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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Trademark - Use in Commerce - Internet Library of Law and Court Decisions - Updated October 8, 2008

309 F.Supp.2d 467 (S.D.N.Y., Dec. 22, 2003), reversed in part and remanded, -- F.3d -- (2d. Cir., June 27, 2005)

Finding plaintiff likely to prevail on its claims of trademark infringement, the District court issued a preliminary injunction, enjoining the pop-up advertiser WhenU from delivering ads which are triggered by a consumer's entry of plaintiff's domain name in either his browser or a search engine, or from including plaintiff's domain name in defendant's proprietary directory, which is used to identify the ads to be delivered to consumers.  Defendant WhenU delivered pop-up ads of plaintiff's competitor to computer users when they typed plaintiff's domain name into either their browser or a search engine.  The court found such conduct likely to cause actionable "initial interest confusion" and to allow defendants to divert consumers seeking plaintiff's products to their own offerings, and thereby unfairly profit from plaintiff's goodwill.  Applying the eight factor Polaroid test, the court found that consumers were likely to be confused by defendants' actions, despite the branding of defendant's advertisements as "a WhenU offer."  As such, the court held that plaintiff was likely to prevail on its trademark infringement claims, and enjoined defendants from continuing to use plaintiff's domain name as a trigger for the delivery of advertisements. 

The court also held that plaintiff was unlikely to prevail on its copyright infringement claims, which arose out of the delivery of pop-up advertisements in a "window" which partially covered the 'window' in which plaintiff's site appeared on a consumer's computer screen.  The court found that this conduct neither violated plaintiff's right to display its copyrighted website, nor its right to create derivative works therefrom.  This later ruling was premised on the court's determination that defendant's ads are not sufficiently fixed to constitute an infringing derivative work.

The court's holding on plaintiff's trademark infringement claims is at odds with that reached by two other district courts - the District Court for the Eastern District of Virginia in U-Haul International, Inc. v., 279 F.Supp. 2d 723 (E.D.Va. 2003), and the District Court for the Eastern District of Michigan in Wells Fargo & Co. v. WhenU., 2003 WL 22808692 (E.D. Mich. 2003), each of which refused to issue similar injunctive relief.  As the Southern District of New York court noted, "this Court disagrees with, and is not bound by these findings."

2000 U.S. Dist. Lexis 14180, 119 F. Supp. 2d 309 (S.D.N.Y., September 28, 2000)

Court refuses to enjoin defendants from operating web sites critical of plaintiffs' business, or from utilizing plaintiffs' common-law service mark in meta tags on those sites to attract visitors seeking information about plaintiffs. The court also refused to enjoin defendants from continuing to publish allegedly libelous statements about plaintiffs on their web sites.

403 F.3d 672 (9th Cir., April 4, 2005)

In this domain name dispute, the Ninth Circuit holds that the use of another’s trademark as the domain name for a non-commercial gripe site does not constitute trademark infringement or dilution in violation of the Lanham Act.  To run afoul of the Lanham Act, a mark must be used in connection with the sale of goods or services.  A web site which is merely critical of another’s goods or services does not fit this bill.  The Ninth Circuit accordingly affirmed the District Court’s grant of summary judgment, dismissing plaintiff’s trademark infringement and dilution claims.

The Ninth Circuit reversed, however, so much of the District Court’s decision which dismissed plaintiff’s Anticybersquatting Consumer Protection Act (“ACPA”) claim.  The ACPA does not have a commercial use requirement, and, accordingly, establishing that the mark was used as the domain for a non-commercial gripe site does not absolve the griper from potential liability under the ACPA.  Because that was the basis on which the lower court dismissed plaintiff’s ACPA claim, its dismissal was reversed.  The matter was remanded to the District Court to determine whether defendant used the mark with a bad faith intent to profit therefrom, in violation of the ACPA.

