Internet Trademark Case Summaries

Rescuecom Corp. v. Google, Inc.

456 F. Supp. 2d 393 (N.D.N.Y. 2006), rev’d, ___ F.3d ____, 2009 WL 875447 (2nd Cir. Apr. 3, 2009)

Plaintiff operated a computer-services franchising business under the trademark RESCUECOM and the domain name “rescuecom.com.” Google’s AdWords advertising program allowed advertisers to bid on keywords, i.e., search terms. When users entered a search query containing the keyword, the advertiser’s advertisement appeared as a “sponsored link” with a link to the advertiser’s website. The sponsored links appeared either to the right or immediately above the regular web search results. Through its “Keyword Suggestion Tool,” Google recommended keywords to advertisers. Google knew the nature of plaintiff’s business because plaintiff purchased various keywords from Google, including “Rescuecom.” Google’s Keyword Suggestion Tool recommended “rescuecom” as a keyword to plaintiff’s competitors to make their advertising more successful. Plaintiff sued for infringement, false designation of origin, and dilution along with various state and common law claims. Google filed a motion to dismiss all claims for failure to state a claim upon which relief could be granted. The court initially noted that the Second Circuit had not considered whether the purchase or sale of a trademark as a keyword used to trigger ads constituted trademark infringement. It also noted the conflicting decisions on the issue among the district courts. Plaintiff urged the court to apply the GEICO and Edina Realty decisions, which found that the sale of keywords by Google and the purchase of keywords by an advertiser, respectively, are “uses in commerce.” The court declined to apply these cases, however, and instead followed the Second Circuit’s decision in 1-800 Contacts (“1-800”), which made clear that “trademark use, in commerce, and likelihood of confusion are three separate elements” of a Lanham Act claim. Although many of plaintiff’s arguments might prove the commercial effect of or the likelihood of confusion caused by Google’s actions, the court held that, without a showing of the “use” of plaintiff’s mark as a matter of law, plaintiff’s Lanham Act claims would fail. Plaintiff asserted that Google’s actions constituted trademark “use” because Google: (1) was free-riding on the goodwill of the RESCUECOM mark and confusing consumers, (2) lured searchers away from plaintiff’s website and prevented them from reaching plaintiff’s site, (3) altered the search results it returned, and (4) used the RESCUECOM mark internally as a keyword to trigger ads. The court rejected all of plaintiff’s arguments and granted Google’s motion to dismiss plaintiff’s Lanham Act claims with prejudice. First, the court held that neither goodwill nor confusion could establish trademark use, noting that “[a]lthough these facts may suffice to satisfy the ‘in commerce’ and likelihood of confusion requirements at the pleading stage, without an allegation of trademark use in the first instance, they cannot sustain a cause of action for trademark infringement.” Second, in support of its argument that Google’s actions prevented users from reaching plaintiff’s website, plaintiff relied on PETA, which held that the defendant’s use of the PETA trademark in the domain name peta.org was actionable. The court distinguished PETA, however, noting that typing a trademark into a search engine leading to sponsored links and web results was fundamentally different than typing a domain name that leads directly to a website. The court also found it significant that plaintiff did not allege that any of the sponsored links (except for plaintiff’s own sponsored links) displayed plaintiff’s mark or that Google’s actions affected the appearance or functionality of plaintiff’s website. In sum, even if Google’s activities had prevented Internet users from reaching plaintiff’s website, plaintiff could not prevail without an allegation that Google made a “trademark use” of plaintiff’s mark. Third, Plaintiff’s argument that Google altered its search results to divert internet users similarly lacked merit because plaintiff failed to allege any facts that Google’s “altered” search results constituted a “trademark use.” The court held that “unlike Playboy Enters., Brookfield Communications, and Bihari, there is no allegation [here] that plaintiff’s trademark is displayed in any of the sponsored links about which plaintiff is concerned.” Fourth, Google’s internal use of the RESCUECOM mark to trigger sponsored links was not a “trademark use” in the absence of any allegations that Google placed “plaintiff’s trademark on any goods, containers, displays, or advertisements” or that Google’s internal use of the mark in the AdWords program was visible to the public. The court thus dismissed plaintiff’s infringement and false designation of origin claims. Finally, the court dismissed plaintiff’s dilution claim because it too required proof of trademark use as a threshold showing.


Rescuecom appealed to the Second Circuit, who reversed and remanded the case back to the district court because the district court “misunderstood the holding of 1-800.” The appeals court found this case to be “materially different” from 1-800 in two ways. First, the defendant in 1-800 “did not use, reproduce, or display the plaintiff’s mark at all” because the search term used to trigger the pop-up ads was the plaintiff’s website address, not its trademark. Here, Google recommended and sold Rescuecom’s exact trademark, RESCUECOM, to advertisers to trigger the advertisers’ sponsored ads. Second, the advertising program used to generate the pop-up ads in 1-800 did not allow advertisers to “request or purchase keywords to trigger their [pop-up] ads”; “did not disclose the proprietary content of [its internal] directory to its advertising clients”; and did not “manipulate which category-related advertisement will pop up in response to any particular terms on the internal directory,” instead relying on the general category (e.g., eye care) associated with the website or keyword rather than the website or keyword itself. Here, however, advertisers could purchase Rescuecom’s exact trademark and specify which sponsored ads would be triggered whenever that keyword was part of a user’s search-engine query. The court found that this “utilization of Rescuecom’s mark fits literally within the terms specified by [Section 45],” i.e., Google “displays, offers, and sells” Rescuecom’s mark when selling its advertising services in commerce. The appeals court also briefly addressed several other rulings of district courts within the Second Circuit that had found no use in commerce when the disputed trademark was used “in an internal computer directory,” such as in a website’s metadata or as a search-engine keyword. The Second Circuit stated that these courts “over-read[ ] the 1-800 decision,” because 1-800 “did not imply that . . . an alleged infringer’s use of a trademark in an internal software program insulates the alleged infringer from a charge of infringement, no matter how likely the use is to cause confusion in the marketplace.” If the court adopted such a rule, “the operators of search engines would be free to use trademarks in ways designed to deceive and cause consumer confusion,” a result not intended by the Lanham Act. The Second Circuit also rejected Google’s argument that keyword purchases were no different from retail vendors that used “product placement” to allow one vendor to benefit from a competitor’s name recognition (e.g., the positioning of store-brand generic products next to trademarked products on a store’s shelves). According to the court, Google’s argument “misses the point.” Simply because non-deceptive product placement was not actionable under the Lanham Act did not mean that product placement was a “magic shield against liability” that would protect deceptive or confusing product placements. The positioning of competing goods on a store’s shelves avoids liability “because it is a benign practice which does not cause a likelihood of consumer confusion,” not because of the absence of a use of a mark “in commerce.” The Second Circuit viewed Google’s acts, as alleged, to be “significantly different from benign product placement that does not violate the [Lanham] Act.” The court declined, however, to consider whether Google’s practices were in fact benign or confusing at this juncture, leaving that determination for the district court to decide on remand. Finally, the court attached a lengthy appendix to its decision in which it engaged in an extended discussion and statutory analysis regarding the definition and scope of a “use in commerce” under Sections 32, 43(a), and 45 of the Lanham Act. The court deemed the discussion dictum and not a binding opinion of the court, but did note that the judges of the panel who decided 1-800 had read the appendix and stated that they agreed with it.