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Sunday, April 4, 2010

Use of Trademarks as Keywords to Trigger Internet Search Engine Advertisements

Brian T. Yeh
Legislative Attorney

The use of trademarks in connection with Internet-based advertising has sparked disputes between trademark owners, advertisers, and Internet search engine operators over whether such activity violates federal trademark law. Specifically, trademark owners have expressed concern over the sale of their trademarks by Internet search engines to third parties that want to have "banner" advertisements, "sponsored links," or "sponsored results" appear on a search results Web page when those trademarked words are entered as a search query. For example, the shoe company Reebok may purchase the trademark "Nike" from the Internet search engine Google as a "keyword." If a consumer conducts a search for the term "Nike" on Google's website, the consumer would be presented with paid advertisements for Reebok's products in the right-hand margin of the Web page immediately next to the search results for Nike's shoes and apparel. 

Whether the use of trademarks as "keywords" that trigger such online advertisements constitutes actionable trademark infringement is a question that has been the subject of much litigation over the past five years. However, to date there have been very few final court rulings on the legality of keyword advertising; most cases have involved rulings from judges on procedural pre-trial motions filed by the parties. The primary issue for these courts was not whether the trademark owner would prevail in a lawsuit brought against a keyword seller (search engines) or keyword buyer (advertisers), but whether the plaintiff was entitled to proceed to trial to offer evidence in support of the trademark infringement claim. For example, most courts have had to answer a threshold question about whether a trademark owner would be able to overcome defense motions to dismiss the case for failure to state a claim for relief, on the grounds that the use of a trademark as a paid keyword is not a "use in commerce" within the meaning of the Lanham Act. Until recently, there was a split in opinion among the federal courts in different circuits concerning this question. The April 2009 decision of the U.S. Court of Appeals for the Second Circuit in Rescuecom Corp. v. Google, Inc. resolved the circuit conflict in favor of a determination that the use of a trademark as a keyword trigger (or facilitating such use) does constitute a "use in commerce" for purposes of the Lanham Act. However, establishing that a defendant uses another's mark in commerce is only one element of the infringement claim; for a violation of the Lanham Act to be found, such use must be likely to cause consumer confusion or mistake as to the origin, sponsorship, or approval of the goods or services offered by the defendant. So far, there is a lack of judicial consensus on this second element, and thus the legality of using trademarks for keyword-triggered advertising remains unsettled. 

This report provides a summary and analysis of judicial opinions that have developed the current state of trademark law governing keyword-triggered advertising.

Date of Report: March 22, 2010
Number of Pages: 18
Order Number: R40799
Price: $29.95

Document available electronically as a pdf file or in paper form.
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