Utah: Tailor-Made Venue for Keyword Advertising Suits

Prof. Goldman's Technology & Marketing Law Blog has the news today that 1-800-Contacts Inc. is suing Lensworld.com Inc. for trademark infringement arising from LensWorld's purchase of search engine keywords and sponsored links tied to 1-800-Contacts trademarks.

While it is true, as Goldman points out, that  numerous cases in the Second Circuit have rejected this theory of trademark liability, it is also true that the latest 1-800-Contacts case was brought in federal court in Utah, in the Tenth Circuit. The Tenth Circuit has held, in Australian Gold v. Hatfield, 436 F.3d 1228 (10th Cir. 2006), that the purchase of a competitor's trademark as a search engine advertising trigger is actionable under the Lanham Act. Australian Gold said that this form of advertising created "initial interest confusion" (a controversial doctrine in cyberlaw circles) that unlawfully "used the goodwill associated with Plaintiff's trademarks in such a way that consumers might be lured to the [products] from Plaintiff's competitors. This is a violation of the Lanham Act."

Australian Gold was followed in a recent Utah district court opinion, Trace Minerals Research v. Mineral Resources Int'l, 505 F. Supp.2d 1233 (D. Utah 2007).

Add to these decisions that fact that Utah appears to be the most trademark-owner-friendly locale in the country. Not only has Utah been the birthplace of tough anti-adware and trademark registration laws, but the  trademark owner's jury verdict affirmed in Australian Gold was $5 million! All in all, you have to like 1-800-Contacts' chances in Utah.