Using Trademarks in Internet Marketing

by Mark J. Rosenberg

Many complications revolve around the use of trademarks. Is the name of the website problematic? What about the domain name? Can competitors' trademarks be used in website content, metatags or purchased keywords? In the brick and mortar world, answers to equivalent questions are relatively straight forward. When it comes to trademark use on the Internet, the law is muddled. As a result, well-intentioned website owners and Internet marketers are often tripped up by trademark issues. These pitfalls can lead to a business owner's nightmare - launching a new product or marketing campaign and, a short time later, receiving a cease and desist letter or even worse, a lawsuit for trademark infringement. Yet, by taking proactive measures, many of these pitfalls can be avoided.

USING COMPETITORS' TRADEMARKS
 
By way of background, the central issue in trademark law is the likelihood of confusion. If the use of a word, name or trademark is likely to cause confusion as to whether the user is affiliated with or authorized by a trademark owner, its use is prohibited. This does not mean that there is a blanket prohibition against using a competitor's trademark for marketing purposes. A legal concept known as "nominative fair use" permits the use of another's trademark in marketing materials provided that certain conditions are met. They are: (i) the competitor's product or service is not readily identifiable without the use of a trademark; (ii) the trademark is used only to the extent necessary to identify the competitor's product or service; and (iii) the competitor's trademark is not used in a way that would suggest that the advertiser is affiliated with or authorized by the trademark owner. In other words, if Microsoft wants to run an Internet advertisement comparing its Zune product with Apple's iPod, it does not have to refer to the iPod as "the portable musical player distributed by the electronics company named after an edible fruit that is harvested in the fall." Instead, it can refer to an iPod as "iPod" and Apple as "Apple."

Of course, there are limits. Microsoft cannot use the iPod trademark in a way that would call undue attention to that trademark, or make any statement that would cause readers of the advertisement to believe that there is a connection between Microsoft and Apple or the iPod. And, any comparison between the Zune and the iPod must be accurate.

Continuing with this example, Microsoft should be able to use "iPod" in metatags and paid keywords. That is, if Microsoft is making a legitimate comparison between a Zune and an iPod or in another context, an Internet retailer is selling a generic version of a trademarked product, Microsoft or the retailer should be able to place the trademark in a metatag or purchase the trademark as a keyword.

But this is where the law becomes hazy. Some courts have held that trademark uses that are equivalent to uses permitted in the brick and mortar world are acceptable on the Internet. If there is a legitimate reason for using a competitor's trademark in a metatag or keyword, and the standards of nominative fair use are met, the trademark can be used. But some courts have held the opposite. Apparently believing that Internet advertising is a different species than other types of advertising, these courts have held that using a competitor's trademark in a metatag or a purchased keyword is not acceptable, regardless of the good faith reasons for the use, regardless of whether Internet users see the trademark, and, in a significant departure from trademark law, even if there is little or no evidence of a likelihood of confusion. Making matters more complicated, some courts, primarily those located in New York, have held that using a competitor's trademark in Internet marketing - whether it be in a metatag, keyword or code for a pop-up ad - is permissible so long as the trademark is not visible to the Internet user.

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Just because you and your marketing consultant believe that the name of your new product or slogan is original does not mean that no one else possesses superior rights in the name or slogan. Learn how to clear your trademarks and slogans and register them at WebsiteMagazine.com. Just search for "Clear Your Trademarks."
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WEBSITE CONTENT, KEYWORDS AND METAGS
Because the law is not settled, if you plan on using a competitor's trademark, proceed with caution. Before using some one else's trademark in website content, a metatag or paid keyword, ask yourself, Why am I using a third party's trademark? If the answer is to call attention to the fact that you are offering the trademarked product or service, or the generic version of a product, the use is most likely acceptable. Or, if the answer is to call attention to a truthful comparison between your product and the trademarked product, use in website content should not be problematic, although courts have not reached a consensus on this issue with respect to paid keywords and metatags. Conversely, if the use is primarily for the purpose of receiving a search engine listing - whether organic or paid - or a more prominent listing, the use is most likely not acceptable. This holds true whether the website owner uses its competitor's exact trademark or a common misspelling. Making matters more complicated, trademark owners often prohibit their Internet distributors from purchasing keywords containing the trademark, even if this use is legally permissible. Website owners must keep in mind that while a type of trademark may be permissible, the trademark must not be used in a manner which violates the second and third prongs of the nominative fair use test. In particular, a competitor's trademark cannot be used more than necessary. This includes using a font or type size that calls undue attention to the trademark or using a trademarked design such as the script Coca-Cola logo instead of block letter form. Unless there is a legitimate reason to do so, using the competitor's trademark repeatedly in a metatag or in website content is unacceptable as is unnecessarily repeating a disclaimer containing the competitor's trademark, such as "we are authorized by or affiliated with Apple," or, as a court in Massachusetts recently held, repeatedly writing the trademark in white print on a white background. While multiple or unnecessary uses of a competitor's trademark may garner a more prominent organic search listing, they will likely place the Internet marketer at legal risk. Of course, the competitor's trademark cannot be used in website content in a manner that is likely to cause confusion.

DOMAIN NAMES
Using a third party's trademark in a domain name for a commercial website is almost always problematic. This holds true whether the domain name contains only the trademark, a misspelling of the trademark (known as typo-squatting) or the trademark combined with additional words such as isolditonebay.com. Even when the website owner is an authorized distributor of trademarked goods, the trademark owner will often object to its distributors' use of the mark in domain names.

Clearly, there are many nuances to trademark law, especially online. As for affiliates, the easiest way to avoid problems is to thoroughly read and understand the merchant's trademark policies before selling their products. If something is unclear, consult a lawyer. For those going it alone, by clearing new trademarks before they are used, asking about intent to use a third party's trademarks and considering the extent of that use, an Internet marketer should be able to stay clear of most trademark disputes.

This article is for information purposes only. It is not intended to be and should not be relied on as legal advice for any particular matter.

Mark J. Rosenberg is Of Counsel to Sills Cummis & Gross P.C.'s Intellectual Property Practice Group and is resident in the Firm's New York office. A significant part of his practice focuses on legal issues pertaining to the Internet commerce.