Purchasing a Keyword that is the Trademark of Another for Online Advertisements Held to be Use in Commerce and Trademark Infringement

While the law surrounding a third party’s use of a trademark owner’s trademark as a keyword so as to trigger an online advertisements is still in flux, a recent United States District Court decision illustrates that the mere purchase of the trademark as a keyword is actionable trademark infringement.  While the defendant attempted to argue that Plaintiff’s trademark infringement claim must fail because it simply purchased a keyword rather than displaying the Plaintiff’s trademark in the text of the online advertisement, the court disagreed and held that the Plaintiff had established all necessary elements for trademark infringement.  In particular, the court held that the mere purchase of the keyword satisfies the “use in commerce” requirement for trademark infringement.  While the question of whether the mere purchase of a keyword satisfies the use in commerce requirement is hotly debated currently, it appears that courts are willing to find that a third party does not have to use another’s trademark in the actual text of the online advertisement to be held liable.

Determining whether or not the purchase of a keyword incorporating the trademark of another for online advertisements equates to trademark infringement is essential to all online advertisers.  Trademark owners must monitor the use of their trademarks in these online advertisements and act when they identify unauthorized uses of their trademarks.  Similarly, it would be wise for online advertisers to determine whether or not particular keywords would subject them to claims of trademark infringement before purchasing them or displaying them as part of the online advertisements.  In fact, domain parking service providers, such as Sedo, are even recommending that domain owners understand the implications of this decision.