📽 Universities & IP Workshop, March 2017 - Berkman Klein Center

Stealth Trademarks: Ad Keywords

Finally, the situation which is the goldmine (actually it is more like a copper mine, as in, it generates a few pennies every day) for small publishers like Cybertelecom: advertising generated by search engine companies based on keywords. The search engine company will let an advertiser bid on trigger-terms – any trigger-terms. The advertiser’s ads can appear in one of two ways: First, when those trigger-terms are typed into the search engine, the ads can appear on the search engine results page, normally designated as paid-for search results. Second, when a third-party website has embedded advertisements from the search engine and is somehow related to a trigger-term, an advertiser’s ad can appear in a little advertisement box (see the Google Ads on the left column of this blog).

Neat! So if an individual is searching for the AcmeNetLaw website and types that trigger-term into a search engine, I could use Acme’s trademark as a trigger-term to get an ad for Cybertelecom to appear! If the individual visit’s the AcmeNetLaw website, and the AcmeNetLaw website has those embedded search ads, my Cybertelecom advertisement could appear (well not really, Google Ads provides a tool to block advertisements from competitors appearing on my website – If AcmeNetLaw fears Cybertelecom, it can block CT). Does this opportunity stumble over trademark law?

Before we go forward, let’s go backwards to the video tape. What constitutes a Lanham Act trademark violation? To prevail on a trademark infringement claim for a registered trademark, a Plaintiff must establish that:

(1) he has a valid mark that is entitled to protection under the Lanham Act;

(2) defendant used the mark;

(3) in commerce;

(4) in connection with the sale or advertising of goods or services; and

(5) without plaintiff's consent.

Okay, you metaphysicians, if the use of the trigger-term is stealth – is it “used in commerce”? Trademark law is all about consumer protection. We want to prevent consumers from being confused about products and services. When a consumer has come to expect a lousy burger and fries from ACME Burger Joint, we want the consumer to always get that same lousy burger and fries wherever they see the ACME Burger Joint trademark. There would be a conundrum if ZETA Veggie Burger Joint used the ACME trademark and slipped people nutritious delicious tofu burgers. The key to trademark violations is the visible identification of the trademark with an imposter’s product or service. So, like the fallen tree, if a trademark is used in the forest and no one is there to visually identify it, is it “in use”? If not, the trademark violation claim fails. A lot of the cases turn on this metaphysical point, and as with the previous cases we have reviewed, the courts are not at all settled on how they want to come out on this one. Let’s look at two recent cases, one where the court finds that the trademark is used in commerce, and one where the court does not so find.

The first case from this year is quite interesting because, while it does in fact find that the trademark is in use in commerce, it still, nevertheless, finds for the defendant. JG Wentworth SSC Ltd v Settlement Funding LLC, No 06-0597 (EDPa Jan 4 2007). In this case, Plaintiff Wentworth is a finance company that provides cash now in exchange for something of value in the future – like if you win the lottery and would get it in 10 payments over the next 10 years – Wentworth would give you cash now for that future value. Defendant Settlement Funding apparent does pretty much the same thing. Both parties have websites and, according to the allegations, Defendant used Plaintiff’s trademark “JG Wentworth” as a trigger term for Google Ads (there is also a metatag argument in this case, but we dealt with metatags in the first article in this series). Claiming that Defendant was taking unfair advantage of the value Plaintiff had bestowed in its trademark, Plaintiff sued.

The court is not perfectly clear why it comes down in favor of “in use.” It reviews a bunch of non-binding cases from other jurisdictions that conclude that stealth trademarks are not in use - brought up by defendant - and some conflicting non binding cases that conclude that they are. And the court basically brushes it all aside stating that defendant is unpersuasive. The court simply lines up on the side of the “in use” cases, stating

But like [those cases], I recognize that defendant’s use of plaintiff’s marks to trigger internet advertisements for itself is the type of use consistent with the language in the Lanham Act which makes it a violation to use “in commerce” protected marks “in connection with the sale, offering for sale, distribution, or advertising of any goods or services,” or “in connection with any goods or services.”

Okay, why? The court acknowledges that it lines up with those cases, but it doesn’t really specify why that line of cases is more persuasive.

The court is more articulate on the next criteria, whether there is any “confusion.” Now, it is important to understand what is going on here. This is not a bait-and-switch thing where the consumer is asking for an ACME Lousy Burger and getting a ZETA Tofu Burger instead. This is a computer user typing “JG Wentworth” into Google, and getting a result page where “JG Wentworth” is likely the top result – go ahead and see what the results page would look like by clicking here (but promise to come on back). In addition to Plaintiff’s link, a whole bunch of other stuff comes up too. But it’s all there. Consumer is not getting one product in place of another – consumer is getting what they asked for… and some other stuff too.

