Traverse Internet Law Federal Court Report: December 2008 Trademark Infringement Lawsuits

Traverse Internet Law Disclaimer

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.


BED BATH & BEYOND INC. AND BED BATH & BEYOND PROCUREMENT CO., INC. v. FIXEDCREDITNOW, ET AL.
DISTRICT OF NEW JERSEY (NEWARK)
2:08-CV-06406
FILED: 12/30/2008

1-800 CONTACTS v. MEMORIAL EYE
CENTRAL DISTRICT OF UTAH
2:08-CV-00983
FILED: 12/23/2008

CORPEDIA CORPORATION v. LRN CORPORATION
CENTRAL DISTRICT OF CALIFORNIA (LOS ANGELES)
2:08-CV-08337
FILED: 12/18/2008

CREATIVE MANAGER, INC. v. SOHNAR, LTD AND JASON LANGOS
DISTRICT OF NEW JERSEY (TRENTON)
3:08-CV-06144
FILED: 12/15/2008

SUAREZ CORPORATION INDUSTRIES AND MHE CORPORATION v. TOP TEN IMPORTS, LLC, ET AL.
NORTHERN DISTRICT OF OHIO (AKRON)
5:08-CV-02924
FILED: 12/15/2008

UNITED FIRST FINANCIAL AND NATIONAL LOAN SERVICING CENTER v. STEVE HERMAN
CENTRAL DISTRICT OF UTAH
2:08-CV-00944
FILED: 12/8/2008

HARRY AND DAVID v. GOURMETGIFTBASKETS.COM
DISTRICT OF OREGON (MEDFORD)
1:08-CV-03130
FILED: 12/2/2008

The Plaintiffs in these cases allege that the Defendants have used their trademarks to key pay-per-click ads. In addition, some of the claims include the use of the trademarks in the title of the ads, in the content or ad description, and in the URL presented with the ad.

There are four legal issues dealing with pay-per-click ads and the use of a trademark, either registered or unregistered, of a competitor. The use of a trademark in the domain name that is being presented may implicate a cybersquatting claim, but it is also a potential trademark infringement. The use of the name in the body of the ad and in the title of the ad is almost universally considered to be trademark infringement today. The use of a trademark as a keyword in order for an ad to be presented is, for the most part, considered to be initial interest confusion, which is a form of trademark infringement.

In other words, if your business trademark is being used by a competitor, and fair use, free speech, or non-commercial use is not implicated, then you have remedies available to address the infringement. If, on the other hand, you are using either the trademark of a competing product or service, or even a product or service in the same industry that could create confusion even though you are not directly competing, this is a very high risk practice.

The number of lawsuits filed in December, which traditionally is a very slow month for the filing of new lawsuits, shows a continuing increase in the trend towards bringing lawsuits over pay-per-click advertising related issues. Do not be misled by much of the legal commentary coming from consumer protection and free speech organizations that enjoy blogging about how these types of practices are not illegal. Traverse Internet Law Cross-Reference Number 1266.


CARROLL SHELBY, ET AL. v. FACTORY FIVE RACING, INC., ET AL.
CENTRAL DISTRICT OF CALIFORNIA (LOS ANGELES)
2:08-CV-07881
FILED: 12/1/2008

Metatags include both the description and keywords. The meta-description is often presented in the organic or natural result in a search engine and therefore displays the trademark in the result. In addition, the algorithms of the search engines use the terminology in the metatags to determine relevance. Remarkably, there is significant commentary from some attorneys who claim that this practice should not be unlawful since no search engines use meta-data to determine the rank or priority of results when a search is conducted. Yet the attorneys ignore the fact that description is often presented within the abbreviated search result. In fact, meta-data is used extensively by search engines and the use of a competitor’s trademark is considered “initial interest confusion” under the trademark infringement laws and is illegal. Don’t use competitor’s registered or unregistered trademarks in your metatags. The fact that there is no registered trademark does not mean that no trademark exists.

The Plaintiff is a trustee of the Carroll Hall Shelby Trust. Carroll Shelby is the legendary racecar driver who broke the land speed record at the Bonneville Salt Flats and won the 24-hour Le Mans road race during his racing career, he is also the creator of various automobiles identified as Shelby Cobras and is famous not only to sports car enthusiasts but to the public in general. The Defendant is alleged to be advertising and promoting for sale on his website “kit cars” bearing designs confusingly similar to the trade dress of the Shelby properties. He uses the trademarks owned by, and licensed to, the Plaintiffs in the metatags of his website to draw Internet traffic.

The Plaintiffs have sued for common law trademark infringement, dilution of trademarks, false advertising, common law unfair competition, and violation of rights of publicity. The Plaintiffs request an award of compensatory, punitive damages, preliminary and permanent injunctive relief, its costs and attorneys fees and expenses, and further relief as the court deems proper and just. Traverse Internet Law Cross-Reference Number 1267.