Opinion ID: 77996
Heading Depth: 2
Heading Rank: 1

Heading: Likelihood of Success on the Merits of the Trademark Infringement Claims

Text: Because Axiom's use of NAM's trademarks constitutes a use in commerce in connection with the advertisement of goods, and because the district court did not clearly err in its factual finding that a likelihood of confusion exists, NAM and Adagen demonstrated a likelihood of success on the merits of their trademark infringement claims. Regarding trademark infringement, the Lanham Act provides, in relevant part, as follows: (1) Any person who shall, without the consent of the registrant  (a) use in commerce 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 ... shall be liable in a civil action by the registrant for the remedies hereinafter provided. 15 U.S.C. § 1114(1)(a) (2006). To prevail on a claim of trademark infringement in this case, plaintiffs must establish: (1) that they possess a valid mark, (2) that the defendants used the mark, (3) that the defendants' use of the mark occurred in commerce, (4) that the defendants used the mark in connection with the sale ... or advertising of any goods, and (5) that the defendants used the mark in a manner likely to confuse consumers. See 1-800 Contacts, Inc. v. WhenU.Com, Inc., 414 F.3d 400, 406-07 (2d Cir.2005); People for Ethical Treatment of Animals v. Doughney, 263 F.3d 359, 364 (4th Cir.2001). Axiom does not challenge the validity of NAM's marks, nor does Axiom dispute that its use of NAM's trademarks affects interstate commerce. [5] Thus, although Axiom purports to challenge whether its placing of NAM's trademarks in its meta tags is a use in commerce and whether such use is likely to confuse consumers, Axiom's arguments actually focus only on the second, fourth, and fifth elements. Moreover, because Axiom separates its use challenge from its likelihood of confusion challenge, we first address the second and fourth elements together (i.e., whether there was a use ... in connection with the sale ... or advertising of any goods), and we then address the fifth element (i.e., whether such use was in a manner likely to confuse consumers).
Axiom briefly argues that placing a competitor's trademarks within meta tags, which consumers never view, does not constitute a use as required to find trademark infringement under the Lanham Act. However, we readily conclude that the facts of the instant case do involve a use as contemplated in the Lanham Act  that is, a use in connection with the sale or advertisement of goods. In deciding whether Axiom has made an infringing use, we focus on the plain language of § 1114(1)(a), which, as noted above, requires a use in commerce ... of a registered mark in connection with the sale ... or advertising of any goods. 15 U.S.C. § 1114(1)(a). The facts of the instant case are absolutely clear that Axiom used NAM's two trademarks as meta tags as part of its effort to promote and advertise its products on the Internet. Under the plain meaning of the language of the statute, such use constitutes a use in commerce in connection with the advertising of any goods. Accordingly, we readily conclude that plaintiffs in this case have satisfied that (1) they possessed a valid mark, (2) that the defendant used the mark, (3) that the defendant's use of the mark occurred in commerce, and (4) that the defendant used the mark in connection with the sale ... or advertising of any goods. In an effort to avoid the foregoing plain meaning of the statutory language, Axiom places its sole reliance on the Second Circuit's 1-800 Contacts case. In that case, whenever a consumer who had installed the defendant's computer program clicked on or searched for the plaintiff's website address, the program generated on the consumer's screen not only the website sought (e.g., plaintiff's), but also a second window displaying pop-up ads for the defendant's alternative, competing products. 414 F.3d at 404-05. The Second Circuit ultimately held, as a matter of law, that such use of the web address is not a use in commerce. Id. at 403. In so holding, the Second Circuit emphasized that the defendant did not use plaintiff's trademark, but rather used its website address, which differed slightly from the mark. Id. at 408-09. Indeed, the court explicitly declined to express an opinion on the appropriate result if defendant had in fact used plaintiff's trademark. Id. at 409 n. 11. Even more crucial to the Second Circuit's holding, the court emphasized repeatedly the fact that the defendant never caused plaintiff's trademarks to be displayed to a consumer. Id. at 408-10. The court explained that the defendant used plaintiff's web address merely in the internal directory of its proprietary software, which was inaccessible to both the C-user and the general public. Id. at 409. Explaining the significance of the fact that the