The Ninth Circuit has affirmed a district court’s grant of summary judgment for the defendant in a case in which the plaintiff law firm claimed the defendant firm’s purchase of a keyword search term violated the Lanham Act.
The case is Lerner & Rowe PC v. Brown, Engstrand & Shely, LLC, et al.
As the court explained,
Plaintiff Lerner & Rowe, PC, a personal injury law firm based in Arizona, had three registered trademarks, including the name “Lerner & Rowe.” In a strategy known as “conquesting,” defendant Brown, Engstrand & Shely, LLC, doing business as The Accident Law Group, or ALG, purchased the term “Lerner & Rowe” as a Google Ads keyword.
Citing Shakespeare’s Romeo and Juliet, act 2, sc. 2, l. 46, the court asked, “What’s in a name?”
“According to Juliet Capulet,” said the court, “not much”:
Romeo Montague’s last name, though charged with meaning, does not confuse her about who he is. In this keyword advertising trademark dispute, the district court saw most consumers as discerning Juliets. Appellant, however, likens them to the larger Capulet clan, a group more prone to confusion.
The court noted that from 2015 to 2021, ALG bought the term “Lerner & Rowe” as a Google Ads keyword. This made the firm’s ads appear near the top of Google’s search results list whenever someone searched for the rival firm of Lerner & Rowe. However, those ALG ads never used the trademarked term “Lerner & Rowe.”
This marketing strategy, intended to divert business from a competitor, is known as “conquesting.” The court noted that Lerner & Rowe itself had used the strategy in other contexts.
2021, Lerner & Rowe filed a complaint against ALG alleging claims for
- trademark infringement, unfair competition, false designation of origin, and false description under the Lanham Act;
- state trademark infringement and unfair competition; and
- unjust enrichment.
The district court entered summary judgement for ALG on all claims and Lerner & Rowe appealed.
On appeal, the Ninth Circuit noted that
To prevail on a claim of trademark infringement under the Lanham Act, 15 U.S.C. § 1114, a party ‘must prove: (1) that it has a protectible ownership interest in the mark; and (2) that the defendant’s use of the mark is likely to cause consumer confusion.’
When assessing the likelihood of confusion in the keyword advertising context, the Ninth Circuit primarily considers the following non-exhaustive list of factors:
- the strength of the mark;
- the evidence of actual confusion;
- the type of goods and degree of care likely to be exercised by the purchaser; and
- the labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page.
Secondary factors include:
- the proximity of the goods,
- similarity of the marks,
- marketing channels used,
- defendant’s intent in selecting the mark, and
- likelihood of expansion of the product lines.
In this case, the main issue was “initial interest confusion” – “when an alleged infringer uses a competitor’s mark to direct consumer attention to its product.”
The court noted that
Although dispelled before an actual sale occurs, initial interest confusion impermissibly capitalizes on the goodwill associated with a mark and is therefore actionable trademark infringement.
Also, in the keyword advertising context, “the owner of the mark must demonstrate likely [consumer] confusion, not mere diversion.”
Regarding the first factor, the parties agreed that the strength of the plaintiff’s mark was strong and that the plaintiff firm had spent millions of dollars to develop it.
As to the second factor, Lerner & Rowe’s showed that ALG’s intake department received 236 phone calls during which the caller mentioned Lerner & Rowe when asked how the caller found ALG’s phone number.
However, said the court,
Data from Google shows that, between 2017 and 2021, searches for “Lerner & Rowe” returned results featuring ALG’s advertisement 109,322 times. Evidence of 236 instances of actual confusion, therefore, constitutes only 0.216% of the total number of users exposed to the challenged advertisements. Moreover, users clicked on ALG’s advertisements 7,452 times, or just 6.82% of the time Google displayed them.
ALG ‘s own expert survey showed that ALG’s ads confused between 0% and 3% of consumers.
Thus, said the court,
No reasonable jury would conclude that this percentage is anything but de minimis and fails to support a finding of likelihood of confusion.
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