Search Engines, Keyword Advertisements, And Trademark Law Headed In The Wrong Direction

Science, Technology, and the Law

Search Engines, Keyword Advertisements, And Trademark Law Headed In The Wrong Direction

Search Engines, Keyword Advertisements, And Trademark Law Headed In The Wrong Direction

Dedicated to my son, Mufaddal Kagalwala, who passed away last year after a brave battle with Leukemia.

 

 

 

 

Abstract

Current trademark law punishes fair competition by placing limitations on the use of trademarks as keywords and thereby obstructing competition on the internet. Many articles have recognized this problem but have not provided any concrete solution for this problem. In this article, I propose that laissez-faire approach is an effective way of dealing with this concern. In this paper, I begin by briefly explaining the impact that restrictions on placement of advertisements on the search results page is having on competition. I then explain the evolution of two legal doctrines that are heavily relied on to restrict advertisements on the search results page. Next, I briefly summarize the evolution of the trademark law to show that one of the core objectives of enacting the trademark law was to promote competition. Finally, I explain why the laissez-faire approach will promote competition.

 

Introduction

“Keyword advertising [is analogous] to the devious placing of a sign advertis[ement] [by] one business at a location where the customers of a competing business are most likely to see it.” [1] This devious placement of an advertisement in physical stores is fair competition.[2] However, such placement of an advertisement on the search results page of a search engine is restricted and regulated.[3] Current trademark law punishes fair competition.[4] The courts rather than allowing search engines to develop and improve are burdening the search engines with extensive liability and legislation.[5]

Many articles have recognized that restrictions on advertisements in the virtual world are comparatively a lot stricter than the non-virtual world and they have provided different solutions for this problem.[6] Many articles hint at getting back to laissez-faire approach but do not adopt it as a remedy to the problem.[7] This article suggests that the search engines who do not get their ‘advertising-search results’ balance right will be abandoned by the internet users.[8] Therefore, the search engines should be allowed to operate the way they did prior to the guidelines issued by the Federal Trade Commission (FTC).[9]

This article begins by summarizing the problem. It will then briefly look at the evolution of the doctrine of contributory trademark infringement, and doctrine of initial interest confusion. And in the concluding section, it will show why laissez-faire approach is an effective way to resolve this concern.

It All Looks The Same

This section is divided into three sub-sections. In the first sub-section I will explain the problem. Then, I will move on to the next sub-section where I will discuss the evolution of current trademark jurisprudence. And in the final sub-section I will discuss how the current trademark jurisprudence is defeating the main goal of the trademark law.

                                                                                                                        I.         Regulation Is Affecting Competition

In the early 90’s internet users had to type the website address in the browser’s address bar to reach or open a website.[10] By mid-90’s as the number of websites increased it became very difficult for the internet users to keep track of all the websites and their corresponding web addresses.[11] Search engines like Google started maintaining indexes of all the websites.[12] This allowed internet users to quickly locate the web addresses of the websites they wanted to visit.[13]

Over time Google became very popular and started earning most of its revenue from advertisements on its website.[14] Whenever an internet user keyed in a search term on Google’s search bar, Google would instantly direct the user to a search results page.[15] Google divided its search results page into two parts, namely advertisements and relevant search results. Google would place the advertisement either on top i.e. before the relevant search results or on the sides of the relevant search results.[16]

Google’s proprietary search algorithm, based on the keywords[17] provided by the advertiser, prompted advertisements to the internet users. Internet users who clicked on the advertisement thinking that it was a link to the most relevant website would reach the advertiser’s page instead of the website they were looking for.[18] Each time a user would click on the advertiser’s link, the advertiser would have to pay a nominal fee to Google.[19]

Google had a tool called Keyword Suggestion Tool (hereinafter referred to as “Tool”).[20] To advertise on Google, advertisers had to give certain keywords to Google.[21] Google through its Tool, assisted its advertisers in finding the most appropriate keywords for their advertisements.[22] Many times, this Tool would suggest competitor’s trademarks as keywords.[23] If the advertiser chose the keywords suggested by the Tool, then the advertiser had to pay a fee to Google.[24] Since 2010 the manner in which results are displayed on Google’s search result page has changed. Below are the before and after images of the search results page:

Fig. 1[25]

 

Fig. 2[26]

As you must have observed there is significant difference in the way two images appear. In the first image we can see the search results and advertisements from competitors. The advertisements are missing from the second image. There are three reasons why Google’s search result’s page layout has changed: (i) doctrine of contributory trademark infringement, (ii) doctrine of initial interest confusion, and (iii) letters from the FTC. In other words, current trademark jurisprudence is restricting comparative advertisement. This is a big problem because trademark law is not supposed to discourage competition. Now examine the following screenshots of the search results page of three popular search engines:

Google.

