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Technology & Marketing Law Blog
Eric Goldman
June 14, 2021

Starting in the mid-2000s, 1-800 Contacts sought to control how its competitors bought search engine advertising triggered by its (so-called) trademarks, a process I call competitive keyword advertising. To do this, 1-800 Contacts typically sued its competitors and then quickly entered into a no-money settlement agreement that required each party to stop bidding on each others’ trademarks.

To property maximalists, 1-800 Contacts’ efforts may sound like run-of-the-mill trademark enforcement. However, the scheme was actually extremely unusual (few, if any, other trademark owners did anything similar), and it had several pernicious effects. The settlements deprived consumers of additional helpful information from competitive advertising. The settlements distorted the keyword ad auctions that the search engines were trying to conduct. Most importantly, the settlements helped 1-800 Contacts avoid competing on price, which has allowed 1-800 Contacts to systematically charge higher prices to consumers (a point 1-800 Contacts freely admits).

1-800 Contacts’ competitors “voluntarily” entered into the settlement agreements, but they were goaded in part by 1-800 Contacts’ threat to wage lawfare against them if they didn’t. This threat wasn’t idle. 1-800 Contacts likely spent $1M+ suing a holdout to its settlement “deal,” Lens.com, even though Lens.com made only $21 of profit from competitive keyword advertising. (Lens.com claimed it incurred at least $1.4M of defense costs). In other words, 1-800 Contacts proved to the industry that it would engage in economically irrational litigation to punish any competitors who tried to compete against it on price.

Five years ago, the FTC initiated an administrative complaint against 1-800 Contacts. The FTC won at the initial administrative hearing and then at the Commission level.

Last week, the Second Circuit reversed and dismissed the FTC’s administrative complaint, saying that the FTC misapplied the applicable antitrust standard and did not make a strong enough evidentiary showing of an antitrust violation. This opinion is mostly antitrust inside-baseball, but I want to highlight a few things.

Case citation: 1-800 Contacts, Inc. v. Federal Trade Commission, 2021 WL 2385274 (2d Cir. June 11, 2021)

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Technology & Marketing Law Blog
Eric Goldman
August 17, 2020
If you are a trademark owner suing over competitive keyword ads, you are almost certainly making a bad business decision, and your attorney might be milking your bank account. If you are an attorney representing a trademark owner in a competitive keyword ad lawsuit, please reexamine your professional decision-making to ensure that you are, in fact, prioritizing the best interests of your clients.

This is my first time blogging keyword ad cases in almost a year. However, in an odd coincidence, we got three rulings in the same week. When it rains, it pours. This post rounds up how trademark owners are doing in these cases (TL;DR: they lose). I don’t have a conclusion at the end of this post because, honestly, what’s left to say? If the conclusion to this post isn’t obvious after reading it, take off your plaintiff-colored glasses.

Passport Health, LLC v. Avance Health System, Inc., 2020 WL 4700887 (4th Cir. Aug. 13, 2020). Prior blog post.

Smash Franchise Partners LLC v. Kanda Holdings Inc., 2020 WL 4692287 (Del. Ct. Chancery Aug. 13, 2020)

Sen v. Amazon.com, Inc., 2020 WL 4582678 (S.D. Cal. Aug. 10, 2020). Prior blog post; and also referenced here.

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The content in this post was found at https://blog.ericgoldman.org/archives/2020/08/three-keyword-advertising-decisions-in-a-week-and-the-trademark-owners-lost-them-all.htm Clicking the title link will take you to the source of the post and was not authored by the moderators of freeforafee.com

Eric Goldman
Technology & Marketing Law Blog
December 20, 2018

The parties compete for the provision of health services related to traveling, like immunizations. The defendant Avance bought keyword ads triggered on the plaintiff’s trademark “Passport Health.” In 2013, the trademark owner complained, and Avance apparently dropped the Google ad buy. However, apparently everyone forget about Bing. In 2017, the trademark owner reemerged, complaining about the Bing ad buys. This lawsuit ensued.

