Q2 2018 Quick Links, Part 1 (Trademarks and Other IP)


* Carter v. Oath Holdings, 17-cv-07086-BLF (N.D. Cal. June 21, 2018)

Courts have held that an online provider does not “use” a mark under the meaning of the Lanham Act when its search engine returns a search result based on an input of a consumer. Perfect 10, 2013 WL 2109963, at *14 (“Defendants do not ‘use’ Plaintiff’s marks in a commercial transaction by merely offering a search function that allows third parties to search for images using Plaintiff’s marks as search terms.”). As such, merely returning search results to purportedly display a trademark does not show that Defendant is liable under the Lanham Act….insofar as Plaintiff alleges that Defendant is liable for trademark infringement unless its search engine returns only search results from Plaintiff’s own website, Plaintiff’s theory is inconsistent with the Ninth Circuit’s view of search engine functionality. See Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171, 1176–77 (9th Cir. 2010) (holding that disallowing the use of trademarks to accurately describe goods and services in the context of nominative fair use would stifle competition).

* Neutron Depot LLC v. Bankrate, Inc., 2018 WL 3014435 (W.D. Tex. May 1, 2018):

First, there is no indication Bankrate used the Mark with an “intent to confuse or deceive” consumers. Neutron Depot has pointed to no evidence indicating Bankrate knew of the existence of Neutron Depot when Bankrate and its affiliates used the Mark to drive customers to its web pages. To the contrary, the record suggests the Mark is one of millions of keywords selected and purchased en masse by Bankrate with the assistance of keyword-identification algorithms. Thus, although Bankrate undoubtedly intended to use the Mark to draw consumers to its web pages, there is no indication Bankrate knew the Mark had any independent significance or association with an existing company or product. Relatedly, there is no indication Bankrate was attempting to “palm off” a good or service as that of Neutron Depot. In fact, Bankrate’s insurance lead division did not sell goods or services to consumers at all—it lured consumers to web pages using reflexively generated keywords, collected the consumers’ contact information, and then sold that information to insurance companies. Upon these facts, no reasonable jury could conclude Bankrate intended to confuse or deceive consumers by using the Mark as part of this process.

Second, Neutron Depot has pointed to no evidence of diverted sales or other actual damage sustained as a result of Bankrate’s use of the Mark. In its response, Neutron Depot alleges it has suffered both financial losses and loss of goodwill as a result of Bankrate’s use of the Mark. Yet Neutron Depot does not identify any evidence to support either of these assertions. Turning first to Neutron Depot’s alleged financial losses, Neutron Depot has presented no evidence it has lost any sales or profits as a result of Bankrate’s use of the Mark. Though Neutron Depot offers the conclusory assertion that it has suffered “financial loss” because of Bankrate’s infringement, the only evidence it cites in support is CSi’s unsupported belief the Mark has been harmed. But Neutron Depot itself has pointed to no evidence of either lost sales or lost profits in support of its contention it has been financially harmed by Bankrate’s use of the Mark. And although Neutron Depot argues it has suffered “loss of goodwill” because of Bankrate’s infringement, Neutron Depot has presented no evidence as to either the value of its goodwill or the magnitude of the alleged loss….

Neutron Depot has not pointed to evidence creating a genuine issue of material fact as to its entitlement to an unjust enrichment award. Specifically, the Court finds Neutron Depot has not raised evidence suggesting Bankrate took “undue advantage” of Neutron Depot by infringing upon the Mark. Though Neutron Depot argues Bankrate took undue advantage by using the Mark as a search engine keyword, this sort of infringement, without more, is insufficient to create an issue of fact as to Neutron Depot’s entitlement to an unjust enrichment award.

This lawsuit has been going on for over 4 years, even though Bankrate apparently got only 73 clicks on its ads and generated less than $1,000 in revenues. FFS.

* Universal Church, Inc. v. Universal Life Church/ULC Monastery, 2017 WL 3669625 (S.D.N.Y. Aug. 8, 2017):

At most, plaintiff’s evidence suggests that someone searching the Internet for “universal church” will sometimes land on defendants’ website. However, the evidence generally fails to establish (1) that this occurs because of defendants’ use of the “Universal Church” mark or (2) that individuals searching for “universal church” are actually searching for plaintiff….

Plaintiff’s survey attempts to measure the extent to which someone googling “the universal church” would believe that he had landed on a website for an entity called “The Universal Church.” However, we find the survey of limited value since the survey takers were simply told that they were searching for a generic entity named “The Universal associated such an entity with plaintiff….

