As far as I know this seem to be the first win over trademark issue in google adwords PPC advertising programme, A company named Storus sued Aroa for using their trademark in online advertising campaign.

DOcument says

"1. Aroaa. Undisputed Facts4Aroa sells “money clip products” under the mark Steinhausen, (see Andara Decl.,filed December 28, 2007, Ex. E at 59), on the website steinhausenonline.com, (see id.Ex. G). From 1998 to January 2001, Aroa also sold, pursuant to an agreement with Storus,Storus’ Smart Money Clip. (See Kaminski Decl. ¶¶ 7-8.)Google Inc., an internet search engine, operates an advertising program titled“AdWords,” under which an account holder can “create ads and choose keywords.” (SeeChoi Decl., filed December 28, 2007, ¶ 4.) Under this program, “[w]hen people search onGoogle using one of the account holder’s keywords, the account holder’s ad may appearnext to the search results, and people can then click on the account holder’s ad.” (See id.)Aroa, an AdWords account holder, chose various keywords for inclusion in the program,including “smart money clip,” and provided Google with an ad to be generated when a usersearched using any of the chosen keywords. (See id. Ex. B at 3, 5.) In particular, underthe AdWords program, if a consumer searched on Google for the phrase “smart money//Case 3:06-cv-02454-MMC Document 212 Filed 02/15/2008 Page 6 of 12
5Storus asserts, and defendants do not dispute, that defendants stopped using“smart money clip” as a keyword in the AdWorks program at some point after the instantaction was filed. Consistent with Storus’ assertion, documents produced by Google, in theinstant action, refer to the “status” of Aroa’s keyword “smart money clip” as “paused,” asopposed to “active.” (See Choi Decl. Ex. G at 5.)7clip,” the following Aroa ad may appear on the results page:Smart Money Cliphttp://www.steinhausenonline Elegant Steinhausen accessories. Perfect to add toany collection.(See Andara Decl. Ex. G.)5 The “Smart Money Clip” portion of the ad is underlined and setforth in a larger font than that used in the rest of the text in the ad. (See id.)During the period from November 13, 2006 to October 12, 2007, the aboveadvertisement was displayed 36,164 times in response to a search for “smart money clip,”and such displays resulted in 1,374 “clicks,” i.e., the consumer “clicked on [Aroa’s] ad afterviewing the page where it was displayed.” (See Choi Decl. ¶ 5, Ex. B at 4-5; Andara Decl.Ex. E. at STOR00673-74.)b. AnalysisIn light of the above undisputed facts, the Court finds Aroa used a mark identical toStorus’ mark with respect to the same type of product, a money clip, and that both Storusand Aroa marketed their respective money clip products over the internet. Defendants’argument, that the first of the “factors of the internet trilogy,” similarity of the marks,nevertheless weighs in Aroa’s favor, is unpersuasive. Although, as defendants point out,Aroa’s Google ad includes a reference to Aroa’s mark “Steinhausen,” the subject ad, asnoted, begins with a mark identical to Storus’ mark, underlined, and in a font size largerthan that used for any other text in the ad. Defendants appear to argue that consumerswould know Steinhausen is the mark of a company different from that of the companyowning the Smart Money Clip mark, and, thus, if consumers proceed to Aroa’s site, theconsumers would not be confused as to the source. Defendants offer no evidence,however, to support such a finding. Moreover, even if such evidence had been offered,defendants’ argument would be unavailing. As noted, under the “initial interest confusion”Case 3:06-cv-02454-MMC Document 212 Filed 02/15/2008 Page 7 of 121
6Defendants rely on the concurring opinion in Playboy Enterprises, Inc. v. NetscapeCommunications Corp., 354 F. 3d 1020 (9th Cir. 2004), in which Judge Berzon expressedconcern that Brookfield was “wrongly decided” and “may one day, if not now, need toreconsidered en banc.” See id. at 1035. Nevertheless, this Court is bound by Brookfield.Moreover, Judge Berzon’s concern pertained to application of the holding in Brookfield to adefendant who, having used the plaintiff’s mark as a keyword, causes consumers to viewan internet ad “clearly labeled” as an ad for the defendant. See id. This concern isinapplicable to the instant matter; Aroa’s advertisement is not “clearly labeled” as an ad forAroa, given that the largest words in the advertisement consist of a mark identical toStorus’ mark.8theory of trademark liability, “source confusion” need not occur; rather, in the internetcontext, the wrongful act is the defendant’s use of the plaintiff’s mark to “divert” consumersto a website that “consumers know” is not Storus’ website. See Brookfield, 174 F. 3d at1062.6Accordingly, the Court finds no triable issue of fact exists with respect to any of thethree “factors of the internet trilogy,” each of which weighs in favor of Storus. SeePerfumebay.com, 506 F. 3d at 