Buying for the Home v. Humble Abode Settles

By Eric Goldman

Buying for the Home, LLC v. Humble Abode, LLC, No. 03-CV-2783 (JAP) (D. N.J. Stipulation and Order of Settlement filed Feb. 16, 2006)

You may recall the Buying for the Home v. Humble Abode decision from last Fall, part of the topsy-turvy jurisprudence from 2006 on whether buying/selling trademarked keywords constitutes a trademark use in commerce. In the prior opinion, the defendant Humble Abode failed to win summary judgment to dismiss Buying for the Home’s infringement claim. Further, Humble Abode brought a counterclaim based on Buying for the Home’s purchase of keywords containing Humble Abode’s trademarks, and the court also denied Humble Abode’s SJ motion for its counterclaim.

Cooler heads have prevailed, and the parties settled the case. Both agreed not to use the other’s trademarks on their websites. However, as far as I can tell, the parties did not agree to stop buying each other’s trademarks as keywords–a pretty big omission if that’s what started the lawsuit in the first place. Further, the settlement deal includes the initial aggressor, Buying for the Home, paying the defendant, Humble Abode, $10,000. So Buying for the Home initiates the lawsuit and beats Humble Abode’s motions for SJ, but nevertheless settles the case without stopping Humble Abode from buying its trademarked keywords, AND ends up writing a check to Humble Abode to boot? What gives?

I asked Ronald Coleman, Humble Abode’s lawyer (and a fellow blogger on trademark law), about the payment, and he explained: “our counterclaims had more merit than their complaint, the summary judgment decision notwithstanding. The judge saw it this way too and made this settlement happen.”

Perhaps there’s a little advocacy bravado in Ronald’s explanation, but no doubt Coleman and his client have reason to be happy with this outcome. Just another reminder that it’s rarely a good choice to bring a lawsuit over keyword purchases, ESPECIALLY if you also buy keywords containing the defendant’s trademarks. In this case, for its troubles, Buying for the Home spent lots of money on its own attorneys’ fees, settled the case without making any real progress, and wrote the defendant a $10,000 check! Buying for the Home would have been much better off just investing its time and money in building its business.

UPDATE: Although last year’s judicial opinion focused on keyword advertising, Ronald Coleman clarifies his view of the case and the role of the keyword purchases in it:

There were never any purchases by my client of key words involving the plaintiff, which there would be no reason for my client to do, considering that no one had ever heard of “Buying for the Home.” The record was clear on this, though the judge (despite ample authority to the contrary) refused to consider the authenticated email from Google to this effect on summary judgment. By and large our counterclaim was about his use of common-law trademarks on his website as product identifiers. As a mechanical matter they acted much like search terms (i.e., within plaintiff’s own product database on Yahoo! Stores) and this could have been an interesting aspect of the case: “Internal” or private use of a competitor’s common-law product names within one’s own online store, for the purchase of products that must objectively be acknowledged to be materially identical to those provided by the competitor. It’s clear, though, that if I sell a COLEMAN WIDGET that’s objectively identical to a widget Goldman sells, and we both buy them from the same widget factory, that does not permit Goldman to say “we sell COLEMAN WIDGETS.” But in this fact context the Court could and should have clarified that this rule applies (1) even in terms of internal use of a trademark on a website or in a catalog and (2) even when the marks used are, as is typical, not registered, but are “model names” utilized by the senior user’s “catalog,” online or otherwise. There is ample authority for these individual propositions as well, and that is why we were confident, ultimately, about pressing forward, if necessary.

Beyond that almost all of the trouble was the result of searches generated from contextual use of key words, including product names and the HUMBLE ABODE registered mark, on the plaintiff’s own website. The purchase of key words from search engines by plaintiff was a fairly insignificant part of the case. In fact the offending behavior had long since ceased – which certainly made it easier to settle.

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