2006 WL 737064, Civil No. 04-4371 (D. Minn. 2006) (JRT/FLN)

The Court holds that the purchase of keyword advertisements triggered by a search containing another's trademark constitutes a use of that mark in commerce sufficient to give rise to trademark infringement claims.  The Court accordingly denied a motion by defendant The MLS to dismiss trademark infringement claims arising out of its purchase of keyword advertisements from Google and Yahoo that displayed 'sponsored links' to defendant's website when a user entered plaintiff's Edina Realty trademark as a search term.

The Court also denied defendant's motion to dismiss trademark infringement claims arising out of its use of plaintiff's mark in hidden text and links found on its website, and in the text of its sponsored links, which motion was premised on the ground that this was a permitted nominative fair use of plaintiff's marks.  Adopting the 'fair use' test followed by the Third Circuit, the Court held such uses of plaintiff's mark were not necessary to the description of defendant's product or services.

Finally, the Court dismissed trademark dilution claims advanced by plaintiff Edina Realty as a result of its failure to provide evidence of actual dilution.

177 F. Supp. 2d 661, 2001 U.S. Dist. Lexis 21302 (E.D. Michigan, December 20, 2001)

Court denies Ford Motor Company's motion for a preliminary injunction seeking to enjoin defendants from continuing to automatically redirect users from a web site defendants operate at to the web site operated by Ford at Defendants achieve this redirection via a link embedded in the programming code of defendants' web site, which link utilizes Ford's mark. The court held that Ford could not succeed on the merits of its federal trademark dilution claim, because defendants were not using plaintiff's mark in commerce. The court further held that Ford could not succeed on its trademark infringement and unfair competition claims, because defendants were not using plaintiff's mark in connection with the sale, or advertising for sale, of any goods or services. Finding that plaintiff would not succeed on the merits of its claims, the court denied plaintiff's motion.

Case No. 03-5340 JF (RS) (N.D. Cal., April 18, 2007)

District Court holds that Google’s use of defendant American Blind & Window Factory’s (“ABWF”) trademarks to trigger the display of competitors’ ads as part of Google’s “Ad Words” program is a use of those marks in commerce within the meaning the Lanham Act.  These competitors’ ads are displayed by Google as ‘sponsored links’ and do not contain defendant’s trademarks.  The Court accordingly allows ABWF to proceed with trademark infringement claims arising from such use of its marks, finding that ABWF had presented sufficient evidence of consumer confusion to survive Google’s motion for summary judgment.  This evidence included the results of a survey that reported that 29% of consumers believed that such “sponsored links” were affiliated with the company that owned the trademark the consumer used to initiate his search.  The Court held as a result that whether consumers were in fact confused by “sponsored links” that do not contain defendant’s mark was an issue of fact requiring resolution at trial.

The Court did dismiss so much of defendant’s claims that were premised on its “American Blind” and “American Blinds” marks, which the Court held were descriptive.  Because ABWF did not submit sufficient evidence to establish that these (then) common law marks had developed sufficient secondary meaning to be entitled to protection from Google’s conduct at the time Google began its allegedly infringing activity, the Court dismissed so much of ABWF’s claims as were grounded on the alleged use of its American Blind and American Blinds marks.

Finally, the Court dismissed ABWF’s Federal and California dilution claims, finding that ABWF had failed to submit sufficient evidence that its marks were “famous,” a prerequisite to such dilution claims.  It should be noted that the court designated its decision as “not for citation.”

1:04cv507 (LMB/TCB) (E.D. Va. August 25, 2004)

Court denies motion to dismiss brought by search giants Google and Overture, and allows plaintiff GEICO to proceed with trademark infringement and unfair competition claims arising out of defendants' alleged practice of selling advertising triggered by the entry of plaintiff's trademarks as search terms, which advertisements are displayed in the search results generated by such searches.

