April 19, 2019

Top Ten Reasons to Attend the Rocky Mountain Intellectual Property Institute

Each year, Colorado Bar Association CLE hosts the Rocky Mountain Intellectual Property & Technology Institute, the “place to be for the best IP.” In case you haven’t yet registered for this year’s event, here are the Top Ten Reasons to Attend:

Top Ten Reasons to Attend the 2016 Intellectual Property & Technology Institute

10. Anyone who’s anyone will be there! And if you’re not there, anyone who’s anyone will know.
9. Patents … Trademarks …Copyrights … Licensing …Technology & Transactions!
8. Learn best practices and practical tips that you can apply immediately.
7. Special panels of USPTO patent judges and SPEs discussing developments at the USPTO.
6. Over 40 sessions presented by an all-star faculty of leading IP practitioners.
5. Grow your professional contacts through networking opportunities with IP attorneys from … well … from all over!
4. Receive the digital course materials AND the MP3 audio download for the ENTIRE Institute!
3. Some of the best from across the nation come together to share their knowledge & insights with you!
2. Annual case law updates of all branches of IP law.
1. This Institute has quickly become “the place to be for the best IP” in the western United States!

If that wasn’t enough to convince you, watch this video of Rocky Mountain Regional U.S. Patent & Trademark Office Director Molly Kocialski and Program Chair Nate Trelease explaining what you’ll learn at the Institute:

Don’t miss the 14th Annual Rocky Mountain Intellectual Property & Technology Institute! Register today.

CLE Program — 14th Annual Rocky Mountain Intellectual Property & Technology Institute

This CLE presentation will occur on June 2-3, 2016, at the Westin Westminster Hotel. Register online or call (303) 860-0608. Can’t make the live program? Order the homestudy here: CDMP3

Let’s Talk About Beer (Law)

BeerColorado loves its beer. Denver is the nation’s former microbrew capital and microbreweries throughout the state continue to thrive. Naturally, because beer business is big business, beer law became a practice area.

Manufacturing and selling alcohol is highly regulated, and microbreweries must comply with myriad state and federal alcohol regulations in addition to standard business regulations. Beyond the regulatory side of beer law, though, are intellectual property concerns. Recently, New Belgium Brewery has been involved in a publicized case about trademark rights to its Slow Ride Session IPA.

New Belgium filed for trademark protection for its Slow Ride IPA, which was granted without opposition by the USPTO. Later, it learned that Oasis Texas Brewing Co. was producing a beer named Slow Ride Pale Ale. According to New Belgium, the Fort Collins brewery offered to resolve the issue amicably in order to allow both breweries to continue to use the Slow Ride name in certain locations, but Oasis refused, instead issuing a cease and desist letter to New Belgium in which it demanded that all products bearing the Slow Ride name be destroyed and profits from Slow Ride given to Oasis. (Oasis claims New Belgium tried to “strong arm” it into accepting a joint use agreement and says that all negotiations with New Belgium have devolved into hostility.) New Belgium eventually filed a lawsuit in the U.S. District Court for the District of Colorado, seeking exclusive use of the Slow Ride name pursuant to its trademark. Earlier this month, a federal judge dismissed the lawsuit for lack of personal jurisdiction over the Texas-based defendants.

The Slow Ride dispute is far from the first trademark dispute to arise from craft beer. Ohio-based Great Lakes Brewing agreed to change the name of its Alchemy IPA as a result of a trademark conflict with the Craft Beer Alliance. Innovation Brewery, a small craft brewery in North Carolina, was accused by Michigan-based Bell’s Brewery of infringing on its trademarked slogan, “bottling innovation since 1985.” Boulder-based Kettle and Stone Brewing Co. agreed to change its name after contact from California’s Stone Brewing Co. Lagunitas Brewery in California dropped its lawsuit against Sierra Nevada Brewing Co. after public outrage at its comparison of the two beer companies’ IPA logos. The list goes on and on.

Later this month, CLE will host its annual Rocky Mountain Intellectual Property Institute. The plenary session, “Innovation & Disruption: How Crafty Micro-brews are Shaking Up the Beer Industry,” features attorney Michael Drumm of Drumm Law Group, LLC and Chris Hill of Odyssey Beerworks Brewery & Taproom in Arvada. The Rocky Mountain IP Institute will also feature a beer tasting this year. To register, click the link below.

