User:Rgisraelsen/Vandevere v. Lloyd

Vandevere v. Lloyd, 644 F.3d 957 (9th Cir. 2011) was a court case decided on July 11, 2011, where the United States Court of Appeals for the Ninth Circuit held that the use of a competitor's trademark as an Internet search advertising keyword did not constitute trademark infringement. In the case, Network Automation advertised their own competing product in search queries that contained Advanced Systems Concepts' "ActiveBatch" trademark. In determining whether trademark infringement occurred, the court evaluated factors relevant to the likelihood of customer confusion outlined in AMF Inc. v. Sleekcraft Boats and concluded that confusion was unlikely.

Background
Google and other Internet search engines and e-commerce sites have made search engine keyword advertising ubiquitous. Network Automation ("Network") and Advanced Systems Concepts ("Systems") both sold job scheduling and management software that were advertised on search engine results. Network's product was called Automate, and Systems' product was called ActiveBatch. Network decided to buy the keyword "ActiveBatch" so that when users searched for "ActiveBatch", Network's website would be displayed as a sponsored link in separate sections from search results, including Google Search and Microsoft Bing. Systems sent a letter to Network saying Network's usage of "ActiveBatch" as a keyword was infringing Systems' trademark rights. As a result, Network filed a lawsuit seeking declaratory judgement of non-infringement. Subsequently, Systems counterclaimed, and asserted trademark infringement under the Lanham Act, 15 U.S.C. § 1114 and therefor sought a preliminary injunction against Network's usage of "ActiveBatch".

Holding of the district court
The district court ordered a preliminary injunction against Network using the "ActiveBatch" mark. The district court analyzed the eight Sleekcraft factors and emphasized that the "Internet troika" from Brookfield were most significant, and found that they all favored Systems. The court's decision relied on Network usage of an identical mark, "ActiveBatch", to sell a product directly competing with Systems' product, and the fact both Network and Systems used the Internet to advertise. The district court also concluded that many of the other Sleekcraft factors were in favor Systems, including the degree of consumer care because "there is generally a low degree of care exercised by Internet consumers."

Network promptly appealed.

Opinion of the Ninth Circuit
The United States Court of Appeals for the Ninth Circuit reversed the district court's decision in the case's reconsideration. It concluded that the likelihood of confusion was insufficient to support trademark infringement and therefor removed the injunction placed on Network. The Ninth Circuit clarified that in its ruling for Brookfield, it did not intend the "Internet troika" as the rigid test for trademark infringement on the Internet. Rather, it re-emphasized that the factors and principles considered in Sleekcraft are non-exhaustive and should be applied flexibly in the context of Internet commerce and other emerging technologies. The Ninth Circuit Court decided that the district court applied the Brookfield factors too rigidly, and emphasized flexibility over rigidity for the "Internet troika" from Brookfield.

Conclusion
This was an important case for keyword advertising since the opinion strongly suggested that keywords involving trademarks were not infringing. In addition, the opinion of the Ninth Circuit Court suggested that previous court case rulings involving trademark infringement on the internet depended too rigidly on specific factors, and did not consider the whole picture in the context of new emerging technologies. The results of this case will make it more difficult for future plaintiffs complaining about trademark infringement with keyword advertising.