AdWords Trademark Infringement
Lead generation companies use both registered and unregistered trademarks of their client’s competitors in Adwords sponsored ad campaigns online. It is happening in many industries and is wide-spread. Seemingly, these lead generation companies, on behalf of third party competitors, are essentially using the brand names and related search terms of their client’s competitors as the campaign keyword(s) to promote traffic to their website through sponsored ads. When searching the keyword or keyword phrase on Google, Bing or Yahoo, for example, the sponsored ad and corresponding website appears at or near the top of page in the paid search engine results. The website operators in question are targeting your business’s brand in an effort to siphon the existing goodwill from your business.
The problem, of course, is that these actions may in fact be actually misleading some visitors of the website that have conducted a search online for your business and/or brand. Some businesses may even receive complaints from individuals stating that they have called some of the numbers contained in various sponsored ads listed in the search results for your business/brand under the belief they were calling your business. Most likely, your competitor have have been contacting these visitors who have provided their contact information on the corresponding sponsored ad websites. Sometimes these visitors, who are prospective customers, may even believe that your business sold their personal information and that they would inform other prospective customers not to visit your website or otherwise do business with your company! Hence, your competitor’s actions, through these third party lead generation companies, may undoubtedly be damaging the reputation of your business and brand.
For example, suppose your brandname as a keyword is searched approximately X times per month in the United States according to Google. Logically, it may follow that a great deal of these searches are looking for your business, given the search term. Yet, say only approximately X visitors each month arrive at your business website using your business/brand name as the search phrase. It would then follow that these third party sponsored ads are undoubtedly contributing to this discrepancy, which is in essence siphoning potential customers away from your business.
Keep in mind, if your business offers a third-party product or service, the term for that product or service may be a competitive keyword, which costs more to bid on. Thus, many lead generation Adwords campaigns target smaller businesses that consumers know are the origin of that specific good or service. The cost to advertise based on the business name/brand as a keyword is much less and if these lead generation companies hijack your trademark, then obviously the likelihood of creating a good lead is much higher!
So, what can your business do about this unauthorized use when it is the exclusive owner of the trademark or service mark in question? Is the law on the side of trademark owners?
Sponsored Ad Title/Text Keywords
The history of Adwords trademark infringement and related claims in the context of using keywords in sponsored ads is largely undeveloped. However, as an initial matter, courts have not required that the trademarked term appear in the text of the sponsored advertisement for use in commerce to be found. (Google Inc. v. Am. Blind & Wallpaper Factory, Inc., No. C 03-5340 JF (RS), 2007 WL 1159950 (N.D. Cal. Apr. 18, 2007), Playboy Enters., Inc. v. Netscape Commc’ns Corp., 354 F.3d 1020, 1026 (9th Cir. 2004) and Hearts on Fire Co., LLC v. Blue Nile, Inc., 603 F. Supp. 2d 274 (D. Mass. 2009)).
Beyond that initial use in commerce question, the main issue of whether using a trademark in connection with sponsored ads online is trademark infringement has not conclusively been answered. In Network Automation v. Advanced Systems Concepts, 638 F.3d 1137 (9th Cir. 2011), the Ninth Circuit provided a thorough analysis of the likelihood of confusion issue in the context of Adwords advertising. That court stated that in the keyword advertising context, “likelihood of confusion will ultimately turn on what the consumer saw on the screen and reasonably believed, given the context.” This analysis involves the consideration of the degree of care and sophistication of the consumer, which varies depending on the product or service offered. Similarly, after denying defendants’s motion to dismiss in Hearts on Fire Co., LLC v. Blue Nile, Inc., the court stated that the likelihood of confusion would “ultimately turn on what the consumer saw on the screen and reasonably believed, given the context.” The court articulated a list of non-exclusive factors it would consider when judging the “content and context,” including: (1) the overall mechanics of web-browsing and Internet navigation, in which a consumer can easily reverse course; (2) the mechanics of the specific consumer search at issue; (3) the content of the search-results web page that was displayed, including the content of the sponsored link; (4) downstream content on the defendant’s linked website likely to compound any confusion; (5) the web-savviness and sophistication of the plaintiff’s potential customers; (6) the specific context of a consumer who has deliberately searched for trademarked diamonds only to find a sponsored link to a diamond retailer; and, in view of the foregoing factors, (7) the duration of any resulting confusion.