425 F.Supp.2d 402 (S.D.N.Y., March 30, 2006)

In six related lawsuits arising out of the sale by online Canadian-based pharmacies of both branded and generic versions of plaintiff's popular anticholesterol medication "Zocor," the Court granted motions to dismiss trademark infringement claims challenging defendants' purchase of the keyword "Zocor" from search engines to trigger the display of "sponsored links" to defendants' websites.  Such purchases do not constitute the requisite 'use in commerce' of plaintiff's mark necessary to sustain such claims.  The Court also granted defendant CrossBorder's motion to dismiss trademark infringement claims arising out of its use of plaintiff's trademark "Zocor" on its website, at which CrossBorder sold both plaintiff's own product, as well as a generic version described as "generic simvastatin."  "Simvastatin" is the active ingredient in "Zocor."  Because it sold branded Zocor at its website, this was a permitted fair use of plaintiff's mark.

The Court declined at this early stage of the proceedings to dismiss the trademark infringement and dilution claims advanced against the remaining defendants.  Defendants link the "Zocor" mark to web pages at which they sold both branded Zocor and generic products described alternatively as "generic Zocor," "Zocor generic" or "Zocor-generic."  The Court was unwilling on this motion to determine whether such uses were likely to confuse consumers as to the source and sponsorship of these generic products, and hence unwilling to declare them permitted fair uses of plaintiff's trademarks.

Finally, the Court granted the motion to dismiss for want of personal jurisdiction of defendant CanadaDrug's CEO.  This individual, a Canadian resident, was neither alleged to have personally undertaken any actions in the United States in furtherance of the infringing activities at issue, nor been a "primary actor" therein.

No. 07-11574 (11th Cir., April 7, 2008)

Eleventh Circuit holds that defendant’s unauthorized use of a competitor’s trademarks in meta tags of its website, which use caused those trademarked terms to appear in search result descriptions of defendant’s website, is likely to infringe plaintiff’s marks.  The Court held such use was likely to falsely lead consumers to believe defendant’s site was affiliated with plaintiff or sold plaintiff’s products.  Importantly, other than in meta tags, plaintiff’s trademarks appeared nowhere on defendant’s website.  In reaching this result, the Eleventh Circuit found that such use of plaintiff’s trademarks constituted a use of such marks in commerce.

Nonetheless, the Eleventh Circuit vacated the preliminary injunction issued by the District Court, which barred defendant from further use of plaintiff’s trademarks in its site’s meta tags.  In reaching this result, the Court called into question the traditional presumption of irreparable injury available to trademark holders who have demonstrated a likelihood of success on the merits of their trademark infringement claim.  Demonstration of such irreparable injury is a prerequisite to injunctive relief.  In light of the Supreme Court’s decision in eBay v. MercExchange, LLC, 547 US 388 (2006), the Eleventh Circuit remanded the case to the District Court with instructions to determine whether plaintiff had sufficiently demonstrated irreparable injury as a result of defendant’s infringing use of its trademarks in its site’s meta tags to warrant the issuing of injunctive relief.   The Court did not, however, decide whether the traditional presumption of irreparable injury in such circumstances survived eBay.

The Eleventh Circuit further upheld the District Court’s ruling that plaintiff was likely to prevail on its claims that defendant engaged in false advertising in violation of the Lanham Act.  The Eleventh Circuit held that defendant’s claims of an affiliation between NASA and either Axiom or one of its products, the DRX 9000, or that that product was FDA ‘approved,’ were literally false, and likely to be material in consumers’ purchasing decisions. 

Nonetheless, the Eleventh Circuit vacated the preliminary injunction issued by the District Court, prohibiting further use of such advertisements, and remanded for further consideration as to whether plaintiff had adequately demonstrated that it would sustain irreparable injury in the absence of such relief.  The Eleventh Circuit held that no presumption of irreparable injury exists in such circumstances, as the claims were not made in the context of comparative advertising about the parties’ respective products.  As the District Court had presumed irreparable injury, the matter was remanded to it for further consideration.