1174. Consequently, the burden shifts to defendants tooffer evidence to support a finding that the remaining factors “weigh strongly against alikelihood of confusion.” See id. at 1174-75.In that regard, defendants offer no evidence to show a lack of actual initial interestconfusion. The only evidence relevant to this factor is offered by Storus, specifically,undisputed evidence that during the period from November 13, 2006 to October 12, 2007,when Aroa’s ad appeared thousands of times in response to searches for “smart moneyclip,” such ad generated 1,374 “clicks.” (See Choi Decl. ¶ 5, Ex. B at 4-5; Andara Decl. Ex.E. at STOR00673-74.) In other words, on 1,374 occasions, consumers who weresearching for a website by using Storus’ mark were, in fact, “diverted” to an Aroa websiteselling money clips that compete with Storus’ money clips. Such diversion constitutes the“initial interest confusion” prohibited by the Lanham Act. See Brookfield, 174 F. 3d at 1062,1065.Defendants offer no evidence as to their intent in selecting Storus’ mark as akeyword in Google’s AdWords program. Again, the only evidence relevant to such factor isoffered by Storus, specifically, evidence that Aroa, before it began using “smart money clip”Case 3:06-cv-02454-MMC Document 212 Filed 02/15/2008 Page 8 of 12
7The Court makes the same finding irrespective of whether the Court employs aburden-shifting approach as set forth in Interstellar Starship and Perfumebay.com, orconsiders each factor without burden-shifting. See, e.g., Playboy Enterprises, 354 F. 3d at1026-29. As discussed above, the only evidence offered with respect to five of theSleekcraft factors is undisputed and each such factor weighs in favor of Storus; defendantsconcede a sixth factor weighs in favor of Storus; a seventh factor is of little importance; andthe eighth factor is irrelevant.9as a keyword in Google’s AdWords program, had actual knowledge that Storus used themark “Smart Money Clip” to market money clips. (See Kaminski Decl. ¶ 7.)With respect to the strength of the Smart Money Clip mark, defendants rely on theirargument that Storus’ mark is descriptive and, consequently, weak. “Whether the mark isweak or not is of little importance,” however, “where the conflicting mark is identical and thegoods are closely related,” see Brookfield, 174 F. 3d at 1059 (internal quotation and citationomitted), which is precisely the situation presented herein.Defendants concede the “degree of consumer care” favors Storus, because“consumer care for inexpensive products is expected to be quite low.” (See Defs.’ Opp. at14:25-27.) The remaining factor, “likelihood of expansion,” is, in the instant case,“irrelevant” because the goods sold by the plaintiff and the defendant are “related.” SeePlayboy Enterprises, 354 F. 3d at 1029.In sum, there is no triable issue with respect to any of the three “factors of theinternet trilogy,” and defendants have failed, on behalf of Aroa, to make any showing, letalone the requisite “strong” showing, that the remaining factors weigh against a finding of alikelihood of confusion. Under the circumstances, the Court finds Storus has shown nomaterial issue exists as to a likelihood of confusion by reason of Aroa’s having usedGoogle’s AdWords program in the above-described manner.72. Skymalla. Undisputed FactsSkymall sells products to consumers through its website, http://www.skymall. (SeeAndara Decl. Ex. M, last page, unnumbered.) The products sold thereon include “apparel,business accessories, computer products, electronic equipment, automobile accessories,Case 3:06-cv-02454-MMC Document 212 Filed 02/15/2008 Page 9 of 12
8Watte’s deposition was taken September 19, 2007. She also testified that “thesearch functionality [of Skymall’s search engine] has been enhanced so that [customerservice employees] can locate products easier.” (See id. Ex. N at 20:4-8.)10gift items, collectable items, housewares, home-furnishings, personal-hygiene products,health-care products, fitness products, food items, pet accessories, travel accessories,seasonal items, gift-certificates and other general merchandise.” (See Schewe Decl., filedJanuary 11, 2008, Ex. 2 at 8.) Skymall’s website has a search engine that consumers canuse to search the Skymall website. (See Andara Decl. Ex. M at 93:21-23.) Among theproducts Skymall has sold are “Gadget Universe” money clips supplied by Aroa. (See id.Ex. L at 13:3-14, 54:12-15, 84:11-19; Ex. M, last unnumbered page.) On July 14, 2005,Skymall, on its website, offered for sale a Gadget Universe money clip; the description ofsaid product included, in two places, the phrase “smart money clip.” (See id. Ex. M at91:21-92:10.)b. Other EvidenceAt his deposition, Skymall’s Chief Financial Officer, Dick Larson (“Larson”), wasasked whether, if a consumer used Skymall’s search engine to search for the term “SmartMoney Clip,” a webpage showing one of Aroa’s money clips would come up; Larsonresponded, “I would expect [Aroa’s] product to come up.” (See id. Ex. M at 94:10-12.) Ather deposition, Skymall’s Customer Service Manager, Jeanette Watte (“Watte”), wasasked, “[I]f you typed in ‘Smart Money Clip,’ do you believe that based on that searchengine it would bring you [Aroa’s] product”; Watte responded, “Today it would, probably.”