advertising – Attorney Evan Brown

July 27, 2021 Unfair Competition

Online retailer’s use of photo of products it did not sell was not an unfair or deceptive act

Defendant online guitar retailer used on its website a photo of premium guitar necks – products that the online retailer did not sell. Plaintiff – the purveyor of the premium guitars found in the photo – sued defendant under the New Hampshire consumer protection act which makes unfair or deceptive acts in trade or commerce unlawful. The case went to trial. The court found in favor of defendant.

website photo deceptive practices

The court found three of plaintiff’s key witnesses not credible. Each of them had some sort of personal relationship with the plaintiff that in the court’s view tainted their testimony. One of them testified in a questionable way – he testified remotely via videoconferencing software and was “clearly reading from notes or a script during his direct examination.” And “[r]ather than looking directly into the camera when he answered questions, he consistently fixed his gaze on the left portion of his computer screen each time he began his answer.”

The photo played a minor part in defendant’s website. It was relatively small in comparison to the rest of the material in which it appeared. It took up approximately a third of an online document’s width and was not much bigger than a thumbnail-sized image. The image quality was low – the guitar necks were blurry and it was difficult to tell whether anything was written on the them, such as a logo.

The court found that plaintiff failed to prove that consumers would have understood defendant’s use of the photo to assert an affiliation between defendant and plaintiff. In the court’s mind, even if defendant had proven the assertion of an affiliation, plaintiff failed to prove that defendant acted with the intent required for the applicable statutory violation.

D’Pergo Custom Guitars, Inc. v. Sweetwater Sound, Inc., 2021 WL 3038640 (D.N.H., July 19, 2021)

October 15, 2019 Fraud/Misrepresentation, Section 230, Unfair Competition

Intellectual property exception to CDA 230 immunity did not apply in case against Google

Plaintiff sued Google for false advertising and violations of New Jersey’s Consumer Fraud Act over Google’s provision of Adwords services for other defendants’ website, which plaintiff claimed sold counterfeit versions of plaintiff’s products. Google moved to dismiss these two claims and the court granted the motion.

On the false advertising issue, the court held that plaintiff had failed to allege the critical element that Google was the party that made the alleged misrepresentations concerning the counterfeit products.

As for the Consumer Fraud Act claim, the court held that Google enjoyed immunity from such a claim in accordance with the Communications Decency Act at 47 U.S.C. 230(c).

Specifically, the court found: (1) Google’s services made Google the provider of an interactive computer service, (2) the claim sought to hold Google liable for the publishing of the offending ads, and (3) the offending ads were published by a party other than Google, namely, the purveyor of the allegedly counterfeit goods. CDA immunity applied because all three of these elements were met.

The court rejected plaintiff’s argument that the New Jersey Consumer Fraud Act was an intellectual property statute and that therefore under Section 230(e)(2), CDA immunity did not apply. With immunity present, the court dismissed the consumer fraud claim.

InvenTel Products, LLC v. Li, No. 19-9190, 2019 WL 5078807 (D.N.J. October 10, 2019)

About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown@internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

June 11, 2011 Electronic Discovery, Trademarks, Unfair Competition

Court allows discovery of competitor’s keyword purchases

Scooter Store, Inc. v. Spinlife.com, LLC, 2011 WL 2160462 (S.D. Ohio June 1, 2011)

The Scooter Store and a related company sued a competitor for trademark infringement and other causes of action for unfair competition based in part on the competitor’s purchase of keywords such as “scooter store” and “your scooter store” to trigger sponsored advertisements on the web. Defendant moved for summary judgment and also moved for a protective order that would prevent it from having to turn over information to plaintiffs concerning defendant’s purchase of the keywords. The court denied the motion for protective order.

Defendant argued that it should not have to turn over the information because plaintiffs’ trademark claims based on those keywords were without merit, as the words are generic terms for the goods and services plaintiffs provide. Defendant also asserted a need to protect the commercially sensitive nature of information about its keyword purchases.