Think about it differently. You go to a grocery store. You ask the clerk for ACME Lousy Frozen Burgers. And when you go to the shelf, there are the ACME Burgers along with ZETA Tofu Burgers. Has ZETA committed a trademark violation for being on the same shelf as ACME. No. So if you see a Google results page that has the ACME Burgers, and a listing for ZETA burgers right next to it, would you be any more confused?

At no point are potential consumers “taken by a search engine” to defendant’s website due to defendant’s use of plaintiff’s marks in meta tags. Rather, as in the present case, a link to defendant’s website appears on the search results page as one of many choices for the potential consumer to investigate. As stated above, the links to defendant’s website always appear as independent and distinct links on the search result pages regardless of whether they are generated through Google’s AdWords program or search of the keyword meta tags of defendant’s website.

Wentworth at 14.

It seems like the court wants to dodge the “in use” question for the “confusion” question. The “in use” analysis is a muffled flip-of the coin – on the one hand here is a bunch of cases, on the other hand here are some different cases and (flip), ah, I chose the former over the later. Where the court is persuasive is the critique of confusion. Whatever it is that is going on, the consumer is getting what they are asking for. The defendant is not engaged in counterfeiting; the defendant is not engaged in bait-and-switch. The defendant’s listing is simply listed on the result page as a “sponsored link” off on the side, or in a shaded box, where plaintiff’s link is front and center. Only a fool (or a lawyer, ah but I repeat myself) would be confused in this situation.

A more recent case Site Pro-1 v Better Metal, Inc., 06-CV-6508 (ILG) (RER) (EDNY May 9th, 2007), returned to the issue of “in use.” This case involved two parties that (according to the court decision) were involved in the sale of equipment used to construct wireless telecom towers. Plaintiff complained that defendant had placed “site” “pro” and “1” in metatags on its website, and purchased a sponsored search at Yahoo! based on those terms. Defendant responded, “yeah, so?! We aint ‘used’ the your trademark.” The court did a nice review of precedent and stated “The key question is whether the defendant placed plaintiff’s trademark on any goods, displays, containers, or advertisements, or used plaintiff’s trademark in any way that indicates source or origin.” In other words, does the consumer perceive the trademark and is the consumer thereby confused. It was undisputed that the use of the trigger-terms was entirely stealth – that the terms did not appear on defendant’s products or website in any way. As such, the court ruled, plaintiff’s claim that defendant is up to bad things fails.

Ah, but wait! Before I could finish this post, yet another case crosses my desk: Fragrancenet.com, Inc. v FrangrenceX.com, Inc., No. 06-CV-2225 (JFB) (AKT) (EDNY June 12, 2007). This case is so much like all the others that I will not bother to hit the auto-replay button for you. The decision is very well written and reviews most of the recent precedent. But the judge takes the analysis one step further. Plaintiff tries to make a fuss based on a New York theory of Passing Off. The court pummels this attempt, stating that this is not a case of Defendant trying to pass off its products as plaintiffs. Rather, this is a case where a consumer uses a trigger-term, and is presented with what the consumer is asking for, along with alternatives, and in a competitive capitalistic market, we like alternatives and choice!

In the world outside the Internet, individuals in search of a company or product are not blinded to competitive products. In other words, it is not unlawful to strategically place billboards or even store locations next to billboards or store locations of competitors. For example, an individual in search of a McDonald’s restaurant will often be confronted with a Burger King restaurant. As long as Burger King did not mislead the consumer under false pretenses to its location, the mere fact that it decided to place itself in close proximity to a McDonald’s, in an effort to potentially draw customers in search of fast food, is not “passing off.”

Slip p. 7. If you ask for a Coke, and are told you can have a Coke, a Pepsi, a rootbeer, or an iced tea, the court approvingly says, this is not confusion, this is the presentation of alternatives. Likewise the use of trigger-terms that produce desired results in search engines along with choices is not confusion - it is the presentation of alternatives.

The outcome of this line of cases if obviously very important. Currently search engines advertising companies can sell any trigger-word available, whether it is someone’s trademark or not. If this type of stealth trademark usage violates the Lanham Act, what type of liability would search engine companies have in these situations and what measures would they be forced to take in order to avoid this liability? It could create a substantial challenge for them to know that a trigger-term is a trademark, especially since pursuant to trademark law, the use of the term in one context could pose a violation where the use of the term in another context might not.