It doesn’t go well for the trademark owner.

Case citation: Passport Health, LCC v. Avance Health System, Inc., 2018 WL 6620914 (E.D.N.C. Dec. 18, 2018)

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The content in this post was found at https://blog.ericgoldman.org/archives/2018/12/your-periodic-reminder-that-keyword-ad-lawsuits-are-stupid-passport-health-v-avance.htm Clicking the title link will take you to the source of the post. and was not authored by the moderators of freeforafee.com

Eric Goldman
Technology & Marketing Law Blog
December 14, 2018

Today’s case comes on post-jury motions in one of several litigation battle royales in the mattress industry. (Aside: I HATE blogging mattress cases because players in that industry litigate to the death, resulting in overlong opinions). The jury found that “Defendants did not infringe Select Comfort’s trademark rights in SLEEP NUMBER, WHAT’S YOUR SLEEP NUMBER?, SELECT COMFORT, or COMFORTAIRE.” Select Comfort sought to overturn the jury verdict based on the initial interest confusion doctrine. The court says no (emphasis added):

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The content in this post was found at https://blog.ericgoldman.org/archives/2018/12/if-your-trademark-case-depends-on-showing-initial-interest-confusion-save-your-money-select-comfort-v-john-baxter.htm Clicking the title link will take you to the source of the post. and was not authored by the moderators of freeforafee.com

Eric Goldman
Technology & Marketing Law Blog
November 26, 2018

Starting in 2002 and continuing for about a decade, 1-800 Contacts systematically locked up many of its online contact lenses retail competitors into settlement agreements that prohibited the parties from bidding on each other’s trademarks at the search engines. Perhaps not coincidentally (this was the subject of some back-and-forth among experts), 1-800 Contacts unapologetically and consistently charges higher prices than its online retailer competitors.

In 2016, the FTC filed an administrative complaint against 1-800 Contacts, alleging that its competitive advertising restrictions were illegal restraints on trade. The enforcement action implicates a number of complex topics, including: (1) when are settlement agreements pro- or anti-competitive; (2) when (if ever) can competitors agree to restrict advertising; and (3) when does competitive keyword advertising infringe trademarks? The case’s complexity virtually ensured long, fact-intensive, divisive, and very expensive proceedings. Both sides lawyered (10+ on each side) and experted up. . . .

Earlier this month, the Commission affirmed the ALJ ruling in a 3-1 ruling (one commissioner was recused). The majority opinion completely vindicates the FTC’s decision to bring the case. The dissent’s opinion, in contrast, raises numerous substantive and procedural flaws with the majority decision. The split of opinion exposes some potentially significant ideological fault lines that might define this cohort of commissioners.

Case citation: In the Matter of 1-800 Contacts, Inc., 2018 WL 6078349 (FTC Docket #9372, Nov. 7, 2018)

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The content in this post was found at https://blog.ericgoldman.org/archives/2018/11/restricting-competitive-keyword-ads-is-anti-competitive-ftc-v-1-800-contacts.htm Clicking the title link will take you to the source of the post. and was not authored by the moderators of freeforafee.com

Technology & Marketing Law Blog

Eric Goldman

August 14, 2018

DealDash and Wish are e-commerce vendors. For a while, Wish offered a service called “Deal Dash” for time-limited bargains. Immediately after DealDash sued, Wish renamed its service “Bargain Blitz” and pulled the “DealDash” term from all advertising. DealDash still pressed for a preliminary injunction that restricted, among other things, using “DealDash” as keyword ad triggers in search engines and app stores.

Wish submitted an affidavit that it had blocked “DealDash” or “Deal Dash” as negative keywords in AdWords. The court responds:

Case citation: DealDash OYJ v. ContextLogic, Inc., 2018 WL 3820654 (N.D. Cal. Aug. 10, 2018)

Technology & Marketing Law Blog

May 11, 2018

Eric Goldman

[ed’s note: Eric always argues that metatags are old school, irrelevant, and don’t mislead. He does so, even when a Circuit court case rules that THEY DO STILL MATTER].

