Technically Legal

Bloomberg is reporting that Apple has filed a compliant against Amazon for using “App Store” in the context of the “Amazon Appstore Developer Program,” (as of 10:42 EDT, Amazon still hasn’t taken down the reference) which will apparently be some kind of Android app stor… err, online market for, well, “apps.”

You may recall that we discussed the issues associated with Apple’s application for the “appstore” trademark in some detail on Podcast 92. In sum, Microsoft thinks this mark is generic (and is separately challenging it before the Trademark Trial and Appeal Board).  I think there is a better argument that this mark is merely descriptive, without a strong secondary meaning.  On the other hand, there are only so many ways to describe a online marketplace (a “store”) of software applications (“apps”) without implicating those two words together.  So, it’s quite possible that a judge may hold Apple’s claimed mark to fail both for genericide and descriptiveness.  Either way, it seems like a tough claim for Apple to defend.

Just about every major tech blog and news site is now carrying this story; but, I’ve yet to see the actual compliant.  Once I find that I will post it back here.

3/22 update: Apple v. Amazon compliant added.

1 Comment Posted in: Links on March 21, 2011

On yesterday’s Podcast, we discussed how Rescuecom voluntarily withdrew their trademark infringement suit against Google’s Adwords program. Last week a similar suit against Google, Stratton Faxxon v. Google, was dismissed out of a Connecticut Superior Court. According to Eric Goldman, there have been approximately twelve similar lawsuits to date (primarily against Google) for the sale of trademarked phrases in the Adwords program.

Unlike Rescuecom, Stratton Faxon didn’t claim trademark infringement in this suit. Instead, their claims alleged interference of business relations and unfair competition. The details are somewhat unclear, and I don’t have access to the actual filings, but it appears that Google filed a “Motion for Judgment” which was granted last week. No order or opinion stating the reasoning for the dismissed seems to be publicly available. However, because Stratton Faxon did not sue on a theory of trademark infringement, they are not precluded from refiling another suit in Federal Court on a trademark theory.

The theory behind the bulk of these suits is fairly novel. To summarize, trademark owners are suing Google for selling their registered trademarks to competitors as search terms. After competitor successfully “buys” (or “bids” might be more appropriate) for a search term that consists of a registered trademark of another person, the competitor’s advertisement appears in the sponsored links section on the search Google search result page. This does not affect the organic results where you would presumably see any links related to the trademark owner. Rather, it only affects what appears as an advertisement which is clearly labeled “sponsored link.” The beef these trademark owners seem to have is that they don’t want any links to competitors, sponsored or not, appearing next to their organic search engine results. Unfortunately, not all uses of a trademarked phrase are protected by the law. See e.g., Nominative fair use.

As you might imagine, these suits have been challenged by Google and other defendants on a number of grounds. In an ordinary trademark infringement case, a plaintiff needs to establish that the defendant, (1) used his identical mark, or one that is confusingly similar, (2) in commerce, (3) in connection with the sale of goods or services, (4) and, that the use was causes a likelihood of confusion to the consumer. The two biggest points of contention that defendants have argued is that selling a trademarked phrase is not “in commerce” and that there is no “likelihood of confusion” that results from the sale of the mark. Before Rescuecom withdrew from litigation, the Second Circuit opined that the sale of trademarks in the Adwords program was enough to satisfy the “in commerce” requirement. As far as I know, no court has resolved the the “likelihood of confusion” issue on the merits. Nevertheless, it smells like an awfully tenuous argument given the layout and separation of sponsored links and organic search results.

Hat tip goes to Eric Goldman for his outstanding coverage on Google Adwords litigation.

Comments Off Posted in: Analysis on March 17, 2010

In 2004, Rescuecom, a computer services franchise business which offers repair, consulting, networking, and various internet services, sued Google for selling its trademark as part of the Google AdWords program.  The company owns the domain Rescuecom.com, where it conducts a substantial amount of business.  Rescuecom registered the trademark “Rescuecom” with the USPTO in 1998.  The AdWords program works by having potential advertisers bid on keyword search terms.  When an internet user enters one of these search terms into Google’s search engine query, a sponsored link to the advertiser will appear at the top or to the right of the results list.  Essentially, an advertiser can bid for any search term in the AdWords program.  Additionally, Google recommends search terms based on search promixity to advertisers through it’s Keyword Suggestion Tool.    

Some competitors to Rescuecom purchased “rescuecom” as a keyword search term to display sponsored  links.  Google also recommended the “rescuecom” mark to competitors through the Keyword Suggestion Tool.  Rescuecom filed suit in New York challenging Google’s right to sell Rescuecom’s registered trademarks to competitors as search terms. The key principle at stake is whether a competitor should be allowed to purchase a search term, otherwise protected from certain uses under trademark law, for the purpose of triggering the display of their own advertisements on the Google search result page.  Until the Second Circuit’s decision, most courts have dismissed such lawsuits.

Before the District Court (N.D.N.Y.), Google filed, and was subsequently granted, a motion to dismiss for failure to state a claim (FRCP 12(b)(6)). The essence of this ruling was based on a precedent from a previous case, 1-800 Contacts v. WhenU.com, 414 F.3d 400 (2d Cir. 2005), involving pop-up advertising software which displays advertisements based on a user’s entry of text strings into an internet browser.  In the case, the alleged infringer’s software was triggering pop-up ads featuring competitively priced products when a computer user visiting the 1-800 Contacts website. The court ruled that the use of the trademark terms were “internal” to the alleged infringers advertising software, and therefore not a use in commerce. This rationale stems from the basic tenants of trademark law—to establish infringement under the Lanham Act (15 U.S.C. § 1114),  a plaintiff must prove an infringer: (1) used the plaintiff’s valid trademark, or one that is confusingly similar, (2) in commerce, (3) in connection with the offering of goods or services.  Google successfully argued in the motion to dismiss that the WhenU.com decision compelled the conclusion that the use of keyword search terms was not a use “in commerce” as required under the Lanham Act, and therefore the elements for an infringement cause of action had not been met.

Rescuecom appealed the N.D.N.Y.’s dismissal of their case to the Second Circuit, which reversed the District Court. The decision issued by the Second Circuit on April 3, 2009, distinguished WhenU.com case, and held that the use of trademarked terms could be a “use in commerce” for the purpose of trademark infringement. The Second Circuit explained that the WhenU.com case relied heavily on the fact that the defendant’s actual use of the trademarks at issue were not displayed to the computer user and the use of the trademarks were limited within the software. In contrast, the Second Circuit declared, “regardless of whether Google’s use of Rescuecom’s mark in its internal search algorithm could constitute an actionable trademark use, Google’s recommendation and sale of Rescuecom’s mark to its advertising customers are not internal uses.” Further, the court noted that, “an alleged infringer’s use of a trademark in an internal software program [does not insulate] the alleged infringer from a charge of infringement.”

Aside from the immediate effects on Rescuecom’s litigation, this decision calls into question several other cases within the Second Circuit’s jurisdiction which cite to the WhenU.com case to support similar conclusions as the N.D.N.Y. court came to.  However, this decision is not dispositive on the ultimate issue of whether Google’s actions amount to trademark infringement.

Comments Off Posted in: Analysis on April 9, 2009