February 27, 2008
Rescuecom v. Google Oral Arguments Finally Calendared
By Eric Goldman
You may recall Rescuecom v. Google, where the district court dismissed a trademark infringement lawsuit against Google for selling trademarked keywords because the sales lacked the requisite use in commerce. We are all watching this case closely because (1) it involves Google, (2) the district court ruling was such a clean and decisive win for Google, (3) the Second Circuit ducked search engine liability in its influential 1-800 Contacts v. WhenU precedent and will now have to address it squarely, (4) an affirmance might prove persuasive enough to encourage other courts to harmonize on the Second Circuit's rule and eliminate the current circuit split on the trademark use in commerce question, and (5) a reversal could lead to doctrinal anarchy.
Over a year after the appeal and all of the briefs were filed, the Second Circuit has finally calendared oral arguments for April 3 at 10 am in NYC (500 Pearl Street, 9th floor). Each side has been allotted 10 minutes. I won't be there but I suspect many others will be.
More case resources:
* Commercial Referential Trademark Uses (Rescuecom v. Google Amicus Brief Outtakes)
* Rescuecom reply brief
* Law professors' brief by Stacey Dogan and me
* Electronic Frontier Foundation amicus brief by Jason Schultz, Corynne McSherry and Fred von Lohmann
* Public Citizen amicus brief by Paul Levy
* eBay/Yahoo/AOL amicus brief by Celia Goldwag Barenholtz, Janet Cullum and others of Cooley Godward Kronish
* Google's initial brief
* Rescuecom's initial brief
* District Court's opinion
February 26, 2008
Click Fraud Talk at SMX West
By Eric Goldman
At SMX West, I participated on a panel about recent search engine law developments with Clarke Walton, Sarah Bird and Jeffrey Rohrs as moderator. Jeff asked me to address click fraud developments, so here's a recap of my very brief talk:
From a legal standpoint, I think click fraud is a relatively unexciting topic. Principally, click fraud is a fairly routine contract interpretation issue--the advertising contract defines the payment mechanism, so search engine-advertiser click fraud cases simply involve the interpretation of that provision. As a result, click fraud cases don't really break any new theoretical ground; the basic legal doctrinal are squarely covered in a first year Contracts course.
The click fraud topic has gotten even less interesting following the 2006 settlements by Google and Yahoo. Since then, I think we've seen a gradual but unmistakable decline in the attention and emotional energy directed towards the topic. Google and Yahoo settled up in part to put the issue behind them, and it looks like they did just that. Let’s consider the denouement from the 2006 settlements:
* Google and Yahoo paid fairly nominal amounts of cash (by their standards)
* The plaintiffs’ attorneys made off with a nice chunk of change (by their standards)
* Advertisers got almost no value from the settlements. My understanding is that the dollar value of credits requests pursuant to the settlement was trivial.
* Hundreds of advertisers opted out of the settlements, and some of those opt-outs have matured into standalone lawsuits of relatively low import (and, IMO, relatively low merit), such as the Feldman v. Google lawsuit. There are some ancillary lawsuits, such as the ongoing Miva securities litigation, that I also think are chickenscratch cases.
Looking forward, I see two main open issues about click fraud:
1) Just how bad is the click fraud problem? We still don’t know the exact rates or volume of click fraud (a topic that has sparked an irresolute war of words and statistics), and advertisers still don’t have a good way to quantify it for themselves. As a result, many advertisers are still mad about click fraud, but at the same time I don’t see any obvious suppression of the click-based advertising market either. I’m sure some advertisers have checked out due to click fraud, and other advertisers have reallocated a portion of their dollars to advertising media less susceptible to fraud, but on the whole the click-based advertising market remains robust, healthy and profitable for all involved. I think this is one of the main reasons that click fraud is receiving less attention.
Another possible reason is that perhaps advertisers are doing a better job managing click fraud despite their imperfect tools. Certainly, advertisers who can track ROI from their click-based advertising can adjust their click bids to account for any valueless clicks. For those advertisers, I recommend that they reduce their bids downward to reflect the value they actually derive. Let your competitors overpay for those clicks.
2) Will there be new class action lawsuits against Google and Yahoo? While the 2006 settlements cleaned up Yahoo and Google’s past liability for click fraud, in theory a new class of advertiser-plaintiffs has been developing since the settlement dates. In light of the sweet deal that the plaintiffs’ attorneys got in the last settlements, it seems inevitable that some entrepreneurial plaintiff-side attorneys are going to round up a new class of post-settlement advertisers.
