Ninth Circuit Vacates Injunction In Advertising Keywords Case

In a 35-page ruling, a three-judge Ninth Circuit panel vacated an injunction blocking a software company called Network Automation from using the keyword ActiveBatch to direct search-engine users to its products, even though ActiveBatch is the trademarked name of software sold by Network Automation's direct rival, Advanced Systems Concepts. The panel (appellate judges Stephen Trott and Kim McLane Wardlaw and Oregon federal district court judge Michael Mosman, sitting by designation) concluded that two long-established Ninth Circuit tests for trademark infringement couldn't be applied with “excessive rigidity” in evaluating online violations. Network Animation, Inc. v. Advanced Systems Concepts, Inc., D.C. No. 2:10-cv-00484-CBM-CW (9th Cir., March 8, 2011). (The opinion can be found at http://amlawdaily.typepad.com/networkautovadvancedsystems.pdf.)

The panel pointed back to the eight-prong standard for infringement it established in a 1979 case, AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir., 1979), and said Los Angeles federal district court senior judge Consuelo Marshall erred in limiting her analysis of Network Automation's alleged infringement to the three Sleekcraft factors the Ninth Circuit highlighted in a landmark 1999 case involving Internet advertising keywords, Brookfield Communications v. West Coast Entertainment, No. 98-56918 (9th Cir., 1999). Those three factors ' the similarity of the trademarks, the relatedness of the goods or services, and the simultaneous use of the Web as a marketing channel ' have become known as the “Internet troika” test for online infringement.