MCLE Self Study
Edited by Barbara Kate Repa
Trademark Tangles on the Web
By Katherine M. Basile and Mike M. Yaghmai
Striving to provide businesses and consumers with a safe place in cyberspace to conduct business while protecting trade identities, brands, and free speech-and preventing unfair competition-courts have turned to well-established trademark principles. And Congress has stepped in with new laws and is considering others.
Defining Some Terms
Understanding the legal issues linking trademark infringement and the Internet requires a basic understanding of established terms.
Trademark. Words, symbols, designs, or other indicia that identify the source of goods or services vis-à-vis others in the marketplace all qualify as trademarks. (See, Lanham Act, 15 U.S.C. § 1051.) Trademarks can be fanciful or arbitrary, suggestive or descriptive. Trademark-infringement considerations, particularly in the Internet context, often turn on whether a particular mark is a coined or arbitrary term, has a meaning apart from its trademark use, or is a descriptive term.
Fanciful or arbitrary trademark.
Considered strong marks and entitled to the highest level of legal protection, fanciful marks are words such as Google for Internet search services or Pentium for microprocessors that are created solely to identify the source of a company's product or service. Arbitrary marks are real words that have nothing to do with the product or service marketed, such as Apple for computers or music.
Suggestive marks. Also considered strong marks, but not as strong as fanciful or arbitrary marks, suggestive marks hint at or suggest something about the product or service, without actually describing its characteristics. A consumer must make some kind of mental leap to associate the mark Champion with sporting goods, or Crate & Barrel with furniture, for example.
Descriptive marks. Considered weak marks, descriptive marks generally describe a characteristic of the goods or services to which they relate and can be protected as trademarks only if, through substantial use, they come to signify the producer of the good or service and not the product-that is, they acquire secondary meaning. Successful descriptive marks include Holiday Inn for hotel services and Chap Stick for lip balm.
Generic terms. Terms that describe the general category to which the underlying product or service belongs are referred to as generic, such as shoe for shoes or apple for apples. Generic terms cannot function as trademarks; they are necessary for identifying products and services and should be available for all to use.
Trademark infringement. Infringement occurs when there is a likelihood of confusion among consumers through the use of a word, symbol, design, or other indicia of source that is the same as, or similar to, another's trademark.
Likelihood of confusion. A consumer's belief that a junior user's goods or services are related to, affiliated with, or sponsored by the senior user is the hallmark of a likelihood of confusion. The courts use several factors to determine whether a likelihood of confusion exists-including similarity of the marks, goods or services, customers, channel of trade, strength of the marks, actual confusion, and the junior user's intent. (AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979).)
Domain Names and Trademarks
A domain name is a unique computer address made up of two components, by which Internet users can locate a website on the Internet: the top-level domain name, which is
a suffix (such as .com or .net) and the secondary level domain name, which often is a company name or brand. Originally, there was much debate about the exact nature of a domain name. Was it like a street address? Was it a trademark? Could you stop someone else from registering your company name or trademark as a domain name? And could someone use a trademark in a domain name if all he or she wanted to do was complain? Fortunately, some of these questions have recently been answered.
Generally, registration of a domain name alone is not trademark use for purposes of establishing trademark rights. (Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F. 3d 1036 (9th Cir. 1999).) Using a domain that incorporates someone else's trademark, however, may be trademark infringement.
Likelihood of confusion remains the cornerstone of any analysis of whether use of a trademark in a domain name is infringing. The general argument is that by using someone else's distinctive trademark as part of a registrant's domain name, the registrant may confuse the public into believing that the trademark owner is somehow affiliated with the registrant and its website, or that the goods and services offered through the website are actually those of the trademark owner and not the registrant. Under the Lanham Act, this likelihood of consumer confusion is a sufficient basis to find liability. (See, People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359, 366-67 (4th Cir. 2001).)
A domain name that incorporates someone else's trademark may also run afoul of the Anti-cybersquatting Consumer Protection Act of 1999 (ACPA). (15 U.S.C. § 1125(d)(1)(A).) This act prevents "registering, trafficking in, or using domain names ... that are identical or confusingly similar to trademarks with the bad faith intent to profit from the goodwill of the trademarks." Similarly, the ACPA prohibits the nonconsensual registering of a domain name that consists of "the name of another living person, or a name substantially and confusingly similar ... with the specific intention to profit from such name by selling the domain name for financial gain."
