Cyber Trademark Infringement Law

The Effects of Meta Tag Abuse

K. Amlap

2/9/2009

The Internet is being used to copy trademark names, logos and designs in order to increase traffic to websites. The misuse of meta tags has infringed on the trademark owner's rights to its brand recognition.

Contents

Introduction......................................................................................................................................3

I. Applicable Law........................................................................................................................5

A. Lanham Act......................................................................................................................................5

B. Unfair Competition – Third Restatement.........................................................................................8

C. Federal Copyright Act....................................................................................................................10

II. Case Law............................................................................................................................11

A. Personal Jurisdiction Issues...........................................................................................................11

1. Roberts-Gordon Case.................................................................................................................11

2. Star-Media Case.........................................................................................................................13

B. Likelihood of Confusion.................................................................................................................15

1. Movado Case.............................................................................................................................15

2. Fairbanks Case...........................................................................................................................17

3. Promatek Case...........................................................................................................................19

C. Recent Developments....................................................................................................................20

1. American Blind Case..................................................................................................................20

Conclusion.....................................................................................................................................24

Introduction

The Internet has created new challenges to trademark infringement laws. Not only is the

Internet used as a medium to copy trademark names, logos and website designs, but it is also

used to funnel fraudulent schemes where customers are being tricked into divesting personal

information through the use of reproduced trademarks.

The main form of trademark infringement discussed in this paper is through the misuse of

meta tags. These are HTML (Hypertext Markup Language) codes in the form of keywords or

website summaries that a website owner uses to describe the content of their website, which are

often hidden or embedded.1 If an internet surfer does not know a company's exact website

address, they enter keywords into a search engine that they think will assist them to find the

website. Search engines generally rank search results by relevance according to the number of

times a keyword appears on the website or in its hidden meta tags.2 The more often a term or

trademark appears in the meta tags, the more likely it is that the website will be a result of a web

search, and the higher on the list of matching results will the website appear.3 Many website

owners are misusing meta tags to attract Internet traffic to their websites by using company trade

names and trademarks as meta tags for their own website. Competitors mislead customers to

their websites and dishonestly profit from it through misdirected sales and public exposure. Not

only do they embed meta tags in their website to enhance search engine results, but they can also

buy meta tags and keywords from search engine companies. However, new lawsuits against

search engine companies may put a stop to selling trademarked keywords to the highest bidder.4

1 Movado Group Inc. v. Matagorda Ventures, Inc., 2000 U.S. Dist. LEXIS 18196, 5 n.4 (S.D.N.Y. 2000) (citing Brookfield Communications, Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036 (9th Cir. 1999)); Roberts-Gordon, LLC v. Superior Radiant Products, Ltd., 85 F. Supp. 2d 202, 206 (W.D.N.Y. 2000).2 Movado Group Inc. v. Matagorda Ventures, Inc., 2000 U.S. Dist. LEXIS 18196, 5 n.4 (S.D.N.Y. 2000) (citing Brookfield v. W. Coast Entm’t Corp., 174 F.3d 1036 (9th Cir. 1999)); Roberts-Gordon, LLC v. Superior Radiant Products, Ltd., 85 F. Supp. 2d 202, 206 (W.D.N.Y. 2000) [defining ‘meta tags’].3 Id.4 See Section II(C)(1) – Recent Developments, p 22, infra.

Many lawsuits have been brought against trademark law violators on the grounds of

unfair competition and breach of the Lanham Act. One such lawsuit was brought by Microsoft

on March 31, 2005 against 117 websites designed to look like pages hosted by the software

giant.5 Although these websites had already been shut down, Microsoft’s main concern was to

track down those who were responsible for running the site to begin with.6 Microsoft wanted no

ties to criminals that lure customers to fake websites which demand personal information in

order to commit identity theft.7

This paper will touch on the challenges of meta tag abuse faced by trademark holders in

the Internet arena and how it is being handled in the court systems.

I. Applicable Law

A. Lanham Act

5 Matt Hines, Microsoft Sues 117 Phishing Websites, CNet News, April 1, 2005, ¶1,2, available at Cnetnews.com 6 Id ¶ 3.7 Id ¶ 6

The Lanham Act of 1946 is also known as the United States Trademark Act. It defines

trademark as “any word, name, symbol, or device or any combination thereof used by a person

or which a person has a bona fide intention to use in commerce and applies to register it.”8

Trademarks are useful in that they help the consumer distinguish between the vast array of

similar or related products in any particular category through, for example, the use of a logo or

brand name or symbol. A trade name is defined as “any name used by a person to identify his or

her business or vocation.”9 Trademarks can be distinguished by the use of a famous slogan or

word that is connected to a specific brand, product or company.