For more on the click fraud topic, in May 2007, I gathered my blog posts on the click fraud topic into a single PDF.
February 25, 2008
CaféPress Denied 230 Motion to Dismiss--Curran v. Amazon
By Eric Goldman
Curran v. Amazon.com, Inc., 2008 WL 472433 (S.D. W.Va. Feb. 19, 2008)
Erik Curran was a National Guard soldier who served in "a combat zone." For reasons unclear from this opinion, he was photographed by an unspecified photographer, and the photo (or photos) of Curran became widely republished. Erik is now suing numerous defendants for violations of his publicity and privacy rights based on these republications.
CaféPress is a defendant because third party users provided Curran's photos for republication on CaféPress-produced t-shirts. CaféPress asserts a 230 defense.
Superficially, 230 looks possible. The images were provided to CaféPress by third parties, CaféPress is a website, and 230 preempts right of privacy claims. I also think 230 probably bar right of publicity claims; even if the publicity claims are IP claims, they would still be state-based IP claims that should be preempted per ccBill.
Nevertheless, I'm a little confused about CafePress' 230 defense. Even assuming 230 facially applies, it should cover only CaféPress' web-based publications and not the vending of physical goods. (As discussed in the Accusearch case, it's possible that any vending by a merchant of record is outside 230's scope, even when the vended materials are just online data). Thus, CaféPress' shipment of physical space t-shirts with an improper image could be outside 230's scope. Perhaps CaféPress believes (much like Amazon did in the Corbis v. Amazon case) that the physical space sales are made by its users, not CaféPress. I could see a judge buying that argument, but if CaféPress is integrally involved in every aspect of the physical retailing, manufacturing and shipment of the impermissible items, it's not clear CaféPress can avoid liability for the non-cyberspace activities, none of which should be covered by 230. (In this sense, I believe CaféPress provides substantially more services to its third party "merchants" than Amazon provides its zShop merchants that were at issue in the Corbis case).
The court doesn't get into this nuance here. Instead, CaféPress argued that Curran's complaint had not alleged that CaféPress had created or developed the content at issue. The court says this argument is insufficient because "CaféPress relies upon the absence of facts not pled in the complaint and seeks to place the onus on the plaintiff to plead around affirmative defenses, which it need not do." I think the court is wrong about this--many courts have granted the 230 defense on a motion to dismiss based on incomplete allegations--but this may not matter in the end. The court adds that "plaintiff faces an uphill battle given the broad grant of immunity conferred by § 230, as interpreted in the seminal case of [Zeran]." But the denial of the motion to dismiss gives Curran a fishing expedition license and some time to parse through the liability associated with vending physical items.
One other interesting note. Curran also sued Amazon for displaying a book cover (from a third party publisher) that featured Curran without his consent. Amazon defended by citing the Almeida case, which dealt with an identical issue. In Almeida, the court sidestepped Amazon's 230 defense and instead held that Amazon wasn't liable because the book cover display was just incidental to Amazon's sale of the book. This court defers the issue, refusing the motion to dismiss as too early to make that judgment.
UPDATE: Michael Erdman's comments.
February 21, 2008
Eric Menhart Backs Off CyberLaw Trademark Claim
By Eric Goldman
You may recall that last month we all had a good laugh over self-proclaimed Cyberlawyer Eric Menhart's trademark application for the term "CyberLaw" to describe his Cyberlaw practice. (In case it wasn't clear, we weren't laughing WITH him...). Despite his initial blustery defense of the application (which, as a reader noted to me, violated the First Rule of Holes), Menhart has now backed off his claim to own the term "CyberLaw." Instead, he has amended his application to seek a trademark registration only in his stylized CyberLaw logo. (Thanks to Tricia Bishop at the Baltimore Sun for calling my attention to the amendment and sending the copy). Unfortunately, I won't dare display the logo here because it would likely make me his next enforcement target; but you can see the design in the amended application.
With this amendment, I'm inferring that all of us--even Michael Grossman, the victim of Menhart's efforts to enforce his purported trademark rights in the term "CyberLaw"--are now free to use the term "Cyberlaw" for its dictionary meaning without fear of getting sued by Menhart. However, Menhart doesn't appear to have changed his tune about the merits of his initial application. Instead, the Baltimore Sun quotes him as saying that he amended his application because:
It was very clear that this was not going to be an academic argument, it was going to be more of a shouting match, and I didn't think it was worth my time to get involved in a shouting match with people that were going to shout louder and had more ammunition in their holsters than I had
Funny--I would have thought it wasn't worth his time because the application was completely unmeritorious.
