Incontestable - May 2010 - College Network, Inc. v. Moore Educ. Publishers, Inc.

Finnegan's monthly review of essential decisions, key developments, evolving trends in trademark law, and more.

May 2010 Issue

Civil Cases

College Network, Inc. v. Moore Educ. Publishers, Inc.,
2010 WL 1923763 (5th Cir. May 12, 2010)

ABSTRACT
Plaintiff sued defendant, a competitor in the study−guide market for nursing students, for trademark infringement based on defendant’s purchase of “THE COLLEGE NETWORK” as a search−engine keyword to trigger sponsored−link advertising for its competing products. The jury found that defendant’s actions did not cause a likelihood of consumer confusion and thus did not infringe the plaintiff’s trademark. The Fifth Circuit agreed and affirmed the jury’s verdict on appeal.

CASE SUMMARY

FACTS
The College Network, Inc. (“TCN”) and Moore Educational Publishers, Inc. (“MEP”) both published and sold study guides for nursing students. TCN sued MEP for trademark infringement based on MEP’s purchase of “THE COLLEGE NETWORK” as a search−engine keyword to trigger sponsored−link advertisements for its competing products. MEP counterclaimed for defamation and tortious interference based on statements made by TCN’s representative that MEP was “going out of business.” At trial, TCN’s expert witness opined that MEP’s use of THE COLLEGE NETWORK as an Internet search keyword created a likelihood of confusion. Both parties moved for judgment as a matter of law at the close of evidence, but the district court judge denied the motions and sent the case to the jury for decision. To establish its claim for trademark infringement under the Lanham Act, TCN had to show that (1) it had a valid trademark in THE COLLEGE NETWORK; (2) MEP used the mark in commerce without TCN’s permission; (3) MEP’s use of the mark was likely to cause confusion; and (4) TCN sustained damage. The court’s instructions to the jury assumed that the mark had been used in commerce and instructed the jury on the legal standards for determining the validity of the mark and whether there was a likelihood of confusion. The jury verdict form asked whether THE COLLEGE NETWORK was a valid trademark or name and, if so, whether MEP infringed it.

The jury found that TCN’s mark was valid, but that it had not been infringed. The jury also awarded MEP damages on its tortious interference and defamation claims. After the jury rendered its verdict, TCN renewed its motion for judgment as a matter of law and requested, in the alternative, a new trial. TCN argued that the evidence at trial established a likelihood of confusion as a matter of law. MEP countered that, regardless of whether there was a likelihood of confusion, MEP’s use of THE COLLEGE NETWORK as a search−engine keyword was not a use in commerce under the Lanham Act. This apparently was the first time either party questioned whether there was a use in commerce. The district court agreed with MEP, holding that MEP’s use of the mark was not a use in commerce, and thus did not address TCN’s argument regarding likelihood of confusion. TCN appealed.

ANALYSIS
The Fifth Circuit Court of Appeals affirmed the district court jury’s verdict that MEP’s use of THE COLLEGE NETWORK as a search−engine keyword was not trademark infringement. As an initial matter, the appeals court stated that it did not have to determine the correctness of the district court’s conclusion that there was no use in commerce, because the evidence presented to the jury at trial did not compel a finding of likelihood−of−confusion under the Fifth Circuit’s eight−factor
likelihood−of−confusion test. At trial, MEP presented extensive documentary evidence on the issue, the jury was permitted to view the keyword search process and visually compare the two companies’ websites, and TCN’s own expert testified that there had not been any actual confusion. The Fifth Circuit held that the evidence presented at trial did not point so “strongly and overwhelmingly in favor” of TCN that a reasonable jury could not arrive at a contrary verdict, the test for overturning a jury’s verdict.

Finally, the Fifth Circuit rejected TCN’s argument that it should apply the so−called “Internet Trinity” likelihood−of−confusion test that the Ninth Circuit uses for Internet advertising cases. Under this alternative test, the three critical factors are the similarity of the marks, the relatedness of the goods or services, and the parties’ simultaneous use of the Internet as a marketing channel. If these three factors suggest that confusion is likely, the remaining factors must “weigh strongly” against a likelihood of confusion to avoid infringement. The Fifth Circuit refused to apply the “Internet Trinity” test because it had not adopted the Ninth Circuit test. Moreover, TCN did not object to the jury instructions on likelihood of confusion using the applicable Fifth Circuit test and thus waived any argument that the Ninth Circuit test should have been applied.

CONCLUSION
This decision is of interest because it is one of the few cases in which the question of trademark infringement based on Internet keyword−advertising was decided by a jury instead of a judge. However, the decision did not describe the content of the objectionable sponsored−link advertisements, particularly whether the ads contained TCN’s mark and how MEP’s marks were displayed, if at all. Thus, it is not clear whether this case involved the hot topic of whether keyword−triggered ads are actionable under the theory of initial−interest confusion even if they do not contain the plaintiff’s mark.