Free for a Fee

By Rebecca Tushnet and Eric Goldman

TrafficSchool.com, Inc. v. Edriver Inc., 2011 WL 3198226 (9th Cir. July 28, 2011)

Rebecca highlights how this opinion has some important things to say about false advertising standing, consumer confusion in false advertising and attorneys’ fees in Lanham Act cases. I’m going to focus on more of the technical issues:

First, DMV.org bought keyword ads that displayed the URL “ca.dmv.org” and “california.dmv.org.” The opinion says “Defendants’ use of the “ca.” and “california.” prefixes obviously was designed to suggest an affiliation with the State of California.” As far as I can recall, this is the first time a court has explicitly treated the URL displayed in keyword ad copy as contributing to consumer confusion. I know some SEMs like to play games with the domain line in keyword ad copy. Even if Google won’t police the URL line, courts will.

Second, the opinion shreds DMV.org’s argument that consumers didn’t think it was affiliated with a government agency; it concludes that DMV.org “willfully” and “egregiously” deceived consumers because

Defendants associated their website with URLs and search terms that falsely implied DMV.org was a government site. They had in their possession hundreds of emails sent by consumers who contacted DMV.org thinking it was a state agency. And DMV.org’s director of customer service testified that he voiced concerns about these emails to senior management.

This deceptive conduct wasn’t curable with a website disclaimer: “defendants knew that the disclaimers were ineffective, because adding them didn’t end the stream of emails sent by consumers who thought they’d contacted their state DMV.” Marketing people love to “fix” any legal problems with disclaimers, but they often simultaneously resist making the disclaimers prominent enough to actually fix the problem, leaving the website no better off.

As usual, Judge Kozinski adopts a realpolitik perspective that we all know what’s going on here, and he isn’t going to countenance it. This discussion doesn’t directly link to or cite the scienter battles in online copyright and trademark cases, but it could be a little uncomfortable for defendants like Fung who rely on form-over-substance arguments.

Third, the district court ordered DMV.org to display a splash screen to incoming visitors containing a disclaimer of government affiliation. I believe the remedy of a mandatory splash screen was also unprecedented. Among other problems with the splash screen, it can hurt or destroy search engine indexing, effectively rendering the domain name worthless. Therefore, even though the district court didn’t award any damages (a ruling affirmed on appeal), the mandatory splash screen was potentially far more detrimental.

On appeal, the court partially reverses the mandatory splash screen, noting that it applied equally to deceptive and non-deceptive content that DMV.org is publishing. The court also notes the disadvantages of interfering with search engine indexing:

[The injunction] also precludes defendants from tailoring DMV.org’s landing page to make it welcoming to visitors, and interferes with the operation of search engines, making it more difficult for consumers to find the website and its protected content.

In a footnote, the court explains:

Defendants introduced unrebutted evidence that splash screens commonly interfere with the automated “spiders” that search engines deploy to “crawl” the Internet and compile the indexes of web pages they use to determine every page’s search ranking. And splash screens themselves don’t have high search rankings: Search engines commonly base these rankings on the web page’s content and the number of other pages linking to it, and splash screens lack both content and links.

This is a pretty savvy explanation of why a splash screen destroys SEO, and it’s heartening to see the court recognize the First Amendment value of SEO (at least, nondeceptive SEO).

The court gives DMV.org some very good news by giving it a chance to work its way out of the splash screen:

On remand, the district court shall reconsider the duration of the splash screen in light of any intervening changes in the website’s content and marketing practices, as well as the dissipation of the deception resulting from past practices. If the district court continues to require the splash screen, it shall explain the continuing justification for burdening the website’s protected content and what conditions defendants must satisfy in order to remove the splash screen in the future. In the alternative, or in addition, the court may permanently enjoin defendants from engaging in deceptive marketing or placing misleading statements on DMV.org.

On the other hand, as Rebecca points out, the DMV.org domain name is, itself, designed to prey on consumer interest in official DMV services. Perhaps there will be no way for DMV.org to fix this, no matter what disclaimers it uses.

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The content in this post was found at http://blog.ericgoldman.org/archives/2011/08/ninth_circuit_r_1.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.