Minnesota Federal Court Finds No Liability for Use of Another’s Mark as a Keyword Absent Credible Evidence of Consumer Confusion
By: DEAN R. KARAU
There have been a number of decisions in recent years in which judges have first found that use of the trademarks of others is “use” under the Lanham Act, and then found consumer confusion. Few, if any, of those courts relied on evidence of confusion but, rather, on theories such as the ill-defined concept of initial interest confusion to find infringement. As a result, trademark attorneys have been advising clients to be very careful about using competitors’ marks when they purchase keywords. See Cindy Moyer’s articles on Keyword advertising, New Battle Over Google Key Word Advertising, Trademark TopicsSM, June 2009, Key Word Advertising – Google in the Hot Seat, Trademark TopicsSM, May 2009, and Take Care When Choosing Words For Sponsored Links, Trademark TopicsSM, September 2008.
Now, a Minnesota federal district court has breathed life back into the simple idea that there must be evidence to support a finding of confusion.
Fair Isaac Corporation (“FICO”) is the developer of the FICO® credit score, which is heavily used in the financial industry to make credit decisions. In a lawsuit against competitors Experian Information Solutions, Inc., TransUnion, LLC, and VantageScore Solutions, LLC, FICO maintained that advertising and other tactics used by the defendants deliberately confused consumers into purchasing their credit scores under the false belief that they were FICO® scores, or that the scores they bought from those companies were used by their lenders to make credit decisions. A jury trial commenced on October 29, 2009 on claims of federal and state trademark infringement, unfair competition, and passing off.
Part of FICO’s infringement claim was that the defendants purchased FICO’s trademarks as keyword search terms on Internet search engines. The court determined that this was an equitable issue (there was no testimony on damages) and, therefore, it rather than the jury would decide the issue. The court similarly found that the passing off claim was also an equitable issue it would decide.) The remaining claims were submitted to the jury.
FICO had claimed that its score range “300-850” was a protectable trademark and its competitors’ use of a range of 501-990 infringed FICO’s rights. However, the jury found that FICO’s alleged “300-850” mark was not a valid, protectable trademark because the term “300-850” had not acquired secondary meaning.
The judge then analyzed the keyword claims. To prevail, FICO had to prove that (1) it owned valid, distinctive marks entitled to protection, and (2) the defendants’ use of those marks as keyword search terms was likely to confuse consumers about the source, sponsorship, or affiliation of the defendants’ products or services.
The court found that the weight of the evidence at trial did not support a credible inference that the defendants’ purchase of the plaintiff’s trademarks as keyword search terms was likely to confuse consumers. Even if the keyword advertising claims were based on valid, protectable marks, the Court found that the evidence simply did not support a credible inference that the defendants’ keyword purchases were likely to confuse consumers: “The only evidence adduced at trial in support of the assertion that the keyword advertising was likely to cause confusion – the opinion testimony of Fair Isaac’s expert James Berger – lacks credibility.”
The court also found no credible evidence to support the passing off claim and, to the extent any confusion existed, it was caused by consumers being generally unfamiliar with the intricacies of the credit scoring industry.
This is an important case which makes it clear that mere use of keywords composed of competitors’ trademarks does not automatically create liability for trademark infringement. Rather, plaintiffs still need to prove consumer confusion, the hallmark of trademark law.
FICO said it plans an appeal of U.S. District Judge Ann Montgomery’s decision.
Fair Isaac Corp. v. Experian Information Solutions Inc., 2009 WL 4263699 (D. Minn. Nov. 25, 2009).