Brief Fact Summary. Rescuecom Corp (Plaintiff) argued that Google, Inc.’s (Defendant) use of Rescuecom’s trademark was a use in commerce and infringed its trademark through Google’s (Defendant) recommendation and sale of Rescuecom’s (Plaintiff) mark to Google’s (Defendant) advertisers, including Plaintiff’s competitors, so as to trigger the appearance of their advertisements and links in a manner likely to cause confusion for the consumer when a Google (Defendant) user initiated a search of the term “Rescuecom.â€
Synopsis of Rule of Law. A trademark owner states a cause of action for trademark infringement by claiming that the owner of an Internet search engine has recommended and sold the trademark to advertisers, including the trademark owner’s competitors, in order to trigger the appearance of their advertisements and links in a way that is likely to cause confusion for consumers when a user launches a search using the trademark as a keyword.
Congress does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions — it does not, one might say, hide elephants in mouseholes.
View Full Point of LawIssue. Does a trademark owner state a cause of action for trademark infringement by claiming that the owner of an Internet search engine has recommended and sold the trademark to advertisers, including the trademark owner’s competitors, in order to trigger the appearance of their advertisements and links in a way that is likely to cause confusion for consumers when a user launches a search using the trademark as a keyword?
Held. (Leval, J.) Yes. A trademark owner states a cause of action for trademark infringement by claiming that the owner of an Internet search engine has recommended and sold the trademark to advertisers, including the trademark owner’s competitors, in order to trigger the appearance of their advertisements and links in a way that is likely to cause confusion for consumers when a user launches a search using the trademark as a keyword. In this case, contrary to the district court’s determination, which relied on the court’s interpretation of 1-800, Google (Defendant) used Rescuecom’s (Plaintiff) trademark in commerce. There are two important ways that the case at bar is distinguishable from 1-800. First, in 1-800, the defendant did not use, reproduce, or display the plaintiff’s mark at all. In contrast here, Defendant recommended and sold Plaintiff’s trademark to trigger the appearance of advertisements. Second, in 1-800, under the defendant’s program, advertisers could not request or buy keywords to trigger their ads. Even if an advertiser wanted to display its advertisement to a searcher using the plaintiff’s trademark as a search term, the defendant’s program did not offer this possibility. In stark contrast here, Defendant encouraged advertisers to buy Plaintiff’s trademark. Such use clearly is “in commerce.â€Â Google (Defendant) responds to this conclusion by arguing that the inclusion of a trademark in an internal computer directory cannot constitute trademark use.  While several courts in this Circuit have reached that conclusion, regardless of whether Defendant’s use of Plaintiff’s mark in its internal search algorithm could constitute an actionable trademark use, Google’s (Defendant) recommendation and sale of Plaintiff’s mark to its advertising customers are not internal uses. Simply using a trademark in an internal software program does not insulate an alleged infringer from a charge of infringement. To hold otherwise would be to give search engine operators free rein to use trademarks in ways designed to deceive and cause confusion among consumers. Defendant also argues that its use is like “product placement†in a store, where a store-brand generic product is placed next to a trademarked product to induce a customer who specifically sought out the trademarked product to consider the typically less expensive, generic brand as an alternative. However, benign product placement does not cause consumer confusion. If retail product placement was performed in a deceptive manner meant to cause confusion so that a consumer seeking to purchase a famous brand would receive the off-brand, believing she had gotten the brand she was seeking, that practice would not avoid liability just because it could claim the mantle of “product placement†Google’s (Defendant) alleged practices are considerably different from benign product placement that does not violate the Lanham Act. To succeed on its claim, Plaintiff will need to provide that Defendant’s use of the Rescuecom trademark indeed caused the likelihood of confusion or mistake Plaintiff claims. However, at this stage of the proceedings, Rescuecom’s (Plaintiff) claim must be permitted to proceed, and should not have been dismissed. Vacated and remanded.
Discussion. The court rejected the trademark use doctrine in this case, and in an appendix to the case explains its position that the Lanham Act’s language does not support it. The court indicates that the definition of “use in commerce†according to § 1127 was meant to apply to the Act’s use of that term in defining favored conduct, which qualifies to receive the protection of the Act, instead of applying to the specification of conduct by an alleged infringer, which causes imposition of liability. Some leading commentators approve of such a position, finding that the Act’s language does not support a trademark use requirement and also observing that imposing such a requirement unreasonably limits appropriate common law development of trademark law. Others, in disagreement, support the trademark use doctrine, finding that, for various related reasons, it should shield defendants from even potential liability for certain types of commercial uses of marks, especially in connection with online contextual advertising and that the threat of contributory infringement liability is enough to regulate such uses. The commentators are split on this issue, as well as the courts.