Published by LawTechie - March 9, 2011 - LawTechie

A software vendor’s use of a competitor’s trademarked name in Google’s Adwords marketing did not constitute trademark infringement rules 9th Circuit. Network Automation, Inc. v. Advanced Systems, 10-55840 (9th Cir. 2011).

Advanced Systems is a companion case to this summer’s Rosetta Stone lawsuit against Google for enabling such alleged trademark infringement. (Recall that Rosetta lost its case in the District Court in Alexandria, Virginia and is now lobbying Congress for legislative recourse while it waits on its appeal in the 4th Circuit.)

In Advanced Systems, plaintiff convinced the lower court to issue an injunction against its competitor by arguing that defendant’s Google Ad was not a clearly labeled advertisement and was, therefore, likely to confuse consumers into believing that defendant’s landing page was associated with plaintiff. The 9th Circuit flatly disagreed:

Google and Bing have partitioned their search results pages so that the advertisements appear in separately labeled sections for “sponsored’ links.

Takeaway: Using competitors’ trademarked terms in Adwords may not constitute infringement as courts across the country seem less inclined to view Google Adwords as a vehicle for infringement as such.

Also, the 9th Circuit at least, seems to view clearly labeled advertising as a decent disclaimer against infringement (although the question remains as to why the 9th Circuit does not consider “clear” advertising of a competitor’s mark to be likely to cause consumer confusion since trademark owners have a tendency, some would say statutory duty, to advertise their own brands on some regular basis).

Addendum: It should be noted that the 9th Circuit’s decision was based on its view that the lower court did not properly weigh the Sleekcraft factors in determining the likelihood of confusion. Specifically, the District Court gave too much weight to the Internet “troika” factors first presented in connection with internet infringement in Brookfield, and should have analyzed all relevant factors “flexibly.”

Adwords Standard: The four Sleekcraft factors considered by the 9th Circuit as most relevant to trademark infringement in the context of internet keywords are (1) strength of the mark; (2) evidence of actual confusion; (3) type of goods and degree of care likely to be exercised by the purchase; and (4) the labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.

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