Intellectual Property Rights

Rescuecom Corporation v. Google Inc.

562 F.3d 123 (2d Cir. 2009)

Facts

Rescuecom provided computer-repair and technical-support services.
It owned the registered trademark RESCUECOM.
Google operated its AdWords advertising programme.
Advertisers could purchase words as keywords.
When an internet user searched for the purchased word, advertisements from the buyer could appear beside the search results.
Google also operated a Keyword Suggestion Tool that recommended useful advertising keywords.
Google allegedly recommended and sold the RESCUECOM mark as a keyword to Rescuecom’s competitors.
Consequently, a user searching for Rescuecom could see competing advertisements.
Rescuecom alleged that the display format could lead users to believe that competitors were affiliated with or sponsored by Rescuecom.
The District Court dismissed the complaint.
It held that Google had not made a trademark “use in commerce” because the mark did not necessarily appear visibly in the advertisement.
Rescuecom appealed.

Whether Google’s recommendation and sale of a registered trademark as an advertising keyword constituted “use in commerce.”
Whether invisible internal use of a mark can fall within trademark law.
Whether Rescuecom had pleaded enough to proceed with a likelihood-of-confusion claim.

Trademark infringement requires the defendant to use the plaintiff’s mark in commerce in connection with goods or services.
Use need not always consist of visibly placing the mark on the defendant’s product.
A mark may be commercially used where it is:
offered for sale;
sold as an advertising trigger;
used to direct consumers toward competing services.
“Use in commerce” is only a threshold requirement.
The plaintiff must still prove that the use is likely to cause confusion regarding:
source;
sponsorship;
affiliation;
approval.
The court must distinguish between:
a purely internal reference to a mark; and
an external commercial transaction involving the mark.

Google did not merely maintain Rescuecom’s mark in an internal directory.
It actively recommended the term to advertisers through its Keyword Suggestion Tool.
It sold the right to use the mark as a trigger for competing advertisements.
Google therefore treated RESCUECOM as a commercially valuable advertising instrument.
The Court distinguished an earlier case involving software that internally used website addresses to generate pop-up advertisements.
In that case, the defendant had not sold the plaintiff’s trademark to competitors.
Google’s activity involved a direct commercial transaction:
competitors paid Google;
the purchased mark caused their advertisements to appear;
the advertisements were presented when users searched for Rescuecom.
That activity was sufficiently connected with advertising services to constitute use in commerce.
Rescuecom also alleged that advertisements might appear in a manner not clearly separated from ordinary search results.
At the pleading stage, the Court had to accept that allegation as true.
Such presentation could potentially cause consumers to believe that a competitor:
was connected with Rescuecom;
was an authorised alternative;
had been sponsored or approved by Rescuecom.
The Court did not decide whether confusion actually existed.
Nor did it hold that keyword advertising is automatically unlawful.
It decided only that the complaint could not be dismissed on the theory that sale of a hidden keyword was never trademark use.

The Second Circuit reversed the dismissal of Rescuecom’s complaint.
Google’s recommendation and sale of the RESCUECOM mark to advertisers constituted use in commerce.
Rescuecom was entitled to attempt to prove likelihood of confusion at later stages.
The Court did not finally find Google liable for infringement.
Use this case for: selling another’s trademark as a keyword for competing advertisements is commercial trademark use, although liability still depends upon proof of likely confusion.