Personally I sort of agree with the Wentworth court here in rejecting the if-you-cant-see-it-its-not-in-use court decisions. The rule appears to be (a) for a trademark to be “in use,” it must be perceived, and (b) to be perceived means visually to see the mark. But seeing a trademark with one’s eyeballs is not the only way to perceive a trademark. I can perceive a trademark by hearing it. I can perceive a trademark by feeling it (particularly if I am blind and am reading Braille). In order to perceive it, I may require the use of some artificial device such as glasses, a hearing aid, or a camera. So why cant I “perceive” a trademark through the means of a computer? Has not a computer become an extension of my mental abilities akin to the primitive glasses and hearing aids? In an attempt to find a thing, I can look for it, I can feel for it, I can listen for it, or, perhaps, I can use my computer. The courts struggle with this line of cases and rightly so. A disruptive technology is taking old law to an entirely new place and the judges lack a solid footing on which to stand. The archaic suggestion that data in the virtual world is beyond human perception, if taken to be true, would fundamentally disorient and divorce the virtual world from the legacy world. We must reconceive our notions of perception and comprehend to degree to which computational power is becoming an amplification and extension of our abilities. To request that a computer find a trigger-term, and to have the computer present results means the computer as our agent perceived that trigger-term somehow associated with those results. We have perceived it.

However, Wentworth is right that this is not the end of the analysis. Getting beyond the metaphysics of perception is the obvious question of confusion; no one is confused here. As the court in Fragrancenet.com indicates, the presentation of alternatives is not confusion. As individuals’ general online experience matures, individuals’ know that search engines presents, if they are lucky, the trigger-term desired, and anything else associated with that trigger term. We may not know exactly what caused the paid-for ads to appear; we don’t care. We know there is a clear difference between the top results which hopefully contain our target, and the promises of fame and fortune in the advertisers box. We are not confused.

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Stealth Trademarks: The Use of Trademarks As Ad Keywords, In Metatags, And In Pop-Ups

Is it wrong for me to use your trademark? Is it wrong for me to use your trademark to attract traffic to my website, if no one sees me using your trademark?

This is a contentious issue that the courts have struggled with. Of course, the use of trademarks in domain names has been explosively contentious, driving DNS policy. The use of a trademark in a domain name is a very visible use of the mark, in an environment where the supply of available opportunities to use the mark is limited (there are only so many dot-coms after all; there is dot-com, dot-biz, dot-ccTLDs, dot-org, dot-edu, dot…. Well, okay there are more opportunities now then there use to be and there would be a lot more opportunities if ICANN would approve more gTLDs). The DNS-Trademark contention has led to the creation of the Uniform Dispute Resolution Policy, the AntiCybersquatter Protection Act, the Fraudulent Online Identity Sanctions Act, lots of trademark litigations, and lots of activity before the World Intellectual Property Organization (WIPO).

But here we deal with the stealth use of trademarks. No human sees them. No human is getting confused by the ALPHA trademark that appears super-glued to BETA’s product.

There are three different models of stealth trademarks: metatags, keywords for search engines, and pop-ups. These models are very closely related, as are the legal proceedings that struggled with them.

Let’s start with the easy model: metatags. And by “easy,” here I mean the courts have a sort of rough consensus on outcome. In these cases, website owners insert trademark terms into the metatags of their webpages. After search engine spiders crawl and index these pages, the metatags will act as trigger-terms, causing the webpage in question (at least in theory) to appear in search results when that trademark is typed into a search engine (rumor has it that a lot of search engines now simply ignore metatags). The courts have generally thought that this use of metatags does not constitute playing nice.

Courts needed to find a confusion between plaintiff’s invisible trademark and defendant’s products, and in order to do this, they have relied on something known as Initial Interest Confusion. This doctrine was well articulated in the case Brookfield Communications v West Coast Entertainment, 174 F.3d 1036 (9th Cir. 1999). Of course, everything was well articulated in Brookfield; dare read that case only if you have a pot of coffee and a lot of spare time on your hand.

In Brookfield, according to the court opinion, plaintiff Brookfield gathered and sold information concerning the entertainment industry. One of its products is a searchable database called “MovieBuff,” which it began to sell in 1993. In 1996, Brookfield attempted to register the domain name moviebuff.com but had been beaten to the punch by defendant. So Brookfield registered “moviebuffonline.com,” set up a website, and sold its MovieBuff software. In 1997, Brookfield registered “MovieBuff” as a trademark.

