Boston Duck v. Super Duck: Court Rules That Sponsored Linking Can Ruffle Feathers

In Boston Duck Tours, LP v. Super Duck Tours, LLC, 527 F. Supp. 2d 205 (D. Mass. 2007), the District Court of Massachusetts ruled that sponsored linking qualifies as 'use in commerce' for purposes of trademark infringement under the Lanham Act. Although the court ultimately found no likely consumer confusion in this case, in holding that sponsored linking falls within the purview of the Lanham Act, the court joins a growing number of circuits and districts that have failed to take a cue from well-settled, and clearly analogous, offline trademark principles. Rather, these courts seem inexplicably intent on reinventing the wheel and expanding the scope of Lanham Act protection to include Web-based activities that are virtually imperceptible to consumers. This line of case law allows plaintiffs to subvert the 'use' requirement by affording them a cause of action for trademark infringement against Web sites and advertisements on which consumers never actually perceive the allegedly infringed mark.

Background

This somewhat daffy case arises from a dispute between two companies in the Boston area, both of which offer Boston sightseeing trips in unique vehicles that travel on land and on water. In the underlying trademark infringement case, U.S. District Judge Nathaniel Gorton issued a preliminary injunction prohibiting defendant Super Duck from using the phrase 'duck tours' as a trademark or service mark in connection with its sightseeing service. Boston Duck, 514 F. Supp. 2d 119 (D. Mass. 2007).

Pursuant to the injunction, Super Duck began to advertise its sightseeing service under its newly adopted moniker, 'Super Duck Excursions.' At issue in this case is the propriety of one of Super Duck's advertising methods, namely, 'sponsored linking.' 527 F. Supp. 205. Offered by most major Internet search engines, sponsored linking allows advertisers to 'purchase' keywords to trigger their advertisements. Thus, when an Internet user enters the purchased keyword as one of his or her search terms, a short ad and link to the advertiser's Web page is displayed alongside the standard search results. Search engines, such as Google and Yahoo, generally distinguish sponsored link results from general search results by placing them in a separate, labeled column or within a highlighted, labeled frame atop the general search results.

Prior to the injunction, Super Duck had purchased the keyword-phrase 'Boston duck tours' on Google. Accordingly, when users searched for 'Boston duck tours,' a link to Super Duck's old Web site, www.superducktours.com, appeared as one of the sponsored links. After being enjoined from using 'duck tours' as a trademark, Super Duck continued linking to the keyword-phrase 'Boston duck tours.' However, as a result of Super Duck's name change, its new domain, www.superduckexcursions.com, is now triggered as a sponsored link. When users click on the link, the only reference they see to the term 'duck tours' is a disclaimer stating that Super Duck Excursions should not be confused with Boston Duck Tours ' a reference that Boston Duck Tours has not challenged as a violation of the injunction.

Alas, presumably as the result of an unresolved dispute, Super Duck filed a motion for clarification of the preliminary injunction, to determine if its continued use of sponsored links, attached to the phrase 'Boston duck tours,' complies with the injunction. On the way to its ultimate holding, that Super Duck has not violated the injunction, the court made a threshold ruling ' one of first impression in the circuit ' that purchasing a trademark as a keyword for sponsored linking does constitute 'use in commerce' under the Lanham Act. Id. at 207. This article discusses why the court erred in making this threshold decision and why an opposite ruling would produce more practical and fair results.

'Use' Under the Lanham Act

In addressing the threshold 'use' issue, the court naturally looked to the Lanham Act for guidance. The instructive provision of the Lanham Act, 15 U.S.C. '1127, states in part that 'a mark shall be deemed to be in use in commerce … (2) on services when it is used or displayed in the ' advertising of services.' From this provision, the court gleaned that any 'use in the advertising of services is deemed to be 'use' for the purposes of determining liability.' Id. at 206.

Having established this broad criterion for determining use, the court turned to the specific question of whether an instance of sponsored linking, in which a party uses a competitor's trademark to trigger its own advertising, constitutes 'use in advertising.' Since the First Circuit has not addressed the issue, Judge Gorton sought guidance from other courts. As he noted, however, a circuit split exists. Id.