The Lanham Act clearly states that in any suit for infringement as a result of a registrant

failing to give notice of registration through the use of phrases such as ‘Registered in U.S. Patent

and Trademark Office’, ‘Reg. U.S. Pat. & Tm. Off.’ or the letter R enclosed with a circle (®),

then no profits and no damages can be recovered unless the defendant had actual notice of the

registration.10

The Lanham Act provides grounds for civil action if any person who, without the consent

of the registrant, uses in commerce any reproduction, counterfeit, copy or colorable imitation of

a registered mark in connection with the sale, offering for sale, distribution, or advertising of any

goods or services on or in connection with which such use is likely to cause confusion, mistake,

or to deceive.11 Nor can someone reproduce, counterfeit, copy or colorably imitate a registered

mark and apply such reproduction to labels, signs, prints or advertisements intended to be used in

commerce or in connection with the sale, offering for sale, distribution or advertising that is

likely to cause confusion, mistake or to deceive.12

8 The Lanham Act § 45, 15 USCA § 1127.9 Id § 45, 15 USCA § 1127.10 Id § 29, 15 USCA § 1111.11 Id § 32, 15 USCA § 1114(1)(a).12 Id § 29, 15 USCA § 1114(1)(b).

The Lanham Act also provides grounds for civil action if “any person who, on or in

connection with any goods or services, or any container for goods, uses in commerce any word,

term, name, symbol, or device, or any combination thereof, or any false designation of origin,

false or misleading description of fact, or false or misleading representation of fact.”13 The false

or misleading conduct must be

(A) likely to cause confusion, or to cause mistake, or to deceive as to

the affiliation, connection or association of such person with another person,

or as to the origin, sponsorship, or approval of his or her goods, services, or

commercial activities by another person, or (B) which in commercial advertising

or promotion, misrepresents the nature, characteristics, qualities, or geographic

origin of his or her or another person’s goods, services, or commercial activities,

shall be liable in a civil action by any person who believes that he or she is or

is likely to be damaged by such act.14

The term ‘uses in commerce’ means the “bona fide use of a mark in the ordinary course of trade,

and not made merely to reserve a right in a mark.”15 A mark is deemed to be in use if it is placed

on goods, containers, displays, tags, labels or associated documents.16 In addition, the mark is

deemed to be in use on goods when they are sold or transported in commerce, and is deemed to

be in use on services when it is used or displayed in the sale or advertising of services and

services are rendered in commerce.17

Liability for trademark infringement without proof of confusion is available. Proving

dilution of the trademark, for example, is a much easier task to accomplish than proving

likelihood of confusion.18 The applicable anti-dilution statute, also known as the United States

Trademark Dilution Act, states that the owner of a famous mark is entitled to an injunction

against another person’s commercial use in commerce of a mark or trade name, if such use

13 The Lanham Act § 43, 15 USCA § 1125(a)(1).14 Id § 43, 15 USCA § 1125(a)(1)(A)(B).15 Id § 45, 15 USCA § 1127.16 Id.17 Id. 18 See Section I. C. Unfair Competition – Third Restatement ¶ 3, p 10, infra.

begins after the mark has become famous and causes dilution of the distinctive quality of the

mark.19 In determining whether a mark is famous or distinctive a court may consider the

following factors:

(A) degree of inherent or acquired distinctiveness of mark, (B) duration and

extent of use of mark in connection with goods and services, (C) duration and

extent of advertising and publicity, (D) geographical extent of trading area in

which mark used, (E) channels of trade for goods and services with which mark

used, (F) degree of recognition of mark in trading areas and channels of trade

used by marks’ owner and person against whom injunction sought, (G) nature

and extent of use of same or similar marks by third parties, and, (H) whether mark

registered under certain acts or on the principal registry.20

If it can be shown that the diluter willfully intended to trade on the owner’s reputation or to cause

dilution of the famous mark, then the owner is entitled to obtain defendant’s profits, any

damages sustained by the plaintiff, and the costs of the action.21 In addition, the defendant could

be asked to destroy anything that contains the word, term, name, symbol, device or combination

thereof. This becomes a very costly mistake on their part.