CLE Program: The 13th Annual Rocky Mountain Intellectual Property Institute

This CLE presentation will take place from Thursday, May 28 through Friday, May 29, 2015. Click here to register.

Can’t make the live program? Order the homestudy here – CDMP3

 

Tenth Circuit: Summary Judgment for Junior Mark User Affirmed in Lanham Act Trademark Infringement Case

The Tenth Circuit Court of Appeals published its opinion in Hornady Manufacturing Co., Inc. v. DoubleTap, Inc. on Wednesday, March 19, 2014.

Hornady manufactures and sells firearm ammunition and related products. Hornady has sold various products under the name “TAP,” short for “Tactical Application Police.” In 1999, Hornady acquired trademark registration for the nonstylized word mark, “TAP.” DoubleTap was founded in 2002 by Michael McNett. DoubleTap has been described as a “niche” ammunition manufacturer.

In January 2010, Hornady sent DoubleTap a cease-and-desist letter, demanding that DoubleTap discontinue using the word “Tap” on its products, remove “Tap” from its website, and destroy any materials it created bearing “Tap.” Hornady eventually filed suit, alleging trademark infringement under Sections 32 and 43(a) of the Lanham Act, common law trademark infringement, deceptive trade practices under Utah law, and unjust enrichment. Both parties moved for summary judgment, arguing that they were entitled to judgment as a matter of law on whether DoubleTap infringed on Hornady’s TAP mark. The district court denied Hornady’s motion and granted DoubleTap’s.

In deciding whether summary judgment was properly granted, the Tenth Circuit had to determine if DoubleTap’s mark was likely to cause confusion with Hornady’s mark. The court applied “six nonexhaustive factors to evaluate whether there is a likelihood of confusion: (1) the degree of similarity between the competing marks; (2) the intent of the alleged infringer in adopting the contested mark; (3) evidence of actual confusion; (4) the similarity of the parties’ products and the manner in which the parties market them; (5) the degree of care that consumers are likely to exercise in purchasing the parties’ products; and (6) the strength of the contesting mark.”

After applying the six factors in a detailed opinion, the court held that consumers were unlikely to be confused by the marks and affirmed the award of summary judgment to DoubleTap.

Surveying Intellectual Property: Predictions for the Supreme Court’s Rulings in 10 IP Cases

HarrisDoughertyBy Ray K. Harris and Thomas Dougherty

There are now ten IP cases under review in the Supreme Court. Why so many? And what will the Court do?

Why So Many IP Cases?

The Supreme Court docket demonstrates the accelerating importance of intellectual property. In the decade of the 1990s the Supreme Court wrote seven patent opinions.[1] The prior two decades saw a similar volume of patent cases. In the same decade, copyright cases decided in the Supreme Court (six)[2] and trademark cases decided in the Supreme Court (three, including two trade dress cases)[3] were about equally rare.

In the decade from 2000 to 2009, the Supreme Court increased the volume to 10 patent related opinions.[4] Total copyright cases (three)[5] and trademark cases (five, including two trade dress cases)[6] decided in the Supreme Court remained about the same.

In 2010 to 2012 the Supreme Court increased the pace to issue four patent opinions in three years.[7] The pace of Supreme Court copyright decisions (two)[8] remained about the same as over the last 20 years. The increase in patent litigation appears not to be aberrational.

Last year the Supreme Court again more than doubled the volume of patent cases handled and issued four patent-related opinions in one year.[9] The Supreme Court also decided one copyright case[10] and one trademark case.[11]

This year the Supreme Court has again increased the volume of patent cases and already has accepted for review six patent cases – more than half the volume it handled in the entire first decade of the 21st Century. The Court has also accepted for review two copyright and two trademark cases.

Why has the Supreme Court accepted review in so many IP cases? Because IP rights have grown in economic importance and clarity is required to maintain that economic value. The Federal Circuit was given exclusive jurisdiction over patent cases to avoid conflicts in treatment among the different Circuit Courts, but clarity (for example, on treatment of software-related inventions) has not uniformly emerged. Also, abusive assertion of IP rights imposes a substantial cost on the economy. Guidance for the Federal Circuit requires either Supreme Court review or Congressional action.

What Will The Court Do?

Here summaries of the issues raised and our humble PREDICTIONS of how these 10 current IP cases may be decided.

Patent. Two patent cases focus on the scope of what a patent may claim.