Fig. 3[27]

 

 

Bing

Fig. 4[28]

Yahoo

Fig. 5[29]

Because there are no advertisements on the search result pages of all the search engines, they all look the same. This again is a problem because customers no longer have a reason to choose one search engine over the other. This in the long run may lead to reduction in number of search engines which in turn may lead to creation of monopolies. Advertisements are main source income for any website, including search engines, which provides only information to the internet users. No advertisements means businesses have no incentive to set up search engines. Advertisements also have direct impact on the lay-out of the search engine. In absence of advertisements all search engines end up looking the same. If all search engines look the same, there is no reason for the users to choose one search engine over another. Limited players automatically lead to creation of monopolies.

                                                                                                                                          II.         How Did This Happen?

The previous sub-section identified two things: (i) search engines cannot show advertisements of competing businesses next to the links of generic search results, and (ii) search results pages of all the search engines look the same. Both are having an adverse impact on fair competition. In this sub-section I will explain that current jurisprudence of trademark law along with the 2013 guidance letter from FTC has led to this problem. This sub-section is divided into three parts: explaining the evolution (i) of the doctrine of contributory trademark infringement, (ii) the evolution of the doctrine of initial interest confusion, and (iii) discusses the FTC letters that lay down the guidelines for search engines.

The roots of the “Doctrine of Contributory Trademark Infringement” which is at the core of this controversy can be traced back to the time when the internet was still in its infancy.[30] A number of judicial precedents have developed the doctrine.[31] The doctrine of contributory trademark infringement makes someone other than a direct infringer liable for the trademark infringement.[32] The Supreme Court in 1924 recognized secondary liability by stating, “One who induces another to commit a fraud and furnishes the means of consummating it is equally guilty and liable for the injury.”[33]

In Inwoods Labs.[34] case, the Supreme Court laid down a two-part test for analyzing contributory trademark infringement. The two-part test chalked out by the Supreme Court is as follows:[35]

“[ ] if a manufacturer or distributor [1] intentionally induces another to infringe a trademark, or if it [2] continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributor is contributorily responsible for any harm done as a result of the deceit.”[36]

Since then the courts have routinely analyzed all contributory trademark allegations through the lens of the two-part test laid down in the Inwoods Labs. case. The test has been extrapolated to flee market owners in Hard Rock Café,[37] and Fonovisa[38]where the defendants were held liable for contributory trademark infringement even when they were not supplying any product to the trademark infringer.[39]

The test has also been extrapolated to credit card companies. The question whether the credit card companies can be held liable for contributory trademark infringement using the Inwood Labs. formula was raised by the plaintiffs in both Perfect 10[40] case and Gucci America[41] case. In both these cases, the court applied the two-part test of Inwood Labs. In the former case the credit card company was found not liable and that in the latter case credit card companies were held liable for contributory trademark infringement.

The Inwood’s test was also used in Procter & Gamble Co.[42] and Tiffany.[43] The Procter & Gamble Co. case clarified that willful blindness was an essential element of the two-part test of Inwoods Labs.[44] Both Procter & Gamble Co. and Tiffany teach us that a third party who could otherwise be held liable for contributory trademark infringement under the Inwood Labs. formula can avoid liability if they take sufficient measures to prevent trademark infringement. From these two cases it can be inferred that intent, willful blindness, and knowledge are corner stones of the Inwood Labs test.[45]

In Rosetta Stone Ltd. v. Google, Inc. the Fourth Circuit Court further extrapolated the Inwood test to search engines and suggested that the search engines can be held liable under the doctrine of contributory trademark infringement.[46] After this decision Google settled the lawsuit with Rosetta Stone. In the years that followed, Google gradually changed the layout of its search results page.

The fifth circuit has defined “Initial Interest Confusion” as: “Initial-interest confusion gives the junior user credibility during the early stages of a transaction and can possibly bar the senior user from consideration by the consumer once the confusion is dissipated.”[47] In initial interest confusion the trademark infringer confuses the customer temporarily but at the time of completion of the transaction the confusion disappears as it becomes clear and apparent to the customer that she is not entering into a transaction with the person she was looking for but with another person who is offering same or similar goods or services. The trademark owners do not like this temporary confusion because the infringer takes away the trademark owner’s customer by free riding on the trademark owner’s goodwill. Eg. Use of “Grotrian-Steinweg” by the trademark infringer was disputed by the famous piano manufacturer who sold his pianos under the trademark “Steinway”. In this case, the second circuit noted “… that the harm to Steinway was that a potential customer, thinking there was a connection, would be attracted by the Grotrian-Steinweg name to consider that brand of piano, even though later investigation revealed that there was no connection with the makers of the Steinway.”[48]. This case is one of the important precedents that support the doctrine of initial interest confusion.[49]

Initial interest confusion is used by competitors to “get the foot in the door” by confusing the customer. The courts have on several occasions held that this business strategy is a violation of the common law doctrine of initial interest confusion. For e.g., the court found look-alike packaging on a non-prescription medicinal product to be infringing because it served to “hook customers at the initial point of contact with the product, thus initially drawing the customers to its product through the similarity in trade dress.”[50]

The Ninth Circuit has applied the doctrine of initial interest confusion in disputes dealing with domain names. It one of the cases it noted that use of a famous, coined trademark as a domain name, like “kodak.com,” even when the Web site sells totally different goods and services, will probably create initial interest confusion and “inevitably trades on the favorable cachet associated with that company, its works and its reputation.”[51] Therefore, the domain name that causes initial interest confusion is trademark infringement.

