intellectual property law will be suing Google.
Well, it’s almost certainly not true. But there’s no question that this dominant player in the Internet (yes, I own a few shares!) (to be exact: four. or five.) is starting to present a ripe target for many a frustrated trademark or copyright owner that is miffed about having its IP properties diced and sliced the Google Way. (UPDATE: And some others.)
As a service to the IP bar, and via the No Watermelons Allowed blog, here’s the first order of business: Coming to a coherent technical understanding of how Google works, courtesy of the Computer Society of those rapscalions at the Institute of Electrical and Electronics Engineers.
Be sure and give me a head’s up when you find someone who has abstracted this into English. But frankly, who wouldn’t like to see more heavy-lifting, drawing on this sort of nuts and bolts technological insight, in the many judicial opinions that brush so very broadly on the issues that will have a vast impact on the Internet and the economy to which it has given birth. For nearly a decade now judges have been ruling on critical cases involving the Internet and IP, trade law and other areas of law without evincing much proof of having gone beyond their own hunches (and maybe those of their clerks) as average Internet Explorer users.
In reality, Congress should be making these calls, not the courts. The question, for example, of whether a search engine is or is not causing likelihood of confusion by delivering results utilizing key word searches that happen to be someone’s trademark is essentially a metaphysical one — which is to say that judges are making policy decisions, which Congress is supposed to do. There is no right or wrong answer to whether someone searching for Coke, and getting the Pepsi website, should be protected from such “unfair competition.” Congress has the horses to get people knee-deep into articles such as this one, to utilize their hard-care technology expertise, and to make appropriate legislative recommendations.
This is all starting to matter too much to be left up to District Court judges in the most overturned Circuit in the country. Or have you heard what I am told is the latest bit of waggery among certain sectors of the bar: How does a typical U.S. Supreme Court opinion now begin? “This case is on certiori from the Ninth U.S. Circuit Court of Appeals. The other grounds for reversal are as follows….”
Isn’t it possible for the legal-political-commercial regime to make some attempt to manage, rather than be managed by, the development of the law of the Internet?
(By the way, don’t have a cybercow. I said manage development of the law of the Internet — not “manage the Internet” or “manage the development of the Internet.”)
Technology & Marketing Law Blog: “The keyword advertising legal roller-coaster continues.”
As someone who is on that thrill ride — at least partly on the dime of my clients (as in the Buying for the Home case) — it is of course troubling for an expert such as Eric Goldman to acknowledge this. It is somewhat of a vindication, though, not least of the fact that attorneys practicing in this area really have no business telling clients they have any idea what the outcome of cases implicating these issues might be, no matter how well we think we know the law.
That’s fine as far as it goes. But what about the law? It is distressing enough to tell your client that his case involves an unsettled area of law and that two courts faced with similar facts could well come to different conclusions about the application of the “same” law to those facts. (It can even happen in the same case, as Eric points out in his commentary on Buying.) It is preposterous, however, that your client could get slammed on damages or, in theory, attorneys’ fees — which require a finding of willfulness, mind you — because courts are still feeling their way around.
What a fine opportunity for Congress to step in and provide guidance via legislation — for these angels dancing on the heads of virtual pins are in fact not so much legal decisions at all but real, live policy decisions: Shall the Lanham Act regulate, as a trademark infringement, the utilization of trademarks as search terms in Internet or other computer-based software engines?
This is not the case every time a trademark and the Internet get involved with each other. In the context of past trademark-on-the-Internet disputes, notably involving domains (which the world once thought would be the alpha and omega of trademark battlegrounds on the Web), we have argued that the issues at stake are not novel “cyberlaw” questions but merely require the application of hoary principles of unfair competition to somewhat novel situations. But that argument simply does not stand when we consider the search engine question. It is pedestrian to observe that Congress could not have contemplated this or that application of a law when it passed it. The common law tradition abjures us from such arguments. It is the job of judges to apply the law which affects the decisions we make about conduct to new factual situations by the application of analogy tempered with equity.
But we are in a new world. When courts make fundamentally different conclusions about a question or cluster of questions — in this case whether trademarks are even “used,” as understood in the Lanham Act, by search engines [UPDATE: See here. They are.] It is time to recognize that these legal questions are political questions implicating not only law but commerce at all different levels, as well as technology and the shape of the Internet to come. Not everyone has the stomach for roller coaster rides. Let those who do have their fun. The rest of us, lawyers and clients alike, are entitled to the option of standing on terra firma while conducting our affairs. This is our stop.