defendant never caused plaintiff's trademark to be displayed to the consumer, the court stated that defendant's use of plaintiff's website address in the directory does not create a possibility of visual confusion with 1-800's mark. Id. In rejecting Axiom's invitation to rely on 1-800 Contacts, we initially note that the above two key facts are not present in the case before us. First, unlike the defendant in 1-800 Contacts, Axiom in the instant case did use NAM's two trademarks in its meta tags; it did not merely use NAM's unprotected website address. Second, and again unlike in 1-800 Contacts, the defendant-Axiom in this case did cause plaintiff's trademark to be displayed to the consumer in the search results' description of defendant's site. [6] Thus, the facts of the instant case stand in stark contrast to those in 1-800 Contacts, and Axiom's reliance on the Second Circuit's opinion is therefore misplaced. Furthermore, to the extent the 1-800 Contacts court based its use analysis on the fact that the defendant did not display the plaintiff's trademark, we think the Second Circuit's analysis is questionable. Although we believe that the absence of such a display is relevant in deciding whether there is a likelihood of confusion, we believe that, when the analysis separates the element of likelihood of confusion from the other elements, this fact is not relevant in deciding whether there is a use in commerce in connection with the sale or advertising of any goods. Because the Second Circuit did separate its analysis in this manner, and did purport not to address the likelihood of confusion issue, see id. at 406, its reliance on the fact that there was no display of the plaintiff's trademark (and thus no possibility of confusion) undermines the persuasiveness of its analysis of the separate elements of use in commerce in connection with the sale or advertising of any goods. In sum, we conclude that Axiom's reliance on the Second Circuit decision in 1-800 Contacts is misplaced. [7] We conclude that the plain meaning of the statutory language clearly indicates that Axiom's use of NAM's trademarks as meta tags constitutes a use in commerce ... in connection with the sale ... or advertising of any goods under the facts of this case. Thus, we turn to the fifth, and final, element that plaintiffs' must establish  that such use was likely to cause confusion.
The district court's finding that a likelihood of confusion exists is not clearly erroneous. Seven factors are relevant when determining whether a likelihood of confusion exists: (1) the strength of the plaintiff's mark; (2) the similarity between the plaintiff's mark and the allegedly infringing mark; (3) the similarity between the products and services offered by the plaintiff and defendant; (4) the similarity of the sales methods; (5) the similarity of advertising methods; (6) the defendant's intent, e.g., does the defendant hope to gain competitive advantage by associating his product with the plaintiff's established mark; and (7) actual confusion. Alliance Metals, Inc., of Atlanta v. Hinely Indus., Inc., 222 F.3d 895, 907 (11th Cir. 2000). The findings as to each factor, and as to the ultimate conclusion regarding whether or not a likelihood of confusion existed, are subject to the clearly erroneous standard of review. Frehling Enters., Inc. v. Int'l Select Group, Inc., 192 F.3d 1330, 1335 (11th Cir.1999). The district court expressly acknowledged the foregoing factors, but it made an explicit finding only with respect to the ultimate conclusion that there was a likelihood of confusion. Regarding that issue, Axiom's brief on appeal did not challenge the district court's implied findings with respect to any of the subsidiary factors (i.e., the foregoing seven factors). Rather, Axiom challenged only: (1) the district court's implied finding that Axiom's use of NAM's two trademarks as meta tags caused the Internet search results at issue, [8] and (2) the district court's reliance on Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir.1999), and Promatek Industries, Ltd. v. Equitrac Corp., 300 F.3d 808 (7th Cir.2002), with respect to the nature of meta tags and search engines. Axiom argues that those opinions erroneously misled the district court to find a likelihood of confusion; Axiom contends that its use of the meta tags was instead analogous to a store placing its own generic brand next to a brand name product on the store's shelf. Because Axiom has not challenged the district court's implied findings with respect to the subsidiary factors, any such challenge is deemed abandoned. Indeed, it is apparent that the marks are not only similar, but identical; Axiom's meta tags precisely mimic NAM's IDD Therapy and Accu-Spina trademarks. Axiom concedes that it is a direct competitor of NAM. It is also apparent that Axiom intended to gain a