The Southern and Eastern Districts of New York and the Second Circuit have ruled that sponsored linking is not 'use' for Lanham Act purposes, on the ground that such 'internal utilization is analogous to an individual's private thoughts about a trademark.' 1-800-Contacts, Inc. v. WhenU.com, Inc., 414 F. 3d 400, 409(2d Cir. 2005); Merck & Co., Inc. v. Mediplan Health, 425 F. Supp. 2d. 402 (S.D.N.Y. 2006); Site Pro-1, Inc. v. Better Metal, LLC, 506 F. Supp. 2d 123 (E.D.N.Y. 2007); Fragrancenet. com, Inc. v. FragranceX.com, Inc., 493 F. Supp. 2d 545 (E.D.N.Y. 2007). However, district courts in Virginia, Pennsylvania and New Jersey, as well as the Ninth and Tenth Circuits, have all found 'use' in sponsored linking or similar activities because of the direct access it provides computer users to the non-trademark owner's content. J.G. Wentworth, S.S.C. Ltd. P'ship v. Settlement Funding LLC., 2007 WL 30115 (E.D. Pa. 2007); Buying for the Home, LLC v. Humble Abode, LLC, 459 F. Supp. 2d 310 (D.N.J. 2006); Gov't Employees Ins. Co. v. Google, Inc., 330 F. Supp. 2d 700 (E.D. Va. 2004); Playboy Enters., Inc. v. Netscape Commc'ns Corp., 354 F. 3d 1020 (9^th Cir. 2004); Australian Gold Inc. v. Hatfield, 436 F. 3d 1228 (10^th Cir. 2006). Judge Gorton adopted the 'majority view,' stating, rather summarily, that '[b]ecause sponsored linking necessarily entails the 'use' of the plaintiff's mark as part of the mechanism of advertising, it is 'use' for Lanham Act purposes.' Boston Duck, 527 F. Supp. 2d 205, 207.

The court further argued that the majority's stance is in line with the plain language of the statute. Id. However, this reasoning seems tenuous at best since none of the cases cited by the court as having found 'use' in sponsored linking even discusses the 'use in advertising' standard. As such a finding is the requirement sprung from the plain meaning of the statute, the court's conclusion is not adequately supported. Rather, the cases cited by the court focus only on whether the use was 'commercial,' and often leap to the conclusion that because an advertiser purchases a trademark as a keyword, it has used that mark 'in commerce' ' completely failing to address section 1127's clearly stated 'use in advertising' requirement. See, e.g., Gov't Employees Ins. Co. v. Google, Inc., 330 F. Supp. 2d 700, 702-705.

This, of course, begs the question of what, exactly, 'in the advertising of services' means. Does the mark have to appear within the advertising, or is it sufficient that the mark is somehow remotely connected to the creation, placement or purchase of the advertising? For instance, if a Burger King executive mentioned in a cover letter accompanying an advertising placement order for a newspaper, 'We want our ad to appear in every issue in which you carry an ad for McDonalds,' could anyone seriously argue that Burger King had 'used' McDonalds' mark 'in the advertising of services?' Instead of grappling with such questions, the court decided to skip over this analysis altogether.

As this was an issue of first impression, the court missed a golden opportunity to put its own stamp on this nascent area of the law by further analyzing the meaning of 'use in advertising.'

Clearly, there is already some discrepancy among courts as to how this standard is applied. Certainly, Congress could not have intended for the 'use in advertising' requirement to be so expansive as to cover all 'uses' connected with advertising, no matter how remote. Such a reading would seemingly also disallow such offline 'uses' as soda companies contracting to pay a premium for their product to be placed right next to the Coca-Cola display. Is this really the type of 'use' that Congress had in mind when framing the Lanham Act?