What Eric Menhart might characterize as a "shouting match" is actually online word of mouth in action. (Note: the Baltimore Sun article incorrectly quoted me as saying that the blogosphere "gang-heckled" him. Actually, I said that we "gang-tackled" him, but the imagery of gang-heckling is perhaps nevertheless appropriate). Historically, it has been fairly rare to see bona fide public evaluations of a lawyer by his or her peers; that kind of reputational information was often well known among lawyers practicing in the geographic/doctrinal area and effectively unavailable to everyone else. Now, through the Internet, everyone--including Menhart's prospective clients--can easily find out what his peers think of Eric Menhart's choices, enabling this reputational information to have a much greater effect at rewarding or punishing marketplace participants as appropriate.
February 19, 2008
McKenna on Trademark Use in Commerce
By Eric Goldman
As you know, a big issue in online trademark law is the meaning and import of a "trademark use in commerce" requirement. To win its case, a trademark plaintiff must show that the defendant made a use in commerce of the plaintiff's trademark. This sounds simple in theory but, due to bad statutory drafting and deep-seated conflicting policy norms, in practice this element has proven baffling to judges. As a result, courts have deeply split on whether keyword triggering or metatag inclusion qualifies as a trademark use in commerce. This has also sparked a robust academic debate; see, e.g., my previous blog post.
Prof. Mark McKenna of St. Louis University (a former guest-blogger here) contributes to this debate with an important insight in his paper "Trademark Use and the Problem of Source in Trademark Law." I (and others) have lauded the trademark use in commerce doctrine as a way to bypass messy factual inquiries into consumer confusion; but as Mark points out, this apparent attractiveness is false, because to determine if a defendant is making a trademark use in commerce, it's necessary to assess if consumers would interpret the trademark usage as a designation of the source of defendant's products. In other words, the trademark use in commerce doctrine still requires a consumer confusion inquiry, negating its elegance as a solution.
Mark is technically right as a descriptive matter, but I'm uncomfortable with the normative implications of his argument. Mark's paper suggests that (as trademark law is currently constructed) we can never avoid a messy inquiry into consumer confusion in trademark cases, making trademark cases inherently difficult and expensive to resolve. Further, because consumer perceptions are constantly changing and often subgroups of consumers have inconsistent perceptions, Mark's paper seemingly suggests that trademark law is just anarchy under the hood. I don't have an immediate solution to this implicit normative crisis, except to suggest that perhaps consumer perceptions about whether defendants are making a source designation are more amenable to expedited judicial determinations than assessments of consumer confusion about the source of marketplace offerings.
Although I'm nervous about its normative implications, the paper is still an excellent contribution to the debate and a must-read for anyone thinking about the trademark use in commerce doctrine.
This paper mediates a scholarly debate regarding the existence and desirability of a trademark use doctrine. It argues that trademark use is a predicate of liability under the Lanham Act, but those who advocate treating trademark use as a threshold question put much more weight on that concept than it can bear. Courts cannot consistently apply trademark use as a distinct element of the plaintiff's prima facie case because trademark use is not separable from the question of likelihood of confusion. Under modern trademark law, courts can determine whether a defendant has made trademark use of a plaintiff's mark only by asking whether consumers are likely to view the defendant's use as one that indicates the source of the defendant's products or services. Because such an inquiry is, by its nature, highly context-sensitive, trademark use is not a concept capable serving the limiting function advocates hope. The trademark use debate, however, reveals a fundamental problem in modern trademark law and theory. Consumer understanding, and particularly consumer understanding of source, defines virtually all of modern trademark law's boundaries. But as trademark law's dramatic expansion aptly demonstrates, these boundaries are never fixed because consumer understanding is inherently unstable, particularly with respect to an ill-defined term like source.
February 18, 2008
No Liability for Providing User-Selected Category Tags--Whitney v. Xcentric
By Eric Goldman
Whitney Information Network v. Xcentric Ventures, No. 2:04-cv-47-FtM-34SPC (M.D. Fla. Feb. 15, 2008)
On remand from the 11th Circuit, the district court once again found that 47 USC 230 protects Rip-off Report and related entities from a defamation claim based on user-submitted reports.