In 1999, the doctrine of initial interest confusion was applied to meta tags.[52] Meta tags like keywords are little content descriptors that assist the search engines in their indexing task. The Ninth Circuit has held that the use of trademarks in metatags causes initial interest confusion.[53] As the search engines algorithms use keywords to determine where the link of a website should appear on the search results page, courts often glance over the doctrine of initial interest confusion to consider whether search engines can be held liable of contributory infringement.[54] In Rescuecom, the Court determined that the search engines use of trademarks as keywords is a “use in commerce”.[55] It is just matter of time that a court will rule that search engines are responsible for causing initial interest confusion and thereby contribute to trademark infringement.

In 2002 and 2013, the FTC sent out letters to all the search-engines which laid the guidelines for displaying advertisements on the search results page. In the 2002 letter, the FTC stressed that search engines should put up “clear and conspicuous” notice on their search results page so that users are in a “better position” to choose from the links provided.[56] The essence of the letter can be understood from the conclusion of the letter which is shown below:

Fig. 6[57]

The 2013 reminder letter was sent by the FTC because the compliance with the 2002 letter was starting to decline.[58] The 2013 letter requested the search engines to provide clear “visual cues” and “text labels” to separate sponsored links from generic results.[59] The 2013 letter also included a section on “New Search Platforms” where the FTC recognizes that online search is dynamic and guides the search engines to be clear about advertisements when providing search results on the new platforms.[60] That section of the letter is shown below:

Fig. 7[61]

In the last five years, Google has changed the appearance of the search results page. The main reason for this shift may be the court cases along with the reminder letter from the FTC.[62] As mentioned above in Part I, this change is not good for the internet users. This change in the long run will reduce competition in the search engine industry.

                                                                                                                                            III.         Was This Foreseen?

The early English and American jurisprudence clearly suggest that the purpose of trademark law was to encourage competition.[63] In 1946 the Lanham Act was enacted.[64] The Lanham Act codified most of the common law jurisprudence on trademarks.[65] The two broad purposes of the Lanham Act are: (1) to protect the trademark owner from unfair competition, and (2) to protect the consumers from confusion.[66] The main goal of trademark law is to promote fair and efficient competition.[67]

The goal of trademark law is different from the purpose of patents and copyrights law.[68] In patents and copyrights exclusive rights are granted to the inventor and author respectively to promote innovation.[69] The rights in a trademark are acquired by its use over a period.[70] Unlike patents and copyrights, trademark rights are recognized and not granted by the government.[71] The grant of patent or copyright is often seen as a reward that the inventor or author gets for creating something new.[72] Comparatively, trademark rights are recognized to promote fair and efficient competition.[73]

Why current jurisprudence on trademark is defeating the goal of trademark law? According to the Lanham Act use of competitor’s name in advertisement or promotion by businesses is fair use when the advertisement or promotion compares the rival products to enable the consumer to take an informed decision.[74] By not allowing comparative advertisement current trademark jurisprudence is defeating the main purpose of the Lanham Act.

Recall that I started my introduction by using an example from Playboy Enterprises, Inc. v. Netscape Communications Corp.[75] In that example the Court stated that devious placement of advertisement by businesses is fair competition.[76] However, the court ruled that devious placement of advertisements on the internet is trademark infringement.[77] Instead of encouraging competition on the internet, the regulation by courts is restricting fair competition on the internet.[78]

Current trademark law has prompted the change in the layout of search result pages. This change in layout is restricting businesses from displaying their advertisements next to the links of their competitors on the search results page. This has severely impacted comparative advertisement. The restrictions on comparative advertisements is discouraging fair competition.

Also, all search engines are websites that internet users visit voluntarily. The search engines should be free to choose the format of their search results page. If the internet users are not happy with the website, they are free to use another search engine.[79] Because of current trademark jurisprudence, the search results pages of all the websites look the same.

Many writers have written articles questioning the doctrine of initial interest confusion.[80] After Rosetta Stone, few authors took it upon themselves to criticize both doctrines, namely the doctrine of initial interest confusion, and the doctrine of secondary contributory infringement.[81] Some scholars have also suggested that heavy lobbying has affected smaller businesses.[82] Most articles focus on the argument that if the authorities continue to impose restrictions on the search engines then big brands will succeed in ensuring that the users never get to find anything about their competitors from search results.[83] This is defeating the information dissemination purpose of trademark law.

