The Unseemly Web of Keyword Advertising

In rejecting the broad conceptual rule precluding liability for lack of use in commerce, the Second Circuit simply remanded without assessing substantive liability. It thus remains to be seen whether or to what extent the New York courts may now adopt any of the equally broad conceptual rules embraced by various other courts supporting findings of liability, including the theory of “initial interest confusion” or a pared down “Internet-only” version of the traditional test of infringement, under which keyword ads might well be deemed per se infringements of the marks to which they are keyed. See e.g., Storus Corp. v. Aroa Marketing, Inc., No. C-06-2454 (MMC), 2008 WL 449835 (N.D. Cal. Feb. 15, 2008) (discussed below).

In their respective focuses to date on broad conceptual grounds to decide keyword advertising cases, few courts have carefully considered meaningful empirical evidence as to whether or when such advertising is indeed likely to cause consumers to make mistaken purchasing decisions. Although beyond the scope of the article, the jurisprudence in Europe is similarly fractured. Puzzling too is how different has been the treatment of Internet advertising as seen through the lens of other legal theories ' particularly privacy law. For instance, although courts consistently have held that pop-up advertising does not violate the Lanham Act, see, e.g., 1-800 Contacts, Inc. v. WhenU.com Inc., 414 F.3d 400 (2d Cir. 2005), the delivery of such advertising has been regularly regarded unlawful as an unfair and deceptive trade practice (either by the FTC or under state law). See In the Matter of DirectRevenue LLC, et al., Docket No. C-4194, FTC File No. 052-3131 (June 26, 2007); In the Matter of Advertising.com, Inc., 2005 ILRWeb (P&F) 2405, FTC File No. 042-3196; In the Matter of Zango, Inc. f/k/a 180solutions, Inc., 2006 ILRWeb (P&F) 3005, FTC File No. 052-3130; People of New York v. Intermix Media, Inc. (Tentative Agreement), No. 401394/2005 (NY Sup Ct, 2005)