Huh.
It seems that a jury in the US District Court for the Western District of Texas (“WDTX”) has rejected the argument that pay-per-click (“PPC”) bidding on registered trademarks constitutes trademark infringement.
In The College Network, Inc. v. Moore Educational Publishing, Inc., WDTX Docket No. A-07-Ca-615-LY, the arguments ran like this:
- College Network, Inc., d/b/a iStudySmart, argued that Moore Educational Publishing, Inc. infringed their registered mark when they placed PPC bids on the words “college” and “network”.
- Moore Educational Publishing, Inc. argued that PPC bids are not “use in commerce,” so no infringement could possibly occur. They also argued that the mark COLLEGE NETWORK was invalid for genericism.
The jury bought the surprising part of Moore’s argument and held that the mark is valid but not infringed since they decided that PPC usage is not “use in commerce.”
It didn’t help College Network that they were using the same PPC strategy against Moore, of course, but still I’m not convinced that the trademark (since it was held to be valid) didn’t get infringed. Frankly, I think this case has been wrongly decided.
Let’s look at this while taking away the interfering medium of the internet. Basically, what seems to have happened here is that one company used the registered trademark of another in a way that gave the company using the mark an advantage in the marketplace to the detriment of the owner of the mark. That sounds an awful lot like “use in commerce” to me, and like the textbook definition of not only trademark infringement but willful trademark infringement.
Now let’s add the internet back in to the equation. Evidently, bidding on a competitor’s registered mark has become common practice in the search-engine marketing industry. (as an aside, that’s a problem right there; it takes control of the registered mark away from the owner of the mark, which means that the owner of the mark can’t possibly police their mark as required). It gives more companies the possibility of front-page listing in search-engine results. However, these front-page listings piggyback on the registered trademarks of others — using the registered mark of another in a way that gives the infringer an advantage in the marketplace to the detriment of the owner of the mark. That still sounds an awful lot like “use in commerce” to me, and like the textbook definition of not only trademark infringement but willful trademark infringement.
I hear a cry of “But everyone is doing it” in this defense. Well, let’s take that to an extreme. It is against federal law to engage in racketeering; if a racketeer were to cry out in federal court that “everyone is doing it,” do you think the racketeer should be able to duck a conviction? No; the federal prosecutor would be all over our racketeer to find out who “everyone” is so she could go after “everyone” for racketeering. But wait: College Network says that this defense might have some merit; let’s not convict the racketeer since “everyone is doing it.” Trademark and racketeering are two different theories that have little to do the one with the other, but, taken to extreme, this is the precedent that this defense’s win sets for us.
It will be interesting to see what happens if this case is appealed. Keep an eye peeled on the US Court of Appeals for the Fourth Circuit for further developments.
