Presenting a live 90‐minute webinar with interactive Q&A

K d Ad i i   d T d k I f iKeyword Advertising and Trademark InfringementProtecting Brands and Avoiding Liability in Online Advertising

T d ’ f l f

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

WEDNESDAY, MAY 11, 2011

Today’s faculty features:

Jennifer M. Mikulina, Partner, McDermott Will & Emery, Chicago

Ariana G. Voigt, Partner, Michael Best & Friedrich, Milwaukee

Torin A. Dorros, Senior Counsel, Michelman & Robinson, Encino, Calif.

The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

Conference Materials

If you have not printed the conference materials for this program, please complete the following steps:

• Click on the + sign next to “Conference Materials” in the middle of the left-hand column on your screen hand column on your screen.

• Click on the tab labeled “Handouts” that appears, and there you will see a PDF of the slides for today's program.

• Double click on the PDF and a separate page will open. Double click on the PDF and a separate page will open.

• Print the slides by clicking on the printer icon.

2

Continuing Education Credits FOR LIVE EVENT ONLY

For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps:

• Close the notification box

• In the chat box, type (1) your company name and (2) the number of attendees at your location

• Click the blue icon beside the box to send

3

Tips for Optimal Quality

S d Q litSound QualityIf you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection.

If the sound quality is not satisfactory and you are listening via your computer speakers, you may listen via the phone: dial 1-866-869-6667 and enter your PIN when prompted Otherwise please send us a chat or e mail when prompted. Otherwise, please send us a chat or e-mail sound@straffordpub.com immediately so we can address the problem.

If you dialed in and have any difficulties during the call, press *0 for assistance.

Viewing QualityTo maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key againpress the F11 key again.

4

Keyword Advertising and Trademark I f i t B t P tiInfringement: Best PracticesJennifer M. MikulinaMcDermott Will & Emery LLPy312.984.3620jmikulina@mwe.com

www.mwe.com

Boston Brussels Chicago Düsseldorf Houston London Los Angeles Miami Milan Munich New York Orange County Paris Rome Silicon Valley Washington, D.C.

Strategic alliance with MWE China Law Offices (Shanghai)

© 2011 McDermott Will & Emery. The following legal entities are collectively referred to as “McDermott Will & Emery,” “McDermott" or “the Firm”: McDermott Will & Emery LLP, McDermott Will & Emery AARPI,McDermott Will & Emery Belgium LLP, McDermott Will & Emery Rechtsanwälte Steuerberater LLP, MWE Steuerberatungsgesellschaft mbH, McDermott Will & Emery Studio Legale Associato and McDermott Will &Emery UK LLP. These entities coordinate their activities through service agreements. McDermott has a strategic alliance with MWE China Law Offices, a separate law firm. This communication may be consideredattorney advertising. Prior results do not guarantee a similar outcome.

What is keyword advertising?

Advertising that is linked to specific words or phrases –Advertising that is linked to specific words or phrases “Sponsored Links”

Example (search for “London hotel”)p ( )

www.mwe.com 6

Yahoo! Search Results

www.mwe.com 7

Bing Search Results

www.mwe.com 8

Google Search Results

www.mwe.com 9

More Background - Keyword AdvertisingAdvertising

Early example: In 1996, Yahoo! placed targeted ad banners when usersEarly example: In 1996, Yahoo! placed targeted ad banners when users searched for “golf”

More sophisticated approaches developed – targeted ads based on specific words searched and “contextual advertising”specific words searched and contextual advertising

Search engines use complex algorithms to determine price of advertising for billions of impressions every day

Multiple inputs – For example, Yahoo! offers “sophisticated modeling technology based on extensive online interactions that include searches, page views, and ad interactions.”p g

Personalized “retargeting” – generates personalized ads with products or services a user recently viewed

www.mwe.com 10

K d Ad ti i d T d k I f i tKeyword Advertising and Trademark InfringementProtecting Brands and Avoiding Liability in Online Advertising

