If you are a brand owner complaining about competitive keyword ads, you are almost certainly making a bad business decision and your attorney may be milking your bank account. If you are an attorney representing a brand owner in a competitive keyword ad process, please double-check your professional decision-making to ensure that you are actually prioritizing your clients' best interests.
This is the first time I've blogged keyword ad cases in almost a year. However, in a strange coincidence, we made three decisions in the same week. When it rains it pours. This post summarizes how trademark owners are doing in these cases (TL; DR: they lose). I don't have a conclusion at the end of this post because honestly what is left to say? If the conclusion on this post isn't obvious after reading it, take off your plaintive colored glasses.
Passport Health, LLC v Avance Health System, Inc., 2020 WL 4700887 (4th Cir. August 13, 2020). Previous blog post.
Avance bid for the term "Passport Health" on Google and Bing from 2011 to 2013. A C&D letter was ignored, but when he was sued he wrote a letter saying he had stopped the ads and would not resume. Avance then changed the SEM companies, but for unexplained reasons the new company offer for "Passport Health" in Bing offered until 2017:
I know what your thinking: who gives a 🐀🍑 about Bing Keyword Ads? Your skepticism is justified in this case:
Data from Bing shows that from 2014 to 2017 (when the campaign actually stopped), the advertising resulting from the campaign generated forty-one clicks, seven of which occurred in the same month that this lawsuit was filed.
So here we are fighting in the Fourth Circle appeals court over the legal consequences of 41 clicks, which are generated at a rate of around 1 click per month. I'm not sure what emotional response to include. Uncontrollable sobs? Manic laughter and pointing to the plaintiff? Disgust that this lawsuit has consumed judicial resources for years? Help me out of here.
The court says the trademark owner didn't develop their arguments about competitive keyword advertising that didn't include the trademark in the ad copy. So the only question on the table is whether the ads including the brand in the ad copy are infringing.
The court of appeal goes through an optimized multi-factor LOCC test. Some highlights:
Highlight similarity. Following the Lamparello approach to domain names, the court says that comparing brand similarity requires consideration of both the brand and the linked website: "The correct context here is the Avance website … Passport focuses on whether to use its Brands will attract consumers to the competitor's website regardless of whether the content of the website will dispel consumer confusion. While Passport never refers to the initial doctrine of confusion of interests, it bases its argument on it. As in Lamparello, we refuse to teach here. "
My mandatory reminder that the only thing dumber than competitive keyword advertising lawsuits are IIC lawsuits. This seems about as emphatic as the court will point out that IIC does not exist in the fourth circuit. This requires the court to take some fancy steps to distinguish the Rosetta Stone precedent versus Google.
In terms of combining the ads with the pages being advertised, "Avance will remove any confusion from the use of the Passport marks in advertisements by the time consumers reach the site." The court declares:
The domain name of the website is "www.avancecare.com". At the top of each page is the "Avance Care" mark and no mention of "Pass Health". There is also no mention of travel health services on the homepage. As soon as a consumer has reached the travel health services page, it also bears the "Avance Care" brand and not "Passgesundheit". No reasonable judge could conclude that consumers would be confused as to whether Passport offers or is affiliated with the services described on the site.
Intention. Since Avance stopped the keyword ads in 2013 and asked the SEM to stop and no one can explain why the new SEM continued with Bing, the brand owner did not show reasonable intent.
Actual confusion. "No sane judge has been able to identify a likelihood of confusion when there has been six years of overlap and there is no evidence of actual confusion." And even assuming that all forty-one clicks on the advertisement were from confused consumers, that confusion is de minimis. “This is a warning to legitimate trademark owners and their attorneys who believe that a state appeal through 41 BING CLICKS is a wise decision: "DE MINIMIS CONFUSION."
Hence, the court says there are not enough factors pointing to LOCC.
In my previous post, I asked myself whether Avance could get a fee shift under federal trademark law as an exceptional case. The tenor of this appeal decision does not make me think; Despite the obvious reasons for doing so, the court did not ridicule the trademark owner. If I were Avance I would ask about it. The appeal statement repeatedly stated that "no reasonable juror" could approve the case, and the court said it was ultimately just de minimis confusion. This case should never have been brought and definitely should not have been challenged. WHAT A WASTE.
That opinion partially corrects the lousy Rosetta Stone Opinion of the Fourth Circle in 2012. However, since that opinion is not overriding, the Rosetta Stone precedent lives on. I think attitudes towards keyword advertising have changed so much since 2012 that Rosetta Stone is not predicting what future cases of keyword advertising will be. I think this judgment is a better predictor.
