Haynes and Boone's Newsroom

Recent Trademark Challenges in Cyberspace...
08/01/2004
Jeffrey M. Becker, Purvi J. Patel

INTRODUCTION

The relatively recent legal doctrines of “initial interest confusion” and “nominative fair use” have become the dominant buzz words for defining the scope of permissible trademark use on the Internet, especially in the on-line advertising context. The prevalence of recent trademark cases applying these doctrines stems from the difficulty involved in assessing trademark liability in cyberspace, particularly when the trademark is not used as visible expression, but is instead being used as an “invisible” tool, such as a metatag  or as a keyword. For example, when the Ninth Circuit adopted the initial interest confusion test with respect to the Defendant’s use of Plaintiff’s registered mark in its metatags in its well-publicized opinion of Brookfield Communications, Inc. v. West Coast Entertainment Corp., it did so noting that the traditional multi-factor likelihood of confusion analysis is not always suitable for assessing trademark liability in the Internet world.

In reviewing the Internet trademark cases that have been decided in the past year, one thing is abundantly clear – the parameters of the initial interest confusion doctrine and the nominative fair use defense have not yet been firmly defined.  There are still no clear rules for their consistent application.  These doctrines are still in their infancy, and because cyberspace trademark issues are “virtual” and novel in nature, courts are wrestling with their application and formulating brick and mortar analogies in order to bring about an “equitable” result.  In doing so, courts are attempting to strike the proper balance between protecting the intellectual property rights of companies without creating undue restrictions on competition and consumer choice.  This has proven to be a difficult feat.  The implications are significant since where the courts ultimately strike the balance will directly impact the future for search engines operators, contextual marketers, and competitive advertising on the Internet.

Recent cases have discussed initial interest confusion and nominative fair use in the context of on-line targeted marketing practices like keyword advertising (also known as “keying”) and “pay per click”  advertising (also known as “pay for placement advertising”), “pop-up” advertisements, and trademark usage of competitors in metatags.  Unfortunately, no clear guidelines are available because many of the relevant cases are still in their preliminary stages and are being examined within the confines of preliminary injunction and summary judgment standards of review.  That said, these decisions provide an insight into courts’ attempts to reconcile the competing interests of brand protection and consumer choice.

In order to get a better understanding as to why initial interest confusion and nominative fair use have gained such traction in current cyber-trademark infringement analyses, a brief description of the doctrines and the cases that launched them are outlined below.