T O R I N A . D O R R O SM I C H E L M A N & R O B I N S O N , L L P

W W W M R L L P C O M

11

W W W . M R L L P . C O M

L O S A N G E L E S Ι O R A N G E C O U N T Y Ι S A N F R A N C I S C O Ι S A C R A M E N T O Ι N E W Y O R K Ι N E W J E R S E Y

l d d ff l kOnline Advertising and Affiliate Marketing

Torin A. DorrosMICHELMAN & ROBINSON, LLP

15676 Ventura Blvd., 5th Fl.

Encino, CA 91436

P: (818) 783‐5530  F: (818) 783‐5507

E tdorros@mrllp com W www mrllp com

12

E: tdorros@mrllp.com W: www.mrllp.com

The Internet – In Very BriefThe Internet  In Very Brief

• Two types of websites:Two types of websites:– Content sites

• These are websites that create or collect content (textThese are websites that create or collect content (text, photos, video)

– Revenue is often generated through “advertising” methods of f thone form or another

– E‐commerce sites• These are websites that sell a product or service via the• These are websites that sell a product or service via the Internet

– Revenue is generated through the sale

13

The E‐Commerce/E‐Marketing GoalThe E Commerce/E Marketing Goal

• $$$$$$$$

• Driving more traffic to the advertiser or merchant websitemerchant website

14

How To Drive Traffic To Your WebsiteHow To Drive Traffic To Your Website

• Search Engine Optimization (SEO)Search Engine Optimization (SEO)

• Search Engine Marketing (SEM)

O li d i i• Online Advertising

• Affiliate Marketing– To some extent a subset of online advertising

15

Search Engine Optimization (SEO)Search Engine Optimization (SEO)

• Based on content/text of the website and theBased on content/text of the website and the metatags and keywords (hidden text) coded into the websiteinto the website

• Essentially the search engine scours/crawls the Internet for the keywords and then ranksthe Internet for the keywords and then ranks the websites based on number of hits as well as number of linked pages to the indexedas number of linked pages to the indexed page

Thi i “ t l” “ i ” h

16

– This is a “natural” or “organic” search

Search Engine Marketing (SEM)Search Engine Marketing (SEM)

• An Internet marketing strategy taking securing• An Internet marketing strategy taking securing website visibility/searchability to a new level through payment for placementthrough payment for placement– SEM is not SEO

Th b it th h i f• The website owner pays the search engine for assistance in assuring that the website 

t i t t/k d th t ill icontains content/keywords that will increase the website’s relevance to searches

17

SEM Is Not SEO And Vice VersaSEM Is Not SEO And Vice Versa

• SEO focuses on optimizing the website to allowSEO focuses on optimizing the website to allow the search engine to rank the website higher based on keywords directly associated/within the y y /website

• SEM is a marketing strategy that allows a websiteSEM is a marketing strategy that allows a website owner to strategically increase the relevance of the website to search engine searchesg– Purchase of keywords through Google Adwords could be one element of a company’s SEM program

18

Online Advertising

• Display Advertising– Banner ads, pop‐up ads, sidebar ads, floating ads, p p p , , g– Targeted Advertising

• Behavioral– Ads are displayed to customers based upon behavioral metrics typically 

obtained through the use of tracking technology such as cookiesobtained through the use of tracking technology such as cookies.• Contextual

– Ads are displayed on websites typically based upon analysis of text and keyword contained within the website

• SemanticSemantic– Ads are displayed on websites typically based upon an analysis of the overall 

content and text of the website for meaning or general subject, i.e. semantics

• Affiliate Marketing“ ”– Largely “link” based, redirection based

– The concept is that an advertiser/merchant pays a publisher/affiliate for actual services/products, traffic driven to the merchant site, and/or leads obtained as a result of a consumer redirection from the 

19

/publisher/affiliate site to the merchant site

Online Advertising – The PlayersOnline Advertising  The Players

• Advertiser– In Affiliate Marketing = the brand or merchant

• Ad NetworkSometimes an Ad Exchange as well– Sometimes an Ad Exchange as well

• Ad Exchanges can connect multiple Ad Networks together or can connect directly to the Advertiser, Ad Network, and Publisher to act as the intermediary or content hostact as the intermediary or content host

– In Affiliate Marketing  = the Affiliate Network– A network is not always needed in Affiliate Marketing