Had the court taken the time to truly assess the 'use in advertising' requirement, it could have dispensed with this case by ruling that the purchase of a trademark as a keyword for sponsored linking does not constitute 'use' under the Lanham Act unless the trademark is actually employed within the triggered advertising perceived by consumers. At a minimum, such a ruling would be in line with traditional trademark principles surrounding offline uses of competitor's trademarks. These principles do a much better job than their online counterparts of balancing the need to protect consumers from brand confusion with the need to maintain a competitive marketplace. Instead, this line of case law opens the door for punishing online advertisers and search engines for conduct virtually identical to that which has become commonplace in the brick and mortar space.

Conclusion

The advent of the digital age has brought with it a flock of legal issues, several of which break new ground and will undoubtedly require innovative legal and factual analysis in order to be resolved. Certainly, such hot-button issues as digital music distribution, privacy, and censorship on the Internet are prime examples. However, not all 'cyber issues' require such a novel approach. Rather, in order to maintain consistency between lawful online and offline conduct, courts should take care to not overlook well-settled, traditional legal principles that can easily be applied by analogy to online disputes.

Ultimately, the decision in this case appears to be in harmony with the emerging view regarding sponsored linking. It remains unclear, however, why so many courts continue to rule that sponsored linking constitutes 'use' for purposes of a Lanham Act claim, especially considering that such a ruling is essentially hollow unless the underlying triggered ad or Web site is found to violate the likelihood of confusion test. The 'use in advertising' requirement was intended to create a threshold before claims could go forward. However, employing such an overly broad reading of this requirement seems to accomplish nothing more than to open the floodgates of litigation, allowing for suits from any plaintiff who is unhappy with any sponsored link displayed alongside the search results for her trademark ' ultimately requiring courts to decide each and every case individually.

The more practical ruling would be that sponsored linking is not 'use,' thus requiring plaintiffs to show both 'use' and 'likelihood of confusion' directly from the contents of the triggered ad or Web site. This approach would not only be more consistent with traditional trademark law, and help to alleviate the threat of frivolous lawsuits against clearly non-infringing content, but it would also serve to foster healthy and fair competition on the Internet, thereby serving the fundamental precept of trademark law ' to protect consumers.

Kiran Belur is an attorney at Fenwick & West LLP, specializing in trademark law. He can be contacted at [email protected]. '2008 Kiran Belur.

In Boston Duck Tours, LP v. Super Duck Tours, LLC, 527 F. Supp. 2d 205 (D. Mass. 2007), the District Court of Massachusetts ruled that sponsored linking qualifies as 'use in commerce' for purposes of trademark infringement under the Lanham Act. Although the court ultimately found no likely consumer confusion in this case, in holding that sponsored linking falls within the purview of the Lanham Act, the court joins a growing number of circuits and districts that have failed to take a cue from well-settled, and clearly analogous, offline trademark principles. Rather, these courts seem inexplicably intent on reinventing the wheel and expanding the scope of Lanham Act protection to include Web-based activities that are virtually imperceptible to consumers. This line of case law allows plaintiffs to subvert the 'use' requirement by affording them a cause of action for trademark infringement against Web sites and advertisements on which consumers never actually perceive the allegedly infringed mark.

Background

This somewhat daffy case arises from a dispute between two companies in the Boston area, both of which offer Boston sightseeing trips in unique vehicles that travel on land and on water. In the underlying trademark infringement case, U.S. District Judge Nathaniel Gorton issued a preliminary injunction prohibiting defendant Super Duck from using the phrase 'duck tours' as a trademark or service mark in connection with its sightseeing service. Boston Duck, 514 F. Supp. 2d 119 (D. Mass. 2007).

Pursuant to the injunction, Super Duck began to advertise its sightseeing service under its newly adopted moniker, 'Super Duck Excursions.' At issue in this case is the propriety of one of Super Duck's advertising methods, namely, 'sponsored linking.' 527 F. Supp. 205. Offered by most major Internet search engines, sponsored linking allows advertisers to 'purchase' keywords to trigger their advertisements. Thus, when an Internet user enters the purchased keyword as one of his or her search terms, a short ad and link to the advertiser's Web page is displayed alongside the standard search results. Search engines, such as Google and Yahoo, generally distinguish sponsored link results from general search results by placing them in a separate, labeled column or within a highlighted, labeled frame atop the general search results.

