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Use of Competitor's Mark to Trigger Paid Search Engine Advertising Was Not Confusing

Friday, December 21, 2012
Collegesource Inc. v. AcademyOne Inc., E.D. Pa., No. 2:10-cv-03542, 10/25/12

  • Key Holding:A website's use of a competitor's trademarks as search engine keywords triggering the placement of advertisements was not trademark infringement because it was done in a way that was unlikely to lead to consumer confusion.


By David McAuley

An online educational services company's purchase of a competitor's marks for use as search engine adwords triggering the display of the company's web advertisements did not amount to trademark infringement because the manner in which the marks were used was unlikely to create consumer confusion, the U.S. District Court for the Eastern District of Pennsylvania ruled Oct. 25 (Collegesource Inc. v. AcademyOne Inc., E.D. Pa., No. 2:10-cv-03542, 10/25/12).

“Modern Internet users, particularly ones who are interested in credit distribution in higher education institutions, are not likely to be confused by Internet advertising,” the court said.

The court chose to follow the four-factor approach adopted by the Ninth Circuit in Network Automation Inc. v. Advanced Systems Concepts Inc., 638 F.3d 1137, 1154, 97 USPQ2d 2036 (9th Cir. 2011) (47 PTD, 3/10/11) for analyzing cases of claimed confusion stemming from adword advertising.

Along the way, the court decided that the defendant had not violated the Computer Fraud and Abuse Act by accessing and using a public website the plaintiff maintained.


Higher Learning Tussle
CollegeSource Inc. provides colleges, universities and the public with services relating to curriculum course descriptions and course-credit transferability. It offers a web subscription service, and also an online service, known as Catalink, that schools can use to display their catalogs. Catalink is not a subscription service; anyone can use it to view a school's catalogue.

AcademyOne Inc. offers an online tool that helps faculty make determinations on course equivalency among colleges and universities.

On seeing some of its content on the AcademyOne site, CollegeSource sued, including claims for trademark infringement and a violation of the CFAA.

CollegeSource argued that AcademyOne's purchase of search-engine adwords that included its “COLLEGESOURCE” and “CAREER GUIDANCE FOUNDATION” trademarks amounted to trademark infringement under the Lanham Act.


Taking Ninth Circuit Approach
Judge Mary A. McLaughlin analyzed the issue by application of the Network Automation factors, i.e., (1) the strength of the mark, (2) evidence of actual confusion, (3) the types of goods involved together with a consumer's likely degree of care in such a transaction, and (4) the labeling and appearance of the advertisement.

First off the district court gave the advantage to CollegeSource, finding that the trademarks were strong marks. One of the marks has been in use for 30 years, and the other for 18. Moreover, CollegeSouce poured hundreds of thousands of dollars into advertising the marks, the court said.

But AcademyOne prevailed on the remaining three factors. The evidence of actual confusion, the court said, was sparse. In fact, CollegeSource was able to demonstrate only 65 mistaken clicks onto the AcademyOne website, and all of were in the same month in 2009. While actual confusion is not needed to prove the likelihood of confusion, significant actual confusion would certainly buttress the argument, the court said.


The Key Factor
The court also noted that the Network Automation court put particular emphasis on the labeling facet of the analysis, saying that the likelihood of confusion “will ultimately turn” on the appearance of the screen showing the ad. Partitioning actual search results from sponsored advertisement links would decrease the likelihood of confusion, the court in Network Automationsaid.

Here, the court noted, that kind of partitioning was evident. It pointed out that the protected marks were not used in the actual text of the AcademyOne ads; they only acted as triggers for generating the ads. And the ads themselves appeared in a separate “sponsored links” section of the displayed webpage, it said.

Finally, an ordinary consumer in quest of information about transferring college credits is especially likely to be careful, the court pointed out. “Given the importance of their inquiries, they have an incentive to be discerning about the search results they choose to trust.”

The court said that other factors were mixed, some favoring one side, some the other. In any event, the four Network Automation factors are more important in these circumstances, the court decided.


CFAA Claim Made
CollegeSource also argued that AcademyOne's use of the Catalink website servers went beyond what was permitted by CollegeSource's subscription agreement and terms of use, and thereby constituted exceeding authorized access in violation of the CFAA, 18 U.S.C. § 1030(a)(2) and (4).

The court appeared unconvinced that a website's terms of use can define authorized access for the site, but said that it did not matter here. AcademyOne was not bound by the website terms of use or subscription agreement, at least with respect to its use of Catalink, it said.

The terms of use appear in a browsewrap agreement to users of CollegeSource's subscrition-only service. While AcademyOne was a subscriber, there was no proof that it used this access to copy CollegeSource content into its own system, the court said. Instead, the contested CollegeSource content was also available on Catalink.


Reach of 'Browsewrap' Agreement
CollegeSource maintained, however, that the plain terms of the subscription agreement included “any other electronic service” CollegeSource offered, thus reaching the use of Catalink. The court was not persuaded.

To begin with, it said, the subscription agreement uses the term “service” in a number of instances that clearly do not apply to Catalink. The court also noted that the agreement gave CollegeSource a right to terminate a user's access. The court said it was unclear that could happen with Catalink--the whole point of Catalink was to be available to the public, it said. And beyond technical issues rendering termination doubtful, an at-will termination right was “facially inconsistent” with public access, it added.

Moreover, the court said, users access Catalink via a third party website, such as a college's, and may never even know that they have landed on a CollegeSource site. “Given the attenuation of CataLink usage to a subscription agreement, it would not be 'natural' to construe the contract to apply to such usage,” it concluded. “[T]he Court holds that because … AcademyOne was under no obligation to abide by any terms of use as to its CataLink access, it did not exceed authorized access.”

The court granted summary judgment in favor of AcademyOne.

David E. Landau of Duane Morris, Philadelphia, represented Academyone. Darren J. Quinn, Del Mar, Calif., represented Collegesource.

By David McAuley


Opinion at /uploadedFiles/Content/News/Legal_and_Business/Bloomberg_Law/Legal_Reports/paid-search(1).pdf

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