For example, an internet user who wanted to look up phones that were Apple phones would type simply type “apple” in the search bar of a search engine and would find out about the products competing with Apple from the search results page. This is not possible because now if you type “apple” in the search bar you can only see information about Apple. You do not get any information about Apple’s competitors.[84] Below is the screenshot of the search results page:

Fig. 8[85]

The Big Solution

In this section I will discuss the benefits of laissez-faire approach. In the previous section I stated that big businesses have successfully manipulated the doctrines of trademark law to make them work against the very object of trademark law. For example, big businesses have restricted the flow of information to the consumers so that consumers cannot take informed decisions. In this section I suggest that we look at the law with a fresh perspective. Instead of proposing a radical change in the law, I propose that instead of regulating search engines, search engines should be allowed to choose the layout of their search results page. I simply propose that the courts should not hold search engines liable for displaying the correct information.

Trademark law has evolved over time to encourage competition. By restricting search engines from showing the competitors of a brand, the courts are discouraging competition.[86] In the real world, products of competing brands are usually sold side by side in retail stores. In the real world this is fair competition. Similarly, competing trademarks should be allowed to appear on the same screen of the search results page because users should know the competing brands.

Search engines should be free to decide the layout of their search results page. If internet users keep getting confused and keep landing on sites they did not intend to, then internet users will stop using the search engines that confuse them and direct them to wrong websites.[87] The authorities should recognize this and stop monitoring the layout of the search results page.[88] To protect fair competition, promote consumer interests, and free speech, the courts should not restrict dissemination of correct information on the search results page.[89]

World After Return To Laissez-faire Approach

In this section I show that the laissez-faire approach is effective. I will conclude this section by naming the pros and cons of the laissez-faire approach.

Under current trademark law, if the search results page appeared like the screen shot below, then Ray-Ban could win a trademark infringement action brought against Google. This is because the link to its website appears below the links of various other advertisers.

Fig. 10

If the courts and the FTC remove the restrictions on search engines, then Google would have to adapt to remain competitive in the search business. Google would clearly have to show the competitors of Ray Ban on its search results page. Google may do this by having a drop-down option stating “show competitors”.

Fig. 11

There are several benefits to this approach. For example, there is no initial interest confusion. Also, the internet user gets the most relevant link at the top of the page. Furthermore, the advertisers, that is, competitors of the trademark owner, are clearly shown. Google may list only the advertisers as the competitors in the drop-down menu i.e. remaining competitors may be listed on basis of relevance on the search page. There would be no concerns for direct or contributory infringement or trademark dilution. It takes care of the problem of confusion, mistake, and deception. Additionally, there is no misleading of the internet user as to affiliation or as to the origin, sponsorship, or approval of goods or services.

However, there are downsides to this approach as well. Advertisers do not get the screen space on the search results page i.e. advertisers prefer to be visible, this suggestion does not support the generalized principle of “location, location, location” of marketing.

The benefits of the laissez-faire approach greatly outweigh the downsides. Thus, the laissez-faire approach is the better approach.

Conclusion

Google is easily the most visited website on the internet. Google, whose motto is “do the right thing”, should not circumvent trademark law by confusing the users of its website. The doctrine of contributory trademark infringement has sufficiently developed to establish Google’s liability in trademark infringement cases. After settling a large number of trademark infringement lawsuits, Google has stopped providing competitors information on the search results page. Therefore, to ensure fair competition, current trademark law must revert to the way it was prior to the increase in regulations. Once the restrictions are lifted, Google should follow the minimal changes to its search result page which in turn would help Google keep its competitive edge. To encourage innovation and development, the current restrictions that are hindering fair competition must go.

[1] 6 Callmann, Unfair Competition, Trademarks & Monopolies, § 22:43 (4th ed. 2017) (Callmann uses this illustration given by the ninth circuit court in Playboy Enterprises, Inc. v. Netscape Communications Corp., 55 F. Supp. 2d 1070, 52 U.S.P.Q.2d 1162 (C.D. Cal. 1999) to explain the essence of fair competition by stating that this opportunistic practice is not trademark infringement or unfair competition, because it does not confuse or coerce or otherwise redirect the consumer’s choice, but merely brings to the consumer’s attention an opportunity to change his or her mind voluntarily).

[2] See Eric Goldman, Brand Spillovers, 22 Harv. J.L. & Tech. 381 (2009) (argues that keyword advertisements should also be fair competition).

[3] See Jennifer E. Rothman, Initial Interest Confusion: Standing at the Crossroads of Trademark Law, 27 Cardozo L. Rev. 105, 182 (2005) (explains that  whenever there is temporary confusion in the mind of a customer before a purchase is made then this confusion is called initial interest confusion) (She argues that doctrine of initial interest confusion should be reformed because it punishes fair competition on the internet); Eric Goldman, Deregulating Relevancy in Internet Trademark Law, 54 Emory L.J. 507, 559 (2005) (criticizes the doctrine of initial interest confusion by stating that it has become a tool to shut down innocent junior users).

