The U.S. District Court for the Central District of California recently ruled that the purchase of a competitor’s registered trademark through Google Inc.’s AdWords program for sponsored keyword advertising on the search engine website constituted “use in commerce” under the Latham Act.<\/p>\n
Trademark owners scored a recent victory in the ongoing battle over the use of trademarks as keywords for online searching.\u00a0 On January 25, 2011, the U.S. District Court for the Central District of California ruled that the purchase of a competitor’s registered trademark through Google Inc.’s AdWords program for sponsored keyword advertising on the search engine website constituted “use in commerce” under the Latham Act.<\/p>\n
Plaintiff, Binder & Binder, is a law firm specializing in assisting clients in claiming benefits from the federal government’s Social Security Disability Insurance and Supplemental Income programs.\u00a0 The firm owns three federal trademark registrations for the terms “Binder & Binder,” “Binder and Binder,” and for a logo showing the terms in a design.\u00a0 Defendant, Disability Group of Santa Monica, California, serves similar clientele.\u00a0 In 2006, it began an advertising campaign which included purchasing ads on Google’s search engine keyed to the term “Binder and Binder.”\u00a0 Plaintiff sued, alleging trademark infringement and false representation under federal law as well as unfair competition under California state law.<\/p>\n
The Court first found that Defendant’s violated the federal Latham Act which requires a plaintiff to prove 1) that it is the rightful owner of a\u00a0registered<\/u>\u00a0trademark; 2) that the defendant used in any reproduction, counterfeit, copy or colorable imitation of a mark without the plaintiff\u2019s consent, in commerce, in connection with the sale, offering for sale, distribution or advertising of any services; and 3) where such use is likely to cause confusion, or to cause a mistake or to deceive.<\/p>\n
Recognizing that Plaintiff owned a valid trademark, the Court found that Defendant’s purchase of “Binder and Binder” as an AdWord and the resulting Google advertising keyed to the mark constituted a “use in commerce.”\u00a0 The Court went on to find that the similarity of the trademark and AdWord, the similarity of the services offered, Defendant’s intent and the overlap in the parties’ marketing channels all weighed in favor of finding a likelihood of causing confusion of potential clients.\u00a0 The Court also found actual confusion of potential clients based on evidence that included a survey and witness testimony.<\/p>\n
The Court went on to find liability under the federal statute for false advertising as Defendant used Plaintiff’s mark to market its own business in a manner that was “likely to confuse” potential clients and that deceived potential clients into thinking they were being led to Plaintiff’s website.<\/p>\n
Also noteworthy is the Court’s lost profits calculation.\u00a0 The Court considered the average revenue per California case for Plaintiff during a one year period, the number of clicks, the number of clicks that turn into submissions, and the number of submissions that turn into cases.\u00a0 Click-to-submission rations were used to determine the redirected traffic results and $146,117.60 was the total lost profits.<\/p>\n
While the court acknowledged lasting negativity in the marketplace, the lack of specific, quantifiable evidence as well as the limited time frame mitigated against any corrective advertising damage award.\u00a0 However, finding that Defendant’s infringement was willful, the Court increased the award to $292,000 and allowed for recovery of attorneys’ fees and costs.<\/p>\n