Finally, the Lanham Act specifically addresses issues of cyber piracy.22 It has a cyber

piracy prevention provision that states that a person shall be liable if, without regard to the goods

and services of the owner, that person has a bad faith intent to profit from that mark and

registers, traffics in, or uses a domain name that:

(I) in the case of a mark that is distinctive at the time of registration of the

domain name, is identical or confusingly similar to that mark; (II) in the case

of a famous mark that is famous at the time of registration of the domain name,

is identical or confusingly similar to or dilutive of that mark; or is a protected

19 The Lanham Act § 43, 15 USCA § 1125(c)(1). 20Id § 43, 15 USCA § 1125(c)(1)(A)-(H).21Id § 35, 15 USCA § 1117(a).22 Id § 43, 15 USCA § 1125(d).

trademark, word or name.23

In addition, the court may consider certain factors to determine if the bad faith standard has been

met. For example, the court can look to “the person’s intent to divert consumers from the mark

owner’s online location to a site accessible under the domain name that could harm the goodwill

represented by the mark, either for commercial gain or with the intent to tarnish or disparage the

mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation or

endorsement of the site.”24

B. Unfair Competition – Third Restatement

The Restatement defines a trademark as, “a word, name, symbol, device or other

designation…that is distinctive of a person’s goods or services and that is used in a manner that

identifies those goods or services and distinguishes them from the goods and services of

others.”25 To elaborate further, a trademark is “distinctive” under Section 13 if because of the

nature of the designation and in the context in which it is used, prospective purchasers are likely

to perceive it as a designation that identifies the goods or services produced or sponsored by a

particular person or identifies the business or other enterprise of a particular person.26

The rights to a trademark or trade name can only be acquired when the designation has

been actually used as such or when an applicable statutory provision recognizes a protectable

interest prior to its actual use.27 It is used as a mark “when the designation is displayed or

otherwise made known to prospective purchasers in the ordinary course of business in a manner

that associates the designation with the goods, services, or business of the user."28 There is a 23 The Lanham Act§ 43, 15 USCA § 1125(d)(1)(A)(I),(II), (III).24 Id § 43, 15 USCA 1125 § (d)(1)(B)(i)(V).25 RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 9.26 RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 13(a),(b).27 Id § 18.28 Id.

priority of rights in the use of the trademark or trade name over another user in 1) any geographic

area in which the actors has used the designation in good faith and 2) any additional geographic

area in which the actor has priority over the other under an applicable statutory provision29.

Someone can be liable for infringing upon a trademark or trade name if it causes a

likelihood of confusion.30 The likelihood of confusion can be performed in one of three ways: 1)

that the actor’s business is the business of the other or is somehow associated or connected to it,

or 2) that the goods or services marketed by the actor are produced, sponsored, certified, or

approved by the other, or 3) that the goods or services marketed by the other are produced,

sponsored, certified or approved by the actor.31 Proof of confusion involves several market

factors, including the degree of similarity between the two designations, similarity in the

marketing methods and channels of distribution used, characteristics of the prospective purchaser

and degree of care exercised in making purchasing decisions, and the degree of distinctiveness of

the other’s designation, among other factors.32

Finally, the trademark owner can prove dilution of its trademark under the anti-dilution

provision that subjects an actor to liability if,

the actor uses such a designation in a manner that is likely to associate the other’s

mark with the goods, services or business of the actor, and: (a) the other’s mark is

highly distinctive and the association of the mark with the actor’s goods, services,

or business is likely to cause a reduction in the distinctiveness; or (b) the association

of the other’s mark with the actor’s goods, services, or business, or the nature of the

actor’s use, is likely to disparage the other’s goods, services, or business or tarnish

the images associated with the other’s mark.33

29 Id § 19.30Id § 20.31RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 20(a)-(c).32 Id § 21(a)-(d).33 Id § 25 (1)(a),(b).

Here, the trademark owner need only show that its mark is highly distinctive and is being diluted

by the infringer’s conduct, and not that the infringer’s use of the trademark will cause a

likelihood of confusion, which carries a higher standard of proof.

The damages a trademark owner can collect against an infringer includes loss from sales

or other revenues because of the conduct, harm to market reputation, and reasonable

expenditures made by the plaintiff in order to prevent, correct or mitigate the confusion or

deception resulting from the conduct.34

C. Federal Copyright Act

The federal Copyright Act prohibits online copyright infringement and provides for

remedies.35 There are a several sections that provide for relief in relation to certain kinds of

online infringement, however subsection (d) will be the focus here.

