The Use Of Trademarks To Trigger Internet Advertising

On Feb. 7, 2006, the Tenth Circuit Court of Appeals affirmed a judgment of trademark infringement in favor of manufacturers of tanning lotions against several unauthorized distributors. The defendants had paid for preferential search engine listings when computer users searched for plaintiffs' trademarks and has also placed plaintiffs' trademarks in the metatags of their Web sites (metatags are internal Web site coding often used by search engines to identify the content of Web sites). Australian Gold, Inc. v. Hatfield, 436 F.3d 1228 (10th Cir. 2006).

Without separately addressing the different potential bases of liability, the court reasoned that overall, defendants had violated the Lanham Act by using 'the goodwill associated with Plaintiffs' trademarks in such a way that consumers might be lured' to their products, instead of going to authorized sellers. Id. at 1239.

While courts have been generally hostile to companies using competitors' trademarks as metatags in order to attract customers (see, eg, Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9^th Cir. 1999); Promatek Industries, Ltd. v. Equitrac Corporation, 300 F.3d 808 (7^th Cir. 2002)), the use of competitors' trademarks to trigger advertisements in the form of sponsored links or pop-up advertisements is an issue that remains unsettled. In conflating liability for the preferential search result listings and the use of trademarks in metatags, the Australian Gold court failed to significantly further this developing area of law. As discussed below, there has yet to develop a consensus among the courts regarding liability for one company using another company's trademarks to trigger Internet advertisements.

United States Trademark Law Proscriptions

In order to succeed on a Lanham Act claim of trademark infringement, a plaintiff must show: 1) it possesses a mark; 2) the defendant used the mark; 3) the defendant's use of the mark occurred 'in commerce'; 4) the defendant used the mark in connection with the sale, offering for sale, distribution, or advertising of goods or services; and 5) the defendant used the mark in a manner likely to confuse consumers. In applying the Lanham Act to search engine or contextual Internet advertising, most of the decisions have turned upon whether use of the mark is 'use in commerce' and, if so, whether the use is likely to cause consumer confusion.

Contextual Pop-Up Advertising

One of the main players in the litigation of this area is a company called WhenU.com. WhenU.com's program 'SaveNow' is generally bundled for distribution with free programs, such as screen savers, that are downloaded (purposefully or unwittingly) by the computer user.

The SaveNow software monitors the user's activity, scans Web addresses, URLs, search terms and Web page content, and compares the content with its proprietary database of keywords, which includes third-party trademarks as part of Web site addresses. Contextually relevant advertisements (either pop-up, pop-under or banner advertisements) are triggered when the software detects terms in its database.

In U-Haul International, Inc. v. WhenU.com, 279 F.Supp.2d 723 (E.D. Va. 2003), Wells Fargo & Co. v. WhenU.com, 293 F.Supp.2d 734 (E.D. Mich. 2003), and 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400 (2d Cir. 2005), WhenU.com won several high-profile litigations defending its actions. (Editor's Note: See coverage of these cases in 'Trademark Law Shapes Internet Pop-up Ads' from our July 2005 issue, available to online subscribers at www.lawjournalnewsletters.iproduction.com/pub/ljn_internetlaw/3_7/news/144802-1.html.)

In holding that WhenU.com's actions did not violate federal trademark law, courts found it relevant that WhenU.com's pop-up advertisements were labeled as originating from WhenU.com, provided a link for more information regarding WhenU.com, and informed consumers that the advertisement did not originate from the Web page that they were viewing. Also, importantly, courts noted that WhenU.
com did not market specific trademarked terms as 'keywords,' but instead only sold terms in larger groups, which included Web site addresses that contained trademarked terms. This database of terms was in the software's internal coding, which was scrambled and not accessible to the user. Further, WhenU.com did not guarantee that any particular term would trigger an advertiser's advertisement, and consumers were able to uninstall the WhenU.com software if they did not want to receive the advertisements.

