Sponsored Links and Metatags: The Trademark Wars, Round 10

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In the strange new world of sponsored links and metatags, when does a "use of a trademark" qualify as a "trademark use."  Or, more precisely, where does a "use of a trademark" qualify as a 'trademark use"?  Not in New York, yes in New Jersey, Illinois and Minnesota.  And now yes, at least tentatively, in California. In Google Inc. v. American Blind & Wallpaper Factory, Inc., U.S. District Judge Jeremy Fogel of the Northern District of California confronted the "use" issue when Google moved for summary judgment seeking dismissal of American Blinds' trademark infringement claim, which arose out of Google's AdWords program,  Under that program, Google sold American Blinds' trademarks as keywords to competitors.  As a result, when a user typed in a search for "american blinds,"  that search term triggered a "sponsored link" to a competitor on Google's search results pages. But because the American Blinds trademark would not appear in the sponsored link or, for that matter, anywhere in the search results other than in connection with legal references to American Blinds products, the question was whether Google's use of the trademarks was in fact a trademark "use" under the Lanham Act.

The question is hardly academic, since a "use in commerce" is a jurisdictional prerequisite under the Lanham Act. And it is hardly a settled question, as Judge Fogel's opinion makes clear.

Just a year earlier, on March 30, 2006, Judge Fogel had denied Google's motion to dismiss the trademark claim, stating that he would consider the issue a later date "both the relevant facts and the applicable law in the context of a fuller record."  In his April 2007 order--under a heading entitled "Developments in the Law Since the March 30th Order--he devotes several pages to a discussion of various federal district court decisions around the country that have grappled with the same issue.  Ultimately, feeling somewhat bound by Ninth Circuit precedents in the related area of the use of  competitors' trademarks in metatags, Judge Fogel denied summary judgment, concluding that "the sale of trademarked terms in the AdWords program is a use in commerce for the purposes of the Lanham Act."

But is it really? The AdWords dispute is just another example of courts struggling to apply old concepts to new technologies.  And whether the metaphor is old wine in new bottles or square pegs in round holes, the result is the same: a poor fit.  What seems at first like willful trademark infringement--"Hey, Google made money selling my trademark to my competitor!"--becomes a lot fuzzier on closer examination. Where is the use in commerce?  Indeed, where is the infringement? Your trademark does not appear anywhere in your competitor's sponsored link--not in the title or in the text of that link. Nor does it appear on any of Google's or your competitor's goods, containers, displays, or advertisements.  Indeed, it is, quite literally, invisible to the public.  Moreover, the risk of so-called "initial interest confusion" is minimal because the sponsored links are conspicuously differentiated from the regular search results--usually grouped at the top against a pink background or in a column on the far right, and always under a heading entitled "sponsored link."  The courts that have found this use to be a "use in commerce" appear to be motivated, at least in part, by a visceral reaction to a company running an advertising program that makes money off of the sale of  someone else's trademarks. But a compelling argument can be made that this is just a fair use which, outside the Internet context, is both common and non-actionable.  I drive past a good example of that every day on my way to work in downtown St. Louis.  As you approach Busch Stadium on the highway, you are confronted by a huge billboard advertising Miller Lite.  Friends in Milwaukee tell me that the approach to Miller Stadium is similarly obscured by a huge billboard advertising Budweiser. Talk about Pop-Up ads!  The billboard advertising agencies are the equivalent of Google, but are their "sponsored links" actionable? Of course not.

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