Alice Corp. Pty Ltd. v. CLS Bank Int’l, 717 F.3d 1269 (Fed. Cir. 2013), cert. granted, 134 S. Ct. 734 (2013) (the test for patentable subject-matter for software inventions). An equally divided court affirmed the District Court holding that the claims were not patent eligible. The Federal Circuit generated seven opinions and could not agree on the appropriate test. NEITHER CAN WE, BUT THE COURT CONTINUES TO DECIDE CASES DEFINING THE LINE BETWEEN INVENTION AND ABSTRACT IDEAS. The court will limit the scope of software patentability, but not eliminate it. SOFTWARE CAN BE PATENTED BUT NOT THESE CLAIMS. AFFIRMED. Watch for oral argument March 31.

Nautilus Inc. v. Biosig Instruments, Inc., 715 F.3d 891 (Fed. Cir. 2013), cert. granted, 134 S. Ct. 896 (2014) (determining when a claim term is indefinite — therefore invalidating the claim) There were multiple reasonable interpretations of the claim language “spaced relationship.” The Federal Circuit concluded the term was not insolubly ambiguous because “inherent parameters” would allow a person of ordinary skill to understand the term. Particular and distinct patent claiming is required by statute. 35 U.S.C. 112. REVERSED. THE COURT WILL REQUIRE TIGHTER CLAIM DRAFTING SO WHAT IS CLAIMED IS DISTINCT FROM WHAT IS NOT CLAIMED AND INFRINGEMENT LIABILITY IS MORE PREDICTABLE. Watch for oral argument April 28.

The remaining 4 patent cases focus on enforcement issues:

Medtronic Inc. v. Boston Scientific Corp., 571 U.S. ___ (Jan. 22, 2014). In a declaratory relief suit by a patent licensee the licensor/patentee always has the burden to prove infringement. REVERSED. WE ARE CERTAIN WE GOT THIS “PREDICTION” CORRECT.

Highmark Inc. v. Allcare Management Systems, Inc., 687 F.3d 1300 (Fed. Cir. 2012), cert. granted, 134 S. Ct. 48 (2013), and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 496 Fed Appx. 57 (Fed. Cir. 2012), cert. granted, 134 S. Ct. 49 (2013) (the standard for awarding attorneys’ fees to the prevailing party). The infringement defendant prevailed in both cases. The Federal Circuit found no deference is owed to a district court’s finding regarding whether allegations of infringement were objectively unreasonable and neither case was “exceptional” under 35 U.S.C. § 285. The prevailing defendants assert (1) the District Court is entitled to deference, and (2) a showing that the litigation is objectively baseless and brought in subjective bad faith sets too high a standard for prevailing defendants (accused infringers) and conflicts with the lower bar set for prevailing plaintiffs (patent owners) — a showing “that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”). THE COURT WILL ELIMINATE THE SUBJECTIVE ELEMENT OF THE REASONABLENESS TEST AND OTHERWISE AFFIRM THE APPELLATE DECISIONS ON THE OBJECTIVE ELEMENT WITHOUT DEFERENCE TO THE TRIAL COURT. This case was argued Feb. 26.

Limelight Networks, Inc. v. Akamai Technologies, Inc., 692 F.3d 1301 (Fed. Cir. 2012), cert. granted, 134 S. Ct. 895 (2014) (inducing infringement where separate elements of the method claim were carried out by different persons, hence there is no one person who directly infringed). The Federal Circuit held there can be inducement liability with no single direct infringer or agency relationship. AFFIRMED. INDUCING MULTIPLE ACTORS TO INFRINGE COLLECTIVELY IS WRONG (ONCE THE ADVERSE PRECEDENT IS NOT CONTROLLING). Watch for oral argument April 30.

Copyright. Both cases deal with defenses to enforcement of copyright protection.

Petrella v. Metro-Goldwyn-Mayer, Inc., 695 F.3d 946 (9th Cir. 2012), cert. granted, 134 S. Ct 50 (2013) (laches as a defense to damages incurred for the three-year period before suit is filed). The Copyright Act has a three-year statute of limitations, 17 U.S.C. 507(b). The Ninth Circuit found claims based on the 1980 film “Raging Bull” barred by laches. The other circuits are less receptive to this defense. AFFIRMED. DAMAGES AND INJUNCTIVE RELIEF ARE BOTH UNAVAILABLE FOR THE CONTINUING TORT ON THE FACTS PRESENTED. This case was argued Jan. 21.