On one hand, plaintiff does not contest defendants’ right to use the name “Universal Life Church,” and therefore defendants have a legitimate, good faith reason to use “universal” and “church” in their search engine optimization strategies. Moreover, it is difficult to imagine what benefit or motive defendants would have to trade off plaintiff’s goodwill. On the other hand, a reasonable juror could find that defendants’ use of the mark “universal church” in various domain names, on their website, in metadata, and in search terms, could be construed as evidence of an intent to capture Internet users looking for plaintiff’s organization. Because a reasonable juror could find this factor in either parties’ favor, we assume that it points in plaintiff’s favor for purposes of summary judgment.

* Synoptek, LLC v. Synaptek Corp., 2018 WL 1980748 (C.D. Cal. March 5, 2018): “Synoptek only speculates that such diversion will occur, without any evidence regarding consumers actually being diverted. In light of the Ninth Circuit’s treatment of initial interest confusion and the lack of evidence presented here, the Court gives little weight to Synoptek’s hypothesis that its consumers will be diverted to Synaptek’s website.”

* Klumba.UA, LLC v. Klumba.com, 2018 WL 2766147 (E.D. Va. June 8, 2018): “Plaintiff next argues that its business relationship with Google via Google’s AdSense program qualifies as use of the mark in commerce, and that plaintiff uses its Klumba mark in connection with plaintiff’s business with Google. …It is of course undisputed that plaintiff sold space to Google, but that alone is insufficient to establish that plaintiff used the Klumba mark in United States commerce.”

* Tempur-Pedic North America v. Mattress Firm, 2017 WL 2957912 (S.D. Tex. July 11, 2017)

the Mattress Firm Web Page, particularly in its first and second revisions, contains a number of elements that appear to trade on the Tempur-Sealy brand in order to draw in the consumer. Elements of the first and second revisions that trade on the Tempur-Sealy brand include: a headline banner with “Tempur-Pedic” in large font, a banner implying that product delivery is available, that the web page contains “everything you need to know” about TempurPedic mattresses, a “learn more” button, a repetition of Tempur-Sealy brand names throughout the page, and another banner describing the various Tempur-Sealy products. Id. The third revision mitigates some of these issues, particularly by removing the Tempur-Pedic name from the large-font headline banner, but it still retained some of these elements. Furthermore, the consumer might be directed to the Mattress Firm Web Page by searching “tempur pedic” with Mattress Firm’s search functionality, another factor the court finds might produce initial-interest confusion. Id. Mattress Firm was previously a long-standing Tempur-Sealy retailer, meaning when the web page is considered in the context of consumer perception, a consumer may more readily assume that Mattress Firm is affiliated with TempurSealy. Therefore, the court concludes that Mattress Firm Web Page’s use of Tempur-Sealy Marks is likely to create initial-interest confusion.

Courts have consistently rejected the notion that buying or creating internet search terms, alone, is enough to raise a claim of trademark infringement…. the AdWords direct consumers to the Mattress Firm Web Page, not Mattress Firm’s main index page. The court has already found the first, second, and possibly the third revision of the Mattress Firm Web Page make extensive use of Tempur-Sealy Marks and are likely to cause consumer confusion that the page is selling Tempur-Sealy products. A consumer navigating to the Mattress Firm Page by following a link promoted by AdWords after a search of a Tempur-Sealy product name is likely to perceive an affiliation with the TempurSealy brand. However, the court concludes the corollary is also true—the mere purchase of AdWords alone, without directing a consumer to a potentially confusing web page, is not sufficient for a claim of trademark infringement. Therefore, the court concludes that the purchase of Tempur-Sealy AdWords to direct users to the Mattress Firm Web Page supports a finding that Mattress Firm’s use of the Tempur-Sealy Marks is likely to cause confusion….

the injunctive relief will allow Mattress Firm to maintain a web page that uses Tempur-Sealy Marks for the limited purpose of comparative advertising. But the injunctive relief will require Mattress Firm to limit its use of Tempur-Sealy Marks to an amount necessary for the comparison and will require a disclaimer to further reduce the likelihood of confusion. Because the court has concluded that the purchase of AdWords alone, without directing consumers to a potentially confusing website, is unlikely to cause customer confusion, the AdWords will not be included in the injunction.

Other IP

* The Hustle: Sears screwed over a small-time wrench inventor — but he fought back

* Forbes: After 10 Years, Nathan Myhrvold’s $3 Billion Of Private Equity Funds Show Big Losses

* Econofact: The Chilling Effect of Non-Compete Agreements