This is the third time I've blogged on this case. The first time, in 2005, the district court dismissed the defendants per 230 with leave to amend. The plaintiffs amended their complaint and the district court dismissed it for lack of jurisdiction. In 2006, the 11th Circuit reversed the district court's jurisdictional dismissal, restoring the case and making it ripe for another substantive dismissal by the district court on 230 grounds, which the court grants here.
The plaintiffs try the typical arguments to get around 230, so the opinion is similar to numerous other 230 defense wins. However, the opinion is distinctive in its analysis of the Ninth Circuit panel opinion in the Roommates.com case. Because the opinion was vacated by the en banc grant and almost certainly will be superseded by a new opinion in the near future, this opinion probably will be one of the only judicial discussions of the original panel's opinion.
The court specifically evaluates Kozinski's "harassthem.com" hypothetical. A number of people have speculated that Kozinski was describing the Rip-off Report in the example, but this court rejects the analogy to Rip-off Report as "dicta" that "bears little resemblance to the ROR website."
The good news kept coming for the Rip-off Report defendants, as the judge gave them a number of other breaks:
1) the court repeatedly criticizes and distinguishes the MCW v. badbusinessbureau precedent, one of the very few bona fide defense losses under 230.
2) on the question of whether Magedson or other Rip-off Report folks write the published reports putatively submitted by their users, the court received numerous declarations from these individuals that they do not. To rebut this, the plaintiffs introduced a deposition from another case where a gentleman named Dickson Woodard (the purported submitter of a report) gave sworn testimony that Magedson created reports and titles. Some judges might have let that deposition create a triable issue of fact, but this judge rejects it because it does not provide any evidence of authorship of the allegedly defamatory reports at issue in this case.
3) even though Rip-off Report asks users to tag their reports with pre-set terms that might be considered defamatory, the court doesn't attribute those tags to Rip-off Report:
the mere fact that Xcentric provides categories from which a poster must make a selection in order to submit a report on the ROR website is not sufficient to treat Defendants as information content providers of the reports about WIN that contain the “con artists”, “corrupt companies”, and “false TV advertisements” categories....Rather, the authors of the postings made the decision to select these categories to describe WIN.
In all, this is another terrific win for Rip-off Report. However, given the plaintiffs' track record, it wouldn't be surprising if this case ends up in the 11th Circuit's lap again.
Finally, the ruling (along with reports from the 7th Cir. hearing in the Craigslist case) provides some more evidence that other judges aren't convinced by the original Roommates.com opinion, meaning that perhaps that case won't be the turning point in 230 jurisprudence we feared.
February 15, 2008
Turnitin Lawsuit to Be Dismissed--AV v. iParadigms
By Eric Goldman
A.V. v. iParadigms, LLC, No. 07-0293 (E.D. Va. removal from trial docket Jan. 9, 2008)
iParadigms, the operators of the Turnitin plagiarism detection tool, issued a confusing press release earlier this week announcing that the lawsuit against them was going to be dismissed. To make sense of the press release, I pulled the applicable court filing--see it here. The main operative provision says:
"It appearing to the Court that Plaintiffs' Motion for Summary Judgment should be granted as to the counterclaims and Defendant's Motion for Summary Judgment should be granted as to the Complaint, it is hereby ORDERED that the this [sic] case is removed from the Court's trial docket, and a Memorandum Opinion and Order will be forthcoming."
It is unusual for a judge to foreshadow an opinion like this. I'm guessing the judge was trying to schedule another trial and needed the space, so the judge issued this order before he had time to write up his thoughts. As of this morning, the opinion still hadn't been posted to PACER. I'm not sure why iParadigms waited a month to issue this press release but then decided to release it now prior to the actual opinion. In any case, I'm sure the opinion will be an interesting read on the contract or copyright topics (or both), but we'll have to wait to see the judge's thinking.
February 14, 2008
Classic Article on "Cybermediaries"
By Eric Goldman
Mitra B. Sarkar et al., Intermediaries and Cybermediaries: A Continuing Role for Mediating Players in the Electronic Marketplace, J. COMPUTER MEDIATED COMMUNICATIONS, 1995
I've been working on my Brand Spillovers paper, which in part addresses the trademark legal principles that govern intermediaries including retailers and search engines. The Sarkar article is one of the most prescient and clear-sighted articles assessing the role of online intermediaries. In particular, it provides a terrific checklist of ways that intermediaries can provide valuable services to consumers and producers, thus continuing to add value to the distribution chain even as transaction costs generally decrease due to electronic mediation. This article is even more remarkable because it was written in the mid-1990s, at the height of cyberspace exceptionalism and at the time when conventional wisdom was that the Internet was going to create widespread disintermediation. A refreshing read, even today.
