Take Care When Choosing Words For Sponsored Links
By: CYNTHIA A. MOYER
September 2008
Regardless of your political affiliation, you may wonder how is it that when you Google “Sarah Palin,” you get a sponsored link to “BarackObama.com”?
Like other search engines, Google offers an AdWords program (similar to other search engines’ keyword programs), which allows anyone to purchase a word or words. When a user types that word into the internet search engine, the search engine provides links to websites that either use that word (organic search results) or have paid to sponsor that word (sponsored search results). Sponsored links usually come up on the side of the screen or along the top. The purchased word does not have to appear anywhere on linked website. You may be thinking, “What a great way to direct traffic to your site!”
As your lawyer, we say, “Not so fast.” This presents an evolving legal question – namely, is it okay to purchase a competitor’s name or trademark through Google’s AdWords program or another similar program and use it to direct traffic to your own competing site so long as you do not use it anywhere on your site or on your product? According to a recent decision from the United States District Court for the District of Minnesota, the answer is “maybe not.”
In August 2008, Judge Montgomery issued Hysitron Inc. v. MTS Systems, Corp., Court File No. 07-01533 ADM/AJB (Aug. 1, 2008). One of the issues in the case involved MTS Systems’s (“MTS”) decision to purchase from Google the plaintiff’s name, “hysitron,” as part of its internet marketing strategy. Whenever an internet user typed in “hysitron” into Google, a sponsored link would appear, directing users to the defendant’s site. Plaintiff sued, alleging violations of the federal Lanham Act and Minnesota state law. The Lanham Act requires that the mark be used “in commerce.” The defendant MTS asked the court to dismiss the case on summary judgment because MTS contended it was not using the mark in commerce. That is, MTS argued that, to use a mark in commerce, the mark “Hysitron” had to either appear on MTS’s products, which it did not, or appear somewhere on MTS’s website, which it did not.
The court disagreed, following the holdings of the majority of federal courts from other jurisdictions that have looked at this issue, and found that using a competitor’s trademark to create a sponsored link or other advertising constitutes a “use in commerce.” This is true even though the mark did not appear anywhere on MTS’s website, nor did it appear on MTS’s products.
The case is not over, however. “Use in commerce” is just the first element of a federal Lanham Act claim. The plaintiff Hysitron also needs to show consumer confusion resulting from the use in commerce. The parties are still gathering information through the discovery process regarding consumer confusion, prompting the Court to deny the motion for summary judgment.
An evolving doctrine involving internet websites and the issue of consumer confusion is the doctrine of “initial interest confusion,” which examines whether the consumer’s initial attention was diverted to the defendant’s website. The court has taken wildly diverging views of the initial interest confusion doctrine, some contending that any diversion constitutes consumer confusion, and others contending that viewing a competitor’s website is not confusion at all. Resolution of the diverging views on whether initial interest confusion constitutes consumer confusion is critical, since the majority of courts contend that purchasing words for sponsored links constitutes a use in commerce. If initial interest confusion constitutes consumer confusion, then a plaintiff has two-thirds of a Lanham Act claim (with only actual or potential harm remaining).
We will continue to provide regular updates through this newsletter as the courts in Minnesota address and clarify these evolving legal standards regarding internet usage of competitor’s trademarks.