The United States Court of Appeals for the tenth circuit recently, on 16 July 2013, decided the 1-800 Contacts Inc v Lens.com Inc matter concerning online keyword trademark infringement. The court affirmed the district court's ruling. In particular, the case concerned internet search engines, mainly Google, that provides advertisers the ability to utilize ad words to target customers. The particular dispute arose out of advertising through the Ad Words program. The Ad Words program allows an advertiser using Ad Words to pay Google to feature one of its ads on screen whenever a designated term, known as a keyword, is used in a Google search. The court was faced with the issue of whether the Lanham Act is violated when an advertiser uses keywords that resemble a competitor's service mark or trademark. The court held "for the most part, we hold that there is no violation". The court was forced to decide issues related to direct trademark infringement liability, initial interest confusion, and secondary liability claims. The court affirmed the district court's grant of summary judgment that no likelihood of confusion existed. However, the court reversed the denial of liability for contributory infringement because the evidence could support a reasonable finding that Lens.com did not take reasonable steps to stop the display of 1-800 Contacts' marks and affiliate ads once it learned of that display.
By way of background, Lens.com bid on the keyword "1-800 Contacts". That keyword matched the federally registered trademark owned by 1-800 Contacts. When a user would type 1-800 Contacts into Google Search Engine, paid advertisements for Lens.com would appear, thanks to Lens.com's use of the Ad Words program. The ad words appeared in sponsored links as opposed to organic results, the organic results included 1-800 Contacts.com. The court analyzed the different kinds of selection an advertiser can make using the Google ad words program, including a broad match, a phrase match, an exact match, and even negative matching. Lens.com was essentially profiting from users coming to their site who had searched for 1-800 Contacts and then referring, as an affiliate marketer, to 1-800 Contacts, through the use of Commission Junction, who managed the network of affiliates. The United States district court in Utah had held, in granting summary judgment, to Lens.com, that Lens.com's purchase of search engine keywords can amount to a use and commerce under the Lanham Act.
However, it ruled that merely purchasing that keyword cannot, on its own, give rise to liability for trademark infringement. It ruled that keyword use can generate a likelihood of confusion only in combination with the specific language of the resulting impressions. Put another way, so long as the ad did not feature 1-800 Contact's marks or any variation in their text, no likelihood of confusion could exist since consumers would not know that Lens.com had made a keyword use of 1-800 Contact's mark. The court of appeal, however, did disagree with the district court's ruling that there was insufficient evidence that Lens.com had the necessary actual or constructed knowledge to be held liable for the conduct of its affiliates, namely Commission Junction. Put simply, since some of the ads did feature some variation of 1-800 Contact's mark, secondary liability could be found, namely vicarious liability of contributory infringement, given the facts of the case.
The court also discussed 1-800 Contact's that initial interest confusion occurred. However, the court recognized that the Ad Words data, as presented by a Lens.com expert, explained that Lens.com's use of the keywords only amounted to 25 instances of the user clicking on the ad for Lens.com after having searched for 1-800 Contacts. The court recognized that at most, 1.5 percent of the time that the Lens.com ad was generated led to a click. It held that such a low number cannot support an inference that Lens.com's keyword activity was likely to lure consumers away from 1-800 Contacts. Nevertheless, the court applied the traditional likelihood of confusion factors and stressed the importance of applying the factors within context of the case.
As it relates to actual confusion, a consumer confusion survey, and other items, the court quickly disposed of those matters consistent with the district court's rulings.
The court also analyzed Lens.com's argument that 1-800's claims should be precluded due to their unclean hands. Lens.com argued that 1-800's claims are barred because 1-800 Contacts does the exact same thing that they are accusing Lens.com of doing, namely betting on keywords similar to the marks of competitors. The court recognized that that alleged misconduct is irrelevant to the claim against Lens.com because a plaintiff's own clean hands will bar recovery for trademark infringement only if the inequitable conduct is related to the plaintiff's cause of action. The court found that Lens.com could not establish that there was such a relationship when the plaintiff has engaged in inequitable conduct toward the public, such as deception or misuse of the trademark itself resulting in harm such that it would be wrong for a court of equity to reward the plaintiff's conduct by granting relief, or that the plaintiff's misconduct is sufficiently related to the cause of action when the plaintiff has acted inequitably toward the defendant in relation to the trademark. Ultimately, this most recent decision involving keyword trademark infringement further clarifies permissible vs. impermissible use of another's trademark in Google Ad Words or other search engine keyword contacts. Keyword infringement trademark attorneys with experience in search engine keyword bidding and the latest law surrounding the same can help advise companies wishing to bid on keywords that correspond to the trademarks of its competitors as well as trademark owners who believe that such competitors have infringed their mark via keyword bidding and use.
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