February 13, 2008
Jan. 2008 Quick Links (IP Edition)
By Eric Goldman
Trademarks and Domain Names
* Adidas America, Inc. v. Payless Shoesource, Inc., 2007 WL 4482201 (D. Oregon Dec. 21, 2007). This case (1) discusses whether advice of counsel is a defense against willfulness in the trademark context, and (2) concludes that Oregon's state anti-dilution law is preempted by Bonito Boats.
* More evidence that price does affect brand perceptions: "A $90 wine tastes better than the same wine at $10."
* Visa Int'l Service Assoc. v. JSL Corp., No. 2:01-CV-00294, 2007 U.S. Dist. LEXIS 95334 (D. Nev. Dec. 27, 2007). The domain name "evisa.com" actually dilutes the Visa brand because it will disappoint people who enter the domain name looking for Visa. That's SO 1997!
* Salle v. Meadows, 6:07-cv-1089-Orl-31DAB (M.D. Fla. Dec. 17, 2007). A rare case interpreting 15 USC 1129, the law restricting the registration of domain names incorporating a person's name.
* The "Surf City" USA lawsuit between Huntington Beach and a Santa Cruz retailer has settled.
* I've seen this issue come up a few times now. Trademarks 1 and 2 are similar. A Google search for TM1 includes the question "Did you mean: TM2?" How might this prompt affect an infringement analysis?
* There has been a lot of domain name craziness in the past few weeks, and unfortunately I couldn't keep up with all of it. So a few brief remarks on two of the more interesting developments:
- First, NSI has admitted that it grabs domain names that people are researching, preventing the potential customers from using any other domain name registrar for 5 days and potentially helping swipers grab the domain name thereafter. NSI's practice is completely sleazy because of the unique retailing environment for domain names. Domain names are a single-item good that is being simultaneously and competitively sold by multiple retailers (the registrars)--but through this practice, NSI expands its inventory and simultaneously shrinks the inventory of competing retailers before NSI has actually made the sale. ICANN needs to shut down this type of inventory abuse NOW.
- Second, Google has announced that it will not provide AdSense ads (through its domain name parking program) to domain names that may be kited (i.e., repeatedly reregistered during the free 5 day trial period). That's great, Google, but why don't you simply say that you won't display ads on any domain names in the first 5 days of their registration? That policy change would kill domain name tasting, but Google's foot-dragging here makes me wonder just how much money Google is making from domain name tasting. C'mon Google, I think you can do better.
Copyright and File-Sharing
* Virgin Records v. Thompson (5th Cir. Jan. 4, 2008). Man improperly sued by the RIAA dragnet can't recover his attorneys' fees. This turns on the fact that he didn't respond to the pre-litigation contacts to turn over his adult daughter who did the file-sharing.
* Atlantic Recording Corp. v. Serrano, 2007 WL 4612921 (S.D. Cal. Dec. 28, 2007). The court rejects the trespass to chattels and CFAA claims of a P2P file sharer against the parties investigating him by checking out his share directory.
* Lots of action over takedown notices:
- The 10th Circuit says that a bogus takedown notice (in this case, an eBay NOCI under its VeRO program) supports jurisdiction in the targeted vendor's home court. Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 2008 WL 217724 (10th Cir. Jan. 28, 2008). See related litigation from the same eBay vendor.
- For a contrary ruling, see Doe v. Geller, 2008 WL 314498 (N.D. Cal. Feb. 4, 2008).
- Colon v. Innovate! is a lawsuit initiated by an eBay seller that claimed an IP owner was misusing eBay's VeRO program to shut down his auctions (which were priced below the IP owner's minimum pricing program although the seller wasn't bound to the program). Innovate made an interesting tactical move (blunder?) to implead eBay into the lawsuit; eBay then countersued Innovate for sending bogus NOCIs.
