Defendant Prevails In Trademark Lawsuit Over Keyword Advertising

Google sells keywords to advertisers that involve the trademarks of competitors often bringing rise to claims for trademark infringement. The latest case attesting to the futility of bringing suits on this basis is General Steel v. Chumley where the Federal District Court in Colorado sided with the Defendant on the trademark claims based on keyword advertisements that were displayed upon a Google search of the Plaintiff’s trademark General Steel. The Court found that Plaintiff had a valid trademark and that there was the possibility of initial interest confusion. This possibility arose when Armstrong Steel (Chumley’s dba) purchased the keyword advertising to the term General Steel. When such term was entered into the search browser, the Defendant’s website address would appear. However, the Court held General Steel’s trademark claims failed because it couldn’t show actionable consumer confusion.

With regard to inital interest confusion the Court stated “a Court cannot simply assume a likelihood of initial interest confusion, even if it suspects it,” as the “proponent of such a theory must prove it.” Purchase of keyword trademarks is not enough to show this type of confusion. The Court reiterated that, “Because a consumer cannot see a keyword, nor tell what keyword generated an advertisement, the Court concludes that the purchase of a trademark as a keyword cannot alone result in consumer confusion. Accordingly, the relevant inquiry here regarding consumer confusion is not just what keyword was purchased, but what was the language of the advertisement generated by that keyword.” So the critical aspect of the inquiry is what terms the keywords will produce.

Although here the keywords generated the Plaintiff’s trademark, General Steel did not offer evidence of actual confusion. While actual confusion is usually not required to show a likelihood of confusion, it is in cases of initial interest confusion. The court suspected that some searchers clicked on Armstrong Steel’s ads believing it would take them to General Steel’s website. However, absent actual evidence of confusion and taking into consideration the fact that steel buildings are complex purchases that buyers will research carefully, there was not strong evidence on which to base infringement. The Court concluded in light of all of the surrounding information that identified Armstrong Steel as the source of the website and distinguished Armstrong Steel from General Steel, the mere fact that “potential customers entered the term ‘general steel’ into a search engine was not evidence that they were searching exclusively for that company, as opposed to executing a broader search for all companies selling similar products.”

Possibly this case can be explained by the “general” nature of the trademark and the expensive, durable nature of the goods sold. The more sophisticated the goods and the transaction, the less likely there is to be consumer confusion. Had the plaintiff a distinguishing name such as hamburger impresario Fuddruckers, a search producing an advertisement for FoodTruckers Restaurant may have been confusing. Absent these circumstances, it appears Courts are willing to allow keyword advertisements that use trademarks of other competitive products if because of sophistication, price and sales cycle, the products themselves can be more readily distinguished.