[4] See Id.

[5] See E.g., Rescuecom Corp. v. Google, Inc., 562 F.3d 123, 127 (2d Cir. 2009) (the court stated that the use of keywords by Google in its adwords program amounted to use in commerce); Rosetta Stone Ltd. v. Google, Inc., 676 F.3d 144, 163-65 (4th Cir. 2012) (the court stated that Google could be held liable for secondary contributory infringement); Playboy Enterprises, Inc. v. Netscape Comm. Corp., 354 F.3d 1020, 1024 (9th Cir.2004) (court found that search engine’s use of trademark as advertising keywords was a use in commerce and it potentially created likelihood of confusion); Bihari v. Gross, 119 F.Supp.2d 309, 318 (S.D.N.Y.2000) (use of meta-tags by search engines amounts to ‘use in commerce’); Government Employees Ins. Co. v. Google, Inc., 330 F.Supp.2d 700, 704-705 (2004) (court found that search engine’s use of plaintiff’s trademark was a use in commerce).

[6] See E.g., Rothman, supra note 3; Goldman, supra note 3, at 593 (argues that current trademark law gives the trademark owners exclusive right in the trademarked word and gives suggests ways to take away their exclusivity); Stacey L. Dogan & Mark A. Lemley, Trademarks and Consumer Search Costs on the Internet, 41 Hous. L. Rev. 777, 785, 815, 819-23 (2004) (this article states three things on current trademark jurisprudence viz. it is limiting the information facilitating goal of trademark law, it is preventing comparative advertisements, and it is resulting in ill-informed consumers. Then she gives a solution to end the exclusivity); Lisa M. Sharrock, Realigning the Initial Interest Confusion Doctrine With the Lanham Act, 25 Whittier L. Rev. 53, 73 (2003) (this article states that the current trademark law jurisprudence is at odds with the purpose, intent, and literal meaning of the Lanham Act and she wants reformation).

[7] See E.g., Rothman, supra note 3, at 189 (she states that Congress should give search engines wide berth to develop and improve – unlike my proposal she says is okay with limited regulation of search engines); Goldman, supra note 3, at 593 (he says that impediments should be removed but does not suggest the laissez-faire approach).

[8] See Rothman, supra note 3, at 185 (she puts the onus on the courts to ensure balance between reducing likely confusion and allowing fair competition – I somewhat agree – intervention by courts should be the last step – step one should be self-monitoring by search engines – search engines to protect their own interest should provide the correct results to users – if search engines consistently give wrong results to the consumers then users will stop using that website – therefore getting the balance right is in the best interest of the search engine).

[9] See Div. Of Adver. Practices, Ftc, Re: Complaint Requesting Investigation Of Various Internet Search Engine Companies For Paid Placement And Paid Inclusion Programs (June 27, 2002), https://www.ftc.gov/sites/default/files/documents/closing_letters/commercial-alert-response-letter/commercialalertletter.pdf; Div. Of Adver. Practices, Ftc, RE: Agency’s Guidance to Search Engine Industry on the Need to Distinguish Between Advertisements and Search Results (June 24, 2013), https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-consumer-protection-staff-updates-agencys-guidance-search-engine-industryon-need-distinguish/130625searchenginegeneralletter.pdf.

[10] Lockheed Martin Corp. v. Network Solutions, Inc., 985 F.Supp. 949, 951-52 (C.D. Cal. 1997) (this case provides a detailed explanation of how internet works).

[11] Brookfield Communications V. West Coast, 174 F.3d 1036, 1045 (9th Cir. 1999).

[12] Id.

[13] Id.

[14] Rescuecom Corp. V. Google Inc., 562 F.3d 123, 126 (2nd Cir. 2009).

[15] Id.

[16] Id.

[17] Keywords are little content descriptors that tell the search engines what a web page is about.

[18] Rescuecom Corp., 562 F.3d at 126.

[19] Id.

[20] Id.

[21] Id.

[22] Id.

[23] Rescuecom Corp., 562 F.3d at 126.

[24] Id.

[25] Danny Sullivan, Meet The New Google Look & Its Colorful, Useful ‘Search Options’ Column, (May 5, 2010, 12:00 PM), Search-Engine Land, https://searchengineland.com/meet-the-new-google-41286; But See LARA O’REILLY, Study Says Google, Yahoo And Bing Are Running ‘Deceptive’ Ads — And Regulators Are Doing Nothing To Stop It (Oct. 14, 2014, 9:17 AM), Yahoo Finance, https://finance.yahoo.com/news/study-says-google-yahoo-bing-131732678.html.

