Second Circuit limits 1-800 Contacts; keyword advertising can be use in commerce

In a recent decision, the Second Circuit reversed a district court's grant of a motion to dismiss in a trademark infringement case.  The district court, relying on the Second Circuit's 2005 decision in 1-800 Contacts, Inc. v. WhenU.com, Inc., held Google's use of its Adwords and Keyword Suggestion Tool to cause advertising to appear when certain trademarked words and phrases are searched did not constitute a "use in commerce" as defined in § 1127 and required for a claim of trademark infringement under § 1114.

On appeal, the Second Circuit reversed, holding this practice did constitute a use in commerce.  The court distinguished the 1-800 Contacts case, observing in that case, the advertisements were in response to visiting a website, not the entry of a trademark.  Further, in that case, advertisers could not "purchase" a competitors keyword, so even if an advertiser wanted its ads to appear when a user visited a competitor's site, the defendant did not offer such a service.

In contrast, here Google not only keys the advertisements to the trademark itself (rather than as a result of visiting a website), but also permits anyone to pay to have its advertisements shown when a trademark is searched.  The Keyword Suggestion Tool will also suggest that advertisers key their advertisments to trademarked terms.  Based on these allegations (taken as true in the context of Google's motion to dismiss), the Second Circuit held there was a use in commerce, and reversed the district court's dismissal of the case.

More detail of Rescuecom Corp. v. Google Inc. after the jump.

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Second Circuit: Sales pitch of slogan to credit card companies not use in commerce

In a decision Monday, the Second Circuit affirmed a district court's summary judgment in a trademark case involving the slogan "My Life. My Card."  An individual threatened to sue American Express for use of the slogan, alleging that he had superior rights in the mark based on efforts to license the phrase to various credit card companies, including American Express.  American Express filed a declaratory judgment action, and the district court granted summary judgment to American Express, holding that seeking to license the mark to companies did not constitute a use in commerce, and as such the individual had not gained any trademark rights in the phrase. 

The Second Circuit affirmed, agreeing that because the individual had not used the mark in commerce, American Express legally held the trademark rights to the "My Life. My Card." slogan.  As summarized by the court:  "there can be no trademark absent goods sold and no service mark without services rendered."

More detail of Am. Express Co. v. Goetz after the jump.

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Seventh Circuit: single sale insufficient use in commerce to support trademark registration

In Custom Vehicles, Inc. v. Forest River, Inc., the Seventh Circuit Court of Appeals held that a trademark plaintiff did not engage in sufficient use in commerce to support trademark rights. Even worse for the plaintiff, the court held that even if there were sufficient use, the mark at issue was descriptive, and there was no secondary meaning, so the plaintiff had no trademark rights to enforce. Ultimately, the court affirmed the lower court's grant of summary judgment to the defendant.

More details of the case after the jump.

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Trademark "use in commerce" must be lawful to build trademark rights

When is a use in commerce not sufficient to build trademark rights? When that use is unlawful. The Ninth Circuit, in a dispute between two manufacturers of antioxidants made from olive extract, held in an issue of first impression in that circuit that unlawful use in commerce cannot support federal trademark rights. This decision agrees with the Tenth Circuit, apparently the only other Court of Appeal to have decided this issue, as well as the Trademark Trial and Appeal Board (TTAB). More details of the case after the jump.

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"Use in commerce" not necessary to support trademark opposition, just use in the United States

The Federal Circuit, reversing the Trademark Trial and Appeal Board ("TTAB"), found that a Canadian company who arguably only did business in Canada could oppose a trademark application based on "spillover" use of its unregistered trademark in the United States. The Canadian company, First Niagara Insurance Brokers, opposed several trademark applications filed by a United States company, First Niagara Financial Group. Both companies use, among others, the word mark "First Niagara," and both companies use a logo, shown below:

First Niagra First Niagara 2

The TTAB held that because the Canadian First Niagara had not used its marks "in commerce" as required by 15 U.S.C. § 1127, it could not use those marks as a basis to oppose the U.S. First Niagara's applications.

The Federal Circuit reversed. First, the court noted that 15 U.S.C. § 1052(d) states that an opposition may be filed based on a mark previously "used in the United States," as opposed to the requirement for registration that the mark be used "in commerce." In addition, a prior Federal Circuit case had held that a mark only used in intrastate commerce can support an opposition. The court found no reason to treat a foreign company who use may not rise to the level required for registration any differently than a domestic one. While there was an issue regarding whether the Canadian First Niagara had waived this argument, the court ultimately held that because there was use of the Canadian marks in the United States, the fact that there may not have been use "in commerce" necessary to register the Canadian marks did not matter for purposes of the opposition.

Accordingly, the court sent the case back to the TTAB for resolution of the opposition on the merits.

To read the full decision, click here.

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