* In a bizarre press release issued almost 2 months after the applicable ruling, John Dozier of the Dozier Internet Law Firm extolled the ruling in the 43sb.com case (a case the Dozier firm wasn't involved with) where the court suggested that cease-and-desist letters were copyrightable. This sparked yet another blogswarm on this topic; see, e.g., Paul Levy, Marc Randazza, Eugene Volokh, Frank Pasquale, Joe Gratz, 43sb.com, Ron Coleman, Overlawyered. It's clear this issue needs a more definitive resolution by the courts or the legislature. Fortunately, a number of people would welcome the opportunity to help Dozier test if his legal theory will fly in court. If you've been contacted by John Dozier threatening you for infringing the copyright in his firm's cease-and-desist letters and would be interested in help arranging an appropriate defense, please contact me.
February 12, 2008
Jan. 2008 Quick Links (Non-IP Edition)
By Eric Goldman
47 USC 230
* A lot of people would love to take down the Ripoff Report. The latest (perhaps unexpected) opponents--the SEO crowd. See here, here and here. Definitely not a group I'd want to have gunning for me...
* Sarah Bird wrote the blog post I wanted to write: a recap of all of the litigation involving the Ripoff Report and its related entities. She updates a number of cases I've blogged about here.
* The quest to find defendants in the AutoAdmit lawsuit has spilled over to unrelated websites whose URLs were posted to AutoAdmit, on the theory that AutoAdmit users were likely to have visited there prior to or after the links were posted. See the plaintiff's motion. This has proven to be a controversial move; see critiques from Mike Masnick and Sam Bayard.
* World Privacy Forum's Top Ten Opt Outs.
* The Privacy Rights Clearinghouse has compiled a master list of all the data breaches that have been announced.
* Venkat on 4 years of CAN-SPAM. I think the best we can say is that CAN-SPAM hasn't destroyed email as a communication tool, but I am skeptical that its significant transaction costs are outweighed by its benefits.
* Search Engine Land shows Wired that its wiki isn't spam-proof and then apologizes for it.
* Greg Linden predicts a dot-com crash in 2008 where a dry-up of investment capital will lead to marketing desperation: "Much like we saw after the 2000 crash, it is likely that those with little to lose will attempt scary new forms of advertising. The Web will become polluted with spyware, intrusiveness, and horrible annoyances. None of this will work, of course, and there will be lawsuits and new privacy legislation, but we will have to endure it while it lasts."
* Oddee has some vintage ads that couldn't be made today.
* Examples of how blogging is actually increasing some companies' sales.
* Giving in to cyberspace exceptionalism, a divorce court judge ordered a husband to stop blogging about the wife. Fortunately, the judge soon realized his error and reversed course, basically throwing up his hands saying "I don't know what to do here." Garrido v. Krasnansky, No. F 466-12-06 (Vt. Fam. Ct. Jan. 14, 2008).
* Once again, Mike Masnick says what I was thinking better than I could: "Both Microsoft And Google Are Probably Best Off Shutting Up About Monopolies."
* Wired has a great article on scraping data from major Internet players, many of whom themselves use scraping-like methodologies to gather data: "But beneath all the kumbayas, there's an awkward dance going on, an unregulated give-and-take of information for which the rules are still being worked out. And in many cases, some of the big guys that have been the source of that data are finding they can't — or simply don't want to — allow everyone to access their information, Web2.0 dogma be damned."
* The FTC has cracked down (again) on a website for inadequate security. This time, the e-tailer "Life is good" promised that "all information is kept in a secure file" but a hacker got good stuff (credit card #s, etc.) anyway. The FTC pointed to several deficiencies, including (1) the retailer's failure to store the sensitive data in encrypted format, (2) inadequate efforts to identify and patch security holes, and (3) inadequate monitoring of intrusions.
* Krause v. Chippas, 2007 WL 4563471 (N.D. Tex. Dec. 28, 2007). Court says a website user was bound to the contract when "lead page" of website said "USE OF THIS SITE AND OR SERVICES OFFERED WITHIN THIS FUTURESCOM.COM SITE SIGNIFIES YOUR AGREEMENT TO THIS SERVICE AND USAGE AGREEMENT."
* An interesting British study explains the downsides of government-mandated disclosures to consumers. HT Rebecca.
* I participated in a 30 minute podcasted conversation on the Lawyer 2 Lawyer show on the topic of social networking sites.
* I have 2 copies left of my 2007 Cyberspace Law course reader. First 2 people to email me with a request and their mailing address get them. [UPDATE: Gone!]