[26] Rosetta Stone, Google, https://www.google.com/search?source=hp&ei=o8IVWuj6JZHG_Qbg-aSwAg&q=rosetta+stone&oq=rosetta+stone&gs_l=psy-ab.3..0l10.6523.8779.0.9552.14.13.0.0.0.0.126.1006.12j1.13.0….0…1.1.64.psy-ab..1.13.1002.0..46j0i131k1j0i46k1.0.29jFfjI7xo8  (last visited Nov. 22, 2017).

[27] Amazon, Google, https://www.google.com/search?q=AMAZON&rlz=1C1CHBF_enUS726US726&oq=AMAZON&aqs=chrome..69i57j69i59j69i61j69i60j0l2.1764j0j8&sourceid=chrome&ie=UTF-8 (last visited Nov. 28, 2017).

[28] Amazon, Bing, https://www.bing.com/search?q=amazon&qs=n&form=QBLH&sp=-1&ghc=1&pq=amazon&sc=9-6&sk=&cvid=44982F666D3841F48BE9E4E0CC77DBA0) (last visited Nov. 28, 2017).

[29] Amazon, Yahoo, https://search.yahoo.com/search?p=amazon&fr=yfp-t&fp=1&toggle=1&cop=mss&ei=UTF-8 (last visited Nov. 28, 2017).

[30] Rothman, supra note 3, at 114-21 (she highlights three cases to show the evolution of the doctrine of initial interest confusion, namely, Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. v. Steinway & Sons, 523 F.2d 1331 (2d Cir. 1975), Mobile Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d. 254 (2d Cir. 1987), and Brookfield Communications v. West Coast, 174 F.3d 1036, (9th Cir. 1999)).

[31] The evolution of secondary trademark infringement doctrine can be traced in following precedents: Inwood Labs., Inc. v. Ives Labs., Inc., 102 S.Ct. 2182 (1982), Hard Rock Café Licensing Corp. v. Concession Servs., Inc. 955 F.2d 1143 (7th Cir. 1992), Fonovisa, Inc., v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996), Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980 (9th Cir. 1999), Ford Motor Co. v. Greatdomains.com, Inc., 177 F.Supp.2d 635 (E.D.Mich. 2001), Perfect 10, Inc. v. Visa Int’l Serv. Ass’n., 494 F.3d 788 (9th Cir. 2007), Gucci America, Inc. v. Frontline Processing Corp., 721 F.Supp.2d 228 (S.D.N.Y. 2010), Procter & Gamble Co. v. Haugen, 317 F.3d 1121 (10th Cir. 2003), Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93 (2nd Cir. 2010).

[32] Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982) (Ives Laboratories, Inc. (Ives) sold the drug cyclandelate under its registered trademark CYCLOSPASMOL. The drug was a white color powder. It was filled in colored gelatin capsules. The blue capsule contained 200mg of the drug and blue-red capsule contained 400mg of the drug. The generic drug manufacturer viz. Inwood Labs., Inc. intentionally copied the appearance of CYCLOSPASMOL capsules and sold the drug in 200mg and 400mg capsules. As the drug sold by Inwood Labs., Inc. was cheaper than Ives the pharmacist illegally substituted CYCLOSPASMOL with the generic drug and mislabeled the substituted drug as CYCLOSPASMOL. In the trademark infringement lawsuit, Ives alleged that Inwoods Labs, Inc. contributed to the infringing activities of pharmacists who mislabeled the generic drug. The Supreme Court ruled that Inwoods Labs, Inc. had contributed to the infringing activities of the pharmacists).

[33] William R. Warner & Co. v. Eli Lilly & Co., 265 U.S. 526, 530-31 (1924) (citing Hostetter Co. v. Brueggeman-Reiner Distilling Co., 46 F. 188, 189 (E.D. Mo. 1891)).

[34] Inwood Labs., 456 U.S. 844.

[35] The Supreme Court chalked out the test after analyzing William R. Warner & Co. v. Eli Lilly & Co., 265 U.S. 526 (1924) along with Coco-Cola Co. v. Snow Crest Beverages, Inc., 64 F.Supp. 980 (D. Mass. 1946), aff’d, 162 F.2d 280 (1st Cir.), cert denied, 332 U.S. 809 (1947).

[36] Inwood Labs., 456 U.S. at 852-54.

[37] Hard Rock Cafe Licensing Corp. v. Concession Services, Inc., 955 F.2d 1143 (7th Cir. 1992) (the Inwood test was extrapolated to make a flea market owner liable for the acts of the vendors operating in the flea market. In this case there are at least five parties but only three are relevant to show that Inwoods Labs. formula was applied in this case. The relevant parties are Hard Rock Café, the flea market owner, and the vendor operating at the flea market. Hard Rock Café granted licenses to use its trademarks exclusively to businesses that owned and operated Hard Rock Café restaurants. The Hard Rock Café merchandise was exclusively sold at these restaurants. The vendor operating from the flea market were found selling counterfeit Hard Rock Café t-shirts. The flea market owner was aware that in the past there were raids and seizures (of counterfeit goods at his flea market) by investigators. The Circuit Court held that Inwoods Labs. test should be used to determine the contributory liability of the flea market owner. The Circuit Court concluded that it was essential, in order to make the flea market owner contributorily liable, to establish that the flea market owner was not only aware of the infringing activities, but he did not take any measures to prevent those activities).

