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What’s in a name? Ninth Circuit OKs keyword ad “conquesting”
A plaintiff must demonstrate likely confusion, not “mere diversion,” in the keyword advertising context of a trademark infringement action.
What’s in a name? Ninth Circuit OKs keyword ad “conquesting”
Federal courts rarely decide cases before trial — especially when dealing with relatively new issues. However, an Arizona district court did just that in a trademark infringement case involving an online advertising technique called “conquesting.” The U.S. Court of Appeals for the Ninth Circuit subsequently upheld the judgment, clarifying its belief that the ad practice is on solid legal ground.y
Search for relief
The case revolved around a dispute between two personal injury law firms based in Arizona. The plaintiff is the larger of the two, with 19 offices throughout the state. It holds three registered trademarks, including for “Lerner & Rowe.” The firm has spent more than $100 million promoting its brand and trademarks in Arizona.
The defendant, doing business as The Accident Law Group (ALG), bought the term “Lerner & Rowe” as a Google Ads keyword so that its ads appear near the top of Google search results when someone searches for the term. This strategy is known as conquesting. ALG’s ads themselves never included or referenced the term, though.
In 2021, Lerner & Rowe sued ALG for, among other things, trademark infringement. The trial court entered summary judgment in ALG’s favor before trial, and the plaintiff appealed.
How to assess consumer confusion
With no dispute as to whether the plaintiff had a protectable interest in its mark, the appellate court focused on whether the defendant’s use of the mark would likely cause consumer confusion. According to the court, a plaintiff must demonstrate likely confusion — not “mere diversion — in the keyword advertising context.
- When assessing the likelihood of confusion in this context, the court primarily considers the following nonexhaustive list of factors:
- The strength of the mark,
- The evidence of actual confusion,
- The type of goods and degree of care likely to be exercised by the purchaser, and
- The labeling and appearance of the advertisements and the surrounding context on the screen showing the results page.
Less relevant factors include the proximity of the goods, similarity of the marks, marketing channels used, defendant’s intent and likelihood of expansion of the product lines.
Court applies test
The mark here was federally registered and, as mentioned, Lerner & Rowe had spent millions of dollars advertising it, landing business from more than 100,000 clients. So the court easily found that the first factor weighed in the plaintiff’s favor. That wasn’t the case, though, for the remaining three factors.
Although evidence of actual confusion is often difficult to collect, the plaintiff submitted evidence of 236 phone calls to ALG’s intake department in which callers mentioned Lerner & Rowe when asked how they found ALG’s phone number. Data from Google, however, showed that searches for the term over a four-year period returned results showing that only 0.216% of the total number of users exposed to ALG’s ad were actually confused.
The court found that no reasonable jury could find this percentage anything more than de minimis and too little to support a finding of likelihood of confusion. The second factor, therefore, weighed substantially in favor of ALG.
The appellate court also found that the third and fourth factors favored ALG. For more than a decade, it said, the court has recognized that consumers who use the internet to shop generally are “quite sophisticated” about how the internet works. For example, they’re familiar with Google’s layout and understand that it produces sponsored links (with a bolded “Ad” designation) along with organic search results. Further, because these consumers would have been using the precise trademark at issue to search, they’d be particularly discerning of the results and capable of finding the result for Lerner & Rowe that includes their actual search term.
The results
The appellate court’s assessment of the less relevant factors didn’t change its conclusion. Because the plaintiff didn’t establish a genuine dispute regarding the likelihood of confusion, this was a rare trademark infringement case that could be decided before trial.
Sidebar: Second Circuit takes a similar stance
Two weeks before the ruling in Lerner (see main article), the U.S. Court of Appeals for the Second Circuit issued its decision in another case involving a competitor’s use of trademarks in keyword search advertisements. The parties were both online retailers of contact lenses.
The defendant bought search engine keywords consisting of the plaintiff’s trademarks to use as keywords in online ad campaigns. It designed misleading, source-ambiguous paid ads for consumers searching for the plaintiff’s website to divert them to the defendant’s website, which mimicked the plaintiff’s website.
As in Lerner, though, the defendant didn’t actually use the plaintiff’s trademarks other than buying them as keywords in online search engine auctions. It didn’t, for example, display or use the trademarks. The court held that the mere act of buying a search engine keyword that’s a competitor’s trademark doesn’t alone, in the context of keyword search advertising, constitute trademark infringement. The Second Circuit noted that, in doing so, it joined “the consensus view.”
