Source: http://www.internetlibrary.com/topics/advertise_online.cfm
Timestamp: 2019-04-25 23:44:35+00:00

Document:
This section of the Internet Law Library contains a host of court decisions that address the legality of the use of another's trademark to trigger the display of various forms of online advertising, typically marketing a competitor's product, including sponsored links displayed on search engine results pages as part of a keyword advertising program, and pop-up ads that are displayed in a separate window on the user's computer screen. Among other issues, these cases address whether such use of a party's trademark constitutes a use in commerce, or a trademark use of the trademark sufficient to give rise to trademark infringement claims.
Reversing the court below, the Second Circuit dismisses trademark infringement claims brought by a mark holder and website operator against a distributor of pop-up ads. Such claims fail because "as a matter of law, [defendant] WhenU does not 'use' [plaintiff] 1-800's trademarks within the meaning of the Lanham Act, 15 U.S.C. § 1127 when it (1) includes 1-800's website address … in an unpublished directory of terms that trigger delivery of WhenU's contextually relevant advertising to [computer] users; or (2) causes separate, branded pop-up ads to appear on a [computer] user's computer screen either above, below, or along the bottom edge of the 1-800 website window."
The absence of such a use by WhenU of plaintiff's trademarks is fatal to 1-800 Contacts' trademark infringement claims, and mandated reversal of the District Court's grant of preliminary injunctive relief. The District Court had enjoined WhenU from including the domain name of plaintiff's website in its unpublished directory, or causing pop-up ads to be displayed when that domain name is entered into the URL bar of a web browser, or as a search term.
In reaching this result, the Second Circuit agreed with the decisions of two other district courts - the Eastern District of Virginia in U-Haul Inc. v. WhenU.com Inc., 279 F. Supp. 2d 723 (E.D.Va. 2003) and the Eastern District of Michigan in Wells Fargo & Co., et al. v. WhenU.com Inc., 293 F.Supp.2d 734 (E.D.Mich. 2003) - each of which similarly held that WhenU's activities did not infringe the respective plaintiffs' trademarks because such activities did not constitute the requisite use of the plaintiffs' respective marks.
Federal District Court holds that the use of plaintiff's 'JR Cigars' trademark as a keyword in GoTo.com's pay-for priority search engine to trigger the display of advertisements from third party competitors constitutes a "trademark use" sufficient to support trademark infringement and dilution claims under the Lanham Act. Such trademark use arises out of GoTo.com's acceptance of bids from JR Cigar's competitors for a linkage to plaintiff's marks, by which GoTo trades on the value of those marks. Such trademark use also arises out of GoTo's act of giving such advertisers priority over 'natural' search results, and thereby steering potential customers away from JR Cigar to its competitors. Finally, such trademark use arises out of GoTo.com's use of a "Search Term Suggestion Tool" to assist in marketing JR Cigar's marks to its competitors, which tool shows the search traffic attracted by plaintiff's mark.
The Court went on to deny cross-motions by JR Cigar and GoTo.com for summary judgment, holding issues of fact precluded its determination of the likelihood of consumer confusion arising out of such usage of plaintiff's marks, and hence from resolving the trademark infringement claims at issue.
Finally, the Court dismissed claims advanced by plaintiff under both New Jersey's Consumer Fraud Act, N.J.S.A. §56:8 et seq. and the federal Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §6102(b). The Court held that plaintiff lacked standing to proceed under New Jersey's Consumer Fraud Act, and that the reach of the Telemarketing Act did not extend to the acts at issue in the case at bar.
Chicago Lawyers Committee For Civil Rights Under Law Inc. v. Craigslist, Inc.
Affirming the District Court below, the Seventh Circuit holds that Craigslist cannot be held liable for violating the Fair Housing Act as a result of its online publication of discriminatory housing ads authored by third parties. To hold Craigslist liable for such conduct would require it to be treated as a ‘publisher’ of these advertisements, which is prohibited by Section 230(c)(1) of the Communications Decency Act. As a result, the Seventh Circuit affirms the District Court’s grant of summary judgment, dismissing plaintiff’s Fair Housing Act claims against Craigslist.