• Publisher– In Affiliate Marketing = the affiliate

C20

• Customer

Basic Online Advertising FlowBasic Online Advertising Flow4. Consumer is directed (often through a third party ad server) 

d bto advertiser website or page on network or exchange which immediately redirects to advertiser website for tracking

1 Advertiser and

2. Ad Network contracts with Publishers for 1. Advertiser and 

ad network contract for ad network to display ads (often through

inventory

ads (often through a third party ad server) on Publishers’ websites using 3. Consumer views 

publisher’s website including advertisers’ ad, and clicks on ad

websites using various advertising/marketing strategies and payment structures

21

payment structures

Online Advertising – Revenue ModelsOnline Advertising  Revenue Models

• Cost Per Click (CPC) or Pay Per Click (PPC)– Paid for each click on the particular ad clicking through to the 

advertiser webpage• Cost Per Impression (CPI)

– Cost Per Mile (CPM)– Cost Per Thousand Impressions (CPT)– Paid for each 1,000 loads of the ad on a webpagep g

• Cost Per Action– Cost Per Acquisition or Cost Per Sale

• Paid upon the consumer actually purchasing the product or service p y p g psubsequent to clicking through the ad

– Cost Per Lead• Paid upon the consumer signing up as a new customer or otherwise registering as a new “lead” i e a real identifiable prospective buyer

22

registering as a new  lead , i.e. a real identifiable prospective buyer

Affiliate MarketingAffiliate Marketing• A subset of online advertising• The primary players are essentially the samep y p y y

– Advertiser or Brand or Merchant– Affiliate Network

• Some brands/retailers have their own affiliate program that do not / p gincorporate an affiliate network

– The publisher/affiliate links directly to the advertiser/merchant– Amazon has a large affiliate program of its own

– Publisher or AffiliatePublisher or Affiliate– Consumer

• The Advertiser/Brand/Merchant is willing to pay a commission to the Publisher/Affiliate for (most often) eachcommission to the Publisher/Affiliate for (most often) each sale obtained as a result of Consumers directed to the Advertiser/Brand/Merchant website from the Publisher/Affiliate website

23

Publisher/Affiliate website

Affiliate Marketing – Affiliate Program Flow

3. Consumer buys product from Merchant website

1. Affiliate joins Merchant affiliate program and publishes link to 

4. Merchant pays Affiliate a 

merchant website on Affiliate website

commission for the sale

2. Consumer goes to Affiliate site for content or other reason and clicks on hyperlink to Merchant website (sometimes the Consumer may click on a display advertisement (this is where online

24

display advertisement (this is where online display advertising and affiliate marketing intersect)

Affiliate Marketing – Affiliate Network FlowAffiliate Marketing  Affiliate Network Flow

4, Consumer is redirected

5. Sometimes the “Merchant webpage” to which the Consumer is redirected is actually first a webpage on the Affiliate Network site that the Affiliate Network tracks which then 

1. Merchant engages Affiliate Network (again there may be a third 

4, Consumer is redirected to the Merchant webpage and purchases a product

almost immediately redirects the Consumer to the actual Merchant website 

party server) to obtain Affiliates for the Merchant site from the Affiliate Network’s aggregate of potentialaggregate of potential relevant Publishers/Affiliates

2. Publishers sign up with ffili k b

3. Consumer views content on Affiliate site and clicks on link or ad to be taken to the

25

Affiliate Network to become an Affiliate of a Merchant in the Affiliate Network 

and clicks on link or ad to be taken to the Merchant website

Affiliate Marketing – Revenue ModelsAffiliate Marketing  Revenue Models

• Cost/Pay Per Action/Sale/LeadCost/Pay Per Action/Sale/Lead– Affiliate is paid based on each sale or lead generated from traffic redirected from thegenerated from traffic redirected from the Affiliate website to the Merchant website

• Cost/Pay Per ClickCost/Pay Per Click– Affiliate is paid based on each clickthrough to the Merchant website from the Affiliate websiteMerchant website from the Affiliate website

26

The Intersection With Trademark LawThe Intersection With Trademark Law

• SEO – use of text in content and keywords in metatags– Is there infringement if a website owner is using a trademark as a 

keyword or textual content in the site?

