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Clamping Down on the Use of Trademarks by Third Parties

When Internet users search online for information, they use search engines like Yahoo, Google, and MSN. Because some page owners have paid for some of its links to the search engine websites and the links come up whenever the website owner’s results appear as a search result, there have recently been conflicts between the owners of the trademark and some third parties.  Efforts are being made to clamp down and contain the unauthorized utilization and misappropriation of trademarks and other intellectual property items when it comes to Internet search related issues.

J.G. Wentworth v. Peachtree Settlement Funding

In one such trademark conflict, J.S. Wentworth complained that Peachtree Settlement Funding infringed the trademarks JG WENTWORTH and J.G.WENTWORTH. The Defendant had used these trademarks as keywords and had paid to have links appear to its own website “immediately proximate to the link to Plaintiff’s website on the search-results screen” each time a user of the Internet searched the Google engine for “J.G. Wentworth” or “JG Wentworth.”

Because Peachtree Settlement Funding and J.G. Wentworth are competitors in the field of structured settlements, Plaintiff claimed that Defendant had stolen potential customers and diluted the effectiveness of its various trademarks, and that this caused a subtantial profit loss for the plaintiff. Defendant Peachtree moved to have the complaint dismissed.

The court acknowledged two important operative issues:
1. Whether Defendant used the trademark as keywords in the Google AdWords advertising program under the Trademark Act’s “use in commerce.” Owner of a trademark establishes rights through the use of the trademark in public marketplace. 
2. Whether the use of the Plaintiff’s trademark infringed trademark rights provided for in the Act because it had a good chance of confusing the consumer.

On whether the trademark was used in commerce, Defendant argued that the trademark’s use was not for the public to see, and was not meant to be associated to Peachtree Settlement Funding, only an analog to the user’s personal response to a trademark. Defendant claimed it was not used in commerce “in connection with the sale of goods or services” to confuse consumers. Disagreeing, the court decided that Defendant’s use of the trademarks as keywords in their Google AdWords links, designed to draw internet users, constituted use in commerce under the Act.

Regarding infringement, however, Defendant argued that using the J.G. WENTWORTH trademarks as keywords was not likely to confuse the consumer. Here the court agreed, and stated  “[a]t no point are potential consumers ‘taken by a search engine’ to defendant’s website...the links to defendant’s website always appear as independent and distinct links on the search result pages.” There was also no accusation that the Defendant’s ads and links that used the Plaintiff’s were “in any way discernable to [I]nternet users and potential customers,” and that “[d]ue to the separate and distinct nature of the links created on any of the search results pages in question, potential customers have no opportunity to confuse defendant’s services, goods, advertisements, links or websites for those of plaintiff.” The court then decided that the use of Plaintiff’s trademarks was not trademark infringement under the Trademark Act and  the court dismissed the complaint.

The J.G. Wentworth v. Settlement Funding case confirms that it is not copyright infringement to use other companies’ trademarks in their online advertising keywords, in the opinion of this Pennsilvania court. Similar decisions have been made by other courts as well, including California, New York, and Virginia, and the Second Court of Appeals.

However, it’s important also that online advertisers such as Google AdWords and the trademark owners be aware that the issues of trademark infringement on these ads has not been resolved nationwide. Some courts have decided that purchase of a keyword does constitute “use in commerce,” and some have not reached a conclusion regarding the question of likelihood of consumer confusion. Other courts, such as New Jersey, California, Georgia, Minnesota, and the ninth Circuit Court of Appeals, have focused on the facts at trials instead of addressing the issues of use in commerce.

In general, however, the courts seem to side with the advertisers who use the keywords rather than the owners of trademarks, although it may be a while before the issue is fully resolved.


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