Trademark Registrant Isn’t Required to Shut Down Competitive Keyword Advertisers–STK v. Backrack

By Eric Goldman

STK LLC v. Backrack, Inc., Cancellation No. 92049332, 2012 WL 2024459 (TTAB May 21, 2012). The TTAB designated this opinion “non-precedential,” which they do with the vast majority of their opinions.

Deborah Gerhardt, Leah Chan Grinvald and I are writing two companion articles on trademark policing doctrines. Our basic thesis is that the trademark policing “duty” is grossly overstated in ways that have pernicious effects on everyone–other than trademark lawyers who extract extra cash from clients due to the ambiguities. You’ll be hearing more about this project as we make more progress (i.e., when I actually write the portions I promised to write).

This opinion illustrates an unsuccessful attempt to overstate the trademark policing “duty.” I believe it’s also the first opinion that expressly addresses what, if any, obligations a trademark owner has to shut down competitive keyword advertising. Consistent with our belief that trademark policing obligations are overstated, the opinion tells trademark owners that they don’t necessarily have to go after competitive keyword advertisers as a precondition to maintaining their trademark rights.

Before I get to the opinion, a note about the TTAB. The TTAB is an administrative adjudication system (not a “court”) within the USPTO that resolves disputes about trademark registrations. TTAB proceedings can be fiercely contested and often are equivalent to judicial proceedings in both scope and cost. In this case, STK sought to cancel Backrack’s trademark registration on the grounds that Backrack for “pick-up truck racks” is generic. Although Backrack is a weak mark, STK had an uphill battle proving genericide.

To support its claims, STK argued that Backrack had not adequately policed against third parties purchasing “backrack” as the trigger for keyword advertising. The TTAB panel rejects the argument for several reasons, including that trademark law’s applicability to keyword advertising is legally unsettled:

In view of the evolving status of the case law in this area, respondent’s failure to pursue purchasers of “backrack” as a keyword is not evidence of failure to police its mark.

Further, the panel says that advertisers may be purchasing the keyword precisely because it is a competitor’s trademark, which would undercut the argument that the term has become generic. Indeed, the panel found that competitors were advertising a variety of analogous goods (not just truck racks) in the ads triggered by “backrack,” and the panel says this reinforces that the term isn’t generic. The panel doesn’t cite Rosetta Stone on this point, but the 4th Circuit’s Rosetta Stone opinion mentions nominative use several times–a doctrine that can apply only if the advertisers use the keyword trigger for its referential meaning. I provide much more support for this legal interpretation in my Deregulating Relevancy article.

While a non-precedential TTAB ruling is hardly the most authoritative source on this topic, this opinion reaches a sound result and provides some helpful insights for trademark owners wondering if they must chase off competitive keyword advertisers to satisfy their trademark policing “duty.” I would argue the answer has always been “no,” and this opinion gives additional legal support for that conclusion. Now, I recognize trademark owners might have other reasons to “protect” their trademarks as keyword ad triggers, but I hope they won’t spend the time and money on the misperception that they have to do so. As usual, that time and money would be better spent competing on the merits than on trying to suppress information available to consumers.

UPDATE: Comments on the case from:

* John Welch/TTABlog

* Rebecca Tushnet