Internet Trademark Case Summaries

Soilworks, LLC v. Midwest Industrial Supply, Inc.

2008 WL 3286975 (D. Ariz. Aug. 7, 2008)

Plaintiff Soilworks and Defendant Midwest Industrial Supply (“Midwest”) were competitors in the soil erosion and dust-control products field. Midwest’s brands included SOIL-SEMENT. Midwest contacted Soilworks expressing concern that Soilworks’ products may infringe two patents about to issue to Midwest. Soilworks filed this action seeking a declaratory judgment of patent invalidity and noninfringement, among other claims. Midwest counterclaimed for trademark infringement, false designation of origin, and unfair competition based on Soilworks’ use of “soil sement” as a search engine keyword and in its website metatags. Although the decision does not state whether Soilworks’ sponsored link advertisements contained the SOIL-SEMENT mark, a review of the court record revealed that the sponsored links did not contain the SOIL-SEMENT mark. Rather, the sponsored links prominently displayed Soilworks’ “Soiltac” trademark in the headline and its www.Soiltac.com URL below the ad text. The parties filed cross-motions for partial summary judgment on Midwest’s trademark claims, among other claims. The court granted Midwest’s motion on its trademark infringement claim. The court first recognized that Midwest’s SOIL-SEMENT mark was a valid and protectable trademark. It then addressed whether Soilworks’ use of the SOIL-SEMENT mark in metatags and as a keyword constituted commercial use for purposes of the Lanham Act. Citing the Ninth Circuit’s decisions in Brookfield and Playboy v. Netscape, the court held that Soilworks intended to capitalize on the fame of the SOIL-SEMENT trademark and attract customers to its websites, thus finding commercial use for purposes of the Lanham Act. The court then analyzed whether Soilworks’ use of the SOIL-SEMENT mark was likely to cause initial-interest confusion. It noted that the Ninth Circuit had applied both the traditional Sleekcraft multi-factor test as well as the so-called “Internet trinity” factors in deciding the issue of likelihood of confusion in initial-interest confusion cases. It proceeded to apply both tests. The court initially considered the “Internet trinity” factors because they are the most important factors in the context of the Internet. Specifically, the similarity-of-the-marks factor favored Midwest—Soilworks’ keyword “soil sement” was “nearly identical” to Midwest’s SOIL-SEMENT mark, and Soilworks’ use of the term “sement soil” and the words “sement” and “soil” in close proximity to each other in its metatags were sufficiently “similar” to the SOIL-SEMENT mark in spelling, sound, and meaning. In addition, the relatedness of the parties’ goods and the marketing channels both favored Midwest because the parties sold competing products and both used the Internet to market their products. Soilworks did not specifically address these three factors or any of the other Sleekcraft factors. Rather, Soilworks claimed that the “Internet trinity” standard did not apply to metatag/keyword cases and that a successful likelihood-of-confusion action required a showing of “deception.” The court rejected these arguments, pointing out that “the wrong in a metatag initial-interest confusion case is not that the consumer is deceived into believing that he is purchasing the plaintiff’s products when in fact he is purchasing defendant’s, but instead is the diversion of the consumer’s initial attention to the defendant’s website using the plaintiff’s trademark and goodwill. When accomplished through the use of key words or metatags . . . , this wrongful conduct may involve no deception of the consumer.” Soilworks also asserted that Midwest presented no evidence of actual consumer confusion, but the court found that the actual-confusion factor was “less relevant in a metatag initial interest confusion case.” Moreover, the court again stated that the wrong here was not actual consumer confusion regarding the source of products, but rather the diversion of potential customers to Soilwork’s websites. In any event, even if Midwest had to prove that consumers were actually diverted to Soilworks’ websites through confusion, it did so. According to the court, “[a] person typing ‘soil sement’ into a search engine presumably would be somewhat familiar with Midwest’s product and would be looking for the product or its maker, and yet would be directed by keywords and metatags to Soilworks’ websites. The confusion—thinking one would be connected to Midwest when in fact Soilworks’ websites also appear in the search results—would entirely be caused by Soilworks’ use of Midwest’s mark.” The court then examined the remaining Sleekcraft factors—the strength of Midwest’s mark, the degree of consumer care, and the likelihood of expansion—and each either favored Midwest or were of “little import” in assessing initial-interest confusion. The court concluded that the undisputed evidence established that Soilworks’ use of the SOIL-SEMENT mark in keywords and metatags “divert[ed] the initial attention of potential Internet customers to its websites” and granted summary judgment for Midwest on trademark infringement liability. Soilworks attempted to assert an unclean hands defense, alleging that Midwest had also used Soilworks’ trademarks as keywords, but the court rejected the allegation because Soilworks had not asserted such a claim. Moreover, even if Midwest did violate the Lanham Act, such actions did “not somehow excuse Soilworks’ violation.”