Prior to the injunction, Super Duck had purchased the keyword-phrase 'Boston duck tours' on Google. Accordingly, when users searched for 'Boston duck tours,' a link to Super Duck's old Web site, www.superducktours.com, appeared as one of the sponsored links. After being enjoined from using 'duck tours' as a trademark, Super Duck continued linking to the keyword-phrase 'Boston duck tours.' However, as a result of Super Duck's name change, its new domain, www.superduckexcursions.com, is now triggered as a sponsored link. When users click on the link, the only reference they see to the term 'duck tours' is a disclaimer stating that Super Duck Excursions should not be confused with Boston Duck Tours ' a reference that Boston Duck Tours has not challenged as a violation of the injunction.

Alas, presumably as the result of an unresolved dispute, Super Duck filed a motion for clarification of the preliminary injunction, to determine if its continued use of sponsored links, attached to the phrase 'Boston duck tours,' complies with the injunction. On the way to its ultimate holding, that Super Duck has not violated the injunction, the court made a threshold ruling ' one of first impression in the circuit ' that purchasing a trademark as a keyword for sponsored linking does constitute 'use in commerce' under the Lanham Act. Id. at 207. This article discusses why the court erred in making this threshold decision and why an opposite ruling would produce more practical and fair results.

'Use' Under the Lanham Act

In addressing the threshold 'use' issue, the court naturally looked to the Lanham Act for guidance. The instructive provision of the Lanham Act, 15 U.S.C. '1127, states in part that 'a mark shall be deemed to be in use in commerce … (2) on services when it is used or displayed in the ' advertising of services.' From this provision, the court gleaned that any 'use in the advertising of services is deemed to be 'use' for the purposes of determining liability.' Id. at 206.

Having established this broad criterion for determining use, the court turned to the specific question of whether an instance of sponsored linking, in which a party uses a competitor's trademark to trigger its own advertising, constitutes 'use in advertising.' Since the First Circuit has not addressed the issue, Judge Gorton sought guidance from other courts. As he noted, however, a circuit split exists. Id.

The Southern and Eastern Districts of New York and the Second Circuit have ruled that sponsored linking is not 'use' for Lanham Act purposes, on the ground that such 'internal utilization is analogous to an individual's private thoughts about a trademark.' 1-800-Contacts, Inc. v. WhenU.com, Inc., 414 F. 3d 400, 409(2d Cir. 2005); Merck & Co., Inc. v. Mediplan Health, 425 F. Supp. 2d. 402 (S.D.N.Y. 2006); Site Pro-1, Inc. v. Better Metal, LLC, 506 F. Supp. 2d 123 (E.D.N.Y. 2007); Fragrancenet. com, Inc. v. FragranceX.com, Inc., 493 F. Supp. 2d 545 (E.D.N.Y. 2007). However, district courts in Virginia, Pennsylvania and New Jersey, as well as the Ninth and Tenth Circuits, have all found 'use' in sponsored linking or similar activities because of the direct access it provides computer users to the non-trademark owner's content. J.G. Wentworth, S.S.C. Ltd. P'ship v. Settlement Funding LLC., 2007 WL 30115 (E.D. Pa. 2007); Buying for the Home, LLC v. Humble Abode, LLC, 459 F. Supp. 2d 310 (D.N.J. 2006); Gov't Employees Ins. Co. v. Google, Inc., 330 F. Supp. 2d 700 (E.D. Va. 2004); Playboy Enters., Inc. v. Netscape Commc'ns Corp., 354 F. 3d 1020 (9 th Cir. 2004); Australian Gold Inc. v. Hatfield, 436 F. 3d 1228 (10 th Cir. 2006). Judge Gorton adopted the 'majority view,' stating, rather summarily, that '[b]ecause sponsored linking necessarily entails the 'use' of the plaintiff's mark as part of the mechanism of advertising, it is 'use' for Lanham Act purposes.' Boston Duck, 527 F. Supp. 2d 205, 207.

