Could purchasing a trademark as a keyword cost you nearly $300,000? (See below)
The basics of keyword-triggered ads
Businesses can purchase keyword-triggered advertisements through online ad networks, such as Google, well known for its AdSense program. Through AdSense, purchasing a keyword results in your ad being shown when a user searches for that keyword. The ad may appear in Google’s search results, usually set apart from the “organic” (unpaid, generated by complex algorithms) results and/or on third-party web sites that allow Google to the place ads in return for a commission when someone clicks an ad.
What is the big deal? Potential infringement!
There is still substantial uncertainty over the legality of this practice. Courts are not in complete consensus as to whether purchasing another’s trademark as a keyword is likely to cause consumer confusion (the standard for trademark infringement). Cases brought against those purchasing trademarks as keywords show that courts are willing to find a likelihood of confusion (and infringement). But as explained below, the ad networks selling trademarked keywords have generally prevailed in court.
Many ad networks allow trademark term purchase
Google considers trademarks fair game, even allowing resellers, review sites, and sellers of compatible/complementary/replacement products to include trademarks in ad text. While Google has yet to lose a case brought against it on selling keywords, it’s recent victory in Rosetta Stone Ltd. v. Google Inc. is being appealed to the Fourth Circuit, along with filings from over 30 amici.
Is this likely to confuse you? An example.
Are consumers likely to be confused as to source, sponsorship, affiliation or endorsement when coming across trademark-keyword triggered ads? While likelihood of confusion may be a fact specific inquiry, a sample test is demonstrated below.
When searching Google for “huggies” (diapers) you may expect to get search results for “huggies” in particular. If another company turns up as a sponsored result, would you question whether it is related to, sponsored by or affiliated with HUGGIES?
Case law
In Hearts on Fire Company LLC v. Blue Nile Inc., the defendant was accused of using plaintiff’s “Hearts on Fire” mark to trigger its sponsored ad. The defendant (a diamond retailer) and plaintiff (a diamond wholesaler) sold similar products, but the defendant was not an authorized dealer of plaintiff’s “Hearts on Fire” diamonds. The court denied the defendant’s motion to dismiss, noting that the two companies were not plain or obvious competitors—which may have made confusion less likely.
The court analogized buying keywords to placing generic products next to brand name products on store shelves, where consumers are given choices among competing products, but are not confused. However, the court was careful to note that online advertisers may attempt to blur the “competitor” distinction in order to capitalize on consumer confusion.
It was also enough that the trademark was being used as a keyword, even though the resulting advertisement did not include the trademark in the text.
Binder and Binder recently received a whopping $292,000 judgment in its favor against the Disability Group, who was using “Binder & Binder” to trigger its own ads in Google’s AdWords program. The court found that the Disability Group’s entire advertising campaign and intentional selection of the “Binder & Binder” mark supported willful infringement and awarded enhanced damages to reach the $292,000 figure.
Finally, in Rosetta Stone (mentioned above), unredacted court documents show that in 2004 Google was aware that use of trademarks in sponsored link text resulted in a high degree of consumer confusion, even confusing Google’s own trademark counsel. Whether such revelations are still relevant with the evolution of the Internet and search engines since 2004 is a matter of debate, but they should not be ignored.
What can you do?
As a keyword purchaser:
- Proceed with caution
- Hearts on Fire and Binder and Binder show that there is real risk in purchasing trademarks as keywords
As a trademark owner:
- Monitor ad networks and search engines to see who may be using your mark as an ad triggering mechanism and/or in the text of an ad
- Some case law, e.g., Hearts on Fire and Binder and Binder, may provide support for an infringement claim
- Carefully watch the appeal to the Fourth Circuit in Rosetta Stone, especially considering the revelation of the unredacted documents on likelihood of confusion