Display of Competitor Trademarks in Search Engine Advertisements is not Required for Keyword Infringement Claims to Proceed
The U.S. District Court for the Northern District of Illinois recently held that the purchase and use of a competitor’s trademark as a keyword to generate pay-per-click advertising on search engine websites including Google®, Yahoo®, AOL® and MSN® may infringe a trademark even if the competitor’s mark is not displayed in the advertisement itself. Morningware, Inc. v. Hearthware Home Products, Inc., Case No. 09 CV 4348, 2009 WL 3878251 (N.D. Ill. Nov. 16, 2009). In Morningware, the court ruled that mere appearance of the keyword purchaser’s advertisement as a sponsored link on a search results page, with or without the plaintiff’s trademarked term in its text, could cause “initial interest confusion” by diverting internet users searching for the plaintiff’s product to the website of the defendant, even though consumers might only be briefly confused. Denying the defendant’s motion to dismiss, the court reminded that “initial interest confusion is an actionable form of trademark infringement under the Lanham Act.”
According to the complaint filed in the case, Morningware and Hearthware compete for sales of counter-top electric ovens. Hearthware used the registered MORNINGWARE trademark as a keyword in Google’s Adwords program to prompt the following advertisement for Hearthware’s own brand of stove: “The Real NuWave® Oven Pro Why Buy an Imitation? 90 Day Gty." When internet users typed the term “morningware” into Google, Hearthware’s advertisement appeared at the top of Google’s search results page. Morningware claimed that the topmost placement of the advertisement coupled with the “why buy an imitation” statement constituted a false claim of product superiority over Morningware’s products and misled and/or confused consumers into believing Morningware’s products were inferior to Hearthware’s because they were “imitations,” and thus fakes, of Hearthware’s products. By diverting consumers who typed the term “morningware” into a search engine from Morningware’s website to Hearthware’s website, Morningware claimed that Hearthware also misled and/or confused consumers into falsely believing that Morningware sponsored Hearthware’s own website and that Morningware countertop ovens were available from Hearthware.
The court agreed that Morningware sufficiently alleged both ownership of a valid and protected mark and that Hearthware’s purchase of Morningware’s trademark as a search term constituted “use in commerce” of that mark, citing with approval the Second Circuit’s seminal decision in Rescuecom Corp. v. Google, Inc, 562 F.3d 123, 130-121 (2nd Cir. 2009). The court also agreed that Morningware sufficiently alleged a likelihood of confusion, noting that initial interest confusion can occur “when a customer is lured to a product by the similarity of the mark, even if the customer realizes the true source of the goods before the sale is consummated.” It found particularly persuasive Morningware’s allegation that Hearthware’s advertisement did not mention Hearthware and thus consumers who viewed the Hearthware advertisement after searching for the term “morningware” in Google could be misled to believe that Hearthware’s link was sponsored by Morningware. Morningware referred to this in its complaint as deceptive “bait and switch,” in that once a potential customer entered Hearthware’s website by clicking the link, Morningware’s products were not offered or mentioned.
Although Morningware’s infringement claims have passed the pleadings stage, it remains to be seen whether the court will actually find infringement, i.e., a likelihood of consumer confusion. As one court recently stated, in a given keyword case, the question of “likelihood of confusion will ultimately turn on what the consumer saw on the screen and reasonably believed, given the context.” Hearts on Fire Co. v. Blue Nile, Inc., 603 F. Supp. 2d. 274, 289 (D. Mass. 2009).
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Keyword advertising is a multi-billion dollar revenue stream for search engines and is gaining popularity as companies face pressure to direct more internet users to their websites and away from their competitors. Although the legality of keyword advertising programs such as Google’s Adwords® is being disputed in court rooms across the U.S., it is doubtful these programs will cease to exist in the near future. See, e.g., Jurin v. Google, Inc., Case No. 2:09-cv-03065 (E.D. Cal. Feb. 26, 2010) (holding that the Communications Decency Act protects Google from liability). As keyword lawsuits against search engines work their way through the court system, brand owners will have to continue to routinely monitor search engines for unauthorized use of their marks by both individual competitors and anonymous infringers seeking to gain unfair advantage through sponsored links, hidden meta-data, cybersquatting and other forms of online infringement. Brand owners also may consider purchasing their trademarks as keywords from search engines to raise the bidding price on such terms, which can serve as a deterrent against infringement.
McKenna Long & Aldridge provides its clients with comprehensive counseling and litigation services to help combat internet infringement including keyword advertising. If you have any questions regarding these issues, please contact us.
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