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The Use Of Trademarks To Trigger Internet Advertising

By Jason D. Sanders
March 30, 2006

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 (9th Cir. 1999); Promatek Industries, Ltd. v. Equitrac Corporation, 300 F.3d 808 (7th 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.

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