(See id. Ex. N at 19:23-20:2.)8c. AnalysisWith respect to Skymall, Storus’ theory of liability is that if a consumer enters thephrase “smart money clip” in Skymall’s search engine, the consumer would be directed to apage, in what is essentially an electronic catalog, on which Skymall offers for sale an Aroamoney clip and on which the words “smart money clip” appear in conjunction with suchoffer. Put another way, its is Storus’ theory that when a consumer asks if Skymall offers aCase 3:06-cv-02454-MMC Document 212 Filed 02/15/2008 Page 10 of 12
9A defendant can only be liable for trademark infringement if it engages in anunconsented “use” of another’s mark. See 15 U.S.C. § 1114(1). Such “use,” in a claim ofthe type alleged against Skymall, could be proved, e.g., by evidence showing the defendantdirects a consumer who searches for “smart money clip” to a webpage on which it offers acompeting money clip, and where that page contains the phrase “smart money clip,” eitherexpressly stated thereon or in a metatag. Here, Storus offers no evidence as to howSkymall’s search engine works; specifically, Storus offers no evidence, or even argues, thatSkymall’s search engine directs a searching consumer to its pages based on metatagsfound on those pages, or by some similar mechanism not visible to the consumer by whichSkymall itself makes “use” of the mark “smart money clip.” Consequently, based on therecord before the Court, Storus can only establish the requisite “use” if it proves Skymall’ssearch engine directs a consumer searching for “smart money clip” to a page in its catalogthat expressly contains the phrase “smart money clip.”11“Smart Money Clip,” Skymall answers, “yes,” and directs the consumer to a page offeringan Aroa money clip. Relying on a claim of initial interest confusion under Brookfield andthe above-described deposition testimony offered by Larson and Watte, Storus arguessuch theory can be established as a matter of law. The Court disagrees.Although Skymall conceded having, on July 14, 2005, a webpage containing thephrase “smart money clip” in a description of an Aroa money clip, Skymall has notconceded that, at that time, a consumer who entered “smart money clip” in the Skymallsearch engine would have been directed to that particular page. All that Skymall conceded,in the above-referenced deposition testimony, is that at present or, at best, at someunspecified time, if a consumer were to enter “smart money clip” in Skymall’s searchengine, the consumer would likely be directed to a webpage depicting an Aroa product.9Critically, Storus points to no concession by Skymall that such a consumer would bedirected to a page containing the phrase “smart money clip,” let alone to a page identical tothat found on Skymall’s website on July 14, 2005. Indeed, it appears, from the limitedevidence submitted, that a page offering an Aroa money clip will appear as a search resultsolely because the consumer searches using the phrase “money clip,” irrespective ofwhether the consumer adds the word “smart” to the search term and irrespective ofwhether the page contains the word “smart.” (See id. Ex. M at 93:18-94:9.) Put anotherway, although the evidence is undisputed that, in July 2005, Skymall’s catalog contained awebpage that included the words “smart money clip,” the record reflects no evidence, or atCase 3:06-cv-02454-MMC Document 212 Filed 02/15/2008 Page 11 of 12
best a triable issue, with respect to whether, at that time, Skymall had a search engine thatwould direct consumers to that page if they were to enter the term “smart money clip.”Conversely, although there is evidence that, at the present time, Skymall’s search enginewould direct such consumers to a page advertising an Aroa money clip, there is noevidence that, at this time, any such page contains the words “smart money clip.” In sum,the inquiry of Larson and Watte at their respective depositions is too imprecise to support,as a matter of law, the inference Storus seeks to draw.Accordingly, the Court finds Storus has failed to show no material issue of fact existsas to a likelihood of initial interest confusion based on Skymall’s search engine.CONCLUSIONFor the reasons stated above, Storus’ motion for partial summary judgment oftrademark infringement is hereby GRANTED in part and DENIED in part, as follows:1. The motion is GRANTED and Storus shall have judgment in its favor as againstAroa on the issue of trademark infringement, specifically, that Aroa’s use of Storus’ mark inconnection with Google AdWords is infringing.2. In all other respects, the motion is DENIED.IT IS SO ORDERED?"

pub.bna.com/eclr/06cv2454_021508.pdf