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Recent developments in the protection of trademarks on the Internet

The United States Court of Appeals for the Ninth Circuit issued a decision Jan. 14, 2004, in Playboy Enterprises, Inc. v. Netscape Communications Corp., 9th Cir., No. 00-56648, that may change the current standard for evaluating trademark infringement on the Internet.

The Playboy case involved "keying," which is the practice of linking advertisements to pre-identified terms on a list of keywords. For instance, a person who searches a term related to fishing might be a prospective customer for an outdoor enthusiast's store; therefore, a company such as Orvis might place a banner advertisement to appear when the results of such a search are displayed.

In the Playboy case, Playboy objected to the search engine's use of PLAYBOY and PLAYMATE as key words used to pull up unlabeled banner ads for various adult-oriented sites. The court agreed with Playboy and found that, because the user does not know the source of the unlabeled banner ads, they at least may be initially confused as to the source, sponsorship or affiliation of the linked Web site under the standard for initial interest confusion set forth in Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1053 (9th cir. 1999). Accordingly, the Ninth Circuit reversed the lower court's grant of summary judgment in favor of the search engines.

The most intriguing aspect of the decision was a concurring opinion written by Judge Marsha S. Berzon. Judge Berzon criticized the initial interest confusion standard applied in Brookfield (which has been adopted in other circuits, including the Seventh Circuit) as being too expansive, whether applied to a case involving keying or meta tags. Judge Berzon asserts that, if the Brookfield standard were applied in Playboy, initial interest confusion would have been found even if the sponsors of the banner ads were clearly labeled.

Judge Berzon asserts that it is not reasonable to find initial interest confusion when a customer knows, or should know, from the outset that a product, service or Web site link is not related to the trademark owner because the ad or hit list so informs him. Judge Berzon makes a distinction between making a customer think he is visiting the trademark owner's website and simply distracting a potential customer with a different, clearly labeled, choice to visit an alternative website. Judge Berzon draws a comparison with shopping "off-line" in retail establishments where customers are faced with competing products side by side all of the time. Simply because an alternative, clearly labeled choice is offered to consumers does not render initial interest confusion likely. Judge Berzon's example is of a department store carrying a high profile clothing brand as well as a lower cost department store brand alternative. Because the two brands are clearly labeled, Judge Berzon insists that initial interest confusion is not likely, and similarly would not be likely when the situation is applied to Internet shopping. Another analogy can be made to coupon distribution at grocery stores. A customer purchases a box of bran cereal, and at checkout receives a coupon for a competing brand of bran cereal. Again, because both product brands are clearly labeled, customers should not be confused.
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At the close of her opinion, Judge Berzon invites the 9th Circuit or another court to consider reevaluating the "insupportable" rule in Brookfield. Adoption of a more restrictive position, as encouraged by Judge Berzon, with respect to meta tags could have a substantial impact on the ability of trademark owners to police unauthorized use of their trademarks on the Internet.

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Lori S. Meddings is an attorney in the Milwaukee office of Michael Best & Friedrich LLP and can be reached at lsmeddings@mbf-law.com.

The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.

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