• SEM – paid listingsp g– Is there infringement if trademarks are specifically 

auctioned/purchased/sold to be used as keywords?– Who would be infringing if anyone?

• Online Advertising and Affiliate Marketing– Is there infringement if the display ad contains trademarks?

• Who would be liable, if anyone?Who would be liable, if anyone?

– Is there infringement if trademarks are used as keywords?• Who is liable, if anyone?

27

d k fTrademark Infringement

Torin A. DorrosMICHELMAN & ROBINSON, LLP

15676 Ventura Blvd., 5th Fl.

Encino, CA 91436

P: (818) 783‐5530  F: (818) 783‐5507

28

E: tdorros@mrllp.com W: www.mrllp.com

Trademark InfringementgTheories of Liability

• Direct Trademark Infringement

• Secondary Trademark InfringementSecondary Trademark Infringement– Contributory

Vicarious– Vicarious

29

Federal Trademark Claims• 15 U.S.C. § 1114 – trademark infringement

– (a)(1) Liability for use in commerce of(a)(1) Liability for use in commerce of confusingly similar mark

– (a)(2) Liability for intended use in commerce ( )( ) yof confusingly similar mark

– Registered marks only• 15 U.S.C. § 1125 – unfair competition

– False designation of origin claims– False advertising claims–Dilution claims

d d k30

– Registered or unregistered marks

Trademark InfringementTrademark InfringementThe Elements

• Proof of a protectable trademark

• Likelihood of confusion between the marks• Likelihood of confusion between the marks

31

Protectable MarkProtectable Mark• Federal Registration

– Prima facie evidence of validity of mark– Burden shifts to Defendant to prove otherwise

• Competing registrations or unregistered vs registered• Competing registrations or unregistered vs. registered– Date on registration remains the compelling evidence– Look toward the priority of use of the marks

• First use in commerce• Right to exclusive use of the mark• Actual exclusive use the mark

– Establishment of secondary meaning or distinctiveness• Revenue generated, notoriety/recognition, advertising, promotion

32

Trademark Distinctiveness SpectrumTrademark Distinctiveness Spectrum• Fanciful marks

– Prima facie registrableEntirely invented or "fanciful" sign– Entirely invented or  fanciful  sign

• Arbitrary marks– Words or images which may have some meaning but are used as trademarks in 

connection with products or services unrelated to that meaningImmediately eligible for registration– Immediately eligible for registration

• Suggestive marks– Indicate the nature, quality, or a characteristic of the products or services in relation to 

which it is used, but does not describe this characteristicRequires imagination on the part of the consumer to identify the characteristic– Requires imagination on the part of the consumer to identify the characteristic

– Relatively weak

• Descriptive marks– Have a meaning directly related to products or services used in connection with the mark– Requires proof of secondary meaning to overcome registration refusal 

• Generic marks– Nothing more than the common name for the product or service; does not identify 

anything but the genus of the product or service

33

– Not registrable and not capable of trademark protection– A basis for cancellation at all times; even after mark is deemed incontestable

Likelihood Of Confusion – DuPont FactorsIn re E.I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973)

• (1) The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation and commercial impression.

• (2) The similarity or dissimilarity and nature of the goods or services as described in an application or registration or in connection with which a prior mark is in use.

• (3) The similarity or dissimilarity of established, likely‐to‐continue trade channels.• (4) The conditions under which and buyers to whom sales are made, i. e. "impulse" vs. careful, 

sophisticated purchasing.• (5) The fame of the prior mark (sales, advertising, length of use).

(6) Th b d f i il k i i il d• (6) The number and nature of similar marks in use on similar goods.• (7) The nature and extent of any actual confusion.• (8) The length of time during and conditions under which there has been concurrent use without 

evidence of actual confusion.• (9) The variety of goods on which a mark is or is not used (house mark "family" mark product• (9) The variety of goods on which a mark is or is not used (house mark,  family  mark, product 

mark).• (10) The market interface between applicant and the owner of a prior mark:

– (a) a mere "consent" to register or use.– (b) agreement provisions designed to preclude confusion, i. e. limitations on continued use of the marks by 

each party.– (c) assignment of mark, application, registration and good will of the related business.– (d) laches and estoppel attributable to owner of prior mark and indicative of lack of confusion.

