Online retailing and initial interest confusion

We reported earlier on a related case in this area implicating the use of trademarks to sell merchandise online via “unauthorized distributors.” A new decision in this area was issued yesterday in the U.S. District Court for the District of Arizona. We represented the defendants and, again, got key help from David Marc Nieporent. Excerpt:

In contrast to the deceptive conduct that forms the basis of a finding of initial interest confusion, S & L Vitamins uses Designer Skin’s marks to truthfully inform internet searchers where they can find Designer Skin’s products. Rather than deceive customers into visiting their websites, this use truthfully informs customers of the contents of those sites. Indeed, in practical effect S & L Vitamins invites Designer Skin’s customers to purchase Designer Skin’s products. The fact that these customers will have the opportunity to purchase competing products when they arrive at S & L Vitamins’ sites is irrelevant. The customers searching for Designer Skin’s products find exactly what they are looking for when they arrive at these sites. S & L Vitamins is not deceiving consumers in any way. Thus, its use of the marks does not cause initial interest confusion./fn7

The Court recognizes that this holding is at odds with the Tenth Circuit’s decision in Australian Gold, Inc. v. Hatfield, 436 F.3d 1228 (10th Cir. 2006). There, under facts virtually identical to those in this case, the Tenth Circuit held that the defendant’s use of the trademarks caused initial interest confusion because it “used the goodwill associated with Plaintiffs’ trademarks in such a way that consumers might be lured to the lotions from Plaintiffs’ competitors.” Id. at 1239. With all due respect to the Tenth Circuit, this Court does not find Hatfield persuasive. In this Court’s view, there is a meaningful distinction between (1) using a mark to attract potential customers to a website that only offers products of the mark holder’s competitors and (2) using a mark to attract potential customers to a website that offers the mark holder’s genuine products as well as the products of competitors. As discussed above, in the latter situation no “bait and switch” occurs.

In sum, S & L Vitamins’ use of Designer Skin’s trademarks to accurately describe the contents of its websites does not cause initial interest confusion.

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/fn7 If it were otherwise, if this guileless, informative use of trademarks in metatags and as search-engine keywords constitutes initial interest confusion, then trademark law would be (to the extent it is not already) in the unenviable position of stymying access to the world of goods and services lawfully available on the internet. Unless it is accurately “mapped,” the internet is just a vast expanse of uncharted (virtual) territory. . . .

There’s more. The decision is here. Reconsider these words: “if this guileless, informative use of trademarks in metatags and as search-engine keywords constitutes initial interest confusion, then trademark law would be (to the extent it is not already) in the unenviable position of stymying access to the world of goods and services lawfully available on the internet.”

The idea of trademarks is, of course, to make goods and services identifiable, findable — to enhance commerce. Imagine having to explain why forbidding their accurate use is not only bad trademark law, but antithetical to the entire concept of a trademark! Yet that is exactly what defendants in cases such as these have to do, at considerable expense. Most just fold up their tents and go home instead.

UPDATE: Comment from Greg Beck, Bill Patry (on the copyright piece of the decision) and Rebecca Tushnet (who addresses the curious retention of the state “unfair competition” claim based solely on copyright).

UPDATE: Eric Goldman weighs in, and WebProNews is right behind. Says Jason Lee Miller:

The outcome of this case will be used as a precedent when deciding others and will bolster the argument that use of keywords in metatags and bidding on trademarked [sic] terms for search purposes is a legitimate practice. Fairly often, plaintiffs are more concerned about control of channels and control of competition than they are about trademark infringement.