A manufacturer of money clips was found liable for trademark infringement last week, a victim of the "initial interest confusion" doctrine set out by the Ninth Circuit in Playboy Enterprises Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004). I am having a hard time understanding the usefulness of this theory of infringement liability, especially online where consumers are "diverted" so easily from one site to another, and this case didn't help matters any.
The plaintiff, Storus Corp., sells money clips with the registered mark SMART MONEY CLIP. The defendant, Aroa Marketing Inc., also sells money clips, and it purchased a Google AdWord that triggered the following advertisement whenever a Google user searched for "smart money clip":
Smart Money Clip
www.steinhausenonline.com Elegant Steinhausen accessories. Perfect to add to any collection.
The plaintiff's evidence showed that this advertisement was displayed 36,164 times during 2006-2007, attracting 1,374 "clicks" by Google users.
The court here wasn't impressed with the defendant's argument that consumers were not confused by the advertisement. Even if consumers were not confused, it said, the trademark infringement claim would still be viable -- because plaintiffs pursuing an initial interest confusion theory need not prove source confusion. All that is necessary, in the Internet context, is for the trademark owner to demonstrate that the defendant's use of the mark "diverted" the consumer to a Web site not operated by the mark owner. The court wrote:
In other words, on 1,374 occasions, consumers who were searching for a website by using Storus' mark were, in fact, "diverted" to an Aroa website selling money clips that compete with Storus' money clips. Such diversion constitutes the "initial interest confusion" prohibited by the Lanham Act.
It was not necessary for the court to decide whether the mere purchase of a keyword containing the plaintiff's mark was infringing, though it likely would have so held, given Brookfield. The prominent display of the plaintiff's mark in the text of the defendant's advertisement was the defendant's undoing here.
Another interesting issue in this case was whether another defendant, Skymall Inc., infringed the plaintiff's trademark when the mall's Web site search mechanism displayed products other than the mark owner's in response to a consumer's search for "smart money clip." The court held that the mark owner was not entitled to summary judgment on this claim, stating that the mark owner had not, at this point in the case, created an adequate recording showing how Skymall's search engine operated.
I think the court could have been a little clearer in its reasoning here. From what I can tell, this court believed that no infringement would occur if Skymall displayed a list of money clips for sale -- including the Storus' Smart Money Clip along with competitors' money clips -- in response to a consumer's search for "smart money clip." The court noted that the defendant's product may very well have been displayed if the consumer had merely searched for "money clip." However, if the Skymall Web site search engine returned a Web page showing competitors' money clips and containing the phrase "smart money clip" somewhere on the page, then that would be infringing. At least I think that's what the court is saying here, preliminarily.
I can't recall any cases like this one, in which a trademark owner challenges the way in which a run-of-the-mill Web site's searching function operates. Google, Yahoo!, Netscape sure, there are plenty of those cases. But in this case, there is no claim that the defendant purchased anything like a keyword from Skymall. I wonder: Are online sellers considering the possibility that their internal search functionality could be infringing a trademarked term if a search query containing the mark returns (accidentally or intentionally to facilitate comparison shopping) results displaying the mark alongside competing products? Could cdw.com lawfully show me a Hewlett-Packard laptop if my search query was for "Dell"?
The case is Storus Corp. v. Aroa Marketing Inc., No. C-06-2454 (N.D. Cal., Feb. 15, 2008).
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