The court rejected defendant’s arguments, ordering that the discovery be allowed. It held that “whether or not [p]laintiffs’ claims involving these terms survive summary judgment [] has no bearing on whether the discovery [p]laintiffs seek is relevant, particularly viewed in light of a party’s broad rights to discovery under Rule 26.” As for protecting the sensitivity of the information, the court found that such interests could be protected through the process of designating the information confidential, and handled accordingly by the receiving party.

March 23, 2011 Spam

Yahoo not liable for blocking marketing email

Section 230 of Communications Decency Act (47 U.S.C. 230) shields Yahoo’s spam filtering efforts

Holomaxx v. Yahoo, 2011 WL 865794 (N.D.Cal. March 11, 2011)

Plaintiff provides email marketing services for its clients. It sends out millions of emails a day, many of those to recipients having Yahoo email addresses. Yahoo used its spam filtering technology to block many of the messages plaintiff was trying to send to Yahoo account users. So plaintiff sued Yahoo, alleging various causes of action such as intentional interference with prospective business advantage.

Yahoo moved to dismiss, arguing, among other things, that it was immune from liability under Section 230(c)(2) of the Communications Decency Act. The court granted the motion to dismiss.

Section 230(c)(2) provides, in relevant part, that “[n]o provider or user of an interactive computer service shall be held liable on account of … any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable.”

Plaintiff argued that immunity should not apply here because Yahoo acted in bad faith by using “faulty filtering technology and techniques,” motivated “by profit derived from blocking both good and bad e-mails.” But the court found no factual basis to support plaintiff’s allegations that Yahoo used “cheap and ineffective technologies to avoid the expense of appropriately tracking and eliminating only spam email.”

The court rejected another of plaintiff’s arguments against applying Section 230, namely, that Yahoo should not be afforded blanket immunity for blocking legitimate business emails. Looking to the cases of Goddard v. Google and National Numismatic Certification v. eBay, plaintiff argued that the court should apply the canon of statutory construction known as ejusdem generis to find that legitimate business email should not be treated the same as the more nefarious types of content enumerated in Section 230(c)(2). (Content that is, for example, obscene, lewd, lascivious, filthy, excessively violent, harassing).

On this point the court looked to the sheer volume of the purported spam to conclude Yahoo was within Section 230’s protection to block the messages — plaintiff acknowledged that it sent approximately six million emails per day through Yahoo’s servers and that at least .1% of those emails either were sent to invalid addresses or resulted in user opt-out. On an annual basis, that amounted to more than two million invalid or unwanted emails.

August 19, 2008 Unfair Competition

Pop-ups don’t amount to unfair competition in Utah case

Nor do they give rise to tortious interference.

Overstock.com, Inc. v. SmartBargains, Inc., — P.3d —-, 2008 WL 3835094 (Utah August 19, 2008)

In 2004, Overstock.com sued its competitor SmartBargains in Utah state court for violations of the state’s anti-spyware statute [Utah Code sections 13-40-101 et seq.], unfair competition and tortious interference with prospective business relations. Overstock accused SmartBargains’ of using a technology to cause SmartBargains pop-up ads to appear when one visited Overstock.com. The lower court granted summary judgment in favor of SmartBargains, holding the anti-spyware statute unconstitutional, and finding that Overstock had not presented a genuine issue of material fact on its unfair competition and tortious interference claims.

Overstock sought review of the lower court’s decision on the unfair competition and tortious interference claims with the Utah Supreme Court. On appeal, the court affirmed the grant of summary judgment.

The lower court had looked to the various WhenU cases, which deal with pop-up advertising to determine there was no triable issue as to unfair competition. (1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400 (2d Cir.2005), Wells Fargo v. WhenU.com, Inc., 293 F.Supp.2d 734 (E.D.Mich.2003), and U-Haul Int’l, Inc. v. WhenU.com, Inc., 279 F.Supp.2d 723 (E.D.Va.2003)) But the Supreme Court found the cases to be of limited value, given that they interpreted federal statutory laws, not state common law.

The court declined to adopt a “per se rule holding that all pop-ups do not violate Utah unfair competition law.” Nonetheless, the court found that Overstock did not demonstrate specific facts beyond the pleadings showing that the pop-ups were deceptive, infringed a trademark or passed off SmartBargains’ goods as those of Overstock. After all, the pop-ups were labeled with SmartBargains’ logo and appeared in a separate window. Without something compelling like survey evidence, the court concluded there was no genuine issue for trial.

