Commercial Referential Trademark Uses (Rescuecom v. Google Amicus Brief Outtakes)

By Eric Goldman

Earlier this year, I drafted the following as a proposed contribution to the law professors’ amicus brief in Rescuecom v. Google. We ultimately decided to go in a different direction, but I’m posting the outtakes here for your consideration. I’m planning to explore this topic in future papers, so I would gratefully welcome your comments. For an example of exactly what I meant by a commercial referential use, see Universal Communication Systems, Inc. v. Lycos, Inc. (1st Cir. Feb. 23, 2007).

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Commercial Referential Trademark Uses Facilitate Consumer Decision-Making

The Lanham Act does not govern every trademark “use.” Discussions and conversations about a trademarked good or service requires the communicating parties to use a common referent—the trademark. Thus, when trademark owners build a proprietary trademark asset, they simultaneously add a new word (or definition of that word) or other symbol to the social lexicon. We describe a trademark use for its lexical value as a “referential” trademark use, which is separate from a “source-identifying” use when a senior (or junior) user uses a trademark to distinguish the source of its own offerings.

Referential trademark uses pervade our society, such as in ordinary social discourse between individuals. For example, a wife may ask her husband to pick up a six-pack of “Coca-Cola” soda at the supermarket. These types of “private” referential trademark uses occur countless times every day, and Lanham Act does not purport to reach them.

The analysis does not change when a commercial enterprise referentially uses a third party trademark. For example, if a gossip magazine reports that a celebrity was spotted drinking Coca-Cola, the magazine is referentially using the Coca-Cola trademark. Like private referential uses, commercial referential uses are both ubiquitous in our society and outside the Lanham Act’s scope.

Commercial referential uses play a critical role in helping make smart and informed marketplace decisions. To make good choices, consumers must be informed about availability, specifications, strengths and weaknesses of marketplace options. Private word-of-mouth educates consumers somewhat, but the production and distribution of credible information often requires adequate financial incentives. Thus, consumers rely on an array of commercial publishers—including newspapers, magazines, broadcasters and emerging sources like online product review sites and bloggers—to provide the information needed to make good choices.

To perform this marketplace disciplining function, commercial publishers must use third party trademarks referentially. For example, a product review in a magazine necessarily must make extensive referential uses of a critiqued product’s trademark. Because these third party trademark references do not designate the magazine’s source, these uses do not satisfy the “use in commerce” requirement and thus remain outside of the Lanham Act’s scope—even if consumers buy the magazine, and even if the magazine sells advertising space adjacent to the product review.

The Internet has contributed to an explosion of credible information about trademark owners—from both private and commercial content providers—that has improved consumers’ ability to make smarter marketplace decisions. Congress recognized the importance of commercial entities’ contribution to these mechanisms by requiring that defendants make a “use in commerce” of the plaintiff’s trademark. This court should continue to provide breathing room for commercial referential uses.

Keyword Triggering is a Commercial Referential Use

When a trademarked keyword expresses the consumer’s interest in that trademark, the trademark is being used referentially. This is similar to the situation where a wife asks her husband to pick up a six-pack of Coca-Cola soda, but in this case, the wife asks the search engine to provide information relevant to the term “Coca-Cola.”

Knowing that consumers are making these referential uses, search engines like Google provide advertisers with the opportunity to respond to those referential inquiries. In effect, search engines say to advertisers: “a group of consumers have expressed interest in [trademark]—if you have something relevant to say to this audience, we can provide you with a way of reaching them.” Thus, the trademarked keyword becomes the “lingua franca” between consumers, advertisers and the search engine; each of them uses the trademark referentially as the shared referent that enables them to communicate with each other.

As the conduit enabling consumers and advertisers to communicate with each other using the trademark, search engines like Google make a commercial referential use of the trademark. In this respect, search engines’ use of trademarks do not differ from the commercial magazine that publishes a product review. In each case, the trademark provides the essential referent for a successful dialogue. As such, using it remains outside the Lanham Act’s scope.

Further, enabling search engines to make these commercial referential uses advances the goals of trademark law. Trademarked keywords allow consumers to improve their decision-making and, including comparative advertising, advertising for complementary products, advertising by resellers of used goods, advertising by providers of competitive offerings that may be better or cheaper for the consumer, and in some cases, advertising by aggrieved consumers who want to highlight problems with the trademarked product. Trademark law seeks to help consumers find what they are looking for, and unrestricted referential trademark uses for advertising purposes fulfills that objective.

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BONUS: An outtake on why cases should be disposed on use in commerce grounds, not other grounds:

Therefore, the “use in commerce” doctrine provides the necessary breathing room for commercial content generation that helps consumers improve their decision-making. In contrast, Congress did not intend to rely on the “likelihood of consumer confusion” doctrine to protect such commercial activities. The fact-intensive nature of inquiring into consumer confusion makes it difficult to resolve cases on summary judgment, leading to many trials. Further, likelihood of consumer confusion is often established by experts, leading to an expensive battle of the experts.

Congress also had good reasons not to rely on the nominative use doctrine to protect commercial referential uses. The Lanham Act does not codify a nominative use defense, nor is it recognized by all circuits. See, e.g., PACCAR, Inc. v. Telescan Technologies, L.L.C., 319 F. 3d 243 (6th Cir. 2003) (Sixth Circuit declines to adopt the nominative use defense). Further, as an affirmative defense, defendants bear the burden of proving the defense, increasing defense costs and inhibiting defendants from making legitimate commercial referential uses.

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