The court further argued that the majority's stance is in line with the plain language of the statute. Id. However, this reasoning seems tenuous at best since none of the cases cited by the court as having found 'use' in sponsored linking even discusses the 'use in advertising' standard. As such a finding is the requirement sprung from the plain meaning of the statute, the court's conclusion is not adequately supported. Rather, the cases cited by the court focus only on whether the use was 'commercial,' and often leap to the conclusion that because an advertiser purchases a trademark as a keyword, it has used that mark 'in commerce' ' completely failing to address section 1127's clearly stated 'use in advertising' requirement. See, e.g., Gov't Employees Ins. Co. v. Google, Inc., 330 F. Supp. 2d 700, 702-705.

This, of course, begs the question of what, exactly, 'in the advertising of services' means. Does the mark have to appear within the advertising, or is it sufficient that the mark is somehow remotely connected to the creation, placement or purchase of the advertising? For instance, if a Burger King executive mentioned in a cover letter accompanying an advertising placement order for a newspaper, 'We want our ad to appear in every issue in which you carry an ad for McDonalds,' could anyone seriously argue that Burger King had 'used' McDonalds' mark 'in the advertising of services?' Instead of grappling with such questions, the court decided to skip over this analysis altogether.

As this was an issue of first impression, the court missed a golden opportunity to put its own stamp on this nascent area of the law by further analyzing the meaning of 'use in advertising.'

Clearly, there is already some discrepancy among courts as to how this standard is applied. Certainly, Congress could not have intended for the 'use in advertising' requirement to be so expansive as to cover all 'uses' connected with advertising, no matter how remote. Such a reading would seemingly also disallow such offline 'uses' as soda companies contracting to pay a premium for their product to be placed right next to the Coca-Cola display. Is this really the type of 'use' that Congress had in mind when framing the Lanham Act?

Had the court taken the time to truly assess the 'use in advertising' requirement, it could have dispensed with this case by ruling that the purchase of a trademark as a keyword for sponsored linking does not constitute 'use' under the Lanham Act unless the trademark is actually employed within the triggered advertising perceived by consumers. At a minimum, such a ruling would be in line with traditional trademark principles surrounding offline uses of competitor's trademarks. These principles do a much better job than their online counterparts of balancing the need to protect consumers from brand confusion with the need to maintain a competitive marketplace. Instead, this line of case law opens the door for punishing online advertisers and search engines for conduct virtually identical to that which has become commonplace in the brick and mortar space.

Conclusion

The advent of the digital age has brought with it a flock of legal issues, several of which break new ground and will undoubtedly require innovative legal and factual analysis in order to be resolved. Certainly, such hot-button issues as digital music distribution, privacy, and censorship on the Internet are prime examples. However, not all 'cyber issues' require such a novel approach. Rather, in order to maintain consistency between lawful online and offline conduct, courts should take care to not overlook well-settled, traditional legal principles that can easily be applied by analogy to online disputes.

Ultimately, the decision in this case appears to be in harmony with the emerging view regarding sponsored linking. It remains unclear, however, why so many courts continue to rule that sponsored linking constitutes 'use' for purposes of a Lanham Act claim, especially considering that such a ruling is essentially hollow unless the underlying triggered ad or Web site is found to violate the likelihood of confusion test. The 'use in advertising' requirement was intended to create a threshold before claims could go forward. However, employing such an overly broad reading of this requirement seems to accomplish nothing more than to open the floodgates of litigation, allowing for suits from any plaintiff who is unhappy with any sponsored link displayed alongside the search results for her trademark ' ultimately requiring courts to decide each and every case individually.

The more practical ruling would be that sponsored linking is not 'use,' thus requiring plaintiffs to show both 'use' and 'likelihood of confusion' directly from the contents of the triggered ad or Web site. This approach would not only be more consistent with traditional trademark law, and help to alleviate the threat of frivolous lawsuits against clearly non-infringing content, but it would also serve to foster healthy and fair competition on the Internet, thereby serving the fundamental precept of trademark law ' to protect consumers.

Kiran Belur is an attorney at Fenwick & West LLP, specializing in trademark law. He can be contacted at [email protected]. '2008 Kiran Belur.