American Broadcasting Companies, Inc. v. Aereo, Inc., 712 F.3d 676 (2nd Cir. 2013), cert. granted, 134 S. Ct. 896 (2014) (streaming a broadcasted video over the Internet so paid subscribers each subscriber receive transmission of a separate copy). The Second Circuit found no infringement of the public performance right. Both parties asked for review. Even the winner below wants to avoid the possibility of inconsistent decisions in other circuits. REVERSED. THE COURT WILL CONCLUDE CONGRESS DID NOT INTEND TO PERMIT THE “RUBE GOLDBERG” DESIGN ADOPTED TO AVOID INFRINGEMENT. STREAMING AND RECORDING ON DEMAND IS A PUBLIC PERFORMANCE. CONGRESS COULD AMEND THE STATUTE IF IT DISAGREES WITH THE COURT (WE ARE NOT ARROGANT ENOUGH TO TRY TO PREDICT CONGRESS — BE SERIOUS). Watch for oral argument April 22.

Trademark. Both cases involve false advertising under the Lanham Act.

POM Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170 (9th Cir. 2012), cert. granted, 134 S. Ct. 895 (2014) (false advertising claims involving the labeling requirements of the Food Drug and Cosmetics Act). The Ninth Circuit found preemption. AFFIRMED. Watch for oral argument April 21.

Lexmark Int’l Inc. v. Static Control Components, Inc., 697 F.3d 387 (6th Cir. 2012), cert. granted, 133 S. Ct. 2766 (2013) (the test for standing to maintain a false advertising claim). The Ninth Circuit requires the plaintiff to be an actual competitor. Other circuits require antitrust standing. The Sixth Circuit and Second Circuit allow the plaintiff to sue if it has a “reasonable interest” in the case. AFFIRMED. THE COURT WILL ADOPT THE REASONABLE INTEREST STANDARD. This case was argued Dec. 3.

Only two of the nine remaining cases reversed. Not a smart bet? “Never tell me the odds.”[12]

Ray K. Harris practices in the area of commercial litigation, including trade secret, trademark, trade dress, computer software copyright, and other intellectual property protection matters. His representation of aerospace clients has included enforcement of patent and trade secret rights and licensing provisions related to IP. Reach Mr. Harris at rharris@fclaw.com.

Thomas A. Dougherty is a registered patent attorney who practices in all areas of intellectual property, and federal appeals. His practice includes international and domestic patent and trademark prosecution; inter partes reexaminations; portfolio management; freedom to operate, medical devices, general counsel services, M&A, and counseling for various clients and technologies. Reach Mr. Dougherty at tdougherty@fclaw.com

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

 


[1] Eli Lilly & Co. v. Medtronic Inc., 496 U.S. 661 (1990); Cardinal Chemical Co. v. Morton, 508 U.S. 150 (1993); Asgrow Seed Co. v. Winterboer, 513 U.S. 179 (1995); Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996); Warner-Jenkinson Co, Inc. v. Hilton Davis Chemical Co., 520 U.S. 17 (1997); Pfaff v. Wells Electronics Inc., 525 U.S. 55 (1998); and Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999). See also Dickinson v. Zurko, 527 U.S. 150 (1999) (administrative burden of proof).

[2] Stewart v. Abend, 495 U.S. 207 (1990), Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991); Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994); Campbell v. Acuff-Rose Music Inc., 510 U.S. 569 (1994); Feltner v. Columbia Pictures, 523 U.S. 340 (1998); and Quality King Distributors Inc. v. L’anza Research Int’l Inc., 532 U.S. 135 (1998). See also Lotus Dev. Corp. v. Borland Int’l Inc., 116 S. Ct 804 (1996) (aff’d by an equally divided court); Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (1993) (copyright claim was immune from antitrust liability).

[3] Two Pesos v. Taco Cabana, Inc., 505 U.S. 763 (1992); Qualitex v. Jacobson Products Co., Inc., 514 U.S. 159 (1995) and College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, 527 U.S. 666 (1999).