The most recent decision in this regard was 1-800 Contacts, Inc. v. WhenU.com Inc., which was also the only appellate court decision of the group. There, the Second Circuit Court of Appeals rejected 1-800 Contacts' argument that WhenU.com Inc.'s use of its Web site address was 'use in commerce' because the defendant used the plaintiff's trademarks to capitalize on 1-800 Contacts' reputation and goodwill and to create an impression that the advertisements were affiliated with 1-800 Contacts. On the contrary, the Second Circuit noted that WhenU.com's use is not the traditional 'use in commerce' whereby an infringer places third-party trademarks on goods or services to pass them off as emanating from or authorized by the plaintiff. The court reasoned that:

A company's internal utilization of a trademark in a way that does not communicate it to the public is analogous to [an] individual's private thoughts about a trademark. Such conduct simply does not violate the Lanham Act, which is concerned with the use of trademarks in connection with the sale of goods or services in a manner likely to lead to consumer confusion as to the source of such goods or services.

414 F.3d at 409. Accordingly, the court held that inclusion of the Web site address in the SaveNow database did not infringe upon 1-800 Contacts' trademark rights. The court also stated that an important factor in its decision was that WhenU.com was not relying on use of 1-800 Contact's mark, but upon its Web site address, even though that address was very similar to the mark. The court specifically expressed 'no view' on whether use of the exact trademark in the database would be a 'use' of the mark.

The court also ruled that the resulting pop-up advertisements (as apart from the inclusion of the terms in SaveNow's database) did not infringe upon 1-800 Contact's trademark rights. The court reasoned that the defendant did not reproduce or display the plaintiff's trademarks at all, and the resulting pop-up advertisements were in a separate window, were prominently branded with the WhenU.com mark, and had no tangible effect on the appearance or functionality of the plaintiff's Web site.

The court also expressed doubts as to whether any significant consumer confusion occurred due to the pop-up advertisements. In general, the court viewed the pop-up ads as legitimate comparative advertising that is not prohibited by the Lanham Act. Accordingly, the Second Circuit dismissed 1-800 Contact's trademark claims based upon the resulting pop-up advertisements. 1-800 Contacts also brought copyright and state law claims, but the court has not yet published rulings on those claims.

Search Engine Generated Advertisements

Netscape and Excite ' Unlabelled or Confusing Pop-Ups

In January 2004, the Ninth Circuit reversed a lower court's grant of summary judgment in favor of Netscape and Excite, finding that there was a genuine issue of fact as to whether Netscape's practice of allowing advertisers, and requiring all adult advertisers, to link their unlabelled banner ads to search results for 'PLAYBOY' and 'PLAYMATE' constituted trademark infringement. Playboy Enterprises, Inc. v. Netscape Communications Corporation, 354 F.3d 1020 (9^th Cir. 2004).

The Ninth Circuit found that when an Internet user input the trademarked terms into one of these search engines, a competing adult-oriented company's advertisement would appear on the user's window, obstructing the search results. In finding a triable issue of fact as to whether this amounted to trademark infringement, the court appeared to be swayed by its belief that the competing advertisements were confusingly labeled or not labeled at all, were graphic in nature, and when clicked caused the user to be directed to the advertiser's Web site and the search results to disappear. Further, defendants profited when users clicked on these unlabelled advertisements. Thus, the court held that the search engines might be liable for trademark infringement based upon an initial interest confusion analysis. The court was specific, however, in the limitations of its holding. It stated that it did not address the 'situation in which a banner advertisement clearly identifies its source with its sponsor's name, or in which a search engine clearly identifies a banner advertisement's source.' 354 F.3d at 1030. Following this decision, the case was settled. Accordingly, no further guidance was given regarding this particular circumstance.

