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U.S. Federal Court Finds Use of Competitors Marks as Keywords in Online Advertising not Trademark Infringement
The U.S. federal court ruled this week that, while the purchase of a competitor’s search engine keyword may constitute trademark dilution and false advertising, it does not constitute trademark infringement.
The lawsuit filed by Merck against several online pharmacies alleged trademark infringement, trademark dilution and false advertising based on the use of the “Zocor” trademark on websites and in keywords. The decision contradicts the rulings in the interlocutory decisions in Geico and the recent Edina Realty Ltd. case, but is consistent with other decisions, such as the appellate decision in 1-800-Contacts.
In Geico, it was argued that Google’s sale to car insurance providers of “Geico” as a keyword to trigger their ads constituted “use in commerce” and was thus trademark infringement. Google settled the case.
In Merck, the court made reference to the Geico decision but did not agree with its reasoning. Instead, the court held that the defendant’s purchase of “Zocor” as a keyword was not improper because the trademark was not placed on the product or label or displayed in the sale of services and as such, did not constitute trademark use.
In Edina Realty Ltd., the Minnesota court found that there was cause to believe that the use of the name “Edina Realty” in keywords purchased by competitors would cause confusion amongst consumers.
Although the Merck ruling is good news for search engine advertisers and competitors seeking to oust their rivals, the issue is not yet crystal clear.
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