[4] JEM Ag. Supply Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S. 124 (2001) (patent alternative to plant variety protection act); Festo Corp. v. Shoketsu Kinzoku Kogyo Kubushiki Co., Ltd., 535 U.S. 722 (2002); Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S. 826 (2002); Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005); Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U.S. 28 (2006) (rule of reason antitrust analysis); eBay Inc. v. Merc-Exchange, LLC, 547 U.S. 388 (2006); MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007); KSR v. Teleflex, Inc., 550 U.S. 398 (2007); Microsoft Corp. v. AT&T Corp, Int’l Co., 550 U.S. 437 (2007); and Quanta Computer Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008).

[5] New York Times Co, Inc. v. Tasini, 533 U.S.483 (2001); Eldred v. Ashcroft, 537 U.S. 186 (2003); and Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005).

[6] Wal-Mart Stores, Inc. v. Samara Bros., Inc. Co., 529 U.S. 205 (2000); TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001); Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003); Dastar Corp. v. 20th Century Fox Film Corp., 539 U.S. 23 (2003); and KP Permanent Make-Up Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004).

[7] Bilski v. Kappos, 130 S. Ct. 3218 (2010); Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011); Bd of Trustees of Leland Stanford Jr. Univ. v. Roche Molecular Systems, Inc., 131 S. Ct. 2186 (2011); Microsoft Corp. v. i4i Ltd. Partnership., 131 S. Ct. 2238 (2011); and Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012). See also Kappos v. Hyatt, 132 U.S. 1690 (2012) (admissible evidence in administrative proceedings).

[8] Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010), and Golan v. Holder, 132 S. Ct. 873 (2012). See also Costco Wholesale Corp. v. Omega S.A., 131 S. Ct. 565 (2010) (aff’d by an equally divided court).

[9] Bowman v. Monsanto Co., 133 S. Ct. 1761 (2013); Gunn v. Minton, 133 S. Ct. 1059 (2013) (patent-related jurisdiction); Association for Molecular Pathology v. Myriad Genetics, 133 S. Ct. 2107 (2013); and FTC v. Actavis, Inc., 133 S. Ct. 2223 (2013) (reverse payment patent license antitrust analysis).

[10] Kirtsaeng v. John Wiley & Sons, 133 S. Ct. 1351 (2013).

[11] Already LLC v. Nike Inc., 133 S. Ct. 721 (2013).

[12] Han Solo to C-3PO, Star Wars: The Empire Strikes Back (1980).

Tenth Circuit: In Trademark Infringement Case, Brand Name Not Likely to Cause Confusion with Senior User’s Trademark

The Tenth Circuit Court of Appeals published its opinion in Water Pik v. Med-Systems on Monday, August 12, 2013.

The parties to this trademark dispute make consumer products for rinsing sinus cavities. Med-Systems, Inc., the earlier entrant in this market, sells its products under the federally registered trademark SinuCleanse. Water Pik, Inc., registered the trademark SIN– USENSE with the intention of selling sinus-irrigation devices under the brand name “SinuSense.” It brought an action against Med-Systems seeking a declaratory judgment that its use of the SinuSense brand name did not infringe on any of Med-Systems’ marks. Med-Systems counterclaimed for trademark infringement and unfair competition under the Lanham Act. Ruling that the SinuSense brand was not likely to cause consumer confusion, the district court awarded summary judgment to Water Pik on the counterclaims. Med-Systems appealed.

Section 32 of the Act allows the owner of a registered mark to bring an infringement action against any person who:

use[s] in commerce any reproduction, counterfeit, copy, or colorable
imitation of a registered mark in connection with the sale, offering
for sale, distribution, or advertising of any goods or services on or in
connection with which such use is likely to cause confusion, or to cause
mistake, or to deceive . . . .

15 U.S.C. § 1114(1)(a). And § 43(a) of the Act provides:

Any person who, on or in connection with any goods or services, or
any container for goods, uses in commerce any word, term, name,
symbol, or device, or any combination thereof, or any false designation
of origin, false or misleading description of fact, or false or misleading
representation of fact, which . . . is likely to cause confusion, or to cause
mistake, or to deceive as to the affiliation, connection, or association of
such person with another person, or as to the origin, sponsorship, or
approval of his or her goods, services, or commercial activities by another
person . . . shall be liable in a civil action by any person who believes that
he or she is or is likely to be damaged by such act.

Id. § 1125(a).