Smash Franchise Partners LLC v Kanda Holdings Inc., 2020 WL 4692287 (Del. Ct. Chancery, August 13, 2020)
This is an unusual place for a branding battle over keyword ads. On the plus side, it's nice to get a new perspective on the subject.
This case concerns the "mobile waste compaction" industry. Yes, this case is literally rubbish. The accused is "Dumpster Devil". Much of this case concerns a failed franchise acquisition that prompted the defendant to create a competitive franchise offer.
I am going to focus on buying competitive keyword ads through Dumpster Devil. The whole analysis of the court:
Proving the actual confusion is a "very fact-intensive" endeavor. The burden is significantly higher when the buyers have specialist knowledge or when the goods are relatively expensive.
Paid website advertising confusion claims are unsuccessful if the search engine has "broken up its search results pages so that the ads appear in separate sponsored link sections" and "the labeling and appearance of the ads as they appear in the Results appear The page contains more than the text of the ad. "(With reference to Network Automation)
Smash based its claim of confusion on an AdWords campaign that featured Dumpster Devil's product as a paid advertisement. While Smash is not necessarily marketed to experts in the field, it does sell an expensive product to people who are likely to do research before buying. According to Smash's disclosure documents, starting a Smash franchise will cost between $ 220,000 and $ 240,000. Smash and Dumpster Devil market their products to people interested in starting a business. Any potential purchase will likely require due diligence before making this type of investment.
Given these facts, the likelihood of actual confusion is very small. Smash's only evidence is an image of Google's current landing page for the Dumpster Devil advertisement. The ad says, “Compare our dumpster smasher – no franchise fees, higher ROI.” Google marks the listing of Dumpster Devil with the bold word “ad” in the top right corner. The smash marker does not appear in the display.
Under established precedents, this amount of evidence is insufficient to support an allegation of actual confusion. Smash has not determined a reasonable likelihood of success for its trademark infringement suit.
As it turned out, only the claim of the trademark owner was smashed here. The court put this claim in the dumpster it belongs in.
Sen v Amazon.com, Inc., 2020 WL 4582678 (S. D. Cal. Aug. 10, 2020). Previous blog post; and also referenced here.
This is a long-term process campaign for the “Baiden Mitten” brand. The brand owner does not like that Amazon is buying search engine keyword ads on the term in order to bring customers into Amazon's virtual premises where competing goods can be advertised. This has some similarities with the Multi-Time Machine litigation, but which dealt with search results from Amazon's internal search rather than Amazon's ads served on third-party search engines.
In 2013, the parties resolved the lawsuit in a messy manner – via a binding agreement that saw the preparation of a more formal settlement agreement that they never agreed on. The court upheld the binding letter of intent. The trademark owner claimed the letter of intent only covered previous violations, not future ones. The court says the letter of intent signals the parties' intention to waive all claims, including future ones. So here the approval applies in comparison.
In addition, the court says that the trademark owner loses even if the letter of intent does not apply. The court applies Network Automation's modified 4-factor LOCC test:
Mark strength. The court says that "Baiden Mitten" implies (what for?) Others use the brand in stores and the brand owner has not shown the brand's commercial strength.
Actual confusion. The brand owner pointed out a single email allegedly showing a confused customer, but the court said the email did not make it clear who was confused about what. Therefore, the court calls this single email "de minimis evidence".
Care of the buyer. "Although Plaintiff's products appear to be inexpensive, Amazon's online marketplace demonstrates that they can be considered above the market standard when compared to similar products from a competitor." You can buy an exfoliating rag for $ 5 while the brand owner's mittens are $ 48. “(C) Consumers are likely to be more aware of purchasing higher value and higher priced products. Additionally, a reasonably prudent consumer is likely to take a great deal of care when purchasing face and body products. Especially to avoid a possible outbreak or allergic reaction. "
Advertisement labeling. Everyone seems to agree that the ad labeling is clear. "Even if potential consumers were to click on Amazon's keyword advertising, it would be deliberate and not confusing, as the sponsored ads are clearly distinguishable from the objective search results."
An easy win for Amazon in court hearings that have been going on for 8 years and will likely hit the ninth circuit again.
