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Recent California cases provide a bit more clarity on internet keyword advertising as infringement

November 29, 2012 0 Comments

Internet lawEarlier this month the Rosetta Stone Settlement jammed a final nail into the coffin of the slowly dying hope that we would someday receive some clarity on whether certain types of internet keyword advertising could infringe existing trademark rights. (Recall that Rosetta Stone sued Google over use of its trademarks by third-parties in Adwords — now with the case settled we can’t know for sure how a court would rule on the legality of such keyword advertising).

Plaintiffs’ attorneys, not so fast! Case by case we are receiving some clarification from various lower courts on whether they consider internet keyword advertising a potential trademark infringement.

Enter Louisiana Pacific Corp. v. James Hardie Building Products, Inc., 2012 U.S. Dist. LEXIS 162980 (N.D. Cal. Nov. 14, 2012):

In Louisiana Pacific Corp. the plaintiff sued on two counts over defendant’s alleged use of its trademarks in keyword advertising: (1) the obvious count of trademark infringement and (2) tortious interference with prospective business advantage. Granting a motion to dismiss, the Northern District of California ruled on the trademark claim that the plaintiff failed to adequately plead all of the trademarks which it claims that defendant had infringed (unfortunately this, again, does not much help clarify whether such keyword advertising is an infringement but simply dismisses the claim on a technicality).

The tortious interference claim is interesting, however, because it was dismissed on the simple basis that potential customers searching a party’s trademarked terms does grant the trademark owner any form of “ownership” over that potential relationship. As the court stated:

Plaintiff’s argument lacks merit as it is premised on the unfounded assumption that a person forms a business relationship with Plaintiff when he or she enters particular terms in Google’s search engine. There is a possibility that consumers who search for Plaintiff through Google will choose to purchase Plaintiff’s goods or services at some point in the future; however, such consumers do not have an existing business relationship with Plaintiff merely because they perform an internet search.

This ruling has some, if not a tremendous amount of, relevance to the trademark claims. Specifically, where trademark infringement is founded on the policy of avoiding consumer confusion, a court saying that searching a keyword does not necessarily guarantee that the searcher will become the keyword owner’s consumer is, in a roundabout fashion, the same as saying that there is no potential consumer confusion in internet keyword advertising (and therefore no infringement).

Hopefully we’ll see some major cases further clarify this issue soon.

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