Se trata del caso Kingspan v. Rockwool.
WARDLAW, link Circuit Judge:
“We must be acutely aware of excessive rigidity when applying the law in the Internet context; emerging technologies require a flexible approach.”
Network Automation (“Network”) and Advanced Systems Concepts (“Systems”) are both in the business of selling job scheduling and management software, and both advertise on the Internet. Network sells its software under the mark Auto-Mate, while Systems’ product is sold under the registered trademark
The district court was confronted with the question whether Network’s use of ActiveBatch to advertise its products was a clever and legitimate use of readily available technology, such as Google’s AdWords, or a likely violation of the Lanham Act, 15 U.S.C. § 1114. The court found a likelihood of initial interest confusion by applying the eight factors we established more than three decades ago in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979), and reasoning that the three most important factors in “cases involving the Internet” are (1) the similarity of the marks; (2) the relatedness of the goods; and (3) the marketing channel used. The court therefore issued a preliminary injunction against Network’s use of the mark ActiveBatch.
Mindful that [HN2] the sine qua non
I. Factual and Procedural Background
Systems is a software engineering and consulting firm founded in 1981. It has used the ActiveBatch trademark since 2000, and it procured federal registration of the mark in 2001. Systems markets ActiveBatch software to businesses, which use the product to centralize and manage disparate tasks. Network is a software company founded in 1997 under the name Unisyn. Its signature product, AutoMate, also provides businesses with job scheduling, event monitoring, and related services. Network has approximately 15,000 total customers, and between 4,000 and 5,000 active customers, including Fortune 500 companies and mid-sized and small firms. The cost of a license to use AutoMate typically ranges from $995 to $10,995. There is no dispute that Network and Systems are direct competitors, or that ActiveBatch and
Google AdWords is a program through which the search engine sells “keywords,” or search terms that trigger the display of a sponsor’s advertisement. When a user enters a keyword, Google displays the links generated by its own algorithm in the main part of the page, along with the advertisements in a separate “sponsored links” section next to or above the objective results. See Appendix A. 1 Multiple advertisers can purchase the same keyword, and Google charges sponsors based on the number of times users click on an ad to travel from the search results page to the advertiser’s own website. Network purchased “ActiveBatch” as a keyword from Google AdWords and a comparable program offered by Microsoft’s Bing search engine.
1 Appendix A presents a compilation of exhibits from the district court record showing results pages displayed when users search for “ActiveBatch” on Google or Bing.
As a result, consumers searching for business software who enter “ActiveBatch” as a search term would locate a results page where the top objective results are links to Systems’ own website and various articles about the product. See Appendix A. In the “Sponsored Links”
On November 16, 2009, Systems demanded that Network cease and desist from using the ActiveBatch mark in its search engine advertising, as it was not “authorized to use these marks in commerce.” In a second letter, Systems explained that Network’s use of ActiveBatch in its Google AdWords keyword advertising infringed Systems’ trademark rights by deceiving customers into believing that Network’s software products were affiliated with Systems’ products. Systems threatened litigation unless Network immediately ceased all use of Systems’ mark, including removing the mark from the Google AdWords Program. Network responded that its use of the ActiveBatch mark was non-infringing as a matter of law, and filed this lawsuit
The district court granted injunctive relief on April 30, 2010. Noting that the parties did not dispute the validity or ownership of the ActiveBatch mark, the district court ruled that Systems was likely to succeed in satisfying the Lanham Act’s “use in commerce” requirement by showing that Network “used” the mark when it purchased advertisements from search engines triggered by the term “ActiveBatch.” Applying the eight-factor Sleekcraft test for source confusion, 2 the district court emphasized three factors it viewed as significant for “cases involving the Internet”: the similarity of the marks, relatedness of the goods or services, and simultaneous use of the Web as a marketing channel. The district court concluded that all three factors favored Systems: Network used the identical mark to sell a directly competing product, and both advertised on the Internet.
