Truth in Googling: Is Unfair Competition the Answer?

In my freshman year of college, a long-time friend of mine and I decided to drive down to Chicago.  Shortly before heading to the Cadillac Palace to claim our seats for a comedy act performing there that night, my companion, being an Asian-food connoisseur, steered our walk downtown towards a Japanese restaurant in River North.   The interior design was stunning: dark, vaulting ceilings; a vibrantly colored fish tank as a focal point in the back; and an elliptical-shaped sushi bar in the center emanating the colors of the ocean.   I can also picture the black and red sign outlining the specials at the establishment’s door.  More vague, however, is my memory of one crucial detail about the restaurant: it’s name.

My inability to recall the name of that restaurant has prompted a flurry of Google searches on River North Japanese restaurants.   In the process, I have found many other places with likewise appealing aesthetics and succulent sushi, but my searches have returned no hits that appear to be the restaurant I was looking for.  The interior design of the River North establishment I found myself at distinguished it from every other restaurant Google has returned to me.  But those searches no less have provided me with other possible establishments awaiting my next trip to Chicago.

Now for a counterfactual.  How would my searches have turned out if I did remember the name of the restaurant? 

What if I saw a number of advertisements in my search results for other restaurants and, with complete knowledge that none were for the restaurant I searched for, decided to stop combing through hundreds upon thousands of search results for my intended target and directed my attention to the other restaurants’ websites instead?

Search engine algorithms and keywords serve as the nuts and bolts behind these results and advertisements.  In fact, Google has made a fortune selling these keywords to companies looking to advertise on Google searches.

Taking advantage of this technology, some companies and firms have used keywords containing their competitors’ trademarks to divert web users towards their businesses and away from their competitors.   Some mark owners have responded by pursuing trademark infringement suits to quell this use of search-engine programming.  And some recent judicial opinions suggest trademark infringement to be a viable theory in this context.  Last year, the Second Circuit in Rescuecom Corp. v. Google Inc., 562 F.3d 123 (2d Cir. 2009), held that Google’s keyword sales constituted a “use in commerce” under the federal trademark laws in the Lanham Act.

But the infringement analysis does not end with use of another’s mark in commerce.  To be sure, the Lanham Act by its terms is limited to certain enumerated instances of consumer confusion.   15 U.S.C. § 1125(a) provides that a person who uses in commerce a name, symbol, device, or any combination of them that is likely to cause confusion “as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person” is liable for trademark infringement.  Thus, to create liability for trademark infringement, there must also be a likelihood of consumer confusion surrounding the subjects delineated by the terms of the statute.

In the keyword cases, consumer confusion certainly arises to the extent that the search results generated by the keywords have misdirected them.   This theory is what some courts have adopted as “initial interest confusion.”  This doctrine, however, has been subjected to substantial criticism, and justified criticism at that.  In the Ninth Circuit, Judge Berzon argued that initial interest confusion renders the proprietors of banner ads triggered by keywords liable for providing consumers more choices beyond those the user may have specifically surfed the Net for.  Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004) (Berzon, J., concurring).  More prominently displaying competing items in a brick-and-mortar store is not infringement, and thus, in Judge Berzon’s view, similar advertising in cyberspace should not be treated any differently.

Though Judge Berzon is correct in objecting to the doctrine of initial interest confusion, the argument that this behavior is not wrongful does not hold water.  Granted, providing more choice to the consumer is helpful, indeed essential, to the efficient functioning of a free market.  Furthermore, unfair competition laws cannot be so broad as to chill rather than promote competition.  The hypothetical signs  with more attention-grabbing characteristics that Judge Berzon describes, however, do not derive their effectiveness from the use of another’s trademark.   In the keyword context, a company takes a trademark right, the purpose of which being to allow consumers to find that competitor’s products among a sea of other similar products, and turns that intellectual property against the company to direct consumers towards the competitors’ products and services.   See, e.g., Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1062 (9th Cir. 1999).  This use of trademarks reeks of misappropriation of a competitor’s intellectual property.

Notwithstanding the behavior’s wrongfulness, a trademark analysis still attempts to fit the proverbial square peg in the round hole.  When a court utilizes initial interest confusion, one of the core purposes of trademark law, consumer protection, has the potential to fall by the wayside.  Jason Allen Cody, Note, Initial Interest Confusion: What Ever Happened to Traditional Likelihood of Confusion Analysis?, 12 Fed. Cir. B.J. 643, 662  (2003).  To be sure, there may be some instances in which consumers will be left better off because they happened to find a website that suits their needs and wants more fully than their intended target website would have.  Furthermore,  to the extent that these cases find infringement where there is no likelihood of confusion as to association, origin, or sponsorship, they have deviated from the Lanham Act’s plain language.  Though those particular species of confusion can and do arise in an initial interest confusion case, as was the case in Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254 (2d Cir. 1987), where a danger existed that unwitting consumers would erroneously believe that Pegasus was somehow related to Mobil, such cases are exceptions that prove the rule.  Unless the confusion happens to touch one of the Lanham Act’s subject matters, with confusion as to “connection” or “association” arising in Mobil, a trademark infringement theory is not an adequate overlay for consumer misdirection cases.

This is not to say, however, that there should be no other available means of legal recourse for this keyword practice.  One avenue to address this problem may lie in state-law unfair competition.  Unlike the Lanham Act’s treatment of trademark infringement, there is no hard and fast definition of unfair competition, other than the general principle that “it is illegal to compete ‘too hard.'”  J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 1:8 (2010).   As with the amorphous concepts of substantiality and reasonableness, the unfairness of competitive methods turns on a case-by-case circumstantial analysis.  Id. In addition, § 1 of the Restatement (Third) of Unfair Competition provides that “[o]ne who causes harm to the commercial relations of another by engaging in a business or trade is not subject to liability to the other for such harm unless” that individual engages in trademark infringement, marketing that makes deceptive representations to consumers, misappropriation of trade secrets and rights of publicity, “or from other acts or practices of the actor determined to be actionable as an unfair method of competition.”  Thus, the Restatement (Third) creates a catch-all provision for the development of new theories to address other unduly damaging competitive strategies that may arise in the future.

Providing that leeway makes for sound policy, as it would prevent unfair competition law from being limited to specific theories into which new facts cannot be pigeonholed.  Just as the inventive con-artist fashions new tools to escape the scrutiny of fraud actions, companies may develop their own methods to damage their competitors in ways that fall through the cracks of the limiting language of current trademark law, and keyword advertising could be one such method.

Therefore, until Congress amends the Lanham Act to specifically provide for initial interest confusion theories outside the instances of confusion enumerated in the statute’s text, the state courts should mold their own unfair competition theories to address this keyword misappropriation.  This option would avoid forcing these cases through ill-suited federal trademark infringement claims that, when applied in a manner consistent with the Lanham Act’s text, can only reach a small subset of keyword advertising cases.

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