Google's 'Adwords' Program ' 'Sponsored Link' Advertisements

Google is by all accounts the dominant search engine on the Internet. When a computer user runs a search on Google, advertisements in the form of 'sponsored links' often appear beside or above the organic search results. Though Google had initially prevented trademarked terms from being used as keywords to trigger sponsored links in its 'Adwords' program, it changed this policy in 2004. Shortly thereafter, Google was sued by Government Employees Insurance Company (GEICO). In denying Google's motion to dismiss, the GEICO court reasoned that when Google sells 'the rights to link advertising to plaintiff's trademarks, [it is] using the trademarks in commerce' as applied under the Lanham Act. Gov't Empl. Ins. Co. v. Google, Inc., 330 F.Supp.2d 700, 704 (E.D. Va. 2004). The court distinguished the WhenU.com cases, stating that 'WhenU allowed advertisers to bid on broad categories of terms that included the trademarks, but did not market the protected marks themselves as keywords to which advertisers could directly purchase rights.' Id.

At trial, at the close of plaintiff's evidence, the court held that there was not sufficient evidence of likelihood of confusion to establish that Google's use of the GEICO trademark as a search term or keyword in its advertising program constituted trademark infringement. Gov't Empl. Ins. Co. v. Google, Inc., 2005 U.S. Dist. LEXIS 18642 at 25-26 (E.D. Va. Aug. 8, 2005). Thus, the infringement claim based upon Google's sale of trademarked terms as Adwords was dismissed. However, the court held that there was sufficient evidence to establish a likelihood of confusion where the trademark appeared in the title or text of the sponsored link advertisements. Id. at 26. The court reserved on the question of whether Google itself was liable for infringement due to those advertisements, and noted that that issue would have to be addressed either by agreement of the parties or in a continuation of the trial. Subsequent to this decision, Google and GEICO reached a settlement, so there was no further judicial opinion issued in this matter.

Google is also currently involved in a lawsuit with American Blind & Wallpaper Factory, Inc. over the use of American Blind's trademarks in Google's Adwords program. On March 30, 2005, a Federal District Court in California denied Google's motion to dismiss the action, finding that significant questions of fact, such as whether Google's resulting advertisements were confusing in nature, precluded the court from dismissing the case as a matter of law. Google, Inc. v. American Blind & Wallpaper Factory, Inc., 2005 U.S. Dist. LEXIS 6228 (N.D. Cal. March 30, 2005). As discovery was recently extended for an additional 4 months, it is unlikely that any further decision in this case will be soon forthcoming.

In accord with these decisions, Google's Adwords policy (currently posted at www.google.com/tm_complaint_adwords.html) states that with regard to trademark rights in the United States and Canada, upon complaint of a trademark holder, Google will 'investigate whether the advertisements at issue are using terms corresponding to the trademarked term in the advertisement's content.' If so, Google 'will require the advertiser to remove the trademarked term from the content of the ad and prevent the advertiser from using the trademarked term in ad content in the future.' Google specifically states that it 'will not disable keywords in response to a trademark complaint.'

Google's policy regarding trademark rights outside the United States and Canada is notably different. It states that it will '[ensure] that the advertisements at issue are not using a term corresponding to the trademarked term in the ad content or as a keyword trigger. If they are, we will require the advertiser to remove the trademarked term from the ad content or keyword list and will prevent the advertiser from using the trademarked term in the future.'

Notably, the distinction is that outside the United States and Canada, upon a complaint, Google will 'require the advertiser to remove the trademarked term from the ' keyword list.' The difference between the policy in North America and that outside of North America may have been driven by several decisions in France, as discussed below.

French Decisions

French courts appear to be the most hostile to the sale of trademarked terms as keywords for advertisements. In October 2003, two French travel firms, Viaticum and Luteciel, won a victory in a court in Nanterre, based on Google's sale of the trademark 'Bourse des Vols' as an Adwords keyword. Subsequently, more French challenges followed.

In 2004, Le Meridien Hotels and Resorts won a preliminary ruling against Google based on a lawsuit over Google's Adwords program. In 2005, a Paris court found in favor of LMVH on behalf of Louis Vuitton in its suit against Google and ordered Google to stop displaying advertisements for Vuitton's rivals whenever Internet users typed Vuitton's name or other trademarks into the search engine. Google was also sued by Paris-based AXA SA, the world's third largest insurer.