competitive advantage by associating its product with NAM's trademark. Finally, the litigation on appeal has proceeded on the assumption that there would be a likelihood of confusion, unless Axiom's arguments about the nature of meta tags and search engines (i.e., Axiom's challenge to Brookfield and Promatek ) prevailed. Therefore, we address Axiom's challenge to Brookfield and Promatek. In the leading case on this issue, the Ninth Circuit concluded that the Lanham Act bars a defendant from including in its meta tags a competitor's trademark or confusingly similar terms. Brookfield, 174 F.3d at 1065. Accordingly, the Brookfield court enjoined one online video store, West Coast, from using in its meta tags the trademark (and similarly confusing terms) of a competing online video store, Movie Buff. Id. at 1066-67. Despite its ultimate conclusion, the Brookfield court conceded that even when a consumer who enters a company's trademark into a search engine sees a list displaying a competitor's website in addition to the trademark holder's website, the consumer will often be able to find the particular website he is seeking by simply scanning the list of results. Id. at 1062. The court also acknowledged that even if the web user chooses the competitor's website from the list, assuming the allegedly infringed trademark is not actually displayed by the competitor, it is difficult to say that a consumer is likely to be confused about whose site he has reached or to think that [the plaintiff] somehow sponsors [the competitor's] web site. Id. Nevertheless, the Brookfield court concluded that the competitor's use of the trademark in metatags will still result in what is known as initial interest confusion. Id. That is, [a]lthough there is no source confusion in the sense that consumers know they are patronizing [the competitor] rather than [the plaintiff], there is nevertheless initial interest confusion in the sense that, by using [the trademark] to divert people looking for [the plaintiff's] web site, [the competitor] improperly benefits from the good will that [the plaintiff] has developed in its mark. Id. In the other case relied upon by the district court, the Seventh Circuit faced facts similar to those in Brookfield and agreed with the Brookfield court's analysis. Promatek, 300 F.3d at 810-13. Other courts, however, have criticized various aspects of the Brookfield opinion. See, e.g., 1-800 Contacts, 414 F.3d at 410-11; Playboy Enters., Inc. v. Netscape Commc'ns Corp., 354 F.3d 1020, 1034-36 (9th Cir. 2004) (Berzon, J., concurring); J.G. Wentworth, S.S.C. Ltd. P'ship v. Settlement Funding LLC, No. 06-0597, 2007 WL 30115, at - (E.D.Pa. Jan. 4, 2007); see also J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 25:69 (4th ed.2003) (discussing meta tags, initial interest confusion, and criticisms of the Brookfield court's approach). Like the Brookfield and Promatek courts, we ultimately conclude that a company's use in meta tags of its competitor's trademarks may result in a likelihood of confusion. However, because NAM and Adagen have demonstrated a likelihood of actual source confusion, [9] we need not decide, as those courts did, whether initial interest confusion alone may provide a viable method of establishing a likelihood of confusion. Unlike those courts, we are not faced with a situation where the trademarks are used without being displayed to consumers. In Brookfield and Promatek, consumers who entered the plaintiff's trademarks into a search engine saw a list displaying the competitor's website in addition to the trademark holder's website without any other indication from the search results that the competitor's website is sponsored by the plaintiff or related to the plaintiff's trademarks. In contrast, in the instant case, when consumers entered NAM's trademarks into a search engine, the search results not only displayed Axiom's competing website, but they also included a brief description of Axiom's website, which description included and highlighted NAM's trademarked terms. That is, the evidence in the instant case specifically shows that if consumers searched with Google for the terms IDD Therapy and Accu-Spina, the first listed result was a legitimate website sponsored by NAM, the owner of these trademarks, and the second entry in the search results was Axiom's competing website. Furthermore, and in contrast to Brookfield and Promatek, as noted above, the search results not only listed the competitor's (i.e., Axiom's) web address, but they also included a brief description of the Axiom's site, and this description included and highlighted both of NAM's trademarked terms, IDD Therapy and Accu-Spina, in addition to Axiom's competing products. Consumers viewing these search results would be led to believe that Axiom's products have the same source as the products of the owner of the IDD Therapy