Best of 2011: Ninth Circuit. Keywords. Trademarks. Hike!

First posted on March 11, 2011.
Here’s a roundup of what other people are saying about the decision in Network Automation, Inc. v. Advanced System Concepts, Inc. involving keyword advertising using other folks’ trademarks (a form of the dreaded “diversion“!) and perhaps implicating secondary liability for trademark infringement:

• Marty Schwimmer:  “‘Forget it Jake, It’s the Ninth Circuit’ – I’m stealing that joke from Prof Tushnet’s critique of the Network Automation keyword case.  I agree with much of her analysis, however I disagree  with her (and this panel’s) view of channels of trade as a LoC factor, but that’s an argument for another day.  Also, check out Prof. Goldman’s discussion.”

We’ve had surprisingly few appellate decisions involving keyword advertising generally, and almost none involving trademark owners’ lawsuits against keyword advertisers (as opposed to suing keyword sellers like search engines). On that basis alone, this ruling is important. The case is also remarkable because the opinion, written by highly regarded Judge Wardlaw, gets so many things right. Perhaps that sounds like damning with faint praise, but the reality is that the Ninth Circuit’s Internet trademark law has become horribly tortured due to deeply flawed opinions like the 1999 Brookfield case. This opinion deftly cuts through the accumulated doctrinal cruft and lays a nice foundation for future Internet trademark jurisprudence.

The only sour note is that the opinion makes some unnecessary and empirically shaky “presumptions”–exactly the kind of unfortunate appellate court fact-finding that got the Ninth Circuit into trouble into the first place. Still, given how this opinion could have turned out, I still give this opinion very high marks.

Even in the middle of a good decision reversing a finding of likely confusion based simply on targeting ads to the competitor’s trademark, the Ninth Circuit can manage to reach out and do silly things: for example, the court said that (declaratory judgment) plaintiff Network’s use of the mark to buy keywords was use in commerce, and further said that Google’ssale of keywords was the same (“We now agree with the Second Circuit that such use is a ‘use in commerce’ under the Lanham Act.”). I guess we’ve all just agreed secondary and primary liability are the same for keywords? But Google gets a big kiss for its sponsored links labeling later in the opinion doubtless of more practical significance to it than a mostly-lost conceptual battle about trademark use.Because the panel can’t outright admit that Brookfield’s initial interest confusion analysis was just wrong, it increases the formal complexity of trademark law by hiving off metatag cases—they’re just different from keyword cases, which are different from domain name cases, for which the “internet troika” of similarity of marks, relatedness of goods, and simultaneous use of the internet still makes sense. Though of course we should at this point refer to the “internet duo” since it’s such a rarity to find a mark without an internet presence and the court explicitly endorses giving this factor “little weight”—indeed, the district court erred by weighing similar marketing channels against Network.

We have often discussed on this blog the misuse of trademark law to suppress online speech that protects and benefits consumers, including both consumer commentary and comparative advertising.  A Ninth Circuit decisionyesterday should make it harder to pursue such claims.Yesterday’s decision, Network Automation v. Advanced Systems Concepts, will be of particular interest in litigation over keyword advertising using trademarks, which we have defended as an important means for comparative advertising that provides useful information to consumers.  The decision strongly implies that neither the purchase nor the sale of keyword ads using trademarks is inherently infringing.  But the ruling also walks the Ninth Circuit away from several past rulings that are often cited by trademark holders to attack consumer criticism as well (although, to be fair, the Ninth Circuit itself has never applied its precedents that way).  The opinion holds out hope for a more sensitive treatment of claims about online trademark infringement.

Originally posted 2011-12-21 08:40:46. Republished by Blog Post Promoter