Keyword Advertising Email Alert

by McNees Wallace & Nurick LLC

The Court of Appeals for the Tenth Circuit recently shed light on an increasingly common Internet business practice. In 1-800 Contacts, Inc. v., Inc., a panel of the court held that the use of a competitor's trademark to trigger a paid advertisement is unlikely to constitute trademark infringement, provided that the text of the advertisement does not contain the competitor's mark. This decision establishes that, in most circumstances, a company may engage in the practice of keyword advertising by using another company's trademark for the purpose of boosting its own website traffic.

This case involves two competing contact lens retailers. The plaintiff, 1-800 Contacts, owns the federally registered trademark 1800CONTACTS. 1-800 Contacts monitors third party use of the 1800CONTACTS trademark by searching for its mark via the Internet search engine Google. In 2005, 1-800 Contacts noticed that paid ads for defendant started appearing among the search results. Significantly, never incorporated 1800CONTACTS into the actual text of its sponsored links. advertises through AdWords, Google's keyword advertising program. A company participating in the AdWords program pays Google to display its advertisement as a sponsored link on a page of search results. In this case, bid on a number of terms, or keywords, including nine variations of the mark 1800CONTACTS. When an Internet user typed one of these variations into a Google search, a paid advertisement for appeared as a sponsored link in the search results.

After several failed attempts to stop from using keywords that resembled its 1800CONTACTS mark, 1-800 Contacts filed a lawsuit. Its primary claim was that infringed on its trademark rights by purchasing search terms similar to 1800CONTACTS, thus creating "initial interest confusion." Such confusion results where a consumer who is looking specifically for one company's product gets diverted to another company's product and becomes confused as to the source of these goods.

The Tenth Circuit focused on empirical evidence presented by the parties. In particular, the AdWords program keeps track of how often a sponsored link is generated and the number of times an Internet user actually clicks on the link. Here, the AdWords data provided a "click-through rate" of 1.5 percent for advertisements. In other words, Internet users clicked on sponsored links only 1.5 percent of the time the links appeared as a result of searching for variations of 1800CONTACTS. The Court found this rate too low to demonstrate that consumers were being lured away from 1-800 Contacts' website.

In addition, the advertisements were presented in such a way that Internet users were not likely to be confused as to the source of the advertised goods. Google displays paid advertisements in a shaded box labeled "Sponsored Links," apart from the organic search results. Relying heavily on the appearance of such advertisements is consistent with recent keyword advertising decisions, including the Ninth Circuit's landmark case Network Automation, Inc. v. Advanced Systems Concepts, Inc. The Tenth Circuit found that this evidence showed a lack of potential and actual confusion among relevant Internet users.

The Tenth Circuit's recent decision potentially has broad implications. The case establishes that the practice of keyword advertising involving a competitor's trademark typically will not infringe on the trademark owner's rights where the competitor's mark is not used in the sponsored link.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McNees Wallace & Nurick LLC | Attorney Advertising

Written by:

McNees Wallace & Nurick LLC

McNees Wallace & Nurick LLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.