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Do Keyword Search Terms Constitute 'Use' of a Trademark?

By Paul A. Lee
June 29, 2006

It has been judicially noted that '[t]he Court must avoid excessive rigidity when applying the law in the Internet context because emerging technologies require a flexible approach.' Edina Realty Inc. v. TheMLSonline.com, D. Minn., No. 04-4371, March 20, 2006, citing Brookfield Commc'ns, Inc. v. W. Coast Entm't Corp., 174 F.3d 1036, 1054 (9th Cir. 1999) (4 ECLR 384, May 5, 1999). Recently, conflicts involving one of the emerging Internet technologies, namely sponsored online key word advertising, have yielded, not only judicial flexibility, but also a fair amount of ambiguity in applying the laws of trademark infringement in Internet advertising contexts. Two recent federal district court decisions on the issue ' Edina Realty v. TheMLSonline.com, D. Minn., No. 04-4371, March 20, 2006; and Merck & Co. Inc. v. Mediplan Health Consulting Inc. d/b/a RXNorth.com, S.D.N.Y., No. 05 Civ 36550, March 30, 2006 ' illustrate the current legal muddle in their diametrically opposite conclusions on the threshold question at the heart of each analysis: Does the purchase and use of key word search terms constitute 'use' of a trademark under the Lanham Act?

In both Edina and Merck, the defendants purchased from Internet search engines Google and Yahoo! the right to have their advertisements appear at the top or along the side of the search results page as 'Sponsored Ads' when a user types a competitor's name, which happens to contain a registered trademark. In the view of many trademark owners, these practices seem unfair because they electronically piggyback on the notoriety or goodwill of leading trademarks to generate and divert Internet traffic to a competitor's Web site. In any event, the practice is becoming more common in online advertising, a market that by all accounts is fast approaching and likely to surpass the advertising revenues of broadcast television and other more traditional media advertising venues.

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