2 The eight factors we identified in Sleekcraft were: “
The district court also concluded that Systems’ mark was strong because, as a federally registered trademark, ActiveBatch is presumptively distinctive. It concluded that the degree of consumer care suggested likely confusion because “there is generally a low degree of care exercised by Internet consumers.” Moreover, Network intentionally used Systems’ mark to advertise its own product. Finally, the district court noted that neither party introduced evidence of actual confusion, and that the likelihood of product expansion was not relevant.
The district court also analyzed whether Network infringed Systems’ mark by creating [HN3] initial interest confusion — as opposed to source confusion — which “occurs when the defendant uses the plaintiff’s trademark in a manner calculated to capture initial consumer attention, even though no actual sale is finally
Based on its analysis of the Sleekcraft factors and its finding of likely initial interest confusion, the district court concluded that Systems had a strong likelihood of success on the merits of its trademark infringement claim. It then presumed a likelihood of irreparable harm, and concluded that the balance of hardships and the public interest favored Systems. Following entry of the preliminary injunction, Network timely appealed.
II. Jurisdiction and Standard of Review
We have jurisdiction pursuant to 28 U.S.C. § 1292(a)(1). [HN4] We review the grant of a preliminary injunction for abuse of discretion. See Advertise.com, Inc. v. AOL Advertising, Inc., 616 F.3d 974, 976 (9th Cir. 2010). “The district court ‘should be reversed if [it] based its decision on an erroneous
[HN5] “A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 129 S. Ct. 365, 374, 172 L. Ed. 2d 249 (2008). Network argues that the district court erred by ruling that Systems was likely to succeed on the merits of its trademark claim, and by then presuming a likelihood of irreparable injury. It also contends that the preliminary injunction is overbroad.
[HN6] 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.” Dep’t of Parks & Recreation v. Bazaar Del Mundo Inc., 448 F.3d 1118, 1124 (9th Cir. 2006).
Network does not contest the ownership or its use of the mark. We note
This case, therefore, turns on whether Network’s use of Systems’ trademark is likely to cause
In Sleekcraft, we analyzed the likelihood of consumer source confusion between boats that were sold under the marks “Sleekcraft” and “Slickcraft.” We noted that [HN8] “[w]hen the goods produced by the alleged infringer compete for sales with those of the trademark owner, infringement usually will be found if the marks are sufficiently similar that confusion can be expected.” 599 F.2d at 348. Although both boats were designed for towing water skiers, and despite a potential overlap in the markets, we concluded that because “Slickcraft” boats appealed to consumers desiring family recreation and “Sleekcraft”
[HN9] We identified eight “relevant” factors for determining whether consumers would likely be confused by related goods: “ strength of the mark;  proximity of the goods;  similarity of the marks;  evidence of actual confusion;  marketing channels used;  type of goods and the degree of care likely to be exercised by the purchaser;  defendant’s intent in selecting the mark; and  likelihood of expansion of the product lines.” Id. at 348-49. We also noted that “the list is not exhaustive,” and that “[o]ther variables may come into play depending on the particular facts presented.” Id. at 348, 348 n.11.
The Sleekcraft factors are intended as an adaptable proxy for consumer confusion, not a rote checklist. See, e.g., Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Mgmt., Inc., 618 F.3d 1025, 1030 (9th Cir. 2010) (“This eight-factor analysis is ‘pliant,’ illustrative rather than exhaustive, and
When we first confronted issues of trademark infringement and consumer confusion in the Internet context over a decade ago in Brookfield, we noted that [HN10] “[w]e must be acutely aware of excessive rigidity when applying the law in the Internet context; emerging technologies require a flexible approach.” 174 F.3d at 1054. There, Brookfield, a software company, marketed an entertainment database program under the mark MovieBuff. It sold the software, and offered access to the database, on its website, moviebuffonline.com. Id. at 1041-42. West Coast, a video retailer, had registered the mark The Movie Buff’s Movie Store. West Coast operated a website using the domain name moviebuff.com, which included a film database that competed with Brookfield’s product. Id. at 1043.
We held that Brookfield
3 Modern search engines such as Google no longer use metatags. Instead they rely on their own algorithms to find websites. See McCarthy at § 25:69.