Under 17 USC 512(d) – Information Location Tools, a service provider shall not be

liable for infringement of copyright by reason of the provider referring or linking users to an

online location containing infringing material or infringing activity, by using information

location tools such as a directory, index, reference, pointer or hypertext link --- if the service

provider:

(1)(A) does not have actual knowledge that the material or activity is infringing;

(B) in the absence of such actual knowledge, is not aware of facts or circumstances

from which infringing activity is apparent; or (C) upon obtaining such knowledge or

awareness, acts expeditiously to remove or disable access to the material;

(2) does not receive a financial benefit directly attributable to the infringing activity,

in a case where the service provider has the right and ability to control such activity;

and (3) upon notification of claimed infringement responds expeditiously to remove

34 Id § 36(2)(a)-(d).35 Copyright Act, 17 USC 512.

or disable access to the material, the notification must contain a reference or link reasonably

sufficient to permit the service provider to locate it.36

This section should be referenced when reading the American Blind v. Google case, which

resulted in a settlement after many years.37

II. Case Law

A. Personal Jurisdiction Issues

1. Roberts-Gordon Case

One of the major issues in cyber piracy cases is the ability to gain personal jurisdiction

over the website owners.

In Roberts-Gordon, LLC v. Superior Radiant Products, Ltd., 85 F. Supp. 2d 202

(W.D.N.Y. 2000), the plaintiff claimed that its trademarked names, marks and logos were being

used on defendant’s website through the use of meta tags.38 The defendant, a Canadian

corporation, raised a motion to dismiss based on lack of personal jurisdiction, which was denied

by the court.39 The court found that the defendant had sufficient minimum contacts with New

York to find that it had purposefully availed itself and that exercising personal jurisdiction under

N.Y. CPLR 302(a)(3)(iii) comported with due process requirements.40

The plaintiff alleged trademark infringement in violation of the Lanham Act, unfair

competition in violation of the Lanham Act 15 U.S.C. § 1125(a), unfair competition in violation

of New York common law and dilution of the distinctiveness of the trademarks under the Federal

Dilution Act, 15 U.S.C. § 1125(c).41

Both companies were in the business of manufacturing and selling heating equipment.

Two of the plaintiff’s registered trademarks were “Gordon-Ray” and “Co-Ray-Vac”, in which

the plaintiff owned valuable goodwill.42 The plaintiff had been using these registered trademarks

since the 1960’s. The plaintiff first learned of the trademark infringement when its CEO

36 Copyright Act of 1976, 17 USC 512(d)(1)-(3).37 See Section II(C)(1) – Recent Developments, p 22, infra.38 Roberts-Gordon, LLC v. Superior Radiant Products, Ltd., 85 F. Supp. 2d 202 (W.D.N.Y. 2000).39 Id.40 Id. 41 Id.42 Id at 206 (citing Complaint, PP 11-12).

“inputted Roberts-Gordon registered trademarks….as keywords in an Internet search for

Roberts-Gordon’s website and, instead, found a website maintained by Superior located at

http:/www.superiorrandiant.com.”43 The plaintiff determined that the keywords “Gordon-Ray”,

“Gordonray” and “Co-Ray-Vac” were among the meta tags assigned to Superior’s website.44

The plaintiff also noted that the president of Superior and an employee in charge of product

design and engineering, were former employee’s of Gordon-Ray.45

A demand to immediately cease all further use of Robert-Gordon’s trademarks was made

by the plaintiff and the defendant responded that the meta tags had been inadvertently placed in

Superior’s meta index file and had been deleted.46 The plaintiff ran a search again a few months

later to find that the defendant had never ceased using the meta tags and that an internet search

using the its trademarks led to the defendant’s website.47 Superior claimed that it was due to

Gordon’s use of old or cache memory in its computer which was previously used to access

Superior’s website, but Gordon was using a computer recently formatted and had never been

used to access the website.48

In this case, the defendant’s company and website were created in Canada. The court

could only exercise personal jurisdiction over the non-domiciliary to the extent permitted by

New York law.49 The court granted the plaintiff a prima facie showing of personal jurisdiction

over Superior based on long-arm jurisdiction under N.Y. CPLR § 302(a)(3)(ii).50 The court

found that the defendant transacted business in New York within the meaning of Section 302(a)

(3)(ii) through the use of its interactive website which could be accessed from computers located

in New York.51 The defendant’s interactive website allowed users to exchange information and

the ability to place orders,52 as opposed to a passive website which only provides information.53

Although the defendant is not physically present in NY, its interactive website could be accessed

from computers located in NY and provided the viewers with the ability to place orders over the

43 Id.44 Id at 207 n.3.45 Id at 206. 46 Id at 207.47 Roberts-Gordon, LLC v. Superior Radiant Products, Ltd., 85 F. Supp. 2d 202, 207 (W.D.N.Y. 2000).48 Id. 49 Id at 208. 50 Id at 209.51 Id at 216.52 Id at 207 n.3 (defining ‘interactive website’).53 Id.

internet.54 In addition, the defendant’s website lists its authorized distributors in NY and states

on its website that they can be contacted over the internet.55 Finally, the defendant’s website

claimed that their distributors provided sales coverage throughout North America with projects

ongoing from Texas to Northern Canada.56 This would include doing business in New York.