The central inquiry is whether the junior user’s mark (Water Pik) is likely to cause confusion with the senior user’s mark (Med-System). In evaluating whether there is a likelihood of confusion, the Tenth Circuit examined six non-exhaustive factors: (1) evidence of actual confusion; (2) the strength of the contesting mark; (3) the degree of similarity between the competing marks; (4) the intent of the alleged infringer in adopting the contested mark; (5) the degree of care that consumers are likely to exercise in purchasing the parties’ products; and (6) the similarity of the parties’ products and the manner in which they market them. See Vail Assocs., Inc. v. Vend–Tel–Co., Ltd., 516 F.3d 853, 863 (10th Cir. 2008).

First, Med-System’s survey strongly suggested an insignificant likelihood of actual confusion, and the other instances cited by Med-Systems were isolated episodes with minimal probative value on whether reasonable consumers as a whole were actually confused by Water Pik’s trademark. Second, the court held the SinuCleanse mark was a weak one, so the differences between it and Water Pik’s mark made confusion highly unlikely. Third, considering the marks as a whole as they are encountered by consumers in the marketplace, the court did not find enough distinction between the marks to cause confusion, although the court granted that “SinuCleanse” and “SinuSense” had several visual similarities. Fourth, the evidence supported the district court’s conclusion that the SinuSense name arose not from an intent to confuse consumers by copying SinuCleanse, but from a thorough process to create a trademark. Fifth, Med-Systems did not dispute Water Pik’s contention that consumers are likely to be more discriminating than usual when they purchase healthcare products. Finally, evidence in the district court established that Water Pik’s sinus irrigation products were very similar to Med-Systems’ and were marketed through nearly identical channels. This last factor favored Med-Systems.

Since the court’s analysis showed that only the last factor favored Med-Systems, the Tenth Circuit AFFIRMED the district court’s grant of summary judgment in favor of Water Pik.

Tenth Circuit: Ruling That Advertiser Violated Lanham Act Reversed in Part and Affirmed in Part After Its Use of Internet Keywords That Resembled a Competitor’s Service Mark

The Tenth Circuit Court of Appeals published its opinion in 1-800 CONTACTS v. Lens.com on Tuesday, July 16, 2013.

The Lanham Act prohibits the infringement of trademarks (used to identify products) and service marks (used to identify services). It was enacted in 1946, but it can be applied to technologies unimagined at the time of enactment. The Internet has created a number of challenging issues. This case concerned Internet search engines, which present advertisers with new means of targeting prospective customers and therefore new possibilities for claims under the Lanham Act. This dispute arose out of advertising through AdWords, a program offered by the search engine Google. An advertiser using AdWords pays Google to feature one of its ads onscreen whenever a designated term, known as a keyword, is used in a Google search. The Tenth Circuit had to resolve whether the Lanham Act was violated by an advertiser’s use of keywords that resembled a competitor’s service mark.

Plaintiff 1-800 Contacts, Inc. (1-800) dominates the retail market for replacement contact lenses. It owns the federally registered service mark 1800CONTACTS. Defendant Lens.com, Inc. is one of 1-800’s  competitors. To police the use of its mark, 1-800 enters different variations of the mark into Google searches and monitors what search results are displayed. When 1-800 found that several searches generated paid ads for Lens.com’s websites, it concluded that Lens.com had reserved the mark as a keyword. After attempting to resolve the situation informally, 1-800 sued Lens.com for service-mark infringement. Its primary claim was that Lens.com itself had infringed the 1800CONTACTS mark by purchasing keywords resembling the mark. As the case progressed, 1-800 supplemented its claim by alleging that third-party marketers hired by Lens.com, known as affiliates, had also purchased keywords resembling the mark and that at least one affiliate was using the mark in the text of its online ads. 1-800 sought to hold Lens.com secondarily liable for its affiliates’ conduct. The theories of secondary liability were common-law agency and contributory infringement. The district court awarded summary judgment to Lens.com on all claims. 1-800 appealed.

To the extent that the district court based summary judgment on the ground that no likelihood of confusion existed, the Tenth Circuit affirmed. Rational analysis and actual marketplace data revealed that the keyword use by Lens.com and its affiliates was highly unlikely to divert consumers. As for the remaining secondary-liability claims, the Court affirmed the denial of liability under agency law because the affiliates, even if agents of Lens.com, lacked authority to include 1-800’s mark in ads for Lens.com. But the Tenth Circuit reversed the denial of liability for contributory infringement because the evidence could support a reasonable finding that Lens.com did not take reasonable steps to halt the display of 1-800’s marks in affiliate ads once it learned of such display.