February 11, 2008
1-800 SKI VAIL Doesn't Infringe--Vail Associates v. Vend-Tel-Co
By Eric Goldman
Vail Associates, Inc. v. Vend-Tel-Co., Ltd., 2008 WL 342272 (10th Cir. Feb. 7, 2008)
This case nicely illustrates that a vanity 800 number containing a third party trademark doesn't create a likelihood of consumer confusion. To the extent that 800 numbers are analogizable to keyword advertising, this case suggests that maybe keyword trademark triggering doesn't either.
The defendant operates nearly 2 dozen 800-phone lines that all begin "1-800-SKI-[destination]." At issue in this case is the phone line 1-800-SKI-VAIL. The 800 number was a redirection service that routed callers to various businesses such as travel agencies.
Not being a skier, I learned from the case that the term "Vail" is special--it is both a geographic descriptor of the town of Vail and a registered trademark for the only ski resort in the Vail geographic area. The plaintiff's argument is that any promotion involving skiing and "Vail" must necessarily involve its resort, making confusion impossible to avoid.
While this isn't a terrible argument, it raises a difficult issue given that many businesses--including, presumably, businesses that cater to the skiing crowd--can legitimately use the term "Vail" in their trademarks due to its geographic descriptiveness. As the majority sharply points out in a smack-on-the-tush footnote at the end of its opinion, "counsel for [the ski resort], who no more wanted to talk about the record evidence than a hog wants to talk about bacon, opined that [the resort] would be well within its rights under the Lanham Act to pursue claims of mark infringement against [the countless number of retailers, merchants, and innkeepers in and around Vail who use the town's name to promote their wares and services]. According to counsel, [the ski resort] declined to do so only as a ‘matter of policy.’ The numerous businesses in the region using the word Vail as a marketing tool surely find small comfort in such knowledge."
While we could do some interesting parsing of the linguistic implications of the phrase "ski Vail," the trial court did that already and found for the defense in a bench trial on likelihood of consumer confusion. This is no small feat given the trial's venue in Colorado and the Vail ski resort's power as a local institution (including troubling allegations that ski resort economically coerced a local travel agent to distort her testimony by cutting off her ability to book at the resort). Working against a trial loss, the ski resort had an uphill battle on appeal and only swayed 1 of the 3 judges on the panel.
Along the way, the majority redefined the 10th Circuit's standards for initial interest confusion, initially articulated in the doctrinally depraved keyword advertising and metatag case Australian Gold v. Hatfield. In this case, the court limits the Hatfield precedent by saying:
a court cannot simply assume a likelihood of initial interest confusion, even if it suspects it. The proponent of such a theory must prove it. See McCarthy, supra § 23:6, at 23-30 (“[E]ven if the marks are almost identical, initial interest confusion is not assumed and must be proven by the evidence.”). Until then, it remains just a theory.
Well, true. Initial interest confusion is just a theory, and a crappy and analytically deficient one at that. And the plaintiff in this case didn't appear to marshal any compelling evidence that consumers experienced any confusion, let alone anything that could be characterized as initial interest confusion. So if hard evidence is required to find initial interest confusion, I don't expect many plaintiffs to be able to assert it successfully.
While this is good news, I’m struck by the fact that the Hatfield finding of initial interest confusion had similar factual deficiencies, and it didn't stop the 10th Circuit then. As I wrote in critiquing the Hatfield case:
the court’s reliance on the initial interest confusion doctrine is lazy....To analyze whether consumers experienced (or could have experienced) initial interest confusion, we would need lots of facts—did search engines even index the metatags? What content did searchers see in search results triggered by metatags that were actually indexed? In the case of the keyword advertising, what did the ad copy say? Should there be a different standard when the defendants were actually selling the manufacturer’s goods from the website? The court does not consider any of these issues.
Worse, consider this. The majority repeatedly bashes Vail ski resort for unsupported empirical assertions, but at the same time the majority--seemingly oblivious to the palpable hypocrisy--says "As for more sophisticated consumers, we doubt whether they would phone 1-800-SKI-VAIL at all. Such consumers would be more apt to contact the Vail Resort directly. But even assuming they phoned 1-800-SKI-VAIL, any initial confusion is unlikely to result in sophisticated consumers booking services elsewhere." (Emphasis added). Uh...any citations for those assumptions?!