The court concluded that the defendant’s conceded “use of selected Roberts-Gordon

trademarks as meta tags in the design and operation of Superior’s website containing information

directed to potential customers throughout North America, including New York…was in

violation of federal trademark law.”57

2. Star-Media Case

In Starmedia Network, Inc. v. Star Media, Inc., 2001 U.S. Dist. LEXIS 4870 (S.D.N.Y.

2001), the plaintiff began the action alleging that the defendant’s corporate and domain name

infringed on the plaintiff's federally registered trademark of “StarMedia”.58 Defendant moved to

dismiss the complaint for lack of personal jurisdiction. The plaintiff’s principal office is in New

York and the defendant’s principal office is in Washington. The plaintiff maintains a website

with a domain name of “starmedia.com” and the defendant has a website with the domain name

of “starmediausa.com”.59

The defendant’s website is considered to be interactive, as it allows its customers to

register with the site, send them comments and download forms.60 It also provides shipping cost

information for the continental Unites States, which in effect allows Internet users to have their

product shipped to them in any state.61 However, the defendant had yet to sell its merchandise in

54 Id at 215. 55 Id. 56 Id at 217. 57 Id.58 Starmedia Network, Inc. v. Star Media, Inc. , 2001 U.S. Dist. LEXIS 4870, 1 (S.D.N.Y. 2001).59 Id at 2.60 Id.61 Id.

New York.62 Therefore the defendant disputes the fact that it could reasonably expect its actions

to have consequences in New York and that it derived substantial revenue from interstate

commerce.63

The plaintiff argued that the court had personal jurisdiction over the defendant pursuant

to the long arm statute of the NY CPLR § 302(a)(3)(ii). In order for Star-Media to establish a

prima facie case, the following must be met: (1) defendant committed a tortious act outside of

New York, (2) plaintiff suffered harm in New York, (3) defendant should have reasonably

expected its actions to have consequences in New York, and (4) defendant derives substantial

revenue from interstate commerce.64 The court stated that the principal issue is whether the

defendant should reasonably expected to have consequences in New York.65 When an Internet

site displays allegedly infringing marks, the tort is deemed to be committed where the website is

created and/or maintained.66 It therefore does not subject the defendant to the jurisdiction of the

courts simply because he maintains such web site which residents of New York visit.67

“However, one who uses a web site to make sales to customers in a distant state can thereby

become subject to the jurisdiction of that state's courts.”68 Consequences in New York include

harm to a business through lost sales or customers, as well as harm resulting from confusion or

deception of New York computer users.69 The defendant had admitted that it solicits business

nationwide via the website and one of the purposes of its website is to attract new customers,

62 Id.63 Id at 3.64 Id at 5.65 Id at 6.66 Id at 6 (citing Cable News Network, L.P., L.L.P. v. Gosms.com. Inc., 2000 U.S. Dist. LEXIS 16156).67 Id at 7 (citing National Football League v. Miller, 2000 U.S. Dist. LEXIS 3929, *1, (S.D.N.Y. Mar. 30, 2000) --citing Bensusan, 126 F.3d 25).68 Id.69 Id (citing Citigroup Inc. v. City Holding Co., 97 F. Supp. 2d 549, 568 (S.D.N.Y. 2000); American Network v. Access America/Connect Atlanta, Inc., 975 F. Supp. 494, 497 (S.D.N.Y. 1997).

including customers from New York.70 With that in mind, the defendant should have reasonably

anticipated being haled into New York courts.71

Through the “use of its website to attract and service business across the nation, including

New York,” the defendant made an effort to serve the New York market.72 Thus the court

extended personal jurisdiction to the defendant and dismissed the motion to dismiss.

B. Likelihood of Confusion

1. Movado Case

“The issue of trademark infringement and unfair competition is not new to the internet.

There is a growing body of case law regarding liability for diverting potential customers to one's

website and for using another's trademark in one's meta tags.”73

In Movado Group Inc. v. Matagorda Ventures, Inc., 2000 U.S. Dist. LEXIS 18196, 5 n.4

(S.D.N.Y. 2000), the court ruled that the plaintiff was entitled to summary judgment on the

issues of trademark infringement and unfair competition in regards to its trademark names being

listed on a competitor’s website.74

Movado uses authorized dealers to sell its watches. In this particular case, one of its

dealers sold a Movado watch to the defendant, who owned an online resale store. Movado

claimed that the defendant’s meta tags were luring its customers to the defendant’s website and

that once the customers were directed to the website and realized they were not at the correct

website, did not leave, and bought a different watch altogether.75 The defendants argued that

70 Id at 3.71 Id at 7.72 Id at 8.73 Movado Group Inc. v. Matagorda Ventures, Inc., 2000 U.S. Dist. LEXIS 18196, 16 (S.D.N.Y. 200074 Id at 16. 75 Movado Group Inc. v. Matagorda Ventures, Inc., 2000 U.S. Dist. LEXIS 18196, 5 (S.D.N.Y. 2000).