Yesterday, the Ninth Circuit ruled about trademarked stripes on tennis shoes. To me, legally weaponizing dots in three lines on a shoe predictably leads to wasteful and possibly anti-consumer litigation. However, instead of critiquing the opinion generally, I’ll isolate just one aspect.

The court says:

Skechers placed metadata tags on its website that directed consumers who searched for “adidas Stan Smith” to the page for the Onix shoe. “Using another’s trademark in one’s metatags is much like posting a sign with another’s trademark in front of one’s store.” Brookfield Commc’ns, Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036, 1064 (9th Cir. 1999). We agree with the district court that “the only reason ‘adidas Stan Smith’ is a useful search term is that consumers associate the term with a distinctive and recognizable shoe made by adidas.” Therefore, the district court did not clearly err by finding that the Stan Smith had acquired secondary meaning.

Instead of the multitude (dozens?) of Ninth Circuit cases interpreting online trademark law in the past two decades, this court in 2018 actually reaches back to the Brookfield billboard analogy from 1999? FFS. As I explained in 2005, Brookfield’s billboard analogy is irreparably flawed. Even in keyword metatag’s halcyon days when they had minor technical relevance, keyword metatags that are processed only by automated bots bear zero resemblance to a physical space sign that consumers see.

Case citation: Adidas America, Inc. v. Skechers USA, Inc., No. 16-35204 (9th Cir. May 10, 2018)

Technology & Marketing Law Blog

Eric Goldman
May 1, 2018
This is a lawsuit between two Alzheimer’s-related non-profit organizations, the Alzheimer’s Association (the more established and better-funded group) and the Alzheimer’s Foundation (the relative upstart). I blogged a prior 2015 ruling.

The potential for brand collisions in consumers’ minds seems obvious. For example, “Between 2007 and 2012, Alzheimer’s Association received more than 5,700 checks made payable to “Alzheimer’s Foundation” or a variant totaling over $1.5 million…AFA, in turn, received more than 5,000 checks between 2006 and June 2016 made payable to “Alzheimer’s Association” or near variants.”” . . . .

Both parties used competitive keyword advertising.

The Court Ruling

Case citation: Alzheimer’s Disease and Related Disorders Association, Inc. v. Alzheimer’s Foundation of America, Inc., 2018 WL 1918618 (S.D.N.Y. Apr. 20, 2018)

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The content in this post was found at https://blog.ericgoldman.org/archives/2018/05/another-court-says-competitive-keyword-advertising-doesnt-cause-confusion.htm Clicking the title link will take you to the source of the post. and was not authored by the moderators of freeforafee.com.

Technology and Marketing Law Blog

Eric Goldman

April 28, 2018

This case involves dispensers of plastic bags for picking up dogshit. The plaintiff has a registered trademark in the brand “ONEpul.” The defendant describes its bags as “one-pull” (and yet, the term “descriptive fair use” doesn’t appear in the opinion once…). It also buys Adwords on another trademark of the plaintiff, “zerowaste,” but the appellate court doesn’t discuss a trademark infringement claim over the zerowaste mark. My prior blog post on the district court ruling.

The court analyzes the ONEpul trademark claim.

The court concludes: “Taken as a whole, the evidence that ZW submitted at summary judgment showed only that ZW and PWD were in competition with one another.” Summary judgment affirmed.

Case citation: ZW USA, Inc. v. PWD Systems, LLC, 2018 WL 1956417 (8th Cir. April 26, 2018)

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The content in this post was found at https://blog.ericgoldman.org/archives/2018/04/competitive-keyword-advertising-doesnt-show-bad-intent-onepul-v-bagspot.htm

 Clicking the title link will take you to the source of the post. and was not authored by the moderators of freeforafee.com.