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March 31, 2006
Keyword Purchases Not a Trademark Use--Merck v. Mediplan Health Consulting
By Eric Goldman
Merck & Co. v. Mediplan Health Consulting, 2006 WL 800756 (SDNY Mar. 30, 2006)
About a week after Edina Realty v. TheMLSonline allowed a keyword purchase of a competitor's trademark to go to trial, we got another ruling about trademark liability for purchasing keywords at the search engines. But this case reached a different result--the court dismissed the trademark infringement claim for the keyword purchases because the purchases do not constitute a trademark "use in commerce." This sets up a direct conflict with the Edina Realty case that will require future cases to clarify the law.
This lawsuit involves various Canadian Internet pharmacies targeting US customers. Most of these pharmacies sell Merck's Zocor (a cholesterol-reducing drug) as well as a generic version. Merck sued for patent infringement, trademark infringement and dilution, and false advertising. In this post, I'm focusing just on the discussion about the pharmacies' purchase of the keyword Zocor at the search engines. The defendants moved to dismiss the trademark infringement claim for these purchases because they did not constitute trademark use in commerce.
Recall that in the Edina Realty case, the court said "Based on the plain meaning of the Lanham Act, the purchase of search terms is a use in commerce." In my previous post, I explained why the court cut corners to make this statement.
Fortunately, the Merck court correctly identifies the applicable statutory definition of trademark use in commerce (15 USC 1127(1)-(2)). This section effectively requires that consumers "see" the trademark usage for it to qualify. The Merck court, citing to the Second Circuit 1-800 Contacts ruling from last summer (as well as the other 2 district court cases involving WhenU), says that keyword purchases are invisible to consumers and therefore do not constitute a trademark use in commerce.
As a result, the defendants are able to dispose of the claims over the keyword purchases on a motion to dismiss. This is a big win for defendants generally (not necessarily for these defendants, who face other legal problems) because knocking out the case on a motion to dismiss is comparatively quick and cheap.
So this case is good news for search engine advertisers (and, as a result, search engines). However, because this ruling directly conflicts with the Edina Realty ruling, we're in legal limbo. We need more courts to weigh in before this issue becomes predictable.
Thanks to Rebecca Tushnet for spotting the case. Her commentary.
Posted by Eric at March 31, 2006 05:28 PM | Search Engines , Trademark
Comments
I preface my comment with the caveat that I haven't read all the law reviews, nor have I read all of the cases on this. I have read a bunch of Lanham Act cases and I have read the statute.
That said, the "no use in commerce" argment seems pretty weak to me.
First, the definition of "use in commerce" includes use on "displays" relating to prodcuts.
Second, both 43(a) and 43(b) not only bar certain uses in commerce, they also bar advertising "in connection with" use in commerce. There are plenty of cases that say that domain names for web sites fall under the "in connection with" rubric, though there may be cases that go the other way.
In a non-cyber analogy, let's say that a pharmacy had a big sign on the window "Zocor sold here" but, in fact, Zocor was NOT sold inside -- only the generic equivalent was. Is there any real argument that such advertising is outside the Lanham Act?
Of course, keywords do not necessarily mean that the word will be used on the target website. But, isn't that a likelihood of confusion question? I suspect that most non search engine savvy users assume that the keyword IS used in the website. In other words, if I type Zocor into Google and drugstore.com comes up, I assume drugstore.com sells Zocor.
What am I missing here?
Posted by: mrisch ![[TypeKey Profile Page]](http://blog.ericgoldman.org/nav-commenters.gif)
at April 1, 2006 11:16 AM
Michael, your comment raises a lot of complex issues that I can't address fully here. Fortunately, I've addressed a large number of them in http://papers.ssrn.com/sol3/papers.cfm?abstract_id=635803 .
For now, let's focus just on one point. I think everyone agrees that likelihood of consumer confusion is paramount. This is why it befuddles me when courts use initial interest confusion to cut short the standard likelihood of confusion test. I'm also befuddled when courts opine on initial interest confusion without looking at each ad/keyword combination and the websites that are presented when a user clicks. I think no court can reach a conclusion about whether consumers are confused without working through the entire panoply of facts.
Thanks for the provocative comment. Eric.
Posted by: Eric at April 11, 2006 06:26 PM
A few Questions on Search Engine Theory, If ANY user most notably a novice user, goes to google.com to search for car insurance, the only name his remembers is geico. So the user types in geico in to the search engine. What should the user get in return?
Question #1 If geico.com is able to force google.com to not do paid listing, what will stop them from stopping google.com doing organic searches as well? Who controls google.com? Geico.com or Google.com? Why should Geico.com stop Google.com from making money from Google.com customer’s at there own website.
If Geico.com or anyone wins this type of claim it would make google.com useless, or am I missing something here?
Question #2 What is use of a search engine if I type Pfizer and only search unpaid and paid results from the search engine is Pfizer.com and Pfizer.com “approved sites”? Do you think this would render search dead? As a user don’t you expect to find competitors to phizer? Wouldn’t anyone?
Large companies hold TM’s on over 2 Million+ popular search terms.
A user type’s in any term, he should get EVERYTHING related to that term, hence the term “search engine”. Restricting results paid or other wise does nothing but hurt the user.
Posted by: WIPO Sucks at April 16, 2006 10:53 AM