Internet Trademark Case Summaries

Fragrancenet.com, Inc. v. Fragrancex.com, Inc.

493 F. Supp. 2d 545 (E.D.N.Y. 2007)

Plaintiff was an online fragrance dealer that operated a website at “fragrancenet.com.”  Plaintiff sued defendant, a competing online fragrance dealer, for trademark infringement for its alleged misuse of plaintiff’s mark FRAGRANCENET.COM on its website.  After learning that defendant also purchased the mark as a keyword from Google to prompt defendant’s website as a sponsored link in Google’s search engine, and was using the mark as a metatag in the code of its website, plaintiff moved to amend its complaint to add federal and state trademark infringement claims based on this conduct.  The court dismissed the proposed amendments as futile, however, holding that defendant did not “use” plaintiff’s trademark for Lanham Act purposes and thus plaintiff’s claims could not withstand a Rule 12(b)(6) motion to dismiss for failure to state a claim.  The court relied on the Second Circuit’s decision in 1-800 Contacts, which held that the defendants there had not “used” plaintiff’s trademarks by creating software causing pop-up ads of plaintiff’s competitors to appear whenever computer users accessed plaintiff’s website.  The court in that case found that defendants made only “internal” use of plaintiff’s trademarks and that the defendants did not place any of plaintiff’s marks on any of its good or services and thus did not falsely indicate a different source or origin.  The district court analogized the reasoning of 1-800 Contacts to this case and found that “no Lanham Act ‘use’ exists for the use of a trademark in a keyword or metatag.”  As in 1-800 Contacts, defendant here had not placed plaintiff’s marks on any of its goods or services, or used them in any other way that indicated source or origin.  Rather, defendant’s use was “strictly internal [and] . . . not communicated to the public.”  The court also rejected plaintiff’s theory that defendant was “passing off” or “palming off” its goods under plaintiff’s mark because there was no allegation that defendant was selling its product under plaintiff’s mark.  Moreover, Google’s keyword program was not substituting defendant’s website in the place of plaintiff’s website, but rather was merely placing a link to defendant’s website next to a link to plaintiff’s website in the search results screen when an Internet user typed plaintiff’s mark into the search engine.  Thus, because defendant was not “using” plaintiff’s marks for Lanham Act purposes, any “confusion cannot be attributed to defendant’s actions for purposes of trademark infringement liability.”  The court also relied on other district court decisions in the Second Circuit – Merck, Rescuecom, and Site Pro-1 – that relied on 1-800 Contacts and held that keyword purchases and/or metatag uses were not “uses” for Lanham Act purposes.  Therefore, the court held that plaintiff’s new claims could not survive a motion to dismiss and denied the motion to amend the complaint as futile.