The ACPA provides a nonexhaustive list of factors that may be considered in determining whether a registrant has acted in bad faith. (See, 15 U.S.C. § 1125(d)(1)(B)(i).) A determination of bad faith is a pivotal issue to applying the ACPA. (E. and J. Gallo Winery v. Spider Webs, Ltd., 129 F. Supp. 2d 1033 (S.D. Tex. 2001) aff'd, 286 F.3d 270 (5th Cir. 2002) (ordering a transfer of domain name and awarding damages where the defendant had registered a domain name similar to the plaintiff's trademark, intended to profit from the domain name, and had a history of registering other domain names similar or identical to various company names); but see, Chatam Internat'l Inc. v. Bodum, Inc., 157 F. Supp. 2d 549 (E.D. Pa. 2001) (finding no liability under the ACPA where there was no evidence of bad faith).) Court is not the only avenue for seeking transfer of an improperly registered domain name. Several administrative bodies, including the World Intellectual Property Organization (WIPO), can order transfer of a domain name. (See, http://arbiter.wipo.int/domains.)
But not every use of another's trademark as part of a domain name is actionable. Preexisting concurrent uses of the same or similar marks, family names, or other innocent and justifiable uses of a term in a domain name that may also be another's trademark-usually a descriptive or suggestive mark-may not be trademark infringement.
Using another's mark in a domain name in a noncommercial setting also may not be infringement. Consider the various www.[insert any company name]sucks.com and other protest websites that are currently active on the Internet. As long as it is clear that the protest websites are not affiliated with the companies they address-which is often easy to determine-and the use of the site is limited to legitimate protest, as opposed to an attempt to tarnish the image of the trademark owner for the registrant's financial gain, then use of the company's name or trademark as part of the domain name would likely be protected under the fair use doctrine and principles of free speech. (See, Wachovia Corp. v. Flanders, WIPO No. D2003-0596; but see, Vivendi Universal v. Sallen, WIPO No. D2001-1121 (ordering the transfer of the registrant's domain ame, www.vivendiuniversal
Metatags and Trademarks
Metatags are computer code embedded in a website in a way that is not generally visible to site visitors. When an Internet user submits a search to a search engine, the engine will quickly browse the Web for sites that make references, either in the text of the page or in the metatags, to the terms that are being searched. Then, based on the number of relevant hits, the search engine will organize and display the websites it has found.
Once businesses understood how search engines functioned, they began to use any means to place their sites at the top of the search results, ahead of their competitors' websites. One method adopted was to incorporate the competitors' trademarks as metatags so that a search for the competitors' products would cause the other business's website to be prominently displayed along with the competitor's site. The tried and true trademark laws, however, have again provided the framework for what is appropriate in this battle for the consumers' attention-and likelihood of confusion continues to be the foundation of the analysis.
The courts have established that the unauthorized use of trademarks as metatags is generally actionable under the Lanham Act. For example, in the case of Brookfield Communications, Inc. v. West Coast Entertainment Corp. (174 F. 3d 1036 (9th Cir. 1999)), the court granted an injunction against West Coast's use of Brookfield's trademark, MovieBuff, as a metatag in West Coast's website. The court held that West Coast's use created initial-interest confusion, which it defined as "the use of another's trademark in a manner reasonably calculated to capture initial consumer attention, even though no actual sale is finally completed as a result of the confusion." It noted that Internet users "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." (174 F. 3d at 1062.)
The use of a third-party trademark, however, may be acceptable if it is the only means of identifying the subject of the mark. For example, in Playboy Enters., Inc. v. Welles (279 F. 3d 796 (9th Cir. 2002)), the court held that in certain circumstances there is no practical way to refer to a mark without naming the mark itself. Terri Welles, a former Playboy playmate, included the terms Playboy and playmate in her website's metatags. The court found Welles's use of the terms to be nominative and permissible as there was "simply no descriptive substitute for the trademarks used in Welles's metatags," only as "much of the marks as reasonably necessary" were used, and nothing suggested endorsement by the trademark holder. (279 F. 3d at 803-04.)
