FTC Explains Why It Thinks 1-800 Contacts’ Keyword Ad Settlements Were Anti-Competitive–FTC v. 1-800 Contacts

31 12 2017

As you may recall, the FTC is pursuing 1-800 Contacts for antitrust violations based on 1-800 Contacts having sued and then settled with competitors who bought keyword ads on 1-800 Contacts’ trademarks. Recently, the FTC filed its “Complaint Counsel’s Corrected Pre-Trial Brief and Exhibits” in the Matter of 1-800 Contacts, Inc. This 90 page document, unfortunately swiss-cheesed by numerous redactions, lays out the FTC’s case. It’s a fascinating read, and I encourage you to read the whole thing. In this post, I’ll flag some of the highlights.

 

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The content in this post was found at http://blog.ericgoldman.org/archives/2017/04/ftc-explains-why-it-thinks-1-800-contacts-keyword-ad-settlements-were-anti-competitive-ftc-v-1-800-contacts.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Your Periodic Reminder That Initial Interest Confusion Lawsuits Are Stupid–Epic v. YourCareUniverse

19 12 2017

The plaintiff has a registered trademark for “CARE EVERYWHERE” for B2B healthcare software. The defendant, YourCareUniverse, also makes healthcare software. It extended its brand to include “YOURCAREEVERYWHERE” and launched a public-facing patient healthcare portal under the extended brand. The plaintiff sued for trademark infringement. The court runs through the standard multi-factor likelihood of consumer confusion test and finds most factors favor the defendant.

That should end the case, but no. As we see far too often with weak marks and weak infringement cases, “Epic attempts to save its claims by relying on the doctrine of ‘initial interest confusion.’” In response, the court issues a major burn: “The facts in this case bear no similarity to those in which a court accepted a theory of initial interest confusion as plausible.”

We still don’t have a consistent (or coherent) definition of initial interest confusion. This court applies the Seventh Circuit jurisprudence, which has historically provided a narrow scope for initial interest confusion. The court defines it as when “the defendant ‘lur[es] potential customers away from [the plaintiff] by initially passing off its goods [or services] as those of the [plaintiff’s] even if confusion as to the source of the goods is dispelled by the time any sales are consummated.’…The Seventh Circuit has summarized initial interest confusion as a “bait and switch” technique, in which a competitor will try to ‘get its foot in the door’ and affect a purchasing decision by confusing the consumer.”

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I’ll close with a free tip for trademark owners. If success in your case depends on establishing initial interest confusion, DON’T BRING THE CASE.

Case citation: Epic Systems Corp. v. YourCareUniverse, Inc., 2017 WL 1093292 (W.D. Wis. March 22, 2017)

The content in this post was found at http://blog.ericgoldman.org/archives/2017/03/your-periodic-reminder-that-initial-interest-confusion-lawsuits-are-stupid-epic-v-yourcareuniverse.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Trademark Lawsuit Claiming Organic Search Results Create Initial Interest Confusion Falls Apart–Larsen v. Larson

19 12 2017

Disclosure note: I provided an expert report in this now-dismissed case, so you might consider my comments to be advocacy. I’ll explain my expert role in a bit.

The Court Opinion

Susan Larsen practices business law in the Denver, Colorado metro area under the name Larsen Law Offices. She claims she’s been using the name since 2003, though she did not register the name as a trademark (and would need to address the obvious secondary meaning issues to do so). David Larson practices estate planning law (and more) in the Denver metro area as well. In 2013, Larson set up a website at the domain name davidlarsonlawoffice.com, and he used the domain name larsonlawoffice.com starting in 2016. In 2016, Larsen sued Larson for trademark infringement, ACPA and more. After the complaint, Larson’s website removed references to Larson Law Offices, adopting the name David M. Larson, PLLC. Larson partially moved to dismiss.

Cybersquatting. The court says “Plaintiff does not allege that Mr. Larson had actual knowledge of Larsen Law Offices’ existence in 2013, or that he has ever conducted a Google search that returned plaintiff’s name.” Further (cites omitted):

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Case citation: Larsen Law Offices v. David Larson, 2017 WL 1131885 (D. Colo. Mar. 14, 2017). The complaint.