Court holds that unauthorized internet reseller of plaintiff’s tanning products is not guilty of trademark infringement as a result of its use of plaintiff’s trademarks in the meta tags of a website at which such products are sold, and as search engine keywords triggering the display of a link to such a website. In reaching this result, the Court rejected plaintiff’s claim that such use of its marks causes actionable ‘initial interest confusion’ by directing those searching for plaintiff’s site to that of the defendant. To sustain such a claim, holds the court, defendant’s conduct must be deceptive. Plaintiff failed to meet this burden because defendant’s site does indeed offer plaintiff’s products for sale, and thus, its use of plaintiff’s mark in the site’s meta tags is not deceptive, but rather accurately describes the contents of defendant’s site. This was true, held the Court, notwithstanding the fact that S & L offered plaintiff’s competitors products for sale on its site as well.
The Court also dismissed trademark dilution claims arising out of defendant’s use of plaintiff’s marks. The Court held that, under the circumstances, defendant’s use of plaintiff’s marks in the meta tags of its site, and as search engine key words, constituted a permissible nominative fair use of those marks. To establish that a use of a trademark qualifies as a permissible nominative fair use, the defendant must ‘do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.’ Notably, the Court reached this result because plaintiff failed to submit adequate evidence as to the impact this use of its marks had on the listing of defendant’s site in search results for plaintiff’s mark. The Court left open the possibility that such a use of plaintiff’s mark may not qualify as a nominative fair use if in fact it caused defendant’s site to appear at or near the top of search engine results for plaintiff’s mark, and thereby suggested that plaintiff sponsored or endorsed defendant’s site.
The Court denied so much of defendant’s motion for summary judgment which sought dismissal of copyright infringement claims arising out of its use of electronic renderings of plaintiff’s products to promote the sale of such products on its web site. Issues of facts as to whether defendant copied such images from plaintiff’s web site, or created its own, precluded an award of summary judgment. In allowing this claim to proceed to trial, the Court rejected defendant’s argument that its alleged use of plaintiff’s images was protected as a fair use. Notwithstanding the fact that defendant’s use did not effect the potential market for plaintiff’s images – which plaintiff does not offer for sale – the Court rejected defendant’s fair use argument, pointing to the fact that its use was commercial, and copied plaintiff’s image, which was a creative work, in its entirety.
Finally, the Court rejected plaintiff’s claim for intentional interference with contractual relations, which arose out of prohibitions contained in contracts with plaintiff’s distributors precluding their resale of plaintiff’s products to Internet resellers such as defendant. Defendant obtained plaintiff’s products from tanning salons, to whom the distributors were permitted to sell such products. Because there was no evidence either that such tanning salons were acting as defendant’s agent in purchasing goods from plaintiff’s distributors, or that defendant directly purchased such goods from the distributors in breach of the prohibitions contained in their agreements, this claim failed.
Federal Trade Commission v. Seismic Entertainment Productions, Inc., et al.
Court holds that the FTC is likely to prevail on its claims that defendants violated the Federal Trade Commission Act ("FTCA"), 15 U.S.C. § 45(a)(1). Defendants were charged with downloading to consumers' computers, without their knowledge or consent, both spyware and adware that delivered pop-up advertisements for anti-spyware software, as well as "exploit code" which altered consumers' home pages, and redirected their browsers to websites selected by defendants. Apparently, this occurred when consumers visited defendants' websites. The Court found that this conduct likely ran afoul of the FTCA's prohibition against the use of "unfair or deceptive acts or practices" in commerce. The Court accordingly issued 'temporary injunctive relief' requiring defendants to remove from their websites the software script that allowed defendants to download this software to consumers' computers without their knowledge.
Court holds that defendants, individual officers of co-defendant Search Cactus LLC (“Search Cactus”) can be held personally liable for violations of the Ohio Consumer Sales Practices Act (“OCSPA”) arising out of the transmission by Search Cactus of allegedly misleading and deceptive promotional emails, if “the officer took part in the act, specifically directed the act, or participated or cooperated in the act.” Because the complaint alleged that the individual defendants approved the content of the promotional emails in question, the Court denied the individual defendants’ motion to dismiss, and allowed plaintiff, a recipient of such emails, to pursue his OCSPA claim against them.
Google Inc. v. American Blind & Wallpaper Factory, Inc.
Court denies Google's motion to dismiss trademark infringement and dilution claims asserted by American Blind, which claims arose out of Google's alleged use of American Blind's trademarks to trigger the display of third party advertisements in search engine results for those marks. The Court declined, on this motion, to hold that use of American Blind's trademarks in this fashion was insufficient to give rise to trademark infringement or dilution claims because it did not constitute a use of the marks to identify the source of goods or services supplied by Google. The Court did dismiss the tortious interference with prospective business advantage claim asserted by American Blind, holding that American Blind had failed to allege the interference with sufficiently certain economic relationships necessary to proceed with such a claim.