Movado was aware of their existence as resellers and that Movado approved and supported their

relationship to further sales of their product.76

The court stated that Movado would have to satisfy the trademark infringement and

unfair competition test.77 Movado had to show that there was a likelihood that a significant

number of ordinary prudent purchasers are likely to be misled or confused as to the source of the

goods.78 The court stated that, “confusion is not limited to cases in which the infringer purposely

attempts to pass on his product as that of his competitor.”79 Rather, it can occur in one of three

ways: (1) where prospective purchasers are led to believe that the trademark's owner sponsors

or otherwise approves the second user's use of the trademark; (2) where potential consumers are

initially led to the non-owners' allegedly infringing mark by virtue of similarity between the two

marks--even if such confusion does not exist at the time of the purchase; and (3) where

customers are confused as to the source of the second users' product even when observed post-

sale.80

The court found that “…the concern is that potential customers of one website will be

diverted and distracted to a competing website. The harm is that the potential customer believes

that the competing website is associated with the website the customer was originally searching

for and will not resume searching for the original website.”81 The Movado watch brand was

listed on the defendants’ website and was found to be infringing on the plaintiff’s registered

trade name. However, the claims against the defendant concerning the use of meta tags to

infringe on the trademark were dismissed since, the court visited the website and after using “a

program available at http://www.scrubtheweb.com/abs/meta-check.html, and Internet Explorer,

76 Id at 6. 77 Id at 13 n.8.78 Id at 13(citing Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254, 256 (2d Cir. 1987)).79 Id.80 Id.81 Id at 16.

the Court determined that the Concord name does not appear in the Defendants' website's meta

tags.”82

2. Fairbanks Case

Fairbanks alleges federal trademark and copyright infringement arising out of the

defendant’s creation and maintenance of his website.83 The defendant was a homeowner, whose

mortgage was serviced by Fairbanks and felt they used unfair practices.84 The defendant

therefore created a website with meta tags using keywords such as “Fairbank” and other related

names. Under the findings of fact, the court found that when certain variations of “Fairbanks”

was run in a search engine, the defendant’s website would be listed before the plaintiff’s.85

The court stated that there was a valid trademark infringement or unfair competition

claim, sine the plaintiff proved the elements listed in 15 U.S.C. §§ 1125(a) .86 The plaintiff had to

primarily establish that there was a “likelihood of confusion as to the source, origin or

sponsorship of the products or services,” and did not have to prove actual confusion.87 The court

found that there was evidence that showed the defendant’s acts involve a tendency to deceive.88

The court stated that the record established, by clear and convincing evidence, that it was highly

likely that large numbers of reasonably alert users of the World Wide Web who are searching for

Fairbanks' website, would land on defendants' website instead of on Fairbanks' site.89 In

addition, it was found that for several moments after landing on defendants' site, such users

82 Movado Group Inc. v. Matagorda Ventures, Inc., 2000 U.S. Dist. LEXIS 18196, 6 n.6 (S.D.N.Y. 2000)83 Fairbanks Capital Corp. v. Kenney et al, 303 F. Supp 2d 583, 585 (MD Dist. Ct. 2003).84 Id.85 Id at 588.86 Id at 589. 87 Id (citing Pizzeria Uno Corp. v. Temple , 747 F.2d 1522, 1527 (4th Cir. 1984) ; Yellowbrix, Inc. v. Yellowbrick Solutions, Inc. , 181 F. Supp. 2d 575, 578 (E.D.N.C. 2001) ).88 Id at 589.89 Id at 590.

would experience genuine confusion over the source of the information being provided at the site

since the defendants' website's homepage announced, "Welcome To The Fairbanks Resource

Site," indicating that the website was owned, sponsored, or otherwise controlled by Fairbanks.90

Although the defendant was not the plaintiff’s competitor per se, the court found that because of

Fairbank’s loss of control over its reputation, goodwill and its “Fairbanks” mark through the

defendant’s domain name and website, it constituted an injury.91

Accordingly the court found that, (1) Fairbanks possessed a valid trademark for the

mark, "FAIRBANKS;" (2) Kenney had used the "FAIRBANKS" mark in the domain names and

on the homepage of his website; (3) Kenney had used the "FAIRBANKS" mark in commerce

through the creation of his website and registered domain names, and had over 200,000 visitors;