Finding no source confusion, we nonetheless concluded that West Coast’s use of MovieBuff in its metatags was likely to cause initial interest confusion. That is, by using Brookfield’s mark MovieBuff to direct persons searching for Brookfield’s product to the West Coast site, West Coast derived an improper benefit from the goodwill Brookfield developed in its mark. Id.
Five years later in Playboy, we considered the practice of “keying” — another situation analogous to that here. Netscape operated a search engine that offered an early version of a keyword advertising program. It sold lists of terms to sponsors, and when users searched for the keywords on the list, the sponsor’s advertisement would be displayed on the results page. 354 F.3d at 1022. Netscape required its advertisers from the adult entertainment industry to link their ads to one such list that contained more than 400 terms,
We reversed, holding that summary judgment was inappropriate because genuine issues of material fact existed as to whether Netscape’s keying practices constituted actionable infringement. Id. at 1031. Following Brookfield, we analyzed the keying issue in terms of initial interest confusion, “find[ing] insufficient evidence to defeat summary judgment on any other theory.” Id. at 1024 n.13. Playboy claimed that Netscape “misappropriated the goodwill of [its] marks by leading Internet users to competitors’ websites just as West Coast . . . misappropriated the goodwill of Brookfield’s mark.” Id. at 1025. In framing the initial interest confusion inquiry, we stressed that Playboy’s infringement claim relied on the fact that the linked banner advertisements were “unlabeled,” and were, therefore, more likely to mislead consumers into believing they had followed a link to Playboy’s own website. Id.
In Playboy, as in Brookfield, we applied the Sleekcraft test flexibly, determining
Concurring, Judge Berzon was struck by how analytically similar the keyed advertisements in Playboy were to the infringing metatags in Brookfield. We agree, and also find similarity to the use of the keyword “ActiveBatch” in this case. Judge Berzon cautioned that a broad reading of Brookfield‘s metatags holding could result in a finding of initial interest confusion “when a consumer is never confused as to source or affiliation, but instead knows, or should know, from the outset that a product or web link is not related to that of the trademark holder because the list produced by the search engine so informs him.” Id. at 1034-35 (Berzon, J., concurring). She clarified that the Playboy panel’s holding was limited to “situations in which the banner advertisements are not labeled or identified.” Id. at 1036.
Judge Berzon analogized the experience of browsing clearly labeled keyword advertisements to shopping at Macy’s, explaining that if a shopper en route to the Calvin Klein section is diverted by a prominently displayed Charter Club (Macy’s own brand) collection and never reaches the Calvin Klein collection, it could not be said that Macy’s had infringed
Here we consider whether the use of another’s trademark as a search engine keyword to trigger one’s own product advertisement violates the Lanham Act. We begin by examining the Sleekcraft factors that are most relevant to the determination whether the use is likely to cause initial interest confusion. 4 While the district court analyzed each of the Sleekcraft factors, it identified the three most important factors as (1) the similarity of the marks, (2) the relatedness of the goods or services, and (3) the simultaneous use of the Web as a marketing channel, for any case addressing trademark infringement on the Internet. For this proposition the district court cited GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199 (9th Cir. 2000), which followed Brookfield in emphasizing these three factors. See GoTo.com, 202 F.3d at 1205; Brookfield, 174 F.3d at 1054 n.16.
However, [HN13] we did not intend Brookfield to be read so expansively as to forever enshrine these three factors — now often referred to as the “Internet trinity” or “Internet troika” — as the test for trademark infringement on the Internet. Brookfield was the first to present a claim of initial interest confusion on the Internet; we recognized at the time it would not be the last, and so emphasized flexibility over rigidity. Depending on the facts of each specific case arising on the Internet, other factors may emerge as more illuminating on the question of consumer confusion. In Brookfield, we used the “troika” factors to analyze the risk of source confusion generated by similar domain names, but we did not wholesale adopt them in the metatag analysis. 174 F.3d at 1054-55. Subsequent courts similarly have found the “troika” helpful to resolve disputes involving websites with similar names or appearances. See, e.g., Internet Specialties West, Inc. v. Milon-DiGiorgio Enters., Inc., 559 F.3d 985, 988-89 (9th Cir. 2009); Perfumebay.com Inc. v. eBay Inc., 506 F.3d 1165, 1169, 1173 (9th Cir. 2007);
[HN14] Given the multifaceted nature of the Internet and the ever-expanding ways in which we all use the technology, however, it makes no sense to prioritize the same three factors for every type of potential online commercial activity. The “troika” is a particularly poor fit for the question presented here. See Jonathan Moskin, Virtual Trademark Use — The Parallel World of Keyword Ads, 98 Trademark Reporter 873, 892-93 (2008) (arguing that the “troika” is inadequate for analyzing trademark infringement claims based on search engine keyword advertising because it omits important factors). The potential infringement in this context arises from the risk that while using Systems’ mark to search for information about its product, a consumer might be confused by a results page that shows a competitor’s advertisement on the same screen, when that advertisement does not clearly identify the source or its product.