Government Employees Insurance Company v. Google, Inc.
In a bench ruling, Court holds that the display by search engine giant Google of third party advertisements denominated "sponsored links", which ads are triggered by the entry of a trademark as a search term, does not run afoul of the Lanham Act provided the "sponsored links" do not contain the searched-for trademark. However, the display of "sponsored links" which do contain the searched-for trademark are likely to confuse consumers and thus was held to run afoul of the Lanham Act.
The Court did not resolve the issue of Google's potential liability for the display of such third party ads, noting that Google had a policy prohibiting its advertisers from displaying "sponsored links" containing trademarks of third parties when such marks are used as the triggering search term. It should also be noted that the Court's finding that consumers would not be confused by "sponsored links" that did not contain a trademark was based, in large part, on its rejection of survey evidence presented by the mark holder. The Court rejected this evidence, despite its showing of consumer confusion, because the consumers were simultaneously shown both ads that did and did not contain the trademarked term.
Christopher Langdon v. Google Inc., et al.
The Court held that the First Amendment, and the guaranties afforded Google and Yahoo thereunder, barred claims seeking redress as a result of Google and Yahoo's refusal to run advertisements on their search engines they did not wish to run. In reaching this result, the Court followed decisions that afforded newspapers similar First Amendment protections when challenges arose concerning their refusal to run advertisements they deemed objectionable. As a result, the Court dismissed claims advanced by plaintiff arising out of the defendants' refusal to run his advertisements, including claims that the defendants defrauded him and engaged in deceptive business practices, violated his First Amendment rights, and failed to meet the duties imposed on those, like inn keepers, engaged in a public calling.
The Court also held that Google and Yahoo were immunized from such claims by the Communications Decency Act, 27 U.S.C. Section 230, which "bars 'lawsuits seeking to hold a service provider liable for its exercise of a publisher's traditional editorial functions - such as deciding whether to publish, withdraw, alter or postpone content.'" It should be noted that plaintiff was proceeding pro se.
mVisible Technologies, Inc. v. Navigation Catalyst Systems, Inc.
In this domain name dispute decided in accordance with the Uniform Domain Name Dispute Resolution Policy (“UDRP”), the Panel holds that respondent Navigation Catalyst Systems Inc. (“NCS”) violated the UDRP by registering 35 domain names that contained complainant’s “myxer tones” mark, or variations thereof, which NCS used as pay-per-click landing pages, featuring advertisements of complainant’s competitors. In reaching this result, the Panel held that respondent’s use of another’s mark in the domain names of pay-per-click landing pages was not a legitimate use of the domain sufficient to defeat complainant’s claim under the UDRP. The Panel further held that respondent had acted with the requisite bad faith because it had used complainant’s mark to attract users to advertisements for its competitors. This finding was supported by the fact that respondent continued to register offending domain names even after the commencement of the instant UDRP proceeding. Finally, the Panel rejected respondent’s contention that it did not act in bad faith because it was unaware of complainant’s mark. The Panel held it was reasonable to conclude that respondent was in fact aware of complainant’s prior use of its mark at the time it registered the domains in question because a trademark and even an internet search would have revealed both a pending trademark application for complainant’s mark, and its use thereof.
Time Warner Cable Inc. v. Directv, Inc.
Second Circuit holds plaintiff Time Warner Cable Inc. (“Time Warner”) likely to prevail on false advertising claims advanced under Section 43 of the Lanham Act as a result television advertisements defendant Directv ran, which were found to be literally false. Affirming the decision of the District Court, the Second Circuit held that, when seen in context, these advertisements falsely claim that the quality of the picture a user of an HD TV receives from Directv is better than the picture received from Time Warner cable. Irreparable injury was presumed because, even though the advertisements at issue did not directly refer to Time Warner, the viewing audience would see the advertisement as targeted at plaintiff. As a result, the Second Circuit affirmed so much of the District Court’s decision that enjoined Directv from further publication of these offending advertisements in markets where Time Warner operates.
The Second Circuit held, however, that internet banner advertisements that promoted Directv’s products, while literally false, constituted non-actionable puffery, because they made claims so exaggerated that no consumer could rely on them. The banner advertisements at issue depicted a split screen. One side of the screen presented a clear, crisp picture that was represented to be the picture a user would view if receiving his signal from Directv. The other side of the screen contained a picture that was blurry and pixilated, which was represented as the picture the consumer would see if receiving a signal from “other tv”, or “basic cable.” The ads urged consumers to “find out why Directv’s picture beats cable.” While this depiction was literally and demonstrably false, because the pictures from both sources were equivalent, the Second Circuit held it was so exaggerated as to constitute non-actionable puffery on which no consumer could rely. As a result, the Second Circuit reversed so much of the District Court’s decision which enjoined Directv from continuing to run these banner advertisements.
