Internet Trademark Case Summaries

Morningware, Inc. v. Hearthware Home Prods., Inc.

2009 WL 3878251 (N.D. Ill. Nov. 16, 2009)

Plaintiff Morningware, Inc. (“Morningware”) sold counter-top electric ovens under the MORNINGWARE mark. Defendant Hearthware Home Products, Inc. (“Hearthware”) sold counter-top electric ovens under the NUWAVE OVEN mark in competition with Morningware. Hearthware operated a website at mynuwaveoven.com and purchased the MORNINGWARE mark as a keyword from several search engines. For example, when Internet users entered the term “Morningware” as a Google search term, Hearthware’s keyword-triggered sponsored link appeared above the natural search results in which Morningware’s website was the first result. Hearthware’s sponsored link contained the heading “NuWave® Oven Pro,” the text “The Real NuWave ® Oven Pro Why Buy an Imitation? 90 Day Gty.”, and Hearthware’s URL “MyNuwaveOven.com.” Hearthware’s sponsored link did not contain the MORNINGWARE mark. Morningware sued Hearthware for unfair competition and product disparagement under the Lanham Act, among other claims. Morningware alleged that Hearthware’s sponsored link caused consumers to mistakenly believe that Morningware sponsored Hearthware’s website and that they could purchase Morningware’s ovens from Hearthware. Morningware also alleged that the location of Hearthware’s sponsored link at the top of the search results page, coupled with the “Why Buy an Imitation?” wording in its text, misled consumers into thinking that Morningware’s ovens were inferior imitations of Hearthware’s ovens. The court denied Hearthware’s motion to dismiss all of Morningware’s claims. Regarding Morningware’s unfair competition claim, the court held that Morningware sufficiently alleged that it owned a protectable trademark and that Hearthware’s use of the mark was likely to cause consumer confusion. Regarding likelihood of confusion, the court rejected Hearthware’s argument that its purchase of the MORNINGWARE keyword was not a use in commerce under the Lanham Act. Although the Seventh Circuit had not yet decided whether the purchase of a trademark as a search-engine keyword constituted a use in commerce, the court found persuasive the Second Circuit’s holding in Rescuecom v. Google that Google’s promotion and sale of Rescucom’s trademark as a keyword trigger was a use in commerce. The court also noted that a majority of courts outside the Seventh Circuit have followed this holding, and that the district court itself several years earlier in Vulcan Golf v. Google denied a motion to dismiss keyword-based claims on use-in-commerce grounds. Further, the court rejected Hearthware’s argument that its purchase of MORNINGWARE as a search-engine keyword was not likely to cause consumer confusion because Morningware alleged sufficient facts in its complaint establishing the potential for initial-interest consumer confusion. Under the Seventh Circuit’s decision in Promatek v. Equitrac, initial-interest confusion may arise even if consumers who are misled to a website are only “briefly confused.” The court rejected Hearthware’s reliance on J.G. Wentworth in which a Pennsylvania district court held that a sponsored link did not cause initial-interest confusion because the link did not contain the plaintiff’s mark and because of the “separate and distinct nature” of the paid and natural search results. Morningware sufficiently pled initial-interest confusion by alleging that a consumer searching for “Morningware” and seeing Hearthware’s ad that did not mention Hearthware could be misled into believing that the ad was associated with Morningware. As to Morningware’s product disparagement claim, Hearthware argued that the statement “Why Buy an Imitation?” in its sponsored link did not imply that Morningware’s products were imitations or fake, and thus it did not make a false or misleading statement. Hearthware also argued that Morningware did not plead sufficient facts demonstrating that the advertisement actually deceived, or was likely to deceive, a substantial portion of its audience. The court disagreed, holding that Morningware’s allegations in its complaint were sufficient to support a product disparagement claim.