A March 17, 2006 search on google.fr (the French Google site) for Louis Vuitton resulted in no sponsored links being shown. However, it appears that Google is not disabling such sponsored links worldwide. A search for Louis Vuitton on google.com resulted in multiple sponsored links, only one of which used the term Louis Vuitton in the advertisement heading or text. In contrast, a search on google.com using the term 'dooney bourke' resulted in multiple sponsored links, all of which used the term 'Dooney' or 'Dooney & Bourke' in the advertisement.

Conclusions and Recommendations

In the 'bricks and mortar' world, a store might place its house brand product next to a name brand. The consumer may go looking for the name brand, but might see the house brand next to it. As long as the consumer is not confused as to the sponsorship of the house brand item, it is not a trademark violation. Courts have so analogized when attempting to apply trademark infringement claims to Internet activity.

Accordingly, United States courts are reluctant to prohibit software that internally uses specific keywords, including trademarks, to generate advertisements based on those terms, as long as the trademarks are used only as internal software coding (invisible to the user), and the resulting advertisements are clearly labeled as to their origin and are not confusing to the consumer. However, potential liability may still exist if the search engine or contextual advertising program uses an exact trademarked term in its database (as opposed to merely a Web site address) and the resulting advertisements contain the trademarked term or are otherwise confusing. Potential liability may also exist under the Federal Trademark Dilution Act, which would also require a finding of trademark 'use', but not require resulting confusion.

There are various steps that can be taken, should a trademark owner wish to limit the use of its mark in generating third-party advertisements. These range from requests to search engines to cease and desist using the trademark, to instituting litigation. Depending upon the goals of the trademark owner and the willingness to litigate, strategies can be tailored to achieving these goals.

On Feb. 7, 2006, the Tenth Circuit Court of Appeals affirmed a judgment of trademark infringement in favor of manufacturers of tanning lotions against several unauthorized distributors. The defendants had paid for preferential search engine listings when computer users searched for plaintiffs' trademarks and has also placed plaintiffs' trademarks in the metatags of their Web sites (metatags are internal Web site coding often used by search engines to identify the content of Web sites). Australian Gold, Inc. v. Hatfield , 436 F.3d 1228 (10th Cir. 2006).

Without separately addressing the different potential bases of liability, the court reasoned that overall, defendants had violated the Lanham Act by using 'the goodwill associated with Plaintiffs' trademarks in such a way that consumers might be lured' to their products, instead of going to authorized sellers. Id. at 1239.

While courts have been generally hostile to companies using competitors' trademarks as metatags in order to attract customers ( see, eg, Brookfield Communications, Inc. v. West Coast Entertainment Corp. , 174 F.3d 1036 (9 th Cir. 1999); Promatek Industries, Ltd. v. Equitrac Corporation , 300 F.3d 808 (7 th Cir. 2002)), the use of competitors' trademarks to trigger advertisements in the form of sponsored links or pop-up advertisements is an issue that remains unsettled. In conflating liability for the preferential search result listings and the use of trademarks in metatags, the Australian Gold court failed to significantly further this developing area of law. As discussed below, there has yet to develop a consensus among the courts regarding liability for one company using another company's trademarks to trigger Internet advertisements.

United States Trademark Law Proscriptions

In order to succeed on a Lanham Act claim of trademark infringement, a plaintiff must show: 1) it possesses a mark; 2) the defendant used the mark; 3) the defendant's use of the mark occurred 'in commerce'; 4) the defendant used the mark in connection with the sale, offering for sale, distribution, or advertising of goods or services; and 5) the defendant used the mark in a manner likely to confuse consumers. In applying the Lanham Act to search engine or contextual Internet advertising, most of the decisions have turned upon whether use of the mark is 'use in commerce' and, if so, whether the use is likely to cause consumer confusion.