Initial Interest Confusion Doctrine
Some of your business’s customers may be users that, as a whole, exercise a low degree of care. This possibly contributes to the significant discrepancy between the total amount of people searching for your business and the portion that actually visit your website using the same search word/phrase online. This conduct therefore in many cases can cause a likelihood of confusion and thus constitutes trademark infringement (and unfair competition and false designation of origin). Specifically, under the ‘initial interest confusion doctrine’, if a consumer is confused as to the source of the goods or services by the text of the advertisement in a sponsored link, this could be enough to constitute trademark infringement even if the confusion is dispelled after clicking on the link and going to the website of the sponsor. (Network Automation v. Advanced System Concepts).
Sponsored Ad Campaign Keywords: “Hidden Trademark Hijacking”
Using a trademark as part of the sponsored ad title text or within the ad in this manner quite obviously results in a strong likelihood of confusion. That is likely undebatable. But, what about when the trademark is not included in the ad title or otherwise does not appear in the ad text and is only used as a campaign keyword? Well, if the visitor clicks on the ad and is taken to a page meant to confuse the visitor into believing it is in fact the trademark owner/business. consumer confusion may likely exist. Where no mention of the trademark owner/business is made on the corresponding ad website and/or the website operator clearly includes its own distinct branding on the webpage, it becomes unclear. Similarly, it is unclear if infringement exists when a third-party is using a trademark as a campaign keyword or part of a campaign keyword phrase so that the sponsored ad appears in the paid search results, but without using the trademark in the ad title or text. The bottom line, however, is that the trademark is still intentionally being used so that the ad appears every time someone searches for the trademark/business online.
Perhaps the most instructive case to date in this regard is Hearts on Fire Co., LLC v. Blue Nile, Inc. Some of the defendant’s keyword-triggered sponsored ads featured the “Hearts on Fire” mark in the ad text, while others did not. The defendant did not contest that ads containing the Hearts on Fire mark stated a claim for trademark infringement, so the issue was whether its use of the trademark as a campaign keyword for sponsored ads not containing plaintiff’s trademark stated a claim. The court determined that Hearts on Fire had alleged enough to defeat defendant’s motion to dismiss, finding that even if the ads did not display the mark, “the surrounding context supplie[d] a sufficient basis to support allegations of consumer confusion at this early stage of the litigation.” According to the court, a consumer who had just entered a search for Hearts on Fire “might easily believe” that the defendant was an authorized Hearts on Fire diamond retailer when presented with the sponsored link, even if the ad did not contain the Hearts on Fire trademark. Further, if the consumer clicked on the ad link to defendant’s website expecting to find Hearts on Fire diamonds there, plaintiff alleged that “nothing there would immediately alert him to his mistake.”
Monitor Your Brand Online
Brand owners should be vigilant and should police the use of their trademarks at all times by others. This includes when any marks are used in commerce as keywords in advertising or on a competitor’s website directly. In fact, trademark owners should monitor their marks’ use on the Internet as frequently as possible. If you find any improper uses, you should immediately utilize the search engine’s complaint process and dispute procedures.
Trademark owners should also consider bidding on their own trademarks. Each day, it seems more businesses are employing this approach to help stop unauthorized use of their marks. Bidding on your own trademarks will allow you to control your brand much more effectively.
You should also contact anyone that is improperly using your business’s trademark as a keywords connected to an Adwords campaign immediately and send a Cease and Desist letter from your legal counsel. These types of letters are usually the first step in initiating any claim of unauthorized trademark use. You are basically notifying the infringer of your trademark rights and demand that the unpermitted use stop immediately. Whether the Adwords trademark infringement is intentional or unintentional, stopping the damage should be a priority for any affected trademark owner.