I Fought The Law: A Primer For Online Brand Marketers By Eric Berman

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Eric Berman, Venable LLP

I FOUGHT THE LAW: A PRIMER FOR ONLINE BRAND MARKETERS

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Search Marketing Issues Involving Your Competitors

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§  When competitors use each other’s trademarked words (i.e., brand names) as ad keywords, they may be sued for trademark infringement

§  Infringement requires likelihood of confusion §  “Initial interest confusion” – confusion before time of

purchase that creates interest in competing product, e.g. when customer first uses keyword to search for a product or brand

§  Courts are split on this theory

Trademarks in Keyword Advertising

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§  Lack of evidence of confusion – cases show that it is very difficult for competitors to prove consumer confusion for keyword search terms, especially actual confusion

§  Nominative use – competitor only used the trademark to identify, with no suggestion of sponsorship or endorsement (i.e. no confusion)

§  Unclean hands – plaintiff has been doing the exact same thing, purchasing competitors’ keywords

Trademarks – Common Defenses

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Facts

§  Webcam system marketer EarthCam brought suit for corporate espionage against competitor OxBlue

§  EarthCam had purchased advertising keyword “OxBlue” from multiple search engines

§  OxBlue counterclaimed for trademark infringement

EarthCam, Inc. v. OxBlue Corp. (N.D. Ga. 2014)

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Ruling §  OxBlue lost the counterclaim on summary judgment

§  OxBlue failed to provide evidence of likelihood of confusion

§  Court also noted that OxBlue had earlier purchased “EarthCam” as an advertising keyword (potential unclean hands)

EarthCam, Inc. v. OxBlue Corp. (N.D. Ga. 2014)

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Facts §  Credit card processor IPS owned trademark “ElitePay

Global” as its business name

§  CardPaymentOptions.com is a review website that had negative reviews of ElitePay Global

§  CPO also purchased “ElitePay Global” keywords to direct searches to their negative reviews, and put the trademark on the review page

Int’l Payment Servs. v. CardPaymentOptions.com (C.D. Cal. 2015)

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Ruling §  IPS lost trademark infringement claim at summary judgment

§  Court’s main ruling is on nominative use

§  CPO made a “referential use” to review and criticize IPS

§  “Referential use” extended to using trademark as a keyword trigger

Int’l Payment Servs. v. CardPaymentOptions.com (C.D. Cal. 2015)

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Facts §  Two nonprofits (AFA and ADRDA) dedicated to fighting

Alzheimer’s

§  AFA bought keyword ads triggered by trademarks registered to ADRDA, such as “Alzheimer’s Association” and “Memory Walk”

§  ADRDA sued AFA for trademark infringement and requested preliminary injunction

Alzheimer’s Foundation of Am. v. Alzheimer’s Disease and Related Disorders Ass’n (S.D.N.Y. 2015)

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Ruling §  ADRDA lost the preliminary injunction §  Court actually said that any likelihood of confusion factors

favored ADRDA §  Once again, lack of evidence of actual confusion killed the

claim – unclear whether any searchers actually mistook AFA for ADRDA

§  Judge criticized both parties for wasting time and money that could have been spent on their actual goals

Alzheimer’s Foundation of Am. v. Alzheimer’s Disease and Related Disorders Ass’n (S.D.N.Y. 2015)

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Facts §  MTM makes popular watches that Amazon does not sell,

including “MTM Special Ops” §  When users search for “MTM Special Ops” on Amazon, page

displays similar competing products as “results” (alternative purchases)

§  MTM sued for trademark infringement §  Lower court granted summary judgment in favor of Amazon,

finding no infringement

Multi Time Machine v. Amazon.com (9th Cir. 2015)

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Ruling §  Ninth Circuit reversed based on initial interest confusion –

case gets to go to trial §  Amazon failed to say in the search results that it did not

stock any MTM products, and the results page included multiple uses of “MTM Special Ops”

§  Controversial decision – Circuits are split on initial interest confusion, and no one had won an initial interest case in years

Multi Time Machine v. Amazon.com (9th Cir. 2015)

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Search Marketing Issues Involving Regulators

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Brand Marketing Via ‘Consumer Engagement’

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§  Brand marketing with user-generated content on social media may trigger consumer actions (e.g., IP rights) and regulatory scrutiny by FTC:

§  Brands’ privacy policy §  Obtaining consent, esp. for children under 13 (COPPA) §  Sharing of consumers’ information with affiliates and business

partners §  Use of consumer testimonials

‘Consumer Engagement’ (cont’d)

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§  AKA sponsored content, has existed since well-before search marketing was a gleam in anyone’s eye

Native Advertising

“This is not a paid write-up nor an ad. It is a sincere appreciation of, and tribute to what I consider one of the great events in Hawaiian history—the opening of the superb Royal Hawaiian Hotel at Waikiki.” The Honolulu Advertiser (1927)

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§  Why does it matter?

§  Consumer confusion

§  Blurs the line between editorial content and commercial speech/ advertising

§  Impacts message conveyed to consumers

Native Advertising (cont’d)

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§  Advertiser-sponsored content designed with the “look and feel” of a news article is likely to generate competitor and FTC interest

Don’t Blur the Lines

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§  Disclosure, disclosure, disclosure §  Where? How? Magic Words?

§  Distinguish sponsored search listings from natural search listings

§  Industry self- regulation & best practices

Reducing the Risk

www.ftc.gov

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MARCH 1-3, 2016