[38] Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996) (In this case, Fonovisa (trademark owner) wanted the court to hold Cherry Auction (swap meet or flea market operator) contributorily liable for the acts of the vendors operating from the swap meet. The lower court rejected the principles laid down in Inwoods Labs. and Hard Rock Café. On appeal, the 9th Circuit Court reversed and remanded the District Courts decisions, thereby concurring with the rule laid down by the 7th Circuit Court in Hard Rock Café).

[39] Lockheed Martin, 194 F.3d at 984 (The court observed the following: “Hard Rock [Café] and Fonovisa teach us that when measuring and weighing a fact pattern in the contributory infringement context without the convenient ‘product’ mold dealt with in Inwood Lab., [the court] consider[s] the extent of control exercised by the defendant over the third party’s means of infringement…. Direct control and monitoring of the instrumentality used by a third party to infringe the plaintiff’s mark permits the expansion of Inwood Lab.’s ‘supplies a product’ requirement for contributory infringement.”).

[40] Perfect 10, Inc. v. Visa Intern. Service Ass’n, 494 F.3d 788 (9th Cir. 2007) (the court held that credit card payment processing network was not the instrument used to infringe Perfect 10’s trademarks and that the infringement of the Perfect 10’s trademarks occurred without the involvement of the credit card companies and their payment system. Therefore, the credit card companies were not held liable for contributory trademark infringement).

[41] Gucci America, Inc. V. Frontline Processing Corp., 721 F.Supp.2d 228 (S.D.N.Y. 2010) (The facts of Gucci America case were different from the Perfect 10’s case. In Gucci America, certain online merchants sold counterfeit Gucci products. The court found that most customer purchases were made using credit cards. The court also found that the credit card companies knew or should have known that the online merchants sold counterfeit Gucci products. It was found that the credit card companies continued to provide its services to the merchants in-spite of knowing that the online merchants were selling counterfeit Gucci’s product).

[42] Procter & Gamble Co. v. Haugen, 317 F.3d 1121 (10th Cir. 2003) (In Haugen, the 10th Circuit Court rejected the contributory trademark infringement claim on finding that “Amway did not instruct the Distributor Defendants to spread the rumor, and, in fact, ‘upon learning of the subject message, Amway suggested that [one of the Distributor Defendants] issue a retraction,’ which he did.” The court supported its decision by citing AT & T v. Winback and Conserve Program, Inc., 42 F.3d 1421, 1433 and n. 14 (3d Cir.1994) i.e. the court justified its decision by stating that the plaintiff could not proceed under the doctrine of contributory infringement because where the objectionable acts of the sales representatives were made known to the principal, the principal in turn ‘‘took appropriate steps to reprimand and discipline the sales representative.’’).

[43] Tiffany (NJ) Inc. v. Ebay Inc., 600 F.3d 93 (2nd Cir. 2010) (The Tiffany case was the first case in which the court applied the doctrine of contributory infringement to an online marketplace. The doctrine of contributory trademark infringement was thoroughly discussed in Tiffany. In this case, Tiffany (NJ) Inc. (Tiffany Inc.) had accused eBay Inc. (Ebay) of contributory trademark infringement. The facts: Ebay operated an internet-based marketplace on its website www.ebay.com. Ebay through its website connected its registered users and facilitated the buying and selling of goods amongst its users. Ebay only provided a forum (i.e. marketplace) to its registered users. It did not sell any goods, nor did it ever take physical possession of any goods. The goods sold on Ebay’s website were mostly second-hand goods. Tiffany Inc., a jeweler, sold its jewelry through Tiffany’s retail stores, catalogs, and website. Tiffany did not have control over the market for second-hand Tiffany wares. Both Tiffany Inc. and Ebay knew that some users were selling counterfeit products on Ebay’s website. The lower court found that Ebay always co-operated with Tiffany in removing listing/s of counterfeit Tiffany Inc.’s product/s. Apart from this Ebay also scrutinized all sellers who wanted to sell Tiffany Inc.’s product/s on Ebay’s website. The conclusion: The Circuit Court confirmed that Ebay was not liable under the second part of the Inwood test. It stated that besides co-operating with Tiffany in removing listing/s of counterfeit Tiffany Inc.’s product/s, Ebay had several programs in place to keep a check on sale of counterfeit products on its website. It was held that Ebay was not liable for contributory infringement because it had taken a lot of measures to detect and remove infringers from its website).