Contextual Pop-Up Advertising

One of the main players in the litigation of this area is a company called WhenU.com. WhenU.com's program 'SaveNow' is generally bundled for distribution with free programs, such as screen savers, that are downloaded (purposefully or unwittingly) by the computer user.

The SaveNow software monitors the user's activity, scans Web addresses, URLs, search terms and Web page content, and compares the content with its proprietary database of keywords, which includes third-party trademarks as part of Web site addresses. Contextually relevant advertisements (either pop-up, pop-under or banner advertisements) are triggered when the software detects terms in its database.

In U-Haul International, Inc. v. WhenU.com , 279 F.Supp.2d 723 (E.D. Va. 2003), Wells Fargo & Co. v. WhenU.com , 293 F.Supp.2d 734 (E.D. Mich. 2003), and 1-800 Contacts, Inc. v. WhenU.com, Inc. , 414 F.3d 400 (2d Cir. 2005), WhenU.com won several high-profile litigations defending its actions. ( Editor's Note: See coverage of these cases in 'Trademark Law Shapes Internet Pop-up Ads' from our July 2005 issue, available to online subscribers at www.lawjournalnewsletters.iproduction.com/pub/ljn_internetlaw/3_7/news/144802-1.html . )

In holding that WhenU.com's actions did not violate federal trademark law, courts found it relevant that WhenU.com's pop-up advertisements were labeled as originating from WhenU.com, provided a link for more information regarding WhenU.com, and informed consumers that the advertisement did not originate from the Web page that they were viewing. Also, importantly, courts noted that WhenU.
com did not market specific trademarked terms as 'keywords,' but instead only sold terms in larger groups, which included Web site addresses that contained trademarked terms. This database of terms was in the software's internal coding, which was scrambled and not accessible to the user. Further, WhenU.com did not guarantee that any particular term would trigger an advertiser's advertisement, and consumers were able to uninstall the WhenU.com software if they did not want to receive the advertisements.

The most recent decision in this regard was 1-800 Contacts, Inc. v. WhenU.com Inc., which was also the only appellate court decision of the group. There, the Second Circuit Court of Appeals rejected 1-800 Contacts' argument that WhenU.com Inc.'s use of its Web site address was 'use in commerce' because the defendant used the plaintiff's trademarks to capitalize on 1-800 Contacts' reputation and goodwill and to create an impression that the advertisements were affiliated with 1-800 Contacts. On the contrary, the Second Circuit noted that WhenU.com's use is not the traditional 'use in commerce' whereby an infringer places third-party trademarks on goods or services to pass them off as emanating from or authorized by the plaintiff. The court reasoned that:

A company's internal utilization of a trademark in a way that does not communicate it to the public is analogous to [an] individual's private thoughts about a trademark. Such conduct simply does not violate the Lanham Act, which is concerned with the use of trademarks in connection with the sale of goods or services in a manner likely to lead to consumer confusion as to the source of such goods or services.

414 F.3d at 409. Accordingly, the court held that inclusion of the Web site address in the SaveNow database did not infringe upon 1-800 Contacts' trademark rights. The court also stated that an important factor in its decision was that WhenU.com was not relying on use of 1-800 Contact's mark, but upon its Web site address, even though that address was very similar to the mark. The court specifically expressed 'no view' on whether use of the exact trademark in the database would be a 'use' of the mark.

The court also ruled that the resulting pop-up advertisements (as apart from the inclusion of the terms in SaveNow's database) did not infringe upon 1-800 Contact's trademark rights. The court reasoned that the defendant did not reproduce or display the plaintiff's trademarks at all, and the resulting pop-up advertisements were in a separate window, were prominently branded with the WhenU.com mark, and had no tangible effect on the appearance or functionality of the plaintiff's Web site.

