Source: https://www.fr.com/news/purchasing-competitors-trademarks-as-keywords-to-generate-sponsored-links-trademark-use-in-commerce/
Timestamp: 2019-04-20 00:43:20+00:00

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Purchasing Competitors’ Trademarks as Keywords to Generate Sponsored Links: Trademark “Use in Commerce”?
Note: Significant portions of this essay were published online as a guest column in IP LAW 360 on January 27, 2009. This is an expansion and update of that piece.
Lawyers are trained in subtlety and complication. Consequently, they have a tendency to over- think, which is why some of the better ones try to remember, and occasionally apply, the acronym KISS.1 The recent quagmire addressing the question posed above (and related questions) could have been avoided by deft application of KISS, or even RTSF (meaning to be disclosed later).
It began with the 1-800 Contacts case in the Second Circuit.2 At issue there was software offered free to Internet users which, among other (presumably more desirable) applications, monitored the use of the computer in which it was embedded and, in response to certain stimuli, generated “pop-up advertising windows” presumably relevant to the computer user’s immediate interest. One such stimulus was the address of plaintiff’s website, so certain users who typed in (or linked to) “1800contacts.com” received pop-up advertising intended to be “of interest” to typical visitors to plaintiff’s website. In fact, what popped up was advertising for competitive websites. 1-800 Contacts sued for trademark infringement and obtained a preliminary injunction, which was appealed and reversed.
Last year, another Circuit Court of Appeals recognized that part of what is wrong with the Second Circuit’s 1-800 Contacts analysis is its focus on the statutory definition of trademark “use in commerce.” In addressing one competitor’s use of another’s trademarks in its own website metatags, which caused the metatagger’s website to show up in search results for the owner’s trademark, the Court concluded that defendant “made an infringing use” of plaintiff’s marks, and emphasized the “plain language” of Section 1114(1)(a) of the Trademark Act, which requires a “use in commerce…of a registered mark in connection with the sale…or advertising of any goods.” Since defendant used plaintiff’s marks as metatags “as part of its effort to promote and advertise its products on the Internet,” defendant used plaintiff’s marks “in commerce” for purposes of trademark infringement.8 In August, a Minnesota District Court took the next step when it concluded that “use in commerce” for trademark infringement purposes is not limited to “use in commerce” for trademark registration purposes. Defendant’s use of plaintiff’s trademark to generate advertising was a “use in commerce” because the “plain meaning” of “use in commerce” is not limited to affixing another’s mark to one’s own goods, but also encompasses any use of another’s mark to advertise or sell one’s own goods and services.9 That observation is correct as far as it goes – and is a convincing rejoinder to the Second Circuit’s view that “infringing use” is limited to “trademark use” – because “advertising” can infringe under Section 1114(1)(a), but is not use of a trademark under Section 1127.
Putting together the pieces, what is wrong with 1-800 Contacts is this: what Section 32(1) of the Trademark Act condemns is “use in commerce [of] any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive…” 15 U.S.C. § 1114(1)(a) [emphasis added]. What is prohibited is not use of a trademark, but use of a “reproduction, counterfeit, copy, or colorable imitation” of a registered mark. Actual trademark “use” as defined in the statute is irrelevant. Trademark owners use trademarks; infringers use reproductions, counterfeits, copies, and/or colorable imitations of trademarks. The statutory definitions of trade- and service mark use in commerce are addressed to registration, not infringement.
Confirmation of this conclusion (if any is needed) is found in Section 43(a), which forbids “[a]ny person…, on or in connection with any goods or services, or any container for goods, [from using] in commerce any word, term, name, symbol or device, or any combination thereof…which…is likely to cause confusion, or to cause mistake, or to deceive as to affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person…” 15 U.S.C. § 1125(a)(1)(a) [emphasis added]. Section 43(a) is a federal statute that reflects the common law of unfair competition related to trademarks. On its face, it captures more infringing conduct than is embraced by the statutory definition of trademark use. If the Second Circuit were correct in 1-800 Contacts, that would mean that common law rights of protection are broader than those granted to marks registered under the Trademark Act, which expressly seeks “to regulate commerce within the control of Congress by making actionable the deceptive and misleading use of marks in such commerce;…to protect persons engaged in such commerce against unfair competition; [and] to prevent fraud and deception in such commerce by the use of reproductions, copies, counterfeits, or colorable imitations of registered marks….”10 That broad language is consistent with the idea that infringement of registered trademarks is not confined to what is defined as trademark use, but encompasses “use in commerce [of] any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive.” If that is so, common law trademark protection is not broader than federal, which is what one would expect.
The right questions in search-word and metatag cases should be (1) is the accused doing something “in commerce” (which Section 45 of the Trademark Act, 15 U.S.C. § 1127, defines as “all commerce which may lawfully be regulated by Congress,” and which Internet search-word advertising plainly appears to be); (2) is that likely to cause confusion in any of its statutory formulations; and (3) is that use fair, nominative, generic, or descriptive use?
In particular, the civil remedies provision penalizes the “use in commerce” of “any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services. 15 U.S.C. § 1114 [emphasis added]. The purchase of a competitor’s trademark to trigger search-engine advertising is precisely such a use in commerce, even if the trademark is never affixed to the goods themselves. In effect, one company has relied on its competitor’s trademark to place advertisements for its own product in front of consumers searching for that exact mark….
Another page or two of cogitation leads to the conclusion that what “use in commerce” for purpose of infringing use means is subject to two possible interpretations, neither of which is “altogether satisfactory.”17 The opinion then notes that the judges of the 1-800 Contacts panel have read the Appendix and agree with it.
1. The fundamental flaw of 1-800 Contacts is now buried in the Second Circuit (no other Circuit followed it, anyway). The issues should move from “use in commerce” to likelihood of confusion, and, perhaps, the viability of “initial interest” confusion as a basis for relief.
2 1-800 Contacts, Inc. v. Whenu.com, Inc., 414 F.3d 400, 75 U.S.P.Q.2d 1161 (2d Cir. 2005).
3 Id. at 406-407, internal footnotes and citations omitted without indication.
5 Gov’t Employees Ins. Co. (“GEICO”) v. Google, Inc., 330 F.Supp.2d 700, 703 (E.D. Va. 2004).
6 800-JR Cigar, Inc. v. GoTo.Com, Inc., 437 F.Supp.2d 273, 284-85 (D. N.J. 2006).
7 Boston Duck Tours, LP v. Super Duck Tours, LLC, 527 F.Supp.2d 205 (D. Mass. 2007).
8 N. Am. Med. Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211, 1218-19 (11th Cir. 2008).
9 Hysitron, Inc. v. MTS Sys. Corp., No. 07-01533, 2008 WL 3161969 (D. Minn. Aug. 1, 2008).
10 15 U.S.C. § 1127.
11 Hearts on Fire Co., LLC v. Blue Nile, Inc., No. 08-11053, 2009 WL 794482, at *5 (Mar. 27, 2009 D. Mass.).
12 Rescuecom Corp. v. Google Inc., 2009 WL 875447 (C.A.2 (N.Y.)).
13 U-Haul Int’l., Inc. v. WhenU.com, Inc., 279 F.Supp.2d 723 (E.D. Va. 2003) and Wells Fargo & Co. v. WhenU.com, Inc., 293 F. Supp.2d 734 (E.D. Mich. 2003).
14 Rescuecom Corp., 2009 WL 875447, at *8.

References: § 1114
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