Category Archives: trademark infringement

Does Selling a Grey Market Goods In New York Confer Individual Jurisdiction Over the Trademark Infringer?

In Chloe v. Queen Bee of Beverly Hills, L.L.C., No. 09-cv (2d Cir. Aug. 5, 2010), the court was presented with a novel issue: whether a New York court would have jurisdiction over a California resident who was alleged to have engaged in one act of trademark infringement by sale of product to a Bronx resident.

In that case, Simone Ubaldelli (“Simone”), a California resident, was the owner of a California company that sold knock-off Padington bags by Chloé . These bags were  misrepresented as being products manufactured by Chloé.  The issue was whether Simone could be sued as an individual in New York for trademark infringement by her company, Queen Bee.

The New York court determined that it had jurisdiction over Simone because, although the she had only engaged in one transaction with a New York resident, her company had made at least fifty (50) sales of merchandise in New York that infringed on Chloé’s trademark.  As a result, there were enough contacts such that suit could proceed against Simone individually.

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© 2012 Nissenbaum Law Group, LLC

Does Google’s Keyword Advertising Constitute Trademark Infringement?

Proving that a mark was used in commerce has long been a requirement for plaintiffs claiming trademark infringement. After all, there is no need to protect a mark that is not being used.

But the case law concerning the definition of “use” was decided before the advent of the Internet. Accordingly, there are a host of new issues that Courts are wrestling with in the modern era. One of them is whether employing a word or phrase in what is called, “keyword advertising” is a “use in commerce” that may violate trademark protection.

Keyword advertising concerns the way people find relevant content on the Internet. When a person performs an Internet search, two types of search results arrive on the page. First, the search engine provides a list of links to websites that it determines to be relevant to the term that is searched. Second (and more important in this case), the search engine provides context-based advertising that includes links to products correlated to the user’s search. Advertisers are permitted to bid on keywords that users might enter into searches. When a user enters a keyword that has been purchased by an advertiser, the website of that advertiser will appear as a sponsored link on the search result page.

In a 2009, the United States Court of Appeals for the Second Circuit addressed this issue in Rescuecom Corp. v. Google, Inc., 562 F.3d 123 (2d Cir. 2009). The plaintiff in Rescuecom, a computer-related services company, had registered the term “Rescuecom” for trademark protection. As part of its advertising strategy, it purchased keywords from Google to promote its services. However, when it attempted to purchase the keyword “Rescuecom” from Google, it realized that Google had already sold the keyword to one of the plaintiff’s competitors. As a result, when Google users entered “Rescuecom” into a search, the competitor’s links would show up alongside the search results, in addition to the link to the plaintiff’s site.

Rescuecom alleged that Google’s sale of its trademark as a keyword constituted trademark infringement. The United States District Court for the Northern District of New York decided in Google’s favor and held that Rescuecom failed to allege any facts indicating that Google’s actions constituted a “use” of the trademark. Rescuecom appealed.

In order to prevail on a claim for trademark infringement, a plaintiff must establish that he or she:

1) has a valid, registered trademark that is entitled to protection;

2) that the defendant used the mark;

3) that the use was in commerce;

4) that the use was in connection with the sale or advertising of goods or services; and

5) that the use was without the plaintiff’s consent.

1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400, 406 (2d. Cir. 2005) (citing 15 U.S.C. § 1114(1)(a)).

The Rescuecom Court reversed the lower court’s decision and held that Google’s actions did constitute “use” of the plaintiff’s trademark. The Court found that “what Google is recommending and selling to its advertisers is Rescuecom’s trademark.” Rescuecom at 129. It stated that Google “displays, offers, and sells Rescuecom’s mark to Google’s advertising customers when selling its advertising services.” Id. Additionally, it “encourages the purchase of Rescuecom’s mark through its Keyword Suggestion Tool.” Id.

Google had argued that the inclusion of a trademark in an internal computer directory could not be considered trademark use. However, the Rescuecom Court held that if that were the case, “the operators of search engines would be free to use trademarks in ways designed to deceive and cause consumer confusion.” Id. at 130. The case was remanded for further proceedings.

Rescuecom is generally in line with the decisions made by the courts of other jurisdictions when hearing similar cases. In 2010, the Tenth Circuit held that a “use in commerce” existed where the plaintiff’s mark was used to promote a defendant’s services and consumers were provided with a link to a website where it could purchase products from the defendant. 1-800 Contacts, Inc. v. Lens.com, Inc., 755 F.Supp. 2d 1151 (D. Utah 2010). Other circuits have relied upon and agreed with the Rescuecom decision. See Fair Isaac Corp. v. Experian Information Solutions, Inc., 645 F. Supp. 2d 734, 760 (D. Minn. 2009); Network Automation, Inc. v. Advanced Systems Concepts, 638 F.3d 1137, 1145 (9th Cir. 2011).

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© 2012 Nissenbaum Law Group, LLC