(4) Kenney had used the "FAIRBANKS" service mark on his website and in connection with the

advertising of legal referral services and URL links; and (5) the Kenney website domain names

are likely to confuse users who are attempting to locate the official Fairbanks website and are

unaware that the Kenney website exists.92

In granting the motion of preliminary injunction, the court stated that the defendant’s

would not be significantly harmed if they were enjoined from using the “Fairbanks” mark.93

There would be minimal effort and nominal cost in changing the domain name and removing the

trademarks from the website.94 The defendant could “create new search words to use in his meta

tags that will enable users to locate his website--without the current confusion between his site

and the Fairbanks site.”95

90 Id.91 Id.92 Id at 592; 15 USC § 1125(a).93 Id at 591.94 Id.95 Id.

3. Promatek Case

This case concerns an appeal by the defendant against an order to place language on its

website in order to rectify Lanham Act violations.96 Promatek had sued Equitrac for trademark

infringement based for its use of the trademark “Copitrak” as a meta tag on its website.97

Equitrac claimed it used the “Copitrack” meta tag because its company provides service and

maintenance on Copitrak equipment.98 After learning of Promatek's suit, Equitrac contacted all

of the search engines known to it and requested that they remove any link between the term

Copitrack and its website and they also removed the Copitrack meta tag from its website.99

However, Promatek was not satisfied with this and was granted a preliminary injunction

where the defendant was asked to place the following language on his website, “If you were

directed to this site through the term "Copitrack," that is in error as there is no affiliation between

Equitrac and that term. The mark "Copitrak" is a registered trademark of Promatek Industries,

Ltd., which can be found at “www.promatek.com” or “www.copitrak.com.”100

Equitrac argued that the language did only inform consumers of its competitor, Promatek,

but would encourage people to go to Promatek's website.101 Promatek argues that without this

language, Equitrac will continue to benefit, to Promatek's detriment, from consumer internet

searches containing the word Copitrack.102 The court concluded that the district court

was correct in finding Promatek would suffer a greater harm than Equitrac if corrective measures

were not taken.

96 Promatek Industries, Ltd v. Equitrac Corp., 300 F. 3d. 808 (7th Cir. 2002). 97 Id.98 Id at 810.99 Id at 811.100 Id.101 Id.102 Id.

The court affirmed the lower court’s preliminary injunction, stating that “[a]lthough

Equitrac claims that it did not intend to mislead consumers with respect to Copitrak, the fact

remains that there is a strong likelihood of consumer confusion as a result of its use of the

Copitrack meta tag.”103 The court stated that the ninth circuit court has held that placing a

competitor's trademark in a meta tag and website creates a likelihood of confusion.104 Although

consumers are not confused when they reach a competitor's website, there is nevertheless initial

interest confusion.105 That consumers who are misled to Equitrac's website are only briefly

confused is of little or no consequence; that confusion as to the source of a product or service is

eventually dispelled does not eliminate the trademark infringement which has already

occurred.106

C. Recent Developments

1. American Blind Case

This case is one of first impression and defines a search engine’s liability for selling

trademarks as keywords to the highest bidder.

In the American Blind & Wallpaper Factory, Inc. v. Google, Inc., 2005 U.S. Dist. LEXIS

6228 (N.D. Cal. 2005), the plaintiff alleged that the defendant was illegally capitalizing by

permitting and encouraging its competitors to purchase keywords that caused links to the

competitors websites to be listed in a position above or next to the link to counterclaimant's

website, when Internet users entered search terms identical or substantially similar to

counterclaimant's marks.107

103 Id at 812.104 Id.105 Id (citing Brookfield Communications v. W. Coast Entm’t Corp., 174 F.3d 1036 (9th Cir. 1999)).106 Id at 813 (citing Forum Corp. of N. Am. v. Forum, Ltd. , 903 F.2d 434, 442 n.2 (7th Cir. 1990). 107 American Blind & Wallpaper Factory, Inc. v. Google, Inc., 2005 U.S. Dist. LEXIS 6228, 1 (N.D. Cal. 2005).