The court also expressed doubts as to whether any significant consumer confusion occurred due to the pop-up advertisements. In general, the court viewed the pop-up ads as legitimate comparative advertising that is not prohibited by the Lanham Act. Accordingly, the Second Circuit dismissed 1-800 Contact's trademark claims based upon the resulting pop-up advertisements. 1-800 Contacts also brought copyright and state law claims, but the court has not yet published rulings on those claims.

Search Engine Generated Advertisements

Netscape and Excite ' Unlabelled or Confusing Pop-Ups

In January 2004, the Ninth Circuit reversed a lower court's grant of summary judgment in favor of Netscape and Excite, finding that there was a genuine issue of fact as to whether Netscape's practice of allowing advertisers, and requiring all adult advertisers, to link their unlabelled banner ads to search results for 'PLAYBOY' and 'PLAYMATE' constituted trademark infringement. Playboy Enterprises, Inc. v. Netscape Communications Corporation , 354 F.3d 1020 (9 th Cir. 2004).

The Ninth Circuit found that when an Internet user input the trademarked terms into one of these search engines, a competing adult-oriented company's advertisement would appear on the user's window, obstructing the search results. In finding a triable issue of fact as to whether this amounted to trademark infringement, the court appeared to be swayed by its belief that the competing advertisements were confusingly labeled or not labeled at all, were graphic in nature, and when clicked caused the user to be directed to the advertiser's Web site and the search results to disappear. Further, defendants profited when users clicked on these unlabelled advertisements. Thus, the court held that the search engines might be liable for trademark infringement based upon an initial interest confusion analysis. The court was specific, however, in the limitations of its holding. It stated that it did not address the 'situation in which a banner advertisement clearly identifies its source with its sponsor's name, or in which a search engine clearly identifies a banner advertisement's source.' 354 F.3d at 1030. Following this decision, the case was settled. Accordingly, no further guidance was given regarding this particular circumstance.

Google's 'Adwords' Program ' 'Sponsored Link' Advertisements

Google is by all accounts the dominant search engine on the Internet. When a computer user runs a search on Google, advertisements in the form of 'sponsored links' often appear beside or above the organic search results. Though Google had initially prevented trademarked terms from being used as keywords to trigger sponsored links in its 'Adwords' program, it changed this policy in 2004. Shortly thereafter, Google was sued by Government Employees Insurance Company (GEICO). In denying Google's motion to dismiss, the GEICO court reasoned that when Google sells 'the rights to link advertising to plaintiff's trademarks, [it is] using the trademarks in commerce' as applied under the Lanham Act. Gov't Empl. Ins. Co. v. Google, Inc., 330 F.Supp.2d 700, 704 (E.D. Va. 2004). The court distinguished the WhenU.com cases, stating that 'WhenU allowed advertisers to bid on broad categories of terms that included the trademarks, but did not market the protected marks themselves as keywords to which advertisers could directly purchase rights.' Id.

At trial, at the close of plaintiff's evidence, the court held that there was not sufficient evidence of likelihood of confusion to establish that Google's use of the GEICO trademark as a search term or keyword in its advertising program constituted trademark infringement. Gov't Empl. Ins. Co. v. Google, Inc., 2005 U.S. Dist. LEXIS 18642 at 25-26 (E.D. Va. Aug. 8, 2005). Thus, the infringement claim based upon Google's sale of trademarked terms as Adwords was dismissed. However, the court held that there was sufficient evidence to establish a likelihood of confusion where the trademark appeared in the title or text of the sponsored link advertisements. Id. at 26. The court reserved on the question of whether Google itself was liable for infringement due to those advertisements, and noted that that issue would have to be addressed either by agreement of the parties or in a continuation of the trial. Subsequent to this decision, Google and GEICO reached a settlement, so there was no further judicial opinion issued in this matter.

