Per blogger and law professor Eric Goldman:
In this case, S&L initiated a declaratory judgment against Australian Gold. By bringing a DJ, S&L kept the case in a Second Circuit jurisdiction--where courts recently have regularly rejected trademark lawsuits over keyword advertising and metatag inclusion. S&L's move paid off when the court says that buying keyword advertising and using metatags, without more, doesn't constitute a trademark use in commerce. This is now the fifth consecutive opinion in a NY federal court saying that advertisers don't make a trademark use in commerce when buying keywords, joining the Merck, Hamzik, Site Pro-1 and FrangranceNet courts (a sixth NY federal court opinion, the Rescuecom case, reached the same conclusion with respect to keyword sales).
The remainder of the opinion includes lots of other interesting discussion, including:
* S&L took its own product shots of Australian Gold's products. The court rejects Australian Gold's claim that S&L declaring "All Rights Reserved" with respect to those product shots constituted false advertising.
* The "Australian Gold" trademark lacked sufficient fame to support a dilution claim.
* Australian Gold claimed that S&L violated its copyrights in its labels by taking the product shots. This is an obviously spurious claim because after-market product shots are exactly what 17 USC 113(c) was designed to permit--and Australian Gold's effort to invoke copyright to restrict product shots shows its desperation to restrict legitimate after-market activities (as the court says, "AG is attempting to force a claim with facts that do not really fit"). Unfortunately, the court sidesteps 113(c). Fortunately, the court nevertheless finds that S&L's product shots were fair use of the labels' copyrights.