Internet search engines such as Google and Yahoo! earn a majority of their profit from selling advertisements to appear next to search results. Google’s coveted advertising space, however, causes nightmares for trademark holders when their trademarks are auctioned by Google to competitors as keywords to trigger the competitors’ advertisements when the trademark is used as a search term. Advertisers strategically bid on trademarks of competitors to ensure that their ads appear whenever the trademark is used as a search term, instead of the advertisements of the trademark holder, as a way to gain visibility and lure consumers away from the trademark holder.

Trademark holders object to this practice on the basis that it allows competitors to free ride off the goodwill and reputation of a trademark when used for the specific purpose of diverting consumers. When a trademark is sold to trigger a sponsored link that does not contain the trademark anywhere in the text of the ad, the sale of the trademark itself is an invisible trademark use–that is, it is not visible to the consumer except when the consumer types the trademark as a search term. Trademark plaintiffs have struggled to prove that such invisible trademark uses satisfy the two key components of a federal trademark claim: (a) a use in commerce that (b) is likely to cause consumer confusion.

Courts both inside and outside the U.S. have struggled with how to properly apply trademark law to the keyword advertising context in a way that promotes fair competition while also upholding policies that protect trademark owners’ rights, including those of the mark’s reputation and goodwill. The Second Circuit’s 2009 decision in Rescuecom Corp. v. Google, Inc. harmonized the federal Courts of Appeals on the issue of use in commerce by holding that the sale of trademarks as keywords does constitute the requisite use for an infringement claim. Now that courts agree that the sale or purchase of a trademark keyword constitutes a use in commerce, claims will boil down to the issue of a likelihood of confusion.

Because the harm of a keyword case–misappropriation of a mark’s goodwill–falls on the trademark owner, rather than the consumer, this Note proposes that keyword plaintiffs should not have to prove the element of consumer confusion. Rather, the defendant’s intent to divert consumers and free ride off the mark’s goodwill should replace the element of confusion. This Note examines the application of initial interest confusion as evidence that U.S. courts are already moving in this direction. The Note also evaluates the judicial landscape on the topic in countries outside the U.S. to illustrate how Google’s treatment of trademark complaints is directly tied to how aggressively a country’s courts treat keyword advertising infringement suits. The Note explains why it is important that, rather than precluding the development of case law, Google and other search engines help remedy the situation by adopting policies that are more favorable to trademark holders and consistent across national boundaries.

Note Author: Rachel Friedman

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