[HN15] In determining the proper inquiry
We turn to an examination of each Sleekcraft factor to analyze whether there is a likelihood of consumer confusion in this case, assigning each factor appropriate weight in accordance with its relevance to the factual circumstances presented here.
1. Strength of the Mark
[HN16] “The stronger a mark — meaning the more likely it is to be remembered and associated in the public mind with the mark’s owner — the greater the protection it is accorded by the trademark laws.” Brookfield, 174 F.3d at 1058. Two relevant measurements are conceptual strength and commercial strength. Conceptual strength involves classification of a mark “along a spectrum of generally increasing inherent distinctiveness as generic, descriptive, suggestive, arbitrary, or fanciful.” Id. “A mark’s conceptual
This factor is probative of confusion here because a consumer searching for a generic term is more likely to be searching for a product category. See id. at 1058 n.19 ([HN17] “Generic terms are those used by the public to refer generally to the product rather than a particular brand of the product.”). That consumer is more likely to expect to encounter links and advertisements from a variety of sources. By contrast, a user searching for a distinctive term is more likely to
The district court acknowledged that the parties failed to address the strength of the mark, but it concluded that the factor favors Systems. It reasoned that ActiveBatch is a suggestive mark because it “requires a mental leap from the mark to the product,” (quoting Brookfield, 174 F.3d at 1058), and as a registered trademark it is “inherently distinctive.” We agree. Because the mark is both Systems’ product name and a suggestive
2. Proximity of the Goods
[HN18] “Related goods are generally more likely than unrelated goods to confuse the public as to the producers of the goods.” Brookfield, 174 F.3d at 1055. “[T]he danger presented is that the public will mistakenly assume there is an association between the producers of the related goods, though no such association exists.” Sleekcraft, 599 F.2d at 350. The proximity of goods is measured by whether the products are: (1) complementary; (2) sold to the same class of purchasers; and (3) similar in use and function. Id.
The proximity of the goods was relevant in Playboy, where unsophisticated consumers were confronted with unlabeled banner advertisements that touted adult-oriented material very similar to Playboy’s own products.
Because the products at issue here are virtually interchangeable, this factor may be helpful, but it must be considered in conjunction with the labeling and appearance of the advertisements and the degree of care exercised by the consumers of the ActiveBatch software. By weighing this factor in isolation and failing to consider whether the parties’ status as direct competitors would actually lead to a likelihood of confusion, the district court allowed this factor to weigh too heavily in the analysis.