• (11) The extent to which applicant has a right to exclude others from use of its mark on its goods.• (12) The extent of potential confusion i e whether de minimis or substantial

34

• (12) The extent of potential confusion, i. e., whether de minimis or substantial.• (13) Any other established fact probative of the effect of use.

Trademark Infringement ‐ RemediesTrademark Infringement  Remedies

• 15 U.S.C. § 1116– Injunctive relief

• 15 U.S.C. § 1117– Actual damagesActual damages– Defendant’s profits

• Ninth Circuit has indicated there are only three justifications for awarding an infringer’s profits: 

– (1) as a means of compensating the plaintiff for diverted sales; – (2) to prevent unjust enrichment; and – (3) to serve a deterrence policy

» Maier Brewing Co v Fleischmann Distilling Corp 390 F 2d 117» Maier Brewing Co. v. Fleischmann Distilling Corp., 390 F.2d 117 (9th Cir. 1968).

– Attorney’s fees• Exceptional cases

35

p

Direct Trademark InfringementDirect Trademark Infringement

• Defendant is using the alleged infringing markDefendant is using the alleged infringing mark

• Prove the basic trademark elementsP t t bl k– Protectable mark

– Likelihood of confusion

36

Secondary Trademark InfringementSecondary Trademark Infringement

• Defendant is not the actual user of the alleged ginfringing mark but in some way is allegedly related to the infringement

• Contributory liability• Contributory liability– Inwood (and progeny) test/factors

• Vicarious liabilityVicarious liability– Agency or joint tortfeasor theories or principles

• Both theories require proof of direct trademark infringement– Plaintiff does not need to actually bring a direct infringement claim, however

37

infringement claim, however

Secondary Trademark Infringementib i biliContributory Liability

• Inwood Labs, Inc. v. Ives Labs, Inc. 456 U.S. 844 (1982)– Plaintiff to show defendant:

• Intentionally induced third party to infringe on plaintiff’s mark; or• Continued to supply defendant’s product to third party whomContinued to supply defendant s product to third party whom defendant knew or had reason to know was infringing on plaintiff’s mark

• Expansion of Inwood beyond “supply [of] products”p y pp y [ ] p– Lockheed Martin Corp. v. Network Solutions Inc., 194 F.3d 980 (9th

Cir. 1999)• Defendant directly controlled and monitored the instrumentalityDefendant directly controlled and monitored the instrumentality used by a third party to infringe on the plaintiff’s mark

• Allowed for expansion beyond “supply [of] products” to services or other non‐product cases

38

Secondary Trademark InfringementVicarious Liability

• Two theories– Agency principles

– Joint tortfeasor principles

39

Secondary Trademark Infringementi i i biliVicarious Liability

• Agency principlesg y p p– Apparent authority

• Evidence somehow reveals that the public could be misled into believing that infringer acting on behalf of defendantinto believing that infringer acting on behalf of defendant

• Am. Tel. & Tel. Co. v. Winback & Conserve Program Inc., 42 F.3d 1421 (3d Cir. 1994)

– Principal/agent relationshipPrincipal/agent relationship• Agent/infringer acts/transacts business on behalf of principal

• Principal benefits financially from agent’s p y gactions/transactions

• Fare Deals, Ltd. v World Choice Travel.com, Inc., 180 F.Supp.2d 678 (D.Md. 2001)

40

Secondary Trademark Infringementi i i biliVicarious Liability

• Joint tortfeasor principlesJoint tortfeasor principles– Applicable in cases where the defendant and third party infringerparty infringer

• Have an actual partnership

• Have authority to bind each other in transactions with yother third parties

• Exercise joint ownership or control over the infringing prod ct or ser iceproduct or service

– Hard Rock Café Licensing Corp. v. Concession Services Inc 955 F 2d 1143 (7th Cir 1992)

41

Services, Inc., 955 F.2d 1143 (7 Cir. 1992)