The Electronic Frontier Foundation (EFF) warned the Chicago Auto Show to back off attempts to muzzle protestors [sic] who posted a parody of the show’s website.
The parody site, autoshowshutdown.org, is a clearinghouse for information about the “Auto Show SHUTDOWN Festival” — an annual event where hundreds of cyclists parade through Chicago to raise awareness about global warming and to promote sustainable transportation. The ride culminates in a rally at the entrance to the show. But this week, a lawyer for the auto show sent a threatening letter to the protestors, claiming that the website amounted to trademark infringement and that it would seek damages if the parody was not taken down.
So far, so good. This is my issue, and it’s not solely a matter of whose ox is being gored, believe me — I have little use for eco-hippies and bicycling polar bears. So what’s the EFF — which didn’t do anything when this happened to my client, mind you, but — what’s the EFF doing about it now?
In a letter sent in response today, EFF reminded the auto show that trademark infringement must involve some commercial use, which is clearly not the case in this non-profit, community-organized protest.”Auto show organizers can’t stop thousands of citizens from attending the SHUTDOWN Festival. Instead, they have resorted to baseless trademark claims to silence critics and interfere with planning for an event that embarrasses them,” said EFF Staff Attorney Jason Schultz. “Both trademark law and the First Amendment won’t allow for that.”
Sounds great! And — wait a minute. Come again?
EFF reminded the auto show that trademark infringement must involve some commercial use, which is clearly not the case in this non-profit, community-organized protest.
The Google / ad words / trademarks story, long a mainstay of LIKELIHOOD OF CONFUSION®, may end up needing a blog of its own, so don’t be surprised if you see less and less coverage of it here. (I just resent stories that outgrow me.) We’re almost there. But first, this, from Search Engine Journal:
Google plans to open up trademarked [sic] keywords to AdWords advertisers in June according to Michael Orey of Business Week. Beginning June 4th, companies will be able to bid on the brand names of their competition, which will heat up the AdWords listings throughout Google and lead to head to head battles in the SERPs over branded product, service and company names.
And litigation, litigation, litigation! Yay! And guess who’s Defendant Number One?:
Firepond, a software company in Texas, has filed a class-action suit against Google claiming its AdWords service profits by encouraging companies to impinge on one another’s trademarks.
Firepond claims that Google’s sale of its brand name to its competitors amounts to trademark violation because people searching for “Firepond” end up clicking on the sponsored links of other companies, “thereby confusing Internet users and diverting a percentage of such users from [Firepond] and enjoying and benefiting from all the goodwill and ‘buyer’s momentum’ associated with” its trademark, the suit read.
That’s Texas, by the way. Ask my friend Walter about Texas as a place to file lawsuits. Here’s the complaint. So, what’s going to happen? If it weren’t for the fact that the case involves both Texas and judges, I would rely entirely on the sober analysis of Eric Goldman — who at least tells us what should happen:
This is a well-structured lawsuit that squarely raises the long-contentious debate over the legitimacy of selling trademarked keywords. (I won’t recap that debate here, but I still think this article of mine best explains why plaintiffs’ whining about competitive diversion from search ads is fundamentally misguided). Should this lawsuit reach a final judgment on the merits, we will have a very important answer about what search engines and other keyword sellers can and can’t do.
But, I don’t think this lawsuit will give us that answer because the judge is very unlikely to certify the class. As we saw in the Vulcan Golf lawsuit, where the court denied class certification over Google’s domain name parking program, trademark issues are just too complicated and individualized for class adjudication. Every trademark is different, the identity of each competitive (or other) advertiser is different, every AdWords ad copy is different, the informational needs of every trademark owner’s customers are different (for more on this, see Hearts on Fire’s complicated standard for evaluating consumer confusion), trademark defenses are idiosyncratic, etc. Perhaps the reason no one has sought a trademark class action over AdWords before is that it probably can’t be done.
Really, why bother even thinking when Eric has everything figured out so squarely? Well, because of Texas. And judges. Both of those being what they are. Yay!
Just when the Southern District of New York was hinting that it might be safe to go back in the water and stop worrying about “initial interest confusion,” a friend in a position to care a lot about the result passes along the just-out decision in 800-JR Cigar, Inc., v. GOTO.COM, Inc., from the other side of the water (the Hudson, that is). Salient points: Read More…