A review of the Rescuecom case: AdWords trademark infringement suit dismissed

Plaintiff Rescuecom, a computer services business, filed suit against Google, claiming that the search engine infringed its trademark by suggesting and selling the registered mark RESCUECOM as a keyword to competitors advertising through Google’s AdWords program. Google moved to dismiss for failure to state a claim, arguing that Rescuecom had not adequately alleged that Google’s sale of the keyword and triggering of ads was an actionable trademark use under the Lanham Act, 15 U.S.C. 1051 et seq.

The court agreed with Google and dismissed the case.

The court first looked to the Lanham Act for the elements of a trademark infringement claim. Under the Act, infringement occurs when (1) a defendant uses a plaintiff’s valid and protectible mark in commerce, without the plaintiff’s consent, in connection with the sale or advertising of goods or services, and (2) that use is likely to cause confusion as to the source of those goods or services.

The court observed that the Second Circuit has not decided whether the sale of a trademarked keyword for advertising purposes constitutes trademark infringement. It noted, however, eight recent decisions indicating a split among district courts over the issue of trademark use in the sponsored listing context.

Rescuecom offered four arguments as to why Google’s suggestion and sale of RESCUECOM as a keyword was trademark “use” under the Lanham Act. First, Google was free-riding on the good will associated with the trademark. Second, Google lured searchers away from the Rescuecom website. Third, the keyword’s use by competitors altered search results, causing confusion. Fourth, Google used “Rescuecom” internally as a keyword to trigger competitor’s advertisements.

The court addressed Rescuecom’s good will argument first, and found that Rescuecom’s allegations could not support improper trademark use by Google. Although the allegation of use of the mark “in commerce” could be supported, the court gave a nod to the decisions in 1-800 Contacts v. WhenU, 414 F.3d 400 (2d Cir. 2005) and Merck v. Mediplan Health Consulting, 425 F.Supp.2d 402 (S.D.N.Y. 2006) to hold the subtle point that commercial use is not the same as “use in commerce” for trademark purposes. In the absence of an allegation of an improper trademark use, there could be no violation of the Lanham Act.

In addressing Rescuecom’s next argument – that Google lured searchers away from Rescuecom’s website – the court rejected the faulty premise that a trademark use occurs when a searcher clicks a sponsored link triggered by “Rescuecom” but the user is not led to the Rescuecom site. Critical to the court’s analysis in rejecting this argument was that Rescuecom had not alleged that any of the sponsored links, besides those leading to Rescuecom’s own site, displayed the RESCUECOM mark.

The court also rejected Rescuecom’s next argument, that Google caused confusion via altered search results. Similar to its analysis for the previous argument, the court found that because searchers could still find Rescuecom’s website in the search results, and because none of the sponsored links displayed Rescuecom’s trademark, there was no infringing use by Google.

Rescuecom’s final argument, namely, that Google’s internal use of the mark to trigger ads was infringing also failed. Where Google did not place the RESCUECOM mark on any “goods, containers, displays, or advertisements” and where Google’s “use” of the mark was not visible to the public, there was no cognizable trademark use under the Lanham Act.

Because Rescuecom had not adequately alleged that Google’s actions constituted a trademark “use,” the court dismissed the federal trademark infringement, false designation of origin and dilution claims. The court refused to exercise supplemental jurisdiction over the remaining state law claims.

Rescuecom Corp. v. Google, Inc., 2006 WL 2811711 (N.D.N.Y., Sept. 28, 2006).