42

Keyword Advertising and Trademark Infringement

A i G V i t Protecting Brands and Avoiding Liability in Online Advertising

Ariana G. VoigtMichael Best & Friedrich LLP100 East Wisconsin AvenueSuite 3300Milwaukee, WI 53202-4108,

Direct Line: 414.225.4928agvoigt@michaelbest.com

Keyword Advertising – Case Law

Two major categories: Keyword sellers/search engines Keyword sellers/search engines Keyword purchasers/competitors

44

“Sponsored Links” with Trademarks in Heading or Text May Create a Likelihood of Confusion

Government Employees Insurance Co. v. Google Inc., 77 U.S.P.Q. 1841 (E.D. Va. 2005) After a bench trial District Court found that plaintiff GEICO hadAfter a bench trial, District Court found that plaintiff GEICO had

established a likelihood of confusion, “and therefore a violation of the Lanham Act, solely with regard to those Sponsored Links that use GEICO’s trademarks in their headings or text.” GEICO, however does not address “whether Google itself is liable for thehowever, does not address whether Google itself is liable for the Lanham Act violations resulting from an advertisers’ use of GEICO’s trademarks in the headings and text of their Sponsored Links, as accomplished through Google’s AdWords program.”

45

Google Practice of Selling Trademarks as Keywords is “Use in Commerce”

Rescuecom Corp. v. Google, Inc., 562 F.3d 123 (2d Cir 2009) The Second Circuit vacated a judgment that dismissedThe Second Circuit vacated a judgment that dismissed

Rescuecom’s complaint against Google for failure to state claim. The U.S. District Court for the Northern District of California had dismissed Rescuecom’s complaint because it found that Google’s practice of selling the RESCUECOM trademark as a keyword didpractice of selling the RESCUECOM trademark as a keyword did not constitute “use in commerce” and without “use in commerce” there is no trademark infringement.

46

Key Findings from Rescuecom

Google uses trademarks in commerce: “Google displays, offers, and sells Rescuecom’s mark to Google’s advertising customers when selling advertising services. In addition, Google encourages the purchase of Rescuecom’s mark through its Keyword Suggestion Tool. G l ’ ili i f R ’ k fi li ll i hi hGoogle’s utilization of Rescuecom’s mark fits literally within the terms specified by 15 U.S.C. § 1127.” 562 F.3d at 129.

The Second Circuit also rejected Google’s product placement argument as an absolute defense commenting that “Google’s argument missesas an absolute defense, commenting that “Google’s argument misses the point.” And, in dicta, the Second Circuit suggests the potential for finding a likelihood of confusion: “[I]f a retail seller were to be paid by an off-brand purveyor to arrange product display and delivery in such a way that customers seeking to purchase a famous brand would receive y gthe off-brand, believing they had gotten the brand they were seeking, we see no reason to believe the practice would escape liability merely because it could claim the mantle of ‘product placement.’” Id. at 130.

47

Rescuecom (cont.)

Rescuecom leaves open the question of whether the trademark owner could establish a likelihood of confusion: “We have no idea whether Rescuecom can prove that Google’s use of Rescuecom’s trademark in p gits AdWords program causes likelihood of confusion or mistake.” Id.

48

Google’s Use of Trademarks as Keywords is a Functional Use

Rosetta Stone Ltd. v. Google Inc., 2010 WL 3063152 (E.D. Va. Aug. 3, 2010).

Google obtains a very favorable decision

The U.S. District Court for the Eastern District of Virginia granted summary judgment in Google’s favor on all counts, dismissing l i i t G l f t d k i f i t d f d l lclaims against Google for trademark infringement under federal law

and Virginia common law, contributory trademark infringement under federal law, vicarious trademark infringement under federal law and trademark dilution under the federal law. In addition, the court found Google’s use of trademarks as keywords to be g yfunctional.

In reaching its decision, the court notes that 70% of U.S. internet searches use Google’s search engine.

