Monday, March 14, 2011
In the past week, the 9th Circuit Court of Appeals handed down a decision impacting the internet keyword advertising industry. In Network Automation, Inc. v. Advanced Systems Concepts, Inc., the Court ruled that a preliminary injunction entered against Network Automation in District Court must be vacated. The companies are business software producers. The Injunction prevented Network Automation from bidding on Advanced Systems' trademarked term "ActiveBatch".
The District Court went awry by applying analytical factors in a rigid manner from precedent set forth in a domain name infringement case. Clearly, a domain name infringement case is a much different animal from a keyword infringement case. The Court found that there was no likelihood of confusion caused by Network's bidding on Advanced Systems' trademarked term.
The 9th Circuit has now laid down important precedent for all future trademark keyword advertising cases in the west. From now, District Courts must apply factors in a flexible manner and engage in real keyword analysis. In essence, the 9th Circuit is mandating that Courts peel back the onion and look at what is really happening in a given keyword advertising campaign. This will likely entail an analysis of the party responsible for composing the adwords text, the content of the text itself, the product or service being sold and sophistication of consumers purchasing the good or service. This case will serve as an important guidepost for all future keyword advertising campaigns.
Those engaged in keyword advertising and affiliate marketing would be wise to hire an experienced keyword advertising lawyer to review campaigns for likelihood of confusion and trademark infringement risk.