Lawsuits Over Competitive Keyword Advertising Are Still Stupid–NRRM v. American Dream Auto Protect
This case involves two competitors in the industry of auto protection plans (VSCs). The rival’s affiliates bought the plaintiff’s trademark “CarShield” for competitive keyword ads. The plaintiff alleged:
Defendant’s agents do not label or indicate that their generic ads direct a customer to Defendant and other competitors who pay for the websites to send them consumer leads. The advertised websites prevent consumers from linking to Plaintiff’s websites and obtaining Plaintiff’s VSCs….Consumers are deceived into believing they are learning about, providing personal information for, and ultimately obtaining quotes for Plaintiff’s VSCs.
Trademark Infringement
Since the 8th Circuit revitalized the initial interest confusion doctrine in 2021 đź’”, it rides to the plaintiff’s rescue here.
The court has no idea how to define IIC. Check out this confused statement:
[IIC] occurs when “an alleged infringer uses a competitor’s mark to direct consumer attention to its product.” Lerner & Rowe PC v. Brown Engstrand & Shely, LLC, 119 F.4th 711, 718 (9th Cir. 2024). The confusion creates initial consumer interest “even though no actual sale is completed as a result of the confusion.” Jim S. Adler, P.C. v. McNeil Consultants, LLC, 10 F.4th 422, 427 (5th Cir. 2021) (internal quotations omitted). Initial interest confusion is a “bait and switch” approach that allows “a competitor to get its foot in the door by confusing consumers.” Dorr-Oliver, Inc. v. Fluid-Quip, Inc., 94 F.3d 376, 382 (7th Cir. 1996)….
The Eighth Circuit held that initial-interest confusion only occurs when a jury question exists as to the issue of consumer sophistication. Thus, if consumers are sophisticated, such as professional purchasers, initial interest confusion is not possible. However, having relatively recently adopted the initial interest confusion theory, the Eighth Circuit has not yet addressed a situation such as the one in this case concerning the purchase of a plaintiff’s trademarks for advertising with an internet search engine.
Nevertheless, the court says the plaintiff’s allegations are good enough:
It is plausible, based on Plaintiff’s allegations, that a consumer searching for the term “CarShield” and shown advertisements for carwarrantyoffers.com, goautowarranty.com, consumeraffairs.com, or forbes.com would believe those websites offered CarShield’s VSCs. The advertisements included in Plaintiff’s amended complaint use generic text and are not clearly labeled as belonging to Defendant, a competitor
(Note: the Network Automation case said that the ads need to be labeled as ads, not that they needed to be labeled as belonging to the defendant).
At this stage of the litigation, when courts have repeatedly stated the likelihood of confusion is usually a fact determination reserved for summary judgment, the Court finds Plaintiff has plausibly alleged Defendant infringed Plaintiff’s trademarks through initial interest confusion.
The court cites the Warby Parker and Lerner & Rowe opinions but clearly didn’t engage with the standards they articulated, which would have instantly doomed this case.
Secondary Trademark Infringement
The court dismisses the secondary trademark infringement claims. The complaint doesn’t sufficiently allege an agency relationship with the ad buyers, or for that matter, who the purported agents are.
The court also says the plaintiff didn’t allege intentional inducement:
Hiring an agent to purchase keywords on internet search engines is not enough to establish trademark infringement; therefore, it is also not enough to establish contributory liability for trademark infringement. [cite to the Warby Parker decision]
Um…I think I’m missing something fundamental. The court just denied the motion to dismiss the direct trademark infringement due to IIC, yet the court seems to say that competitive keyword advertising categorically isn’t direct trademark infringement. I believe only one of these propositions can be true. 🤷‍♂️
So I don’t really understand what happened here or why the court dismissed the case in entirely, with leave to amend. Call me confused. Perhaps the court will shut this case down for good in the next round.
Case Citation: NRRM, LLC v. American Dream Auto Protect, Inc., 2025 WL 2106971 (E.D. Mo. July 28, 2025)
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