Google is also currently involved in a lawsuit with American Blind & Wallpaper Factory, Inc. over the use of American Blind's trademarks in Google's Adwords program. On March 30, 2005, a Federal District Court in California denied Google's motion to dismiss the action, finding that significant questions of fact, such as whether Google's resulting advertisements were confusing in nature, precluded the court from dismissing the case as a matter of law. Google, Inc. v. American Blind & Wallpaper Factory, Inc., 2005 U.S. Dist. LEXIS 6228 (N.D. Cal. March 30, 2005). As discovery was recently extended for an additional 4 months, it is unlikely that any further decision in this case will be soon forthcoming.

In accord with these decisions, Google's Adwords policy (currently posted at www.google.com/tm_complaint_adwords.html) states that with regard to trademark rights in the United States and Canada, upon complaint of a trademark holder, Google will 'investigate whether the advertisements at issue are using terms corresponding to the trademarked term in the advertisement's content.' If so, Google 'will require the advertiser to remove the trademarked term from the content of the ad and prevent the advertiser from using the trademarked term in ad content in the future.' Google specifically states that it 'will not disable keywords in response to a trademark complaint.'

Google's policy regarding trademark rights outside the United States and Canada is notably different. It states that it will '[ensure] that the advertisements at issue are not using a term corresponding to the trademarked term in the ad content or as a keyword trigger. If they are, we will require the advertiser to remove the trademarked term from the ad content or keyword list and will prevent the advertiser from using the trademarked term in the future.'

Notably, the distinction is that outside the United States and Canada, upon a complaint, Google will 'require the advertiser to remove the trademarked term from the ' keyword list.' The difference between the policy in North America and that outside of North America may have been driven by several decisions in France, as discussed below.

French Decisions

French courts appear to be the most hostile to the sale of trademarked terms as keywords for advertisements. In October 2003, two French travel firms, Viaticum and Luteciel, won a victory in a court in Nanterre, based on Google's sale of the trademark 'Bourse des Vols' as an Adwords keyword. Subsequently, more French challenges followed.

In 2004, Le Meridien Hotels and Resorts won a preliminary ruling against Google based on a lawsuit over Google's Adwords program. In 2005, a Paris court found in favor of LMVH on behalf of Louis Vuitton in its suit against Google and ordered Google to stop displaying advertisements for Vuitton's rivals whenever Internet users typed Vuitton's name or other trademarks into the search engine. Google was also sued by Paris-based AXA SA, the world's third largest insurer.

A March 17, 2006 search on google.fr (the French Google site) for Louis Vuitton resulted in no sponsored links being shown. However, it appears that Google is not disabling such sponsored links worldwide. A search for Louis Vuitton on google.com resulted in multiple sponsored links, only one of which used the term Louis Vuitton in the advertisement heading or text. In contrast, a search on google.com using the term 'dooney bourke' resulted in multiple sponsored links, all of which used the term 'Dooney' or 'Dooney & Bourke' in the advertisement.

Conclusions and Recommendations

In the 'bricks and mortar' world, a store might place its house brand product next to a name brand. The consumer may go looking for the name brand, but might see the house brand next to it. As long as the consumer is not confused as to the sponsorship of the house brand item, it is not a trademark violation. Courts have so analogized when attempting to apply trademark infringement claims to Internet activity.

Accordingly, United States courts are reluctant to prohibit software that internally uses specific keywords, including trademarks, to generate advertisements based on those terms, as long as the trademarks are used only as internal software coding (invisible to the user), and the resulting advertisements are clearly labeled as to their origin and are not confusing to the consumer. However, potential liability may still exist if the search engine or contextual advertising program uses an exact trademarked term in its database (as opposed to merely a Web site address) and the resulting advertisements contain the trademarked term or are otherwise confusing. Potential liability may also exist under the Federal Trademark Dilution Act, which would also require a finding of trademark 'use', but not require resulting confusion.

There are various steps that can be taken, should a trademark owner wish to limit the use of its mark in generating third-party advertisements. These range from requests to search engines to cease and desist using the trademark, to instituting litigation. Depending upon the goals of the trademark owner and the willingness to litigate, strategies can be tailored to achieving these goals.