Northern District of New York Dismisses Rescuecom’s Claims Against Leading Search Engine Google
- United States
- 10/05/2006
- Arent Fox PLLC
Ruling is Contrary to Recent U.S. District Court (New Jersey) “800-JR Cigar” Decision
On September 28, 2006, the United States District Court for the Northern District of New York granted Google Inc.’s motion to dismiss all counts of a complaint by Syracuse-based computer services franchise Rescuecom Corporation for trademark infringement, false designation of origin and trademark dilution based on Google’s keyword-triggered advertising program. The court found that Google’s sale of Rescuecom’s mark as a keyword to trigger competitors’ ads, as alleged in the complaint, was not actionable because it did not satisfy the threshold requirement of “trademark use.” See Rescuecom Corp. v. Google, Inc., No. 5:04-cv-1055 (N.D.N.Y. September 28, 2006).
The court heavily relied on the Second Circuit’s decision in 1-800 Contacts v. WhenU.com, Inc., 414 F.3d 400 (2d. Cir. 2005) (a case involving competitors’ pop-up ads appearing over trademark owners’ Web site), and reiterated that to prevail on a trademark infringement or a false designation of origin claim under the Lanham Act, a plaintiff must establish, as threshold matter, that the defendant has “used” its mark in commerce. In this case, the court held that even if Rescuecom could prove that (1) Google had capitalized on the goodwill associated with the RESCUECOM mark by marketing it to Rescuecom’s competitors as a keyword to generate advertising revenues for Google; (2) Rescuecom’s competitors believed that Google was authorized to sell the RESCUECOM mark; and (3) internet users viewing competitors’ sponsored links were confused regarding whether the sponsored links belonged to or emanated from Rescuecom, “none of these facts, alone or together, establish trademark use.”
Significantly, the court noted that Rescuecom’s complaint did not allege that the keyword ads in question contained the RESCUECOM mark in their visible text. The court used this fact to distinguish this case from the result in Government Employees Ins. Co. v. Google, Inc ., 330 F. Supp.2d 700 (E.D. Va. 2004) (“GEICO I”). The GEICO I decision, which did find Google’s sale of trademarks as keywords to constitute a use in commerce, noted that the complaint in that case had alleged that the plaintiff’s mark appeared in the visible ad text. Interestingly, this notation in GEICO I was made almost in passing with regard to its ruling on trademark use. It was the court’s later ruling in that case, on the issue of likelihood of confusion, that discussed at length the differences between instances where the mark appeared in triggered ad text and where it did not, holding that the evidence failed to establish a likelihood of confusion when the ads did not feature the mark, but did establish a likelihood of confusion with regard to ads that did use the mark in their headings or text. Government Employees Ins. Co. v. Google, Inc., 77 U.S.P.Q.2d 1841 (E.D. Va., August 08, 2005) (“GEICO II”).
Rescuecom also argued that Google’s use of the RESCUECOM mark prevents Internet users from reaching its Web site because Internet users searching for Rescuecom cannot click on a sponsored link and access Rescuecom’s website simulatenously. Rescuecom also claimed that Google’s sale of RESCUECOM as a keyword to Rescuecom’s competitors diverts and misdirects Internet users away from Rescuecom’s Web site. The court rejected these arguments, highlighting the fact that the so-called “natural,” non-paid, results were the only results that displayed the RESCUECOM mark in text, and these results all linked to Rescuecom’s site. Similarly, the court held that Rescuecom failed to allege that Google’s activities affect “the appearance or functionality” of Rescuecom’s Web site, and that Internet users could still go to Rescuecom’s Web site by clicking on the appropriate link on the search results page—even though they may have other choices.
Federal District Court in New Jersey Had Ruled Otherwise in July
In contrast to the Rescuecom decision, the court in 800-JR-Cigar, Inc. v. GoTo.com, Inc ., —- F.Supp.2d ——, 2006 WL 1971659 (D.N.J. July 13, 2006); 2:00-cv-03179, recently held that, as a matter of law, search engine GoTo.com did make trademark use of JR Cigar’s marks (1) by accepting bids from JR Cigar’s competitors that paid for prominence in search results; (2) by ranking its paid advertisers before any “natural” listings in a search results list, thus injecting itself into the marketplace and acting as a conduit to steer potential customers from JR Cigar to JR Cigar’s competitors; and (3) through its “search term suggestion tool,” which identified JR Cigar’s marks as effective search terms and marketed them to JR Cigar’s competitors.
JR Cigar had sued GoTo.com (which became Overture services Inc. and was then acquired by Yahoo!) for trademark infringement, dilution and unfair competition. The complaint is based on allegations that GoTo.com allowed JR Cigar’s competitors to purchase the mark JR CIGAR as a keyword. In addition to finding that the use of trademarks as keywords could constitute trademark use, the court held that other factual issues precluded summary judgment in favor of either party. With regard to likelihood of confusion, the court determined that the issues of evidence of actual confusion and the impact, if any, of initial interest confusion, as well as GoTo.com’s intent in adopting the JR CIGAR mark (e.g., whether GoTo.com’s editors really believed that “JR CIGAR” stood for a “small cigar”), must be decided at trial. Notably, the court stated that the legal theory that “best embraces the facts of this case” is contributory or indirect infringement, and instructed JR Cigar to advance its case under that theory. There is no trial date set for this case, but a settlement conference is scheduled for October 10, 2006.
Search engine cases are being closely watched by trademark owners, search engines, licensees and advertisers, as they have broad and serious implications for the multibillion dollar Internet advertising industry. Recent decisions such as these are particularly noteworthy since courts in other jurisdictions have split on the question of whether purchasing another’s mark for use as a search engine keyword to generate a sponsored link advertisement does, in fact, constitute “use” of the mark under the Lanham Act. See, for example, our July 5, 2006 Legal Update. The Arent Fox Intellectual Property Group is involved in a number of related matters on behalf of our clients, and we continue to monitor all developments in this area of the law.
Sheldon H. Klein
202.857.6404
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David S. Modzeleski
202.857.6073
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