456 F.Supp.2d 393 (N.D.N.Y., September 28, 2006)

Federal District Court holds that Google's use of plaintiff's trademark "Rescuecom" as a keyword in Google's "Ad words" program to trigger the display of "sponsored link" advertisements from third party competitors for a fee is not a "trademark use" of plaintiff's mark, as the mark is not being used to identify the source of any goods or services.  The same holds true of Google's use of plaintiff's trademark in its "Keyword Suggestion Tool," in which Google recommends to potential advertisers, including plaintiff's competitors, keywords they may be interested in using, for a fee, as a trigger for the display of their advertising.  Notably the advertisements themselves, which appear along with search results for plaintiff's mark, were not alleged to display plaintiff's Rescuecom mark. 

As a result, the Court grants Google's motion to dismiss trademark infringement, unfair competition and dilution claims brought by plaintiff under the Lanham Act, as such claims require a showing of actionable "trademark use" which, the Court holds, Rescuecom cannot make.  Having dismissed plaintiff's federal claims, the Court declined to exercise pendant jurisdiction over plaintiff's state law claims, including a claim for tortuous interference.

In reaching this result, the District Court elected not to follow decisions reached by the courts in Geico v. Google, 330 F.Supp. 2d 700 (E.D. Va. 2004) and Edina Realty v. MLS, 2006 WL 737064 (D.Minn., March 20, 2006) which had denied motions to dismiss trademark infringement claims arising out of similar activity.  The Court, instead, followed the path taken by the court in Merck & Co. Inc. v. Mediplan Health Consulting, Inc., 425 F.Supp. 2d 402 (S.D.N.Y. 2006), which dismissed similar claims on the ground, inter alia, that there was no "trademark use."

319 F.3d 770 (6th Cir., February 7, 2003)

Reversing the court below, the Sixth Circuit dissolves an injunction which enjoined defendants from using plaintiff's trademarks in conjunction with the word "sucks" in the domain name of several "complaint" sites, as well as in the domain name of a non-commercial "fan" site.  The Sixth Circuit held that defendants' use of plaintiff's mark in a 'fan' site did not run afoul of Section 1114 of the Lanham Act because of the presence of both a prominent disclaimer on the site disavowing any affiliation with plaintiff, and a link to plaintiff's official web site.  Defendant's use of plaintiff's marks in conjunction with the word "sucks" in the domain names of non-commercial complaint sites did not violate Section 1114 of the Lanham Act because there was no likelihood of consumer confusion arising therefrom, and because such speech is protected by the First Amendment.

368 F.3d 433 (5th Cir. 2004)

Reversing the District Court, the Fifth Circuit holds that defendant's operation of a non-commercial gripe site at a domain which varied from plaintiff's mark solely by the subtraction of the letter "s" did not violate either the Federal or Texas State Dilution Acts, nor did it run afoul of the Anticybersquatting Consumer Protection Act ("ACPA").  The Court determined that defendant's actions were not motivated by the requisite bad faith intent to profit from the use of the mark, but rather, by defendant's desire to inform the public about his dispute with plaintiff and the services it offered him.  The absence of such bad faith was fatal to plaintiff's ACPA claim.  Plaintiff's Federal Dilution Act claim failed because defendant's use was not commercial.

279 F. Supp.2d 723 (E.D. Va., September 5, 2003)

Court grants defendants' motion for summary judgment, and dismisses trademark infringement, copyright infringement and unfair competition claims brought by website owner against distributor of pop-up ads.  Defendants distribute a software program, which causes pop-up ads to be displayed on a user's computer screen in a window that covers all or part of plaintiff's website.  The court held that such conduct does not constitute a use of plaintiff's trademark, a prerequisite to a trademark infringement claim.  Quite the contrary, the display results from the computer user's consensual download of defendants' software, and his ability to control, via the multitasking capabilities of window's operating environment, what appears on his own computer screen.  Similarly, defendants' acts do not infringe plaintiff's copyright in the material that appears on plaintiff's website, because defendants neither display plaintiff's copyrighted materials nor make a derivative work thereof.  Defendants' ads instead appear in a separate window on a user's computer screen, which operates independently of plaintiff's website, and leaves the content appearing thereon untouched.

