Keyword Advertising: Small Victory for Trademark Owner Will Not Slow Search Engine Juggernaut

By Edward Dailey.

April 2009 IP Update

Earlier this month, the Second Circuit Court of Appeals issued its long-awaited ruling in the latest trademark lawsuit over internet keyword advertising. In Rescuecom Corp. v. Google Inc., the court overturned the trial court’s dismissal of Rescuecom’s infringement, false designation, and dilution claims, and in the process brought the Second Circuit into line with other federal circuits.

Like earlier claimants against search engine companies, Rescuecom alleged that Google sold use of the RESCUECOM® mark to Rescuecom’s competitors. So, for example, when Rescuecom’s trademark was entered as a Google keyword search term, the search engine displayed Rescuecom’s link but would also display a link to competitors who had purchased use of the trademark as a search term.

The competitor’s information is listed in the “sponsored links” section of Google’s display page. Rescuecom claims that Google’s keyword search program allows competitors to deceive and divert users searching for Rescuecom.

Google’s defense was that its internal, non-public linking of trademarks is not “use in commerce” under the Lanham Act. Joining other circuits, the Court of Appeals distinguished its earlier ruling in 1-800 Contacts, Inc. v. WhenU.com, Inc., and declared that Google’s keyword sales program involves “use in commerce” and is therefore actionable under the Lanham Act.

Apart from alignment with other circuits, the Second Circuit’s decision in Rescuecommay have little real-world impact. Proof of trademark infringement in keyword cases has been elusive. Indeed, in the earliest challenge to Google’s keyword program, GEICO, like Rescuecom, prevailed on the “use in commerce” issue but failed at trial to prove a likelihood of confusion. See GEICO v. Google Inc.

While GEICO and others have failed because of flawed consumer surveys, a recent decision from the U.S. District Court in Boston suggests even greater obstacles to proving likelihood of confusion in search engine cases. In Hearts of Fire Company, LLC v Blue Nile, Inc. the court stated a need to balance consumer rights to information against trademark rights. Ultimately, the court declares, the balance must accrue to consumer benefit.

A trademark is not a shield against competition. So, if keyword searching facilitates consumer choice, fleeting confusion on a search page is of no legal consequence.

Infringement confusion must be genuine and substantial, something “more than momentary.” Accordingly, says the Boston court, “[t]he crucial question in these cases is one of degree: whether the consumer is likely confused in some sustained fashion by the sponsored link and the defendant’s website, or whether the link serves some benign and even beneficial form of comparison shopping.”

It may well be that consumers’ conditioned use of search engines has already answered the court’s question. Choice and multiple options have long since become the purpose and expectation of search engine users.

When a trademark is entered as a keyword search term, consumers are not surprised—in fact, they affirmatively expect– to find a menu of  competing products and companies, not just the trademark owner’s site. On that basis alone, there is no likelihood of confusion to support an infringement case.