American Blind conducts a significant amount of business through its website launched

in 1997, it receives more than 30,000 visits a day and processes more than 400,000 transactions a

year.108 In addition, “American Blind has spent over $10 million developing its Web site, spends

over $1 million per year maintaining, enhancing, and updating its Web site, and employs over

fifty full-time employees in connection with its Internet operations.”109 It owns registered

trademarks such as “American Blind & Wallpaper Factory”, “American Blind Factory” and

“Decorate Today.”110 In addition, it has used the names and marks “American Blind” and

“American Blinds.”111 Through its annual revenues of $100 million, the plaintiff claims that it

has “acquired a fine reputation and are famous among prospective purchasers.”112

Google operates an Internet search engine, which allows Internet users to locate Web

sites that match the "keywords," they enter which produces a search result page with links to the

Web sites displayed in order of decreasing relevance, with the most relevant Web sites listed

first.113 Google offers a keyword-triggered advertising program called "AdWords” which

enables advertisers to purchase or bid on certain keywords.114 The advertiser’s website link is

then listed in the “Sponsored Links” area which appear in the margins or on the top of the search

results page.115 This case is monumental, as it "could have large implications for search

marketing at Google. According to Google's last financial statement, AdWords ads account for

more than 98% of its annual revenue."116

108 Id at 3. 109 Id at 5 n.3.110 Id at 4.111 Id.112 Id.113 Id at 5.114 Id at 6.115 Id.116 Brian Quinton, Google, American Blinds Get Ready To Rumble Over Trademark Keywords, MultiChannel Merchant, at http://multichannelmerchant.com/ecommerce/Google-American-Blinds-05312007 (May31, 2007).

American Blind alleges that through the use of Google’s “AdWords Keyword

Suggestions” feature, it actively and deliberately encourages American Blind's competitors to

purchase as keywords both the American Blind Marks and virtually every conceivable, though

indistinguishable, iteration of those marks.117 American Blind’s contention is that “Google

sells and its advertisers purchase the possibility of intercepting American Blind's potential

customers, who may click on the links to the Web sites of American Blind's competitors without

realizing that they are being directed to a competitor's Web site or who may eventually recognize

the diversion but either fail to search for or be forced to spend time and energy searching for

American Blind's Web site.”118 American Blind claims that "the unauthorized and willful use of

copies, variations, reproductions, simulations or colorable imitations of [its] registered marks in

connection with the sale of keyword advertising constitutes trademark infringement under

Section 32(1) of the Lanham Act and that it constitutes a false designation of origin and false

description and representation as described in Section 43(a) of the Lanham Act.119

The term "initial interest confusion" describes a situation in which, although the

consumer does not experience confusion as to the source of goods or services, the defendant, by

diverting or capturing the consumer's initial attention, improperly benefits from the goodwill that

the plaintiff developed in its mark.120 The court found that there was initial confusion, since

internet users expect search engine results to appear in order of relevance, not advertising

expenditures.121

The court denied the defendants' motions to dismiss American Blind's claims of

trademark infringement, false representation, and dilution under the Lanham Act, among other

117 Id at 7.118 Id at 8.119 Id at 15.120 Id at 25 (citing Brookfield Communications , 174 F.3d at 1062-63 ).121 Id at 31.

claims.122 The court also denied defendant’s motion to dismiss the contributory claims of

trademark infringement and dilution. The contribution to the infringement or dilution comes

about when the defendant induces a third party to infringe on the plaintiff’s trademark with

actual or constructive knowledge that it is doing so. 123 In so ruling the court does not express an

opinion on whether the defendant’s will prevail in trying to prove that they are not liable to

American Blinds, that this order is only allowing the plaintiff to proceed with its claims through

the motion-to-dismiss stage.124

The case ended in a settlement with an agreement signed and dated August 31, 2007 in

which American Blind & Wallpaper Factory Inc and Google Inc agreed to dismiss the federal

litigation, with prejudice.125 Google walked away without having to pay a penny for the alleged

trademark infringement, and American Blinds agreed not to sue Google as long as they do not

change their current AdWords trademark policy.126

Conclusion

Meta tag trademark infringement is not new to the court system. Although many court

rulings have declared that meta tag trademark infringement is prohibited, infringers continue to

122 Id.123 Id at 33.124 Id at 31 n.25. 125 Trademark Plaintiff Drops Suit Vs. Google Over Ads, Reuters, at http://www.reuters.com/article/internetNews/idUSN0336124420070904 (September 4, 2007).126 Id.

practice their unlawful activities. The potential gain of profits in increased Internet traffic to

perpetrator’s website in misusing and buying meta tags seems too good to pass up. Many

infringers wait until they are hauled into court before they remove the trademarked meta tags,

preferring to pay the fine or conform to an injunction, than to forgo the use of the trademark. By

that time, the damage to the trademark owner’s goodwill is potentially complete, and the

infringer's public exposure and gain is already set. In order to curb this conduct, the size of the

damages awarded to plaintiffs must be so large, that it would surpass any possible gain that the

infringer can realize. The case law foundation for meta tag misuse is still young and future

developments will be interesting at the least.