Bloomberg Law®, an integrated legal research and business intelligence solution, combines trusted news and analysis with cutting-edge technology to provide legal professionals tools to be...
Dec. 10 --Claims under California state law of trademark infringement, unfair and deceptive trade practices and trademark dilution targeting Yahoo's keyword advertising program were barred by an immunity provision of the Communications Decency Act, the U.S. District Court for the Southern District of California ruled Dec. 4 (Parts.com, LLC v. Yahoo! Inc., 2013 BL 339124, S.D. Cal., No. 3:13-cv-01078-JLS-WMC, 12/4/13).
The court dismissed most of the claims under state and federal law brought by a trademark holder against Yahoo based on Yahoo's sale of the trademark as a keyword to trigger competitors' ads when users entered the plaintiff's trademark in a Yahoo search. However, the federal trademark infringement claim survived dismissal and the court gave the trademark holder the opportunity to amend some of those claims to cure pleading defects.
Yahoo! Inc. of Sunnyvale, Calif., which was founded in 1994 as “David and Jerry's Guide to the World Wide Web,” started as an online directory service and now provides a range of services including as a web portal and search engine service provider. Throughout its history, Yahoo has remained one of the most popular portals for U.S. internet users and it maintains portals for internet users worldwide in numerous languages.
Like other search engine operators, notably Yahoo's rival Google Inc., Yahoo sells advertising space adjacent to its search results and through its keyword advertising service it offers advertisers the opportunity to link their search results to search terms entered by users.
Parts.com objected to the sale of its trademark for keyword-triggered advertising and sued Yahoo, alleging trademark infringement, false designation of origin, unfair competition, and trademark dilution under federal law as well as common law trademark infringement and unfair competition, unfair and deceptive trade practices, and trademark dilution and injury to business reputation under California state law.
Yahoo moved for dismissal under Fed. R. Civ. P. 12(b)(6) for failure to state a claim for which relief is available under the law.
“Despite the cribbing,” the court said, the complaint sufficiently pleaded trademark infringement.
The court distinguished Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 2011 BL 5938, 97 U.S.P.Q.2d 2036 (9th Cir. 2011) (47 PTD, 3/10/11), which involved a trademark infringement claim based on Google's sale of keyword ads.
Network Automation vacated a federal district court's imposition of a preliminary injunction against Google, after casting doubt on the lower court's conclusion that the trademark holder had established a likelihood of initial interest confusion. Thus, Yahoo argued, under Network Automation, Parts.com could not establish a likelihood of confusion arising from the keyword ads.
However, the court emphasized that Network Automation was addressing a showing of a likelihood of success of showing likelihood of confusion at the preliminary injunction stage. The district court could still have ultimately found likelihood of confusion following full evidentiary proceedings, the court said.
Moreover, Network Automation's ruling was based on only one of the factors of the likelihood of confusion balancing test, specifically, the factor addressing the sophistication of consumers. This did not bar a finding in the instant proceeding that Parts.com had sufficiently pleaded a claim of trademark infringement.
Similarly, the court said, there was no plausible basis for the claim that the appearance of keyword-triggered ads would lead consumers to believe that Yahoo was affiliated with Parts.com. Thus, the court dismissed this claim without prejudice.
No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.
The court determined that in this case, Yahoo did qualify as an interactive computer service and it also was not the provider of the content at issue. Again, the court found the situation to be comparable to that in Jurin, and concluded that Yahoo did have immunity against the state law claim under Section 230. The court said:
Without anything in the Complaint to suggest that Yahoo creates advertisement content, the Court is left with a portrait of Yahoo analogous to Google in Jurin. Jurin involved Google's sales of keywords for the display of sponsored links in search engine results--a business model almost identical to Yahoo's. … Like Google, Yahoo “provides a space and a service and thereafter charges for its service,” which “allows competitors to post their digital fliers where they might be most readily received in the cyber-marketplace.” … The court in Jurin concluded that this activity was entitled to CDA immunity. … Yahoo, therefore, should also be entitled to CDA immunity for its advertising activities.
The court thus dismissed the state law claims.
Of the remaining factors, Parts.com had failed to submit evidence to support its assertions regarding the “duration, extent, and geographic reach of advertising and publicity of the mark.” The court noted a lack of evidence of promotion, advertising, use in trade publications, and resources expended.
Regarding “amount, volume, and geographic extent of sales,” the court found that the record showed only evidence of Parts.com's inventory rather than its sales. And, finally, with respect to actual recognition of Parts.com's trademark among consumers, the court found no evidence in the record that the company's efforts to promote its mark had had any impact on the public conscience.
Taking all the factors together, the court found that there was no support in the record for Parts.com's assertion of fame and thus this claim was also dismissed. The court offered Parts.com the opportunity to amend its complaint to re-plead this claim, as well as the Lanham Act false designation of origin and unfair competition claim.
Parts.com was represented by James V. Fazio III of the San Diego IP Law Group LLP, San Diego. Yahoo was represented by David K. Caplan and Larry W. McFarland of Kilpatrick Townsend & Stockton LLP, Beverly Hills.
To contact the reporter on this story: Anandashankar Mazumdar in Washington at email@example.com
To contact the editor responsible for this story: Naresh Sritharan at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)