Rosetta Stone is on appeal to the Fourth Circuit49

Key Findings from Rosetta Stone

Google had no intent to infringe: “Web users do not visit Google’s website to buy Google products because Google does not sell any products. Any argument that Google is trying to palm off its goods as p oduc s y a gu e a Goog e s y g o pa o s goods asthose of Rosetta Stone’s is, therefore, unfounded.”

If there is any confusion, Google is not causing the confusion: Witnesses testified that after clicking on Sponsored Links and purchasing items, the witnesses knew they were not purchasing the items directly from Rosetta Stone. “Thus, none of the Rosetta Stone witnesses were confused about the source of their purchase but only as to whether what they purchased was genuine or counterfeit. They were not confused by the Sponsored Links, but by the confusing naturewere not confused by the Sponsored Links, but by the confusing nature of the websites from which they purchased.”

50

Key Findings from Rosetta Stone (cont.)

The functionality doctrine protects Google’s use of Rosetta Stone’s trademarks as keyword triggers:

“If Google is deprived of the use of the Rosetta Stone Marks, consumers would lose the ability to rapidly locate potentially relevant websites that promote genuine Rosetta Stone products atrelevant websites that promote genuine Rosetta Stone products at competitive prices. Consequently, because the Court is persuaded that Google’s particular use of the trademark keywords as triggers for paid advertisements is functional, and no prohibition exists th i th C t h ld th f ti lit d t i totherwise, the Court holds the functionality doctrine prevents a

finding of infringement.”

51

Take Away From the Google Cases: Google Always Wins

None of the Google cases address whether the advertiser is liable for purchasing the keyword and using the keyword to generate the advertisement, although Rosetta Stone suggests that even the d i b bl f i li d fadvertiser may be able to assert a functionality defense.

Jurin and Rosetta Stone suggest that courts are reluctant to find a likelihood of confusion stemming from Google AdWords but theselikelihood of confusion stemming from Google AdWords, but these district court cases do not provide a definitive answer to the ultimate question of infringement or whether different facts would support Google liability for trademark infringement.

52

In “Competitor” Keywords Cases, Courts Have Been Conflicted

Courts have been conflicted about whether there is a sufficient likelihood of consumer confusion from a “Sponsored Link” or “Sponsored Ad” to support a finding of liability.

J.G. Wentworth S.S.C. LP v. Settlement Funding, LLC, 2:6-cv-0597 (E.D. Penn. Jan. 4, 2007), grants the keywords buyer motion to dismiss because the advertisements themselves did not incorporate plaintiff’s marks. Because each party’s advertisement had separate and distinct links on the search results page, the court also rejected “initial interest confusion” as a p g , jtheory of liability.

53

“Competitor” Keyword Cases (cont.)

Hearts on Fire Company v. Blue Nile Inc., 603 F. Supp. 2d 274 (D. Mass. 2009), denies a motion to dismiss a keywords advertising case because of the potential for initial interest confusion. Sponsored advertisements are not always seen as an alternative to the trademarked product that a consumer initially searched for on the Internet. That said, when the distinction between Internet vendors is clear, no initial interest confusion exists.

Binder v. Disability Group, Inc., CV 07-276 (C.D. Cal. Jan. 25. 2011), awards $300,000 in damages to a law firm because its competitor purchased the law firm’s trademarked name, Binder & Binder, from Google to generate a “Sponsored Links” advertisement. The purchasing of the keywords equaled trademark infringement and false advertising; however, the plaintiff offered survey evidence of actual confusion.

54

Ninth Circuit Sets New Standard for Competitor Keyword Advertising

Network Automation, Inc. v. Advanced Systems Concepts, Inc., 2:10-cv-00484 (9th Cir. March 8, 2011) reverses a preliminary injunction that had prohibited a software company from pursing the name of its

i ’ d k d i h i lcompetitor’s product as keyword in search engine results.

The Network Automation analysis identifies four factors as the most relevant to keyword advertising casesrelevant to keyword advertising cases The strength of the mark; The evidence of actual confusion; The type of goods and degree of care likely to be experienced byThe type of goods and degree of care likely to be experienced by

the purchaser; and The labeling and appearance of the advertisements and the

surrounding context on the screen displaying the results page.

