Trademark Law: "Initial Interest Confusion" Doctrine Applied

Technology & Marketing Law Blog: Adwords Ad Creates Initial Interest Confusion--Storus v. Aroa

Storus Corp. v. Aroa Marketing Inc., No. C-06-2454 (N.D. Cal. Feb. 15, 2008).

(Sorry for my delay blogging this one).

A federal district court has held that displaying a competitor's trademark in Adwords ad copy constitutes impermissible initial interest confusion, leading to a summary judgment win for the trademark owner. This is one of the first competitor-vs.-competitor search advertising cases where the plaintiff has won the trademark claims. This case also has an interesting and rare discussion about the trademark implications of a retailer’s internal search engine.

On the surface, this case looks problematic for the search
advertising industry. Any time a search advertising practice is deemed
infringing, it should promptly eliminate all similar ads from other
advertisers, taking a chunk of revenues out of search engine pockets.
Further, when advertisers are liable for trademark infringement, it
increases the risk that search engines will be contributorily liable
for those infringing ads.

... Aroa’s practices here (displaying a competitor’s trademark in the ad copy) are already restricted by all of the search engine trademark policies. Therefore, this ruling shouldn’t reduce much ad revenue for search engines.

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