Ninth Circuit: “Keying” of search terms may constitute trademark infringement

In a ruling which is sure to have repercussions throughout and beyond the Internet search engine community, the Ninth Circuit Court of Appeals has issued an opinion which opens the way for trademark infringement lawsuits based on the prevalent practice of “keying”, or linking, well known trademarks to advertisements for competitive products of services. In a decision issued on January 15, 2004, in Playboy Enterprises, Inc. v. Netscape Communications (copy of the decision available here), the Court reversed a summary judgment grant by the U.S. District Court for the Central District of California which held that “keying” could not constitute trademark infringement.

As explained by the Court, the practice of keying “allows advertisers to target individuals with certain interests by linking advertisements to pre-identified [search] terms. To take an innocuous example, a person who searches for a term related to gardening may be a likely customer for a company selling seeds. Thus, a seed company might pay to have its advertisement displayed when searchers enter terms related to gardening. After paying a fee to defendants, that company could have its advertisements appear on the page listing the search results for gardening-related terms: the ad would be ‘keyed’ to gardening-related terms.”

Under the facts of the case, the plaintiff, Playboy Enterprises, Inc (“PEI”), was able to demonstrate that the defendants, who operate Internet search engines, had “keyed” the search terms “playboy” and “playmate” (both trademarks of PEI) to advertisements for competing adult entertainment companies, so that users were shown banner advertisements for those companies along with the results of their search.

The defendants, Netscape Communications Corporation and Excite, Inc, successfully argued below that summary judgment in their favor was proper because there was no likelihood of confusion from the “keyed” banner ads. According to Netscape and Excite, users of their service would surely know that the advertisements did not originate from, and were not affiliated with, PEI. The Ninth Circuit, however, cast aside this argument in stating that the banner ads, at the very least, appear to cause “initial interest confusion” and that the actions of the defendants “do nothing to alleviate confusion.” The Court also dismissed the three defenses raised by Netscape and Excite, fair use, nominative use and functional use, as inapplicable to the facts of the case.

In its ruling, the Ninth Circuit also reversed, on similar grounds, the lower court’s grant of summary judgment in favor of the defendants on PEI’s cause of action for trademark dilution.

To learn more about this decision and the impact on your trademark rights, please contact one our experienced trademark attorneys by clicking here.

Lott & Friedland, P.A.

Florida intellectual property law firm located in Miami, Florida. Our attorneys and lawyers specialize in patent law, trademark law, copyright law, Internet law, entertainment law and related litigation.

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