55

Network Automation “Context” Factor likely to be “Key” in Keywords Advertising Cases if Adopted by Other Courts

“Here, even if Network has not clearly identified itself in the text of its ads, Google and Bing have partitioned their search results pages so that the advertisements appear in separately labeled sections for ‘sponsored’ links. The labeling and appearance of the advertisements as they appear on the results page includesappearance of the advertisements as they appear on the results page includes more than the text of the advertisement, and must be considered as a whole.”

J.G. Wentworth applied a similar rationale in focusing on the separateness of each party’s advertisementseach party s advertisements.

Hearts on Fire also looked somewhat at the context in distinguishing between ads that may create initial interest confusion and those that clearly offer a generic alternative to a trademarked productalternative to a trademarked product.

Damages award in Binder does not necessarily conflict with Network Automationbecause the plaintiff in Binder presented evidence of actual confusion—one of th “ t l t” f tthe “most relevant” factors.

56

Best Practices

KeywordsKeywords

Proper Identification of MarksProper Identification of Marks

Use of Third Party Marks

Policing Use

www.mwe.com 57

Keywords: Best Practices

Use general terms to describe goods/servicesUse general terms to describe goods/services

– Consider likely search terms used by customers

Utili f / li f h t– Utilize focus groups/online surveys for search terms

Take advantage of search engine reporting features

– Demographics

– Geographic

– Repeat visitors

www.mwe.com 58

Keywords: Best Practices

Consider Keyword Tools (Google) Ad OptimizationConsider Keyword Tools (Google), Ad Optimization (Yahoo! and Bing) or similar products

Tool can suggest keywords based on website content– Tool can suggest keywords based on website content

– Find synonyms

– Language/location

Track statistics and update on a regular basis

www.mwe.com 59

Proper Identification of Marks

Use appropriate symbolsUse appropriate symbols

Consider list of terms owned by company in website t / diti l l i f titerms/conditions or legal information page

www.mwe.com 60

Use of Third Party Marks

Acknowledge use of third party marks withAcknowledge use of third party marks with permission

A k l d hi f thi d t kAcknowledge ownership of third party marks

Acknowledge source of pop-up ads (no endorsement)

www.mwe.com 61

Use of Third Party Marks:Avoid False AffiliationAvoid False Affiliation

The Lanham Act and state statutes prohibit any The Lanham Act and state statutes prohibit any claim which is likely to cause confusion with respect to affiliation

Use of competitor’s names and/or logos in advertising can lead to a claim of false affiliation oradvertising can lead to a claim of false affiliation or sponsorship

www.mwe.com 62

Use of Third Party Marks:Comparative Advertising ClaimsComparative Advertising Claims

Truthful non-deceptive comparisons using factualTruthful, non deceptive comparisons using factual information help purchasers and are legally acceptable if:– All representations are consistent with general rules and prohibitions

against false and deceptive advertising;

– They are not based on a selected or limited list of characteristics in which the advertiser excels while ignoring those in which thewhich the advertiser excels while ignoring those in which the competitors excel;

– The advertisement clearly discloses any material or significant limitation of the comparison; andlimitation of the comparison; and

– The advertiser can substantiate all claims made

www.mwe.com 63

Use of Third Party Marks:CompatibilityCompatibility

Compatibility ClaimsCompatibility Claims– Objective statements that a product can be used in

conjunction with another product or system offered by aconjunction with another product or system offered by a third party

– Permissible if they are true and can be substantiatedPermissible if they are true and can be substantiated

www.mwe.com 64

Policing Use

Third Party ServicesThird Party Services–Marksmen – eBeagle

–Google Alerts

Yahoo! Alerts–Yahoo! Alerts

www.mwe.com 65

Policing Use

Monitor directory websitesMonitor directory websites– Search engines frequently pull results from online

directoriesdirectories

– Open Directory Project example

www.mwe.com 66

Policing Use

Clarify permitted use of marks in written licenseClarify permitted use of marks in written license agreements with vendors, customers, suppliers, sales force, etc.,– Proper use of marks on web pages

Ability to use marks in domain names– Ability to use marks in domain names

– Use of marks in keyword advertising or other web-based advertisingadvertising

www.mwe.com 67