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The 2nd Circuit held that Google's practice of selling trademarks as keywords to its advertising clients constitutes a "use in commerce" as defined by the Lanham Act. Cases of Interest Cases of Interest >  Cyberlaw >  Trademark
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Rescuecom Corp v Google Inc

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C. Haley Cook
Cyberlaw Spring 2009
April 7, 2009

Rescuecom Corp. v. Google Inc.
2009 WL 875447 (2d Cir. 2009)
http://web2.westlaw.com/Find/default.wl?bhcp=1&cite=2009+WL+875447&rs=LAWS2%2E0&strRecreate=no&sv=Split&vr=1%2E0(external link) (cache)

Procedural Posture: Plaintiff Rescuecom appealed from a dismissal for failure to state a claim. The district court for the Northern District of New York dismissed the plaintiff’s claims of trademark infringement, false designation of origin, and dilution against Defendant Google. The Second Circuit reversed and remanded for the district court to determine whether Google’s use of Rescuecom’s mark is likely to cause confusion.

Holding: In a motion for dismissal for failure to state a claim, the court held that Rescuecom had adequately alleged a claim for violation of the Lanham Act because Google’s use of its registered trademark constituted use in commerce. The court declined to rule on whether or not Google’s use of Rescuecom’s mark was likely to cause confusion, and thus resulted in a violation of the Lanham Act.

Background: Rescuecom is a computer service company that has validly registered the trademark “Rescuecom.” Rescuecom brought this action against Google for its practice selling “keywords” to advertisers. Google through its AdWords? program provides context-based advertising when users enter certain search terms. In order for certain searches to bring up certain advertisements, Google designates certain keywords that when searched, bring up certain advertisements. Through its Keyword Suggestion Tool, Google recommends certain keywords for advertisers to purchase thereby bringing up their advertisements when that term is entered into a search. In addition to generic and categorical terms, Google’s Keyword Suggestion Tool often suggests trademarked terms to its advertisers. Rescuecom alleged that Google’s practices of tying keywords to trademarked terms and suggesting those terms to advertisers are likely to cause confusion in violation of the Lanham Act. The district court dismissed Rescuecom’s claims based on a prior decision in the Second Circuit, 1-800 Contacts v. When U.com. The district court found that like the defendant’s use of plaintiff’s mark in the 1-800 case, Google’s use of Rescuecom’s mark was not a “use in commerce” as required by the Lanham Act.

Court’s Analysis: The court rejected the district court’s reasoning that 1-800 required the dismissal of the case at hand. The court distinguished the previous case for two reasons. First, the court noted that When U used 1-800’s website address, not its specific trademark, and that in dictum, the 1-800 court suggested that use of the trademark itself may result in liability. Here, Google used the plaintiff’s trademark in suggesting keywords, not merely its website address. Second, in 1-800, advertisers could not pick certain trademarks to purchase in order to tie their advertisements to them. The advertisers did not see the keywords that were used for their advertisements because When U used categorical associations rather than the keywords themselves. Google recommends specific trademarked terms to its advertisers and offers them for purchase. Google had recommended and sold Rescuecom’s specific mark to various advertisers. Google argued that its use of Rescucom’s mark was internal, and therefore, under the 1-800 case it precludes a finding of use in commerce. The court rejects this as an overbroad reading of the 1-800 case because internal use does not foreclose the possibility of trademark infringement, it also noted that if it were to accept Google’s argument, search engines would be able to use trademarks in ways that confuse and deceive the public without liability as long as the trademarks were used in an internal computer directory. The court also rejects Google’s argument that its use of Rescuecom’s mark is the same has harmless product placement. The court notes that the fact that a use is “product placement” does not mean that it is a non-infringing use. The focus of the inquiry is whether or not the practice causes confusion. Based on the foregoing reasons, the court finds that Google’s use of Rescuecom’s mark is a use in commerce. The court declines to rule on whether or not Google’s use creates a likelihood of confusion, and remanded the case to the district court to determine whether or not there has been a violation of the Lanham Act.

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