As for the tortious interference claim, the court similarly held that Overstock had not shown any evidence of improper purpose (competition was fully legitimate end) or improper means on the part of SmartBargains in causing the pop-ups to appear. Although the case doesn’t expressly say so, the dismissal of this claim was probably collateral damage to the unconstitutionality of the anti-spyware statute. Among the things included as “improper means” under Utah tortious interference law is violation of a statute. With no statue left to violate, no so-called improper means could subsist.

May 9, 2008 Trademarks, Uncategorized

A look at some keyword cases and a PPC class action suit

Court orders use of “negative keywords”

Orion Bancorp, Inc. v. Orion Residential Finance, LLC, No. 07-1753, 2008 WL 816794 (M.D. Fla., March 25, 2008)

Plaintiff Orion Bancorp, Inc. is a bank operating under the ORION name and registered trademark since 2002. Defendant Orion Residential Finance, LLC provides financial and real estate related services, and used the term “Orion” in interstate advertising and in the domain name “orionresidentialfinance.com” without Orion Bancorp’s authorization or consent.

The court entered an agreed permanent injunction, ordering Orion Residential Finance to refrain from any and all use of the term “Orion”. The defendant was prohibited from purchasing the word “Orion” as a keyword to trigger sponsored advertising. Moreover, it was required to activate “Orion” as a “negative keyword” (specifically preventing Orion Residential Finance’s ads from appearing when one searches using the terms “Orion”).

N.D. Cal.: Competitor’s trademark as keyword causes initial interest confusion

Storus Corp. v. Aroa Marketing Inc., 2008 WL 449835 (N.D. Cal. Feb. 15, 2008).

Plaintiff Storus Corporation (“Storus”) sued Defendants Aroa Marketing, Inc. (“Aroa”) and Skymall, Inc. (“Skymall”) for trademark infringement based on the defendants’ use of Storus’ mark “Smart Money Clip” to trigger sponsored listings. Storus sells its patented Smart Money Clip, and Aroa sold competing products under its Steinhausen mark which were marketed as the “Smart Money Clip”. Aroa tried unsuccessfully to argue that Storus’ mark was a descriptive term not entitled to protection (but offered no evidence of lack of secondary meaning, i.e., it did not prove consumers do not think of Storus when they see the Smart Money Clip mark).

The Court found that Aroa’s use of Storus’ mark in the sponsored ad caused initial interest confusion. In 11 months, the ad was displayed 36,164 times in response to a search for “smart money clip,” resulting in 1,374 clicks on Aroa’s ad. The court found that the marks were identical, were used on the same type of product, and were marketed via the Internet. (Even though Aroa’s mark appeared in the ad, Storus’ mark appeared first, was larger, and was underlined).

11th Circuit: Competitor’s Trademark as Keyword Likely to Cause Confusion

North American Medical Corp. v. Axiom Worldwide, Inc., 2008 WL 918411 (11th Cir. April 7, 2008)

Eric Goldman has a thorough report on his Technology & Marketing Law Blog of a case where the defendant’s use of the plaintiff’s ACCU-SPINA and IDD THERAPY trademarks in metatags constituted use in commerce, and thus trademark infringement where a Google search listed the defendant as the second most relevant organic search result (below the plaintiff). In a footnote, the court did hint that if the defendant’s website included an explicit comparative advertisement, things might have come out differently.

Possible Class Action Suit against Google and PPC Groups

Finally, Sarah Bird reports on SEOmoz.org that a class action trademark and ACPA lawsuit against Google and other domain parking agencies will move ahead. (Goolge’s adsense program contributes to the pay-per-click links on “parked”, i.e., recently acquired, or tasted domain names). The Plaintiff’s are seeking to hold them liable for these PPC links which may offer competing goods. Though for Google’s part, it notes on its FAQ that it is not responsible for the domain names on which its adsense ads appear, it seems disingenuous to suggest that their algorithms are not behind the PPC links that appear. Google’s method for trademark owners to object to sponsored links places the burden for policing this practice on mark owners.