and Accu-Spina trademarks, or at least that Axiom distributed or sold all of the products to which the brief description referred, or that Axiom was otherwise related to NAM. This, of course, is misleading to the consumer because Axiom is not related in any way to NAM, nor does Axiom distribute or sell the products of NAM. Moreover, there was nothing in Axiom's website itself to disabuse consumers of the notion (suggested by the Google search) that there is some relationship between Axiom and NAM. In other words, if consumers accessed Axiom's website after viewing the Google search results, they would be told all about Axiom's products but would be met with utter silence with respect to NAM's products. For example, there was no comparative advertising in Axiom's website which would have made clear to consumers that NAM's and Axiom's products are competing items. Thus, the factual situation in the instant case is that Axiom's use of the meta tags caused a likelihood of actual consumer confusion as to source. The instant case is more like Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir.2004), than Brookfield or Promatek. In Playboy, the defendant, Netscape, sold advertisements to competitors of Playboy and then caused its search engine to pop up banner ads of its advertisers. Playboy, 354 F.3d at 1023. The ads appeared when the consumer-searcher typed in the search terms Playboy and/or Playmate, which are trademark terms owned by Playboy. Id. The search engine operated in this manner by using keying words in its software. Id. at 1022-23. A competitor's ad could be keyed to pop up in a banner ad along the margin of the search result when the searcher entered Playboy and/or Playmate. Id. at 1023. Thus, the keying words operated in hidden fashion, much like the meta tags in this case. Because the banner ads appeared immediately after the searcher typed in the Playboy trademarks, and invited the user to click here, id. at 1023, and especially because the banner ads did not clearly identify a source (i.e., the sponsor of the ad), id. at 1025 n. 16, 1030, the user was likely to be confused regarding the sponsorship of the unlabeled advertisements. Thus, the Playboy case involved some actual confusion as to source, unlike the situation in Brookfield where there was never any confusion as to source or affiliation. The instant case is more like Playboy than Brookfield. We note, however, that the source confusion in the instant case is considerably more pronounced than in Playboy. In Playboy, there was no explicit representation of a relationship between the source of the ad and Playboy, while there is an explicit representation in this case of some relationship between Axiom and NAM. Judge Berzon wrote a concurring opinion in Playboy in which he highlighted this distinction from Brookfield. Id. at 1035-36 (Berzon, J., concurring). Judge Berzon criticized Brookfield, arguing that it involved merely a distraction of a potential customer with another choice in a situation in which the customer was never confused as to source. Id. Rather, the potential customer merely was provided an opportunity for another choice, which clearly was not the sponsor of the original search. Id. Such distraction, Judge Berzon pointed out, was very much like the product placement in a department store. Id. at 1035. When a customer walks in, asks for the Calvin Klein section, and is directed to the second floor, no one thinks that there is a trademark infringement because the store has placed its own (or another competitor's) clothing line in a more prominent place as a distraction. Id. Because Axiom's use of NAM's trademarks as meta tags caused the Google search to suggest that Axiom's products and NAM's products had the same source, or that Axiom sold both lines, or that there was some other relationship between Axiom and NAM, Axiom's use of the meta tags caused a likelihood of actual source confusion. Thus, the instant case is very different from the product placement in a department store. This case is also very different from Brookfield where there was never source confusion. Finally, the instant case is not subject to the criticism leveled by Judge Berzon. For the foregoing reasons, and under the particular factual circumstances of this case, we cannot conclude that the district court's finding of a likelihood of confusion is clearly erroneous. [10] Because the district court in this case was not clearly erroneous in finding (1) that plaintiffs possessed valid trademarks; (2) that defendants used those marks, (3) in commerce, (4) in connection with the advertisement of defendant's goods; and (5) that such use caused a likelihood of confusion to consumers, we conclude that the district court did not err in concluding that plaintiffs demonstrated a likelihood of success with respect to the trademark infringement claim.