So while I'd like to think that this case trumps Hatfield and will require future 10th Circuit plaintiffs to make a meaningful evidentiary showing of initial interest confusion, we know how this story goes. As I said two years ago in my post about Hatfield, "As a result of the 10th Circuit's corner-cutting, I think the 10th Circuit will need to revisit its holding in future cases to clean up its doctrinal errors—much like other circuits that lazily adopted the initial interest confusion doctrine to resolve the dispute at hand." Here we are, and the 10th Circuit has done just that, but there's no reason to think this is the final ruling on this matter. Instead, until the 10th Circuit kills the initial interest confusion doctrine outright, this is probably more like the beginning of a long and strange journey. Thus, I predict that more doctrinally tortured opinions are in the 10th Circuit's future.
Despite that, let's focus on the principal good news here:
1) For now, the vitality of the initial interest confusion doctrine has been significantly undercut in the 10th Circuit.
2) I'm not sure how much trademark infringement cases involving 800 phone numbers teach us about keyword advertising cases because the caselaw involving the different technologies have engaged in limited cross-fertilization. To the extent there is some insights to be drawn between the two technologies, this case provides another data point suggesting that when a trademark owner-vs-advertiser lawsuit over keyword advertising reaches a trial on likelihood of consumer confusion, the factfinder will conclude there isn't any. (For another limited data point, see the JG Wentworth case).
3) We're all still free to encourage others to "ski Vail"....although, after reading about the ski resort's regressive attitudes towards trademark law, I won't be encouraging anyone to do so any time soon...
February 08, 2008
Third Circuit Says Google Isn't State Actor--Jayne v. Google Founders
By Eric Goldman
Jayne v. Google Internet Search Engine Founders, No. 07-4083 (3rd Cir. Feb. 7, 2008)
You may recall Jayne v. Google Founders, one of several wacky pro se lawsuits filed against Google last summer. When I first saw the lawsuit, I laughed out loud because the complaint was handwritten in a rather unpolished script and filled with some pretty crazy allegations about the availability of Jayne's social security number--in scrambled format--via Google. The complaint didn't get very far, as the district court dismissed the complaint sua sponte.
Jayne appealed to the Third Circuit, which dismissed his complaint in a terse 267 word per curiam opinion. The key line: "Google and its founders are not state actors, and Jayne’s allegation concerning his coded social security number does not constitute a violation of the Constitution or federal law."
This isn't the first time that Google has been declared not to be a state actor. See the district court KinderStart opinion. But it's nice for Google to have a Third Circuit ruing validating it.
HT: Tom O'Toole
February 06, 2008
Kentucky Court Votes Keyword Ads = TM Use in Commerce--TDI v. Golf Preservations
By Eric Goldman
T.D.I. International, Inc. v. Golf Preservations, Inc., 2008 WL 294531 (E.D. Ky. Jan. 31, 2008)
In a thinly reasoned opinion with meager facts, a Kentucky federal court meekly voted that keyword advertising is a trademark use in commerce, at least for purposes of a motion to dismiss.
The case involves competitors in the golf course drainage system installation business. Bailey worked for the plaintiffs before starting up his own competing venture. The plaintiffs claim (among other things) that Bailey misappropriated trade secrets when he walked out the door and that his new venture engaged in trademark infringement by buying keyword advertising (apparently the "XGD" trademark, which as of today still triggers a Google AdWords ad for the defendant).
The court describes the precedent cited by both sides regarding the "use in commerce" question (a2z and 1-800 Contacts on the defense; GEICO, American Blinds, Buying for the Home, Edina Realty, JG Wentworth, Rescuecom v. Computer Troubleshooters, Paisola) before throwing up its hands and punting:
The Court has given careful consideration to the arguments and authorities presented by both parties. In light of the uncertain state of the law on the specific issue presented in this case, the Court does not find the Defendants' arguments sufficient to warrant dismissal of the Plaintiffs' Lanham Act claims at this stage in the proceedings.FN1 Accordingly, the Court finds that the Plaintiffs have alleged facts sufficient to “state a claim to relief that is plausible on its face."
In the footnote, the court notes that the plaintiffs alleged other conduct beyond just buying keywords. The case doesn't recount these facts, but they might very well support a use in commerce determination without needing to address the keyword advertising issue at all.
Either way, this case reinforces the pattern that Second Circuit-controlled courts aren't finding trademark use in commerce from keyword triggering and all other courts are. In that respect, this ruling is reminiscent of the American Airlines v. Google ruling, where the court declined to dismiss the complaint without any substantive explanation.