3. Similarity of the Marks
[HN20] “[T]he more similar the marks in terms of appearance, sound, and
In Sleekcraft, we concluded that the marks “Sleekcraft” and “Slickcraft” were similar in terms of sight, sound, and meaning by examining the actual situations in which consumers were likely to read, hear, and consider the meaning of the terms. Id. at 351-52. Such an inquiry is impossible here where the consumer does not confront two distinct trademarks. Rather, after entering one company’s mark as a search term, the consumer sees a competitor’s sponsored link that displays neither company’s trademarks. The district court erroneously treated “ActiveBatch,” the keyword purchased by Network, as conceptually separate from ActiveBatch the trademark owned by Systems. This is an artificial distinction that does not reflect what consumers “encountered in the marketplace.” Again, however, because the consumer keys in Systems’ trademark,
4. Evidence of Actual Confusion
[HN21] “[A] showing of actual confusion among significant numbers of consumers provides strong support for the likelihood of confusion.” Playboy, 354 F.3d at 1026 (citing Thane Int’l, Inc. v. Trek Bicycle Corp., 305 F.3d 894, 902 (9th Cir. 2002) (“Evidence of actual confusion constitutes persuasive proof that future confusion is likely . . . . If enough people have been actually confused, then a likelihood that people are confused is established.”). However, “actual confusion is not necessary to a finding of likelihood of confusion under the Lanham Act.” Academy of Motion Picture Arts & Sciences v. Creative House Promotions, Inc., 944 F.2d 1446, 1456 (9th Cir. 1991) (citing American Int’l Group, Inc. v. American Int’l Bank, 926 F.2d 829, 832 (9th Cir. 1991)). Indeed, “[p]roving actual confusion is difficult . . . and the courts have often discounted such evidence because it was unclear
In Playboy, the expert report showing a significant number of users were confused by the keying practice at issue was strong evidence that Playboy’s infringement claim should be allowed to proceed. 354 F.3d at 1027. Playboy, however, was decided at the summary judgment stage, whereas here we examine a sparse record supporting preliminary injunctive relief. As the district court noted, neither Network nor Systems provided evidence regarding actual confusion, which is not surprising given the procedural posture. Therefore, while this is a relevant factor for determining the likelihood of confusion in keyword advertising cases, its importance is diminished at the preliminary injunction stage of the proceedings. The district court correctly concluded that this factor should be accorded no weight.
5. Marketing Channels
[HN22] “Convergent marketing channels increase the likelihood of confusion.” Sleekcraft, 599 F.2d at 353. In Sleekcraft, the two products were sold in niche marketplaces, including boat shows, specialty retail outlets, and trade magazines. Id. at 353. However, this factor becomes less important when the marketing channel is less obscure.
Therefore, the district court’s determination that because both parties advertise on the Internet this factor weighed in favor of Systems was incorrect.
6. Type of Goods and Degree of Care
[HN23] “Low consumer care . . . increases the likelihood of confusion.” Playboy, 354 F.3d at 1028. “In assessing the likelihood of confusion to the public, the standard used by the courts is the typical buyer exercising ordinary caution . . . . When the buyer has expertise in the field, a higher standard is proper though it will not preclude a finding that confusion is likely. Similarly, when the goods are expensive, the buyer can be expected to exercise greater care in his purchases; again, though, confusion may still be likely.” Sleekcraft, 599 F.2d at 353 (citations omitted).
[HN24] The nature of the goods and the type of consumer is highly relevant to determining
In Brookfield, the websites were visited by both sophisticated entertainment industry professionals and amateur film fans, which supported the conclusion that at least some of the consumers were likely to exercise a low degree of care. Id. at 1056. In Playboy, the relevant consumer was looking for cheap, interchangeable adult-oriented material, which similarly led to our court’s finding that the consumers at issue would exercise a low degree of care. 354 F.3d at 1029.
We have recently acknowledged that the default degree of consumer care is becoming more heightened as the novelty of the Internet evaporates and online commerce becomes commonplace. In Toyota Motor Sales v. Tabari, 610 F.3d 1171 (9th Cir. 2010), we vacated a preliminary injunction that prohibited a pair of automobile brokers from using Toyota’s “Lexus” mark in their domain names. 5 We determined that it was unlikely that a reasonably prudent consumer would be confused into believing that a domain name that included a product name would necessarily have a formal affiliation with the maker of the product, as “[c]onsumers who use the internet for shopping are generally quite sophisticated about such matters.” Id. at 1178. The Tabari panel reasoned,
[I]n the age of FIOS, cable modems, DSL and T1 lines, reasonable, prudent and experienced internet consumers are accustomed to such exploration by trial and error. They skip from site to site, ready to hit the back button whenever they’re not satisfied with a site’s contents. They fully expect to find some sites that aren’t
Id. at 1179 (citations omitted).
