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The Unseemly Web of Keyword Advertising

By Jonathan Moskin

Despite the surface simplicity of keyword advertising disputes (typically entailing unwanted use of the exact trademark of a direct competitor promoting competing goods or services) the web the courts have spun addressing such Web-based advertising has been anything but. Fortunately, the Second Circuit's April 3 decision in Rescuecom Corp. v. Google, Inc., 562 F.3d 123 (2d Cir. 2009) (on the one-year anniversary of oral argument), straightens at least some of the tangled seams by recognizing that keyword ads tied to a trademark do constitute a use in commerce of the subject mark. The Second Circuit thus agreed with arguments made by this author in numerous articles (including Virtual Trademark Use ' The Parallel World of Keyword Ads, 98 Trademark Rptr. 873 (May-June 2008)) that New York district courts, in a cluster of cases recognizing no such “use in commerce,” had mistakenly focused on the statutory definition of how an owner acquires bona fide rights in a mark in the first instance, rather than the statutory test of infringement. The previous week, a Massachusetts decision adopted much the same analysis. Hearts on Fire Co. v. Blue Nile, Inc., 2009 WL 794482 (D. Mass. March 27, 2009).

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).

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