More articles on keyword advertising:
* Competitor receives Pyrrhic victory in wrong advertising costume via search ads – Harbor Breeze versus Newport Fishing
* IP / internet / antitrust professor Amicus Brief in 1-800 contacts against FTC
* New Jersey Attorney Ethics Opinion Blesses Competitive Keyword Advertising (… or does it?)
* Another Competitive Keyword Advertising Lawsuit Fails – Dr. Greenberg v. Perfect body image
* Florida Bar regulates, but does not prohibit, competitive keyword ads
* Summary of three current keyword advertising cases – Comphy v. Amazon & More
* Are adjacent organic search results a trademark infringement? Of course not … but … – America CAN! v. CDF
* The ongoing saga of the Florida Bar's Fear of Competitive Keyword Advertising
* Your regular reminder that keyword ad lawsuits are stupid – Passport Health v. Avance
* Restricting competitive keyword ads is anti-competitive – FTC v. 1-800 contacts
* Another failed trademark lawsuit for competitive keyword advertising – JIVE v Wine Racks America
* Exclusive keywords help in overcoming the preliminary injunction – DealDash v. ContextLogic
* The Florida Bar and Competitive Keyword Advertising: A Tragic Comedy (in 3 parts)
* Another court says competitive keyword advertising does not cause confusion
* Competitive keyword advertising shows no bad intent – ONEpul v. BagSpot
* A quick recap of the three developments in keyword advertising litigation
* Interesting tidbits from FTC's antitrust win against keyword ad restrictions of 1-800 contacts
* 1-800 contacts charge higher prices than their online competitors, but they are okay with this – FTC v. 1-800 contacts
* FTC explains why 1-800 contacts' keyword ad billing was anti-competitive – FTC v. 1-800 contacts
* Amazon Defeats Keyword Ad Buying Lawsuit – Lasoff Vs Amazon
* More evidence of why keyword advertising litigation is subsiding
* Court Dumps Crappy Trademark & Keyword Ad Case – ONEPul v BagSpot
* AdWords purchases using geographic terms support personal responsibility – Rilley v. MoneyMutual
* FTC is suing 1-800 contacts for restricting competitive keyword advertising
* The competitive keyword advertising lawsuit goes to a jury – edible agreements v. Provision of trade
* Texas Ethics Opinion approves competitive keyword ads from attorneys
* Court knocks out another competitive keyword advertising process – Beast Sports v BPI
* Another dire opinion about lawyers who buy keyword ads on other lawyers' names – In re Naert
* The Keyword Ads lawsuit is not covered by California's anti-SLAPP law
* Confusion from competitive keyword advertising? Fuhgeddaboudit
* Competitive keyword advertising allowed as nominative use – ElitePay Global v. CardPaymentOptions
* Google and Yahoo defeat the last remaining competitive keyword advertising lawsuit
* Mixed decision in competitive keyword advertising – Goldline v. shelf
* Another competitive keyword advertising lawsuit fails – Infogroup v. DatabaseLLC
* The damage caused by competitive keyword advertising is “negligible”.
* More defendants win keyword advertising claims
* Another keyword promotion process fails
* Duplicitous Competitive Keyword Advertising lawsuits – Fareportal against LBF (& vice versa)
* Brand Owners Just Can't Win Keyword Commercials – EarthCam v. OxBlue
* Would you like to learn about Amazon's confidential settlement terms for a keyword advertising lawsuit? Merry Christmas!
* Florida enables competitive keyword advertising by lawyers
* Another Keyword Advertising Lawsuit rejected out of hand – Infostream v. Avid
* Another keyword advertising process fails – Allied Interstate v Kimmel & Silverman
* More evidence that competitive keyword advertising benefits brand owners
* Keyword advertising lawsuit is a bad business decision for brand owners
* Florida suggests banning competitive keyword advertising by lawyers
* Further confirmation that Google has won the AdWords brand battles worldwide
* Google's search suggestions do not violate the Wisconsin Publicity Rights Law
* Amazon's merchandising of search results does not violate trademark law
* Buying keyword ads for people's names does not violate their advertising rights
* With its victory in the Australian court, Google is getting closer to legitimizing keyword advertising worldwide
* One more decision that competitive keyword ad lawsuits are stupid – Louisiana Pacific vs. James Hardie
* Another Google AdWords advertiser beats trademark infringement lawsuit
* With Rosetta Stone Settlement, Google is getting closer to legitimizing billions of AdWords revenue
* Google beats the brand challenge for its AdWords service
* Newly released consumer survey shows that legal concerns about competitive keyword advertising are exaggerated