As for defendant, West Coast, a video rental store chain – it had registered the domain name moviebuff.com in 1996 and had launched its website moviebuff.com in 1998 (I will not confuse you with other facts such as West Coast had acquired a service mark for “The Movie Buff’s Movie Store” in 1991, had marketed goods and services since 1988 using the term “Movie Buff,” or that the court concluded that defendant’s “Movie Buff’s Movie Store” mark was different than plaintiff’s “MovieBuff” mark because of the spaces between the words – and therefore not prior – but that defendant’s moviebuff.com domain name was identical to plaintiff’s “MovieBuff” mark – ignoring that domain names can’t have spaces or “moviebuff.com” had four additional non identical symbols.).

In the 36 or so arguments of defendant’s that the court obliterated was the argument that, as the defendant registered the domain name moviebuff.com in 1996, and as this was prior to plaintiff’s registering the trademark MovieBuff in 1997, defendant wins on the ground of prior use. The court rejects this argument on exactly the same grounds that subsequent courts will reject this court’s holding: if it can’t be seen, it’s not “in use in commerce” as required for a trademark violation.

Registration with Network Solutions, however, does not in itself constitute "use" for purposes of acquiring trademark priority. The Lanham Act grants trademark protection only to marks that are used to identify and to distinguish goods or services in commerce -- which typically occurs when a mark is used in conjunction with the actual sale of goods or services. The purpose of a trademark is to help consumers identify the source, but a mark cannot serve a source-identifying function if the public has never seen the mark and thus is not meritorious of trademark protection until it is used in public in a manner that creates an association among consumers between the mark and the mark's owner.

Brookfield ¶ 7. If it can’t be seen, then it’s not “in use” - hold that thought until we get to the next scenarios.

So after about three hours of reading about how MovieBuff was prior to MovieBuff, but different than MovieBuff, and therefore the use of the domain name moviebuff.com was a trademark violation, you get to the tagged-on argument about metatags (in other words, defendant had not just lost by this point; defendant had been beaten into a pulp by the court). It is now firmly established in the court’s opinion that plaintiff can do no wrong and defendant can do no right. Obnoxious defendant (the one that had been using the phrase “Movie Buff” for five years prior to plaintiff’s use) dared to visibly label its goods and services with the domain name moviebuff. Now the court considers whether defendant can use a stealth trademark in its metagags as trigger-term for search engines. The public cannot see the mark; there is no visible association between the stealth-mark and the defendant’s good and services. But the defendant is evil! The Court must bend it so that defendant has been bad once again, and therefore articulates the doctrine of Initial Interest Confusion in terms of metatags:

Web surfers looking for Brookfield's "MovieBuff" products who are taken by a search engine to "westcoastvideo.com" will find a database similar enough to "MovieBuff" such that a sizeable number of consumers who were originally looking for Brookfield's product will simply decide to utilize West Coast's offerings instead. Although there is no source confusion in the sense that consumers know they are patronizing West Coast rather than Brookfield, there is nevertheless initial interest confusion in the sense that, by using "moviebuff.com" or "MovieBuff" to divert people looking for "MovieBuff" to its web site, West Coast improperly benefits from the goodwill that Brookfield developed in its mark.

There’s no source of confusion; defendant this time has no visible use of plaintiff’s mark; the not-confused consumer has a results page in front of the consumer with both MovieBuff and West Coast – not-confused customer can pick the product that the not-confused customer asked for, or something else - and there will always be something else on the search results page. Because this not-confused consumer might elect to visit some other website than plaintiff’s, this makes defendant, once again, evil – and the not-confused customer is mysteriously confused as legally required.

Bad cases make for bad law. It’s clear the court did not like defendant’s use of “MovieBuff” in its domain name and it’s clear that the courts grasp of the Internet was novice at best. Brookfield was really a strong trademark-domain name case, with a weak meta-tag issue tagged on. It was an afterthought – and this afterthought set the course that many other cases followed. See, e.g., Promatek Industries v. Equitrac Corp, 300 F.3d 808 (7th Cir. 2002); Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d 456, 464 (7th Cir. 2000)

Not all courts, however, have bought into the Brookfield inquisition. See Site Pro-1 v Better Metal, Inc., 06-CV-6508 (ILG) (RER) (May 9th, 2007). As time has progressed, the metaphysical contradiction that the non-visible use of a trademark in one place did not constitute “a use” where in another place it did was too perplexing.

Final lark: After what must have been a costly litigation, the moviebuff.com domain, at the time of this writing, is no longer a working website!

In the next scenario, someone gets the bad idea of using stealth trademarks as trigger-terms in order to cause pop-up ads to appear!