Court issues a preliminary injunction, enjoining defendant Gator Corporation ("Gator") from causing pop-up ads to appear on a user's computer screen at the same time the user is viewing any of the 16 web sites operated by the plaintiff news organizations. Such ads appear as a result of the operation of Gator's software, which a user has installed on his computer. Gator's software apparently tracks the user's Internet usage, and delivers ads to his computer that defendant believes will interest the user based on his prior Internet usage When these ads appear on a user's screen, they partially cover up the web site that also appears there. Gator did not have plaintiffs' permission to cause ads to appear in this fashion. The court held that plaintiffs were likely to prevail on their claim that causing pop-up ads to appear in this manner is an infringement of plaintiffs' trademarks, which are found on the web pages the pop-up ads partially cover up. The court accordingly issued a preliminary injunction enjoining defendant from continuing this activity "on" plaintiffs' sites.
Court issues preliminary injunction, enjoining enforcement of Utah's Spyware Control Act, which, inter alia, prohibits the delivery of 'pop-up' ads that obscure any portion of an Internet website, and bars advertisers from downloading programs that deliver ads to a consumer's computer unless the consumer's consent to such download is obtained in the manner specified by the Act. The Court issued such relief because it found that plaintiff was likely to prevail on its claim that those portions of the Act run afoul of the Commerce Clause of the United States Constitution.
The Court is mindful of the challenges that sometime arise in applying existing legal principles in the context of newer technologies. As expressed by the Edina Realty court, supra, Defendants’ alleged use of Plaintiff’s mark is certainly not a traditional ‘use I commerce.’ Nonetheless, the Court finds Plaintiff has satisfied the ‘use’ requirement of the Lanham Act in that Defendants’ alleged use was ‘in commerce’ and was ‘in connection with any goods or services.’15 U.S.C. Section 1125(a)(1). First, the alleged purchase of the keyword was a commercial transaction that occurred “in commerce,’ trading on the value of Plaintiff’s mark. Second, Defendants’ alleged use was both “in commerce” and “in connection with any goods or services” in that Plaintiff’s mark was allegedly used to trigger commercial advertising which included a link to Defendants’ furniture retailing website. Therefore, not only was the alleged use of Plaintiff’s mark tied to the promotion of Defendants’ goods and retail services, but the mark was used to provide a computer user with direct access (i.e. a link) to Defendants’ website through which the user could make furniture purchases. The court finds that these allegations clearly satisfy the Lanham Act’s “use” requirements.
FragranceNet.com, Inc. v. FragranceX.com, et al.
Following the lead of the Second Circuit in 1-800 Contacts, Inc. v. WhenU.com, 414 F.3rd 400 (2d Cir. 2005) and of other district courts in the Second Circuit, the Court holds that the use of plaintiff’s mark either as a keyword to prompt the appearance of sponsored links advertising defendant’s site in Google’s search engine, or in the metatags of defendant’s site to trigger higher search engine placement, does not constitute a use in commerce of plaintiff’s mark sufficient to give rise to trademark infringement or dilution claims, either under the Lanham Act or New York state law. Such use of plaintiff’s mark, reasoned the court, is the equivalent to store product placement, where the store places its own generic products on store shelves adjacent to more well-known brands to take advantage of the consumer’s attraction thereto. As such a use is permissible, so to is the use of plaintiff’s mark in keyword advertising.
It would be inconsistent with the reasoning set forth in 1-800 Contacts to conclude that the use of trademarks in keywords and metatags constitutes Lanham Act ‘use’ where, as here, defendant does not place the trademark on any product, good or service nor is it used in any way that would indicate source or origin. Here, the use of plaintiff’s trademark is strictly internal, and, because such use is not communicated to the public, the use does not indicate source or origin of the mark.
As a result, the Court denied plaintiff’s motion to amend its complaint to assert, inter alia, claims of trademark infringement and dilution arising out of the use of its mark in keyword advertising and metatags. The Court held that such amendment would be futile, as the proposed claims could not withstand a motion to dismiss.
In should be noted that, according to the court, ‘courts in other circuits have generally sustained such claim.’ However, the Court elected to follow the precedent cited above and deny plaintiff’s motion to amend.

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