478 F.3d 413, No. 06-1826 (1st Cir., February 23, 2007)

Court dismisses cyberstalking and security law claims advanced by plaintiffs under Florida state law against defendant Lycos, holding such claims barred by the immunity afforded Lycos under Section 230 of the Communications Decency Act (“CDA”).  Such claims arose out of statements critical of plaintiff Universal Communication Systems (“UCS”) and its CEO, Michael Zwebner, that were posted by third parties on a message board found on a website operated by Lycos at the domain Raging  Plaintiffs claimed that defendants, including Lycos, were involved in a scheme to manipulate plaintiff’s stock price.  Plaintiffs claimed that defendants shorted UCS stock, and then posted derogatory comments on in an attempt to drive the stock price down.  Such a claim, held the court, sought to hold Lycos liable for its role in the publication of these statements, which were authored by third parties, and as such was barred by operation of the CDA.  The cyberstalking claim was similarly barred because the act on which such claim rested was the publication of derogatory statements on the message board authored by third parties.  As such, this claim too, sought to hold Lycos liable for its role in the publication of such statements, and was barred by application of the CDA. 

The court also dismissed federal cyberstalking claims asserted by plaintiffs against Lycos under 47 USC Section 223, holding that this statute did not create a private right of action for a civil suit.

Finally, the Court dismissed trademark dilution claims advanced by plaintiffs under Florida state law.  These claims were premised on the use of UCS’ trademark as the name for a message board on Raging at which third parties posted statements critical of plaintiffs.  The Court held that, despite the fact that the message boards contained advertising, such a use did not constitute the requisite use in commerce of plaintiffs’ mark.  In addition, such use of plaintiffs’ mark to describe a message board that contained statements about plaintiffs was not actionable under the dilution act.

No. 07-4095 (10th Cir., May 29, 2008)

Affirming the decision of the district court below, the Tenth Circuit dismisses trademark infringement, unfair competition and cybersquatting claims brought by plaintiff Utah Lighthouse Ministry as a result of defendant Allen Wyatt’s operation of a non-commercial website at domains containing the names of both plaintiff and its principals, which website in turn linked to articles criticizing plaintiff’s principals found on defendant Fair’s website.  Plaintiff was created to criticize the Church of Jesus Christ of Latter-day Saints.  Fair is an organization that responds to criticisms of that Church.  Wyatt’s website was designed to look like that of the plaintiff, incorporating elements and content found thereon with slight alterations, and contained no disclaimer as to the site’s affiliation with the plaintiff. 

The Tenth Circuit affirmed the dismissal of plaintiff’s Lanham Act trademark infringement and unfair competition claims on the grounds that plaintiff had failed to establish that defendant had used its trademark in commerce.  In reaching this result, the Court held that links from Wyatt’s website to that of Fair, at which books were offered for sale, were too attenuated to constitute a commercial use because the links took the user to pages of that site containing criticism of plaintiff, and not to those pages of the site at which books were offered for sale.  The Court further held that the use of plaintiff’s trademark in the operation of a site that diverted consumers from plaintiff’s commercial site to a non-commercial site was not a commercial use sufficient to sustain a Lanham Act claim.  In reaching this result, the Court refused to follow a contrary decision of the Fourth Circuit. 

The Tenth Circuit also dismissed plaintiff’s trademark infringement claim on the ground that plaintiff failed to establish the requisite likelihood of consumer confusion arising out of defendant Wyatt’s operation of his site.  The Court relied both on its analysis of the traditional likelihood of confusion factors, as well as its determination that defendant’s site was a successful parody of that of the plaintiff.