5 The Tabari court applied the nominative fair use test rather than the Sleekcraft factors, but it explained that Sleekcraft‘s consumer confusion inquiry was “analogous.” Id. at 1176. Network has not argued that nominative fair use applies here. We find the initial interest confusion analysis more appropriate for the circumstances of this case. Cf. New Kids on the Block v. News Am. Publ’g, Inc., 971 F.2d 302, 308 (9th Cir. 1992) (explaining that nominative fair use applies when “the only word reasonably available to describe a particular thing is pressed into service”).
We further explained that [HN26] we expect consumers searching for expensive products online to be even more sophisticated. Id. at 1176 (“Unreasonable, imprudent and inexperienced web-shoppers are not relevant.”).
Therefore the district court improperly concluded that this factor weighed in Systems’
7. Defendant’s Intent
[HN27] “When the alleged infringer knowingly adopts a mark similar to another’s, reviewing courts presume that the defendant can accomplish his purpose: that is, that the public will be deceived.” Sleekcraft, 599 F.2d at 354. Nevertheless, we have also “recognized that liability for infringement may not be imposed for using a registered trademark in connection with truthful comparative advertising.” Lindy Pen Co., Inc. v. Bic Pen Corp., 725 F.2d 1240, 1248 (9th Cir. 1984).
Therefore, much like the proximity of the goods, the defendant’s intent may be relevant here, but only insofar as it bolsters a finding that the use of the trademark serves to mislead consumers rather than truthfully inform them of their choice of products. The district court incorrectly considered the intent factor in isolation, and concluded that it weighed in Systems’ favor without first determining that Network intended
8. Likelihood of Expansion of the Product Lines
[HN28] “Inasmuch as a trademark owner is afforded greater protection against competing goods, a ‘strong possibility’ that either party may expand his business to compete with the other will weigh in favor of finding that the present use is infringing. When goods are closely related, any expansion is likely to result in direct competition.” Sleekcraft, 599 F.2d at 354 (citations omitted). Where two companies are direct competitors, this factor is unimportant. Cf. Brookfield, 174 F.3d at 1060. Therefore, the district court correctly declined to consider the likelihood of expansion.
9. Other Relevant Factors
[HN29] The eight Sleekcraft factors are “not exhaustive. Other variables may come into play depending on the particular facts presented.” Sleekcraft, 599 F.2d at 348 n.11. In the keyword advertising context the “likelihood of confusion will ultimately turn on what the consumer saw on the screen and reasonably believed, given the context.” Hearts on Fire Co. v. Blue Nile, Inc., 603 F. Supp. 2d 274, 289 (D. Mass. 2009). 6 In Playboy, we found it important that the consumers saw banner
6 The Hearts on Fire court identified a new seven-factor test to determine whether there is a likelihood of consumer confusion arising from a firm’s use of a competitor’s trademark as a search engine keyword triggering its own sponsored links. 603 F. Supp. 2d at 289. Network urges us to adopt the Hearts on Fire factors. While we agree that the decision’s reasoning is useful, we decline to add another multi-factor test to the extant eight-factor Sleekcraft test.
The appearance of the advertisements and their surrounding context on the user’s screen are similarly important here. The district court correctly examined the text of Network’s sponsored links, concluding that the advertisements did not clearly identify their source. However, the district court did not consider the surrounding context. In Playboy, we also found it important that Netscape’s search engine did not clearly segregate the sponsored advertisements from the objective results. 354 F.3d at 1030. Here,
Given the nature of the alleged infringement here, the most relevant factors to the analysis of the likelihood of confusion are: (1) the strength of the mark; (2) the evidence of actual confusion; (3) the type of goods and degree of care likely to be exercised by the purchaser; and (4) the labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page.
The district court did not weigh the Sleekcraft factors flexibly to match the specific facts of this case. It relied on [HN30] the Internet “troika,” which is highly illuminating in the context of domain names, but which fails to discern whether there is a likelihood of confusion in a keywords case. Because the linchpin of trademark infringement is consumer confusion, the district court abused its discretion
We REVERSE the district court’s order granting Systems’ motion for a preliminary injunction, VACATE the injunction, and REMAND for further proceedings consistent with this opinion.
[SEE FIGURES IN ORIGINAL]