[44] Procter & Gamble, 317 F.3d at 1130.

[45] Jane Coleman & Griffith B. Price, Jr., Secondary Trademark Infringement 32-76 (2013).

[46] Rosetta Stone Ltd. v. Google, Inc., 676 F.3d 144, 163-65 (4th Cir. 2012) (in this case the issue before the court was whether the lower court erred in granting summary judgement in favor of Google on Rosetta Stone’s contributory infringement claim. The court held that there was sufficient evidence to establish a question of fact as to whether Google continued to supply its services to known infringers).

[47] Elvis Presley Enterprises Inc. v. Capece, 141 F.3d 188, 204 (5th Cir. 1998).

[48] Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. v. Steinway & Sons, 523 F.2d 1331, 1342 (2d Cir. 1975).

[49] See supra note 30.

[50] 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 23:6 (4th ed. 2003) (quoting McNeil-PPC v. Guardian Drug Co., 984 F. Supp. 1066 (E.D. Mich. 1997)).

[51] Id. (quoting Interstellar Starship Services, Ltd. v. Epix, Inc., 304 F.3d 936 (9th Cir. 2002)).

[52] Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999).

[53] Id.

[54] Rothman, supra note 3, at 173-74.

[55] Rescuecom Corp., 562 F.3d (Parties: Rescuecom Corp. (hereinafter referred to as “Rescuecom”), a computer service company, was the owner of the trademark “Rescuecom”. Google, Inc. (hereinafter referred to as “Google”) through its website www.google.com assisted internet users to locate a website on the internet.  Dispute and Holding: Rescuecom alleged that it had started losing its online customers because Google was assisting its competitors by directing customers of Rescuecom to its competitors’ websites. The trial court dismissed Rescuecom’s complaint stating that use Rescuecom’s trademark by Google was an internal use and therefore Google’s use was not a use in commerce. Rescuecom appealed the lower courts order. The second circuit held that Google’s use of Rescuecom’s trademark in its advertising program was a “use in commerce” and remanded the matter back to the trial court. Parties settled their dispute).

[56] Supra note 9.

[57] Id.

[58] Id.

[59] Id.

[60] Id.

[61] Id.

[62] Id.

[63] See E.g., English cases: Southern v. How, Blanchard v. Hill, Millington v. Fox, Hall v. Barrows, Leather Cloth Co. v. American Leather Cloth Co., Levy v. Walker, and Sykes v. Sykes; American cases: Snowden v. Noah, Ch R 347 (NY Ch 1825), Taylor v. Carpenter, 3 Story 458 (C.C.Mass. 1844), 2 West. Law J. 187, Amoskeag Mfg. Co. v. Spear & Ripley, 1849 N.Y. Misc. LEXIS 1, 2 Sandf. 599, Burnett v. Phalon, 5 Abb.Pr.N.S. 212 (1867).

[64] 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 5:4 (5th ed. 2017).

[65] Id.

[66] S. Rep. No. 1333, at 3 (1946).

[67] Barton Beebe, Trademark Law: An Open-Source Casebook, 26 (2017).

[68] Id. at 11.

[69] Id.

[70] Id.

[71] Id.

[72] Beebe, supra note 55, at 11.

[73] Id. at 26.

[74] Lanham Act § 43(c), 15 U.S.C. § 1125(c) (1946).

[75] See Playboy Enterprises, Inc. v. Netscape Communications Corp., 55 F. Supp. 2d 1070, 1075 (1999).

[76] Id.

[77] Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020, 1033-34 (9th Cir. 2004).

[78] See supra note 3.

[79] See Goldman, supra note 3, at 593 (users want the best results from search engines).

[80] See supra note 6.

[81] Id.

[82] Rothman, supra note 3, at 190 (“In recent years, Congress has been heavily lobbied by some of the most powerful intellectual property groups and has codified more and more expansions of intellectual property laws at the expense of the public and smaller businesses. Such efforts should be rebuffed with regard to initial interest confusion since the doctrine flies in the face of the justifications for trademark protection and the Lanham Act, and raises serious conflicts with the First Amendment and other intellectual property laws.”).

[83] Goldman, supra note 3, at 596.

[84] See Goldman, supra note 3, at 566-67 (he gives example of Canon camera and Nikon camera).

[85] Apple, Google, https://www.google.com/search?q=apple&rlz=1C1CHBF_enUS726US726&oq=apple&aqs=chrome..69i57j0l5.862j0j7&sourceid=chrome&ie=UTF-8 (last visited Nov. 28, 2017).

[86] See Goldman, supra note 3, at 591 (he has suggested that competition between search engines is resulting in innovation and development).

[87] See supra note 76.

[88] See supra note 8.

[89] See Rothman, supra note 3, at 185 (she proposes reformation of the doctrine of initial interest confusion whereas I propose no monitoring of search engines).

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