Finally, the Tenth Circuit dismissed plaintiff’s cybersquatting claim, advanced under the Anticybersquatting Consumer Protection Act (“ACPA”), on the ground that the defendants lacked the requisite bad faith intent to profit from their use of plaintiff’s mark, given their site was non-commercial, and intended to criticize plaintiff.   The Tenth Circuit held that such claim also failed because defendant Wyatt fell within the protection of the ACPA’s safe-harbor provision, which precludes a finding of bad faith intent to profit if ‘the court determines that the [defendant] believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.’

293 F.Supp.2d 734 (E.D. Mich., November 19, 2003)

Court denies website operators' application for a preliminary injunction, and refuses to enjoin defendant, Inc. from delivering advertisements, triggered by a computer user's visit to plaintiffs' sites, that either pop-up or under those sites.  Defendant WhenU delivers such ads via its software applications Save and Save Now!  These applications are typically consensually downloaded by the user to his or her computer as the quid pro quo of his free receipt of another software application.

The Court held that WhenU's delivery of these ads neither infringes the trademarks found on plaintiffs' sites, nor their copyrights in the material thereon.  WhenU's activities - including the use of plaintiffs' marks in a directory which determines the ads a user receives, and the display of ads in windows that partially obscure plaintiffs' websites but do not contain plaintiffs' marks - do not constitute a use of plaintiffs' marks in commerce, a prerequisite to a trademark infringement claim.  Plaintiffs' trademark infringements claims also failed because plaintiffs did not present evidence sufficient to establish that users would likely be confused by WhenU's activities, and conclude that plaintiffs sponsored WhenU's ads.  Rather, the Court held, users with Save and Save Now! installed on their computers are likely to conclude that WhenU is the sponsor of the ads in question, both because the ads so inform the user, and because of their familiarity with such displays.

The Court held that plaintiffs' copyright infringement claims failed because the appearance of WhenU's ads in a window that partially obscures plaintiffs' sites does not constitute the creation of an unauthorized derivative work in violation of plaintiffs' exclusive right to create the same.  Rather, plaintiffs' copyrighted works - the content of their websites - remain unaltered on the servers on which they are hosted, and simply appear simultaneously with WhenU's advertisements in separate windows opened by and with the consent of the user on whose computer screen they appear.  Plaintiffs' copyright infringement claims also failed because any images appearing on a user's screen are simply too transitory to constitute the creation of a work.  As such, WhenU and the users cannot be held to have created a derivative work, and thus cannot be held to have infringed plaintiffs' copyrights.

Quick Hits

Boston Duck Tours, L.P. v. Super Duck Tours, LLC, et al.
Civ. Act. No. 07-11222-NMG (D. Mass., December 5, 2007).

Court holds that competitor’s purchase of sponsored links from Google that are triggered by the entry of plaintiff’s “Boston Duck Tours” mark constitute a trademark use of plaintiff’s mark actionable under the Lanham Act.  Recognizing that the courts have reached conflicting answers to this question, the Court stated:

In short, the emerging view outside of the Second Circuit is in accord with the plain language of the statute.  Because sponsored linking necessarily entails the ‘use’ of the plaintiff’s mark as part of a mechanism of advertising, it is ‘use’ for Lanham Act purposes.

The Court further holds that the display of such sponsored link advertisements by defendant in the case at bar does not violate either the Lanham Act, or a prior preliminary injunction issued by the Court, because the ads market defendant as “Super Duck Excursions” and ‘serve[] to distinguish the defendant from the plaintiff.”  The preliminary injunction previously issued by the Court had enjoined defendant from continuing to use the phrase “duck tours” as a trademark or service mark in the greater Boston area, as such use was likely to infringe plaintiff’s ‘Boston Duck Tours’ mark.  As a result, defendant had changed its name from “Super Duck Tours” to “Super Duck Excursions.”

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