The metatag decisions, as with the domain-name decisions, rely consistently on well-established trademark principles, and likelihood-of-confusion analysis appears to be well positioned to resolve those disputes.
Pop-up advertising is targeted advertising that appears on an Internet user's computer screen as he or she enters a website. The particular ad that pops up is driven by the search term the Internet user entered. Pop-up ads are generated by adware software, which Internet users can either proactively or unknowingly install on their computers.
Trademark owners have often argued that the use of trademarks by adware programs to identify and display competing goods and services and eventually divert consumers to competitor's websites constitutes trademark infringement. But the courts have not consistently agreed. In two cases brought against one of the leading pop-up advertising companies, WhenU.com, Inc., the courts ruled that WhenU.com's act of using third-party trademarks in its database did not amount to use under the Lanham Act. (See, U-Haul Int'l, Inc. v. WhenU.com, 279 F. Supp. 2d 723, 725 (E.D. Vir. 2003); Wells Fargo & Co. v. WhenU.com, Inc., 293 F. Supp. 2d 734, 766-69 (E.D. Mich. 2003).) The courts reasoned that WhenU.com's use of the marks was limited to its own database, and the allegedly infringed marks were never used or displayed as part of the pop-up ads.
On the other hand, in 1-800 Contacts, Inc. v. WhenU.com (309 F. Supp. 2d 467 (S.D.N.Y. 2003)), the court granted the plaintiff a preliminary injunction when the defendant's pop-up ads, promoting a direct competitor of the plaintiff, appeared every time a user went to the plaintiff's website. (309 F. Supp. 2d at 478.) The plaintiff argued that this caused consumers to mistakenly believe the two companies were affiliated rather than in competition, causing a likelihood of confusion and infringing plaintiff's trademark. In support of this assertion, the plaintiff presented a consumer survey showing that 60 percent of respondents believed the website owner actually placed those pop-up ads on its own site. The court held that such ads were likely to cause source confusion and initial-interest confusion. Interestingly, this court's ruling ignored the issue of use that was central to the U-Haul decision.
Keywords, or keying, refers to when a search engine company links a business's website with a particular term, or keyword, for a fee, so that every time an Internet user searches the keyword, a banner advertising the website, or a link to that site, is displayed along with the actual search results. The use of trademarks as keywords is somewhat similar to the pop-up issue-and the law in this area is also still developing.
Keywording may not be a problem if the keyword consists of a term that is generic or highly descriptive. For example, Apple Computer, which uses the mark Airport for a wireless routing device, may have a hard time objecting to the use of airport as a keyword for services associated with an airport, even if they are wireless services available at the airport. On the other hand, when the keywords are fanciful or coined terms, or perhaps suggestive marks, a successful trademark-infringement claim may be easier to assert.
Once again, the important question to ask is whether consumers are likely to be confused as to the source of the banner ad or link. (See, Gov't Employees Ins. Co. v. Google, Inc., 330 F. Supp. 2d 700, 704 (E.D.Vir. 2004) (finding the defendant's practice of selling advertising linked to the plaintiff's mark as a keyword did constitute use in commerce as required under the Lanham Act, but holding that alone did not constitute trademark infringement, as the determination would turn on whether such use caused a likelihood of confusion); see also, Playboy Enters. v. Netscape Communs. Corp., 354 F.3d 1020, 1024 (9th Cir. 2004) (explaining that banner ads that were displayed by the defendants in response to an Internet user's search for the plaintiff's trademark were likely to cause initial-interest confusion, particularly when the ads did not clearly identify their sponsor).)
At least one court has preliminarily ruled that the practice of keywording as it relates to the display of sponsored links is acceptable because evidence of consumer confusion as to the source of the sponsored links was lacking. (See, Gov't Employees Ins. Co. v. Google, Inc., 330 F. Supp. 2d 700 (E.D. Vir. 2004).) Nevertheless, with several other cases on this issue currently pending, the future of keywording must be closely monitored.
Katherine M. Basile is a partner and Mike M. Yaghmai is an associate with the Menlo Park office of Howrey, Simon, Arnold & White. They acknowledge Maggie Goodrich's research support for this article.