Search engines often sell “keywords” – search terms designed to turn up sponsored links on search result pages along with the “natural” search results.  Consumers searching online for trademarked brands will often find links to competitors’ products displayed on the search results pages.  Recent federal district court decisions have split on whether such sales of trademarked terms constitute trademark infringement.
In March, the U.S. District Court for the District of Minnesota held in Edina Realty v. that a business that purchases a trademarked keyword Internet search term from a search engine “uses” that mark in commerce for purposes of the Lanham Act.  There, the court found on summary judgment that there was a triable issue of fact as to likelihood of confusion resulting from’s purchase of keywords that included terms trademarked by plaintiff Edina Realty.  The court relied, in part, on study that showed that 62 percent of consumers did not understand the difference between sponsored links and natural search results.    
Contradicting that decision, the U.S. District Court for the Southern District of New York District Court in Merck & Co., Inc., et al. v. Mediplan Health Consulting, Inc., et al. held earlier this month that when a mark is used solely to trigger the display of a sponsored link, such use is not a use of the mark in a trademark sense.  In this case, Merck sued online pharmacies, alleging trademark infringement based on the use of Merck’s “Zocor” trademark in websites and keywords.  The New York court noted that a trademark is legally “used in commerce” when it is placed on a product, label, or associated documents used to sell the product or service, and that “internal use of the mark ‘Zocor’ as a key word to trigger the display of sponsored links is not use of the mark in a trademark sense.”

We understand that Yahoo! currently blocks the purchase of trademarked keywords and Google currently has no such policy in place.  For now, the federal courts remain murky on this issue.

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