The content in this post was found at http://blog.ericgoldman.org/archives/2017/03/trademark-lawsuit-claiming-organic-search-results-create-initial-interest-confusion-falls-apart-larsen-v-larson.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



California Court Enjoins Canadian Court’s Global De-listing Order to Google as Contrary to CDA

6 12 2017

In a decision that sets up a potential international comity showdown, a California district court granted Google’s request for a preliminary injunction preventing enforcement in the U.S. of a Canadian court order that compelled Google to globally de-list certain search results of a former distributor that had allegedly used its websites to unlawfully sell the defendant Equustek Solutions’s (“Equustek”) intellectual property. (Google LLC v. Equustek Solutions Inc., 2017 WL 5000834 (N.D. Cal.  Nov. 2, 2017)).

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The content in this post was found at https://newmedialaw.proskauer.com/2017/11/09/california-court-enjoins-canadian-courts-global-de-listing-order-to-google-as-contrary-to-cda/ and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Interesting Tidbits From FTC’s Antitrust Win Against 1-800 Contacts’ Keyword Ad Restrictions

30 11 2017

Over the course of about a decade starting in 2004, 1-800 Contacts entered into over a dozen settlement agreements with competitors, most of which mutually restricted both parties from buying keyword ads triggered to their competitor’s trademarks and sometimes requiring the use of negative keywords. The FTC challenged this practice as anti-competitive via the FTC’s administrative adjudication process. In a behemoth 215 page opinion peppered with annoying redactions, the ALJ agrees with the FTC. The opinion’s summary:

Complaint Counsel has met its burden of proving that the Challenged Agreements unreasonably restrain trade in violation of Section 5 of the FTC Act. Contrary to Respondent’s argument, FTC v. Actavis, 133 S. Ct. 2223 (2013), is not authority for the proposition that trademark settlement agreements are immune from antitrust scrutiny.

The evidence in this case demonstrates that the advertising restraints imposed by the Challenged Agreements cause harm to consumers and competition in the market for the sale of contact lenses online. This is sufficient to establish Complaint Counsel’s prima facie case that the agreements are anticompetitive. The evidence fails to prove that the Challenged Agreements have countervailing procompetitive benefits that outweigh or justify the demonstrated anticompetitive effects of the Challenged Agreements. Accordingly, the Challenged Agreements violate Section 5 of the FTC Act.

This opinion is chock-full of goodies. Normally I’d recommend reading the whole thing. However, at a hefty 215 pages, it would take you a long time to do so. Here are some of the highlights I saw.

 

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Case citation: In the Matter of 1-800 Contacts, Inc., Docket No. 9372 (FTC Off. of Admin. L. Judges Oct. 27, 2017)

Case library: The FTC maintains a page with all of the public filings in this case. Here’s a selected library of materials:

 

The content in this post was found at http://blog.ericgoldman.org/archives/2017/11/interesting-tidbits-from-ftcs-antitrust-win-against-1-800-contacts-keyword-ad-restrictions.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Amazon Defeats Lawsuit Over Its Keyword Ad Purchases–Lasoff v. Amazon

3 02 2017

Lasoff owns Ingrass, which makes artificial turf. He claims he’s losing business to “cheaper, counterfeit” versions of Ingrass. (The opinion uses the term “counterfeit,” though it probably means knockoffs). He objects to the fact that Amazon runs keyword ads for “Ingrass” at the search engines and in promotional emails that are algorithmically programmed for remarketing (i.e., promoting products the email recipient viewed on Amazon but didn’t buy). The promotional email ad copy comes from third party sources. Prospective customers who saw these ads for “Ingrass” were directed to the Amazon product pages containing listings from the alleged counterfeiters.

Section 230

Citing the Ninth Circuit’s ccBill v. Perfect 10 ruling, the court cleans out all of the state law claims (unfair competition, state trademark infringement, tortious interference, negligence and unjust enrichment) due to Section 230. The court says:

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Case citation: Lasoff v. Amazon.com, (W.D. Wash. Jan. 26, 2017)

 

The content in this post was found at http://blog.ericgoldman.org/archives/2017/02/amazon-defeats-lawsuit-over-its-keyword-ad-purchases-lasoff-v-amazon.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



More Evidence Why Keyword Advertising Litigation Is Waning

4 01 2017

A venerable and classic Internet Law question: when a consumer uses a trademark as a search term, what are they looking for? If they are seeking the trademark owner–and only the trademark owner–then competitive keyword advertisers may encroach on the trademark owner’s goodwill and “steal” the trademark owner’s customers (and the search engine/ad network may be profiting from this “theft”). In contrast, if consumers have heterogeneous search objectives when using a trademarked search query, trademark law would overreach–in ways that would significantly harm social welfare–if it prevented ads from parties other than the trademark owner.

Nearly a decade ago, I argued–without empirical proof–that searchers had heterogeneous search objectives when using trademarks in search queries, which made competitive keyword advertising both permissible and desirable. Since then, some empirical studies have supported this argument, especially the Franklyn/Hyman study; see also the Tucker/Bechtold study.

A new empirical study, Jeffrey P. Dotson et al, Brand Attitudes and Search Engine Queries, 37 Journal of Interactive Marketing 105 (2016), provides further support for this conclusion. The study is based on a rich dataset: a time-series of actual Google search queries in the cellphone and automotive categories by opted-in consumers. The authors don’t consider the legal questions, but their conclusions buttress the perspective that consumers have heterogeneous motivations when they use trademarks in their search queries.

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The content in this post was found at http://blog.ericgoldman.org/archives/2016/12/more-evidence-why-keyword-advertising-litigation-is-waning.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



FTC sues 1-800 Contacts for attacking competitors’ search ads

13 08 2016
The Federal Trade Commission has sued online retailer 1-800 Contacts, saying the company illegally restrained competitors from buying search advertisements. It’s a dramatic move that could mold the shape of online trademark law for years to come.

 

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The content in this post was found at http://arstechnica.com/tech-policy/2016/08/ftc-sues-1-800-contacts-for-attacking-competitors-search-ads/ and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Another Murky Opinion on Lawyers Buying Keyword Ads on Other Lawyers’ Names–In re Naert

18 11 2015

Technology & Marketing Law Blog

October 3, 2015

Eric Goldman

I recently posted a co-authored article, Regulation of Lawyers’ Use of Competitive Keyword Advertising, discussing lawyers’ use of competitive keyword ads triggered by other lawyers’ names. That article examines both IP laws and attorney rules of professional conduct and explains why buying lawyers’ names for competitive keyword ads is permissible and desirable. If you haven’t read it, it will be a helpful foundation for the rest of this post.

In light of our paper, a new opinion from South Carolina Supreme Court left me scratching my head. The case reached the Supreme Court as an “Agreement for Discipline by Consent” between the state bar counsel and Zachary Naert–basically, a settlement agreement. The Supreme Court approved the settlement in an opinion with scant analysis.

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The content in this post was found at http://blog.ericgoldman.org/archives/2015/10/another-murky-opinion-on-lawyers-buying-keyword-ads-on-other-lawyers-names-in-re-naert.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Do Online Retailers’ Search Results Constitute Trademark Infringement?

22 09 2015

Since the inception of the search engine, trademark owners, advertisers, search engine providers, and the courts have struggled with the issue of the use of third-party trademarks in keyword advertising and search returns, and whether such trademark use is likely to confuse consumers when they are searching for information regarding a particular brand. Despite an array of holdings on this issue over the years, following the 2011 decision in Network Automation, Inc. v. Advanced System Concepts, Inc., the Ninth Circuit and other courts have generally held that the potential for “mere diversion” of a consumer caused by the use of a third party’s trademark in connection with sponsored keywords or search results does not constitute trademark infringement unless a trademark owner can demonstrate that particular search returns or sponsored keyword advertisements are likely to cause confusion based on the specific use or presentation of a trademark in a search return.

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The content in this post was found at http://www.ipwatchdog.com/2015/09/20/do-online-retailers-search-results-constitute-trademark-infringement/id=61807/and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.