NAM designs and manufacturers physiotherapeutic spinal devices, commonly known as traction devices, which are used, for example, to treat lower back pain. Adagen is an authorized distributor of NAM's devices. Axiom, a competitor of NAM's, manufacturers a physiotherapeutic device known generally as the DRX 9000. Gibson and Exharhos are, respectively, the president and vice president of Axiom. In the present lawsuit, NAM and Adagen allege that Axiom engaged in unfair competition by infringing NAM's trademarks and by issuing false advertising regarding the DRX 9000.
The trademark infringement claims stem from Axiom's use of two of NAM's registered trademarks: the terms “Accu–Spina” and “IDD Therapy.” Axiom included these terms on its website within meta tags. Although Axiom's website never displayed NAM's trademarked terms to visitors and never mentioned NAM or NAM's products, Axiom nonetheless included the terms within its meta tags to influence Internet search engines. For instance, evidence in this case indicated that, before Axiom removed these meta tags from its website, if a computer user entered the trademarked terms into Google's Internet search engine, Google listed Axiom's website as the second most relevant search result. In addition, Google provided the searcher with a brief description of Axiom's website, and the description included these terms and highlighted them.
...the plain meaning of the statutory language [of the Lanham Act] clearly indicates that Axiom's use of NAM's trademarks as meta tags constitutes a “use in commerce ... in connection with the sale ... or advertising of any goods” under the facts of this case....Because Axiom's use of NAM's trademarks as meta tags caused the Google search to suggest that Axiom's products and NAM's products had the same source, or that Axiom sold both lines, or that there was some other relationship between Axiom and NAM, Axiom's use of the meta tags caused a likelihood of actual source confusion.
Standard Process also alleges that Dr. Banks is liable for trademark infringement because of “initial interest confusion.” “Initial interest confusion” occurs when a customer is lured to a product by the similarity of the mark, even if the customer realizes the true source of the goods before the sale is consummated. For example, in Promatek, the plaintiff used a direct competitor's trademark in its metatags. A metatag is HTML (Hyper Text Markup Language) code that describes the content of a website, and search engines used to use them to identifying the content of a website. The Seventh Circuit found that the use of the competitor's trademark in the plaintiff's metatags diverted customers to the plaintiff's website and likely caused customer confusion.
Like the plaintiff in Promatek, Dr. Banks used Standard Process trademarks in the metatags of his website. However, today “modern search engines make little if any use of metatags.” As more and more webmasters “manipulated their keyword metatags to provide suboptimal keyword associations, search engines progressively realized that keyword metatags were a poor indicator of relevancy.”Accordingly, search engines today primarily use algorithms that rank a website by the number of other sites that link or point to it.
In any event, even if search engines still made significant use of metatags, this case is different than Promatek. Consumers who enter “Standard Process” in a search engine may be diverted to Dr. Banks's website where, unlike the plaintiff's site in Promatek, it actually provides an opportunity to purchase the trademark holder's goods. Dr. Banks is not a direct competitor to Standard Process. Consumers will still be able to purchase unaltered SP Products on his site, so the likelihood of consumer confusion is not present here. (citations omitted)So what sort of rule can we develop from these cases? There are two parts to this test, with a series of subparts. First, the plaintiff must demonstrate use in commerce in connection with the sale or advertising of any goods, consistent with the Lanham Act. In doing so, the plaintiff must show (1) they possessed a valid mark, (2) that the defendant used the mark, (3) that the defendant's use of the mark occurred “in commerce,” and (4) that the defendant used the mark “in connection with the sale ... or advertising of any goods.” Second, the plaintiff must demonstrate the likelihood of confusion. Seven factors are relevant when determining whether a likelihood of confusion exists: (1) the strength of the plaintiff's mark; (2) the similarity between the plaintiff's mark and the allegedly infringing mark; (3) the similarity between the products and services offered by the plaintiff and defendant; (4) the similarity of the sales methods; (5) the similarity of advertising methods; (6) the defendant's intent, e.g., does the defendant hope to gain competitive advantage by associating his product with the plaintiff's established mark; and (7) actual confusion.
Edited to add (4/13/13): As has been suggested, many companies buy their competitor's names as Google AdWords. These decisions suggest that, at least in some circumstances, that it might be a trademark violation. However, here's an article that suggests plaintiffs rarely win trademark infringement claims involving Google AdWords. Additionally, the financial stakes don't make much sense.