More Defendants Win Keyword Advertising Lawsuits

February 11, 2015 · by Eric Goldman · in Marketing, Search Engines, Trademark

Photo credit: Keyword Advertising 3d render concept with blue and white arrows flying over a white background // ShutterStock

I’m reporting results in keyword advertising lawsuits as I see them. TL;DR: defendants keep winning. Two more rulings supporting that proposition:

CollegeSource, Inc. v. AcademyOne, Inc., 2015 WL 469041 (3d Cir. Feb. 5, 2015). (some citations ommitted) See my blog post on the district court ruling, where I explained:

The lawsuit involves two competing web services that help college students research options for transferring to other colleges. CollegeSource sued AcademyOne for a long laundry list of perceived wrongs, including competitive keyword advertising.

CollegeSource owns the trademarks “CollegeSource” and “Career Guidance Foundation.” AcademyOne purchased the keywords “college,” “college source,” “career guidance,” and “career guidance foundation” in Google AdWords. Its ad copy displayed the titles “College Transfer Help” or “Find Transfer Information” and the domain name “collegetransfer.net,” but didn’t include CollegeSource’s trademarks. The court granted AcademyOne’s summary judgment motion because, among other reasons:

* CollegeSource presented “sparse” evidence of actual consumer confusion given that AcademyOne got only 65 clicks on its ads in one month.
* AcademyOne’s ads were clearly presented to consumers in light of “the entire context of the advertisement’s appearance, especially the clearly differentiated [Sponsored Link] text boxes and the fact that CollegeSource’s name does not appear within the language of the advertisement.”
* Internet users are becoming more careful searchers generally, and the complexity and expense of college transfer decisions means that students will be especially careful.

The appellate court affirms in an efficient opinion:

In this instance, A1 paid Google to display ads for “www.collegetransfer.net,” an A1 offering, when the user searched for terms including “college source,” and “collegesource.”

To succeed on a claim for trademark infringement or unfair competition under the Lanham Act, CS must prove that: (1) it owns the mark at issue; (2) the mark is valid and legally protectable; and (3) A1’s use of the mark is likely to create confusion. Checkpoint Sys., Inc. v. Check Point Software Tech., Inc., 269 F .3d 270, 279 (3d Cir.2001). The first two elements here are not in dispute. The District Court thus properly focused on the “likelihood of confusion” element by applying the test we adopted in Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir.1983), drawing additional guidance from the Ninth Circuit’s recent holding in Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1148–54 (9th Cir.2011).

The District Court’s careful analysis on this point concluded that the strength of CS’s mark was outweighed by: (1) the lack of evidence of actual confusion; (2) the expected savviness of internet users seeking out college-transfer information; and (3) the distinct labeling of Google’s advertisements. On that basis, the Court found no likelihood of consumer confusion that would support a claim for trademark infringement. We agree with the District Court’s factual findings and legal conclusions on this point, and see no need to reiterate the same analysis in further detail.

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M-Edge Accessories LLC v. Amazon.com Inc., 2015 WL 403164 (D. Maryland Jan. 29, 2015). (some citations omitted)

The court says competitive keyword advertising isn’t “unfair competition”:

an Amazon employee acknowledges “creat[ing] a sparkle specifically for M–Edge keywords that also directs to Accessories homepage.” [A] “sparkle” is a link displayed alongside search results for an M–Edge product that directs a user to another company’s related product. Amazon has admitted to bidding for searches based on the M–Edge keyword. M–Edge engages in the same practice with its competitors’ keywords. Amazon presents legal authority supporting the permissibility of such practice. See 1–800 Contacts, Inc. v. Lens.com, Inc., 722 F.3d 1229 (10th Cir.2013); Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137 (9th Cir.2011). Therefore, this conduct cannot serve as a basis for a claim of unfair competition.

Another good citation would have been Overstock v. SmartBargains.

The court also says competitive keyword advertising isn’t false advertising:

Amazon used what it referred to as “sparkles” to direct consumers using M–Edge keywords to the Amazon accessories page. M–Edge contends that this practice is a false or misleading description of fact or misrepresentation of fact. As stated in Playboy Enters., Inc. v. Netscape Comms. Corp., 354 F.3d 1020, 1035 (9th Cir.2004) (Berzon, J., concurring):

If I went to Macy’s website and did a search for a Calvin Klein shirt, would Macy’s violate Calvin Klein’s trademark if it responded (as does Amazon.com, for example) with the requested shirt and pictures of other shirts I might like to consider as well? I very much doubt it.

See also Wells Fargo & Co. v. When U.com, Inc., 293 F.Supp.2d 734 (E.D.Mich.2003) (holding no likelihood of confusion for pop-up advertisements for non-Wells Fargo vendors displayed in response to “Wells Fargo” keyword); U–Haul Int’l, Inc. v. When U .com, Inc., 279 F.Supp.2d 723, 728 (E.D.Va.2003). Since Amazon’s use of “sparkles” would not constitute a literally false statement, M–Edge would have had to produce extrinsic evidence of consumer confusion by virtue of their use. M–Edge has not done so.

Another good citation might have been Heartbrand Beef v. Lobel’s, holding that competitive keyword advertising isn’t a Lanham Act false designation of origin.

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Some Related Posts

* Another Keyword Advertising Lawsuit Fails Badly

* Duplicitous Competitive Keyword Advertising Lawsuits–Fareportal v. LBF (& Vice-Versa)

* Trademark Owners Just Can’t Win Keyword Advertising Cases–EarthCam v. OxBlue

* Want To Know Amazon’s Confidential Settlement Terms For A Keyword Advertising Lawsuit? Merry Christmas!

* Florida Allows Competitive Keyword Advertising By Lawyers

* Another Keyword Advertising Lawsuit Unceremoniously Dismissed–Infostream v. Avid

* Another Keyword Advertising Lawsuit Fails–Allied Interstate v. Kimmel & Silverman

* More Evidence That Competitive Keyword Advertising Benefits Trademark Owners

* Suing Over Keyword Advertising Is A Bad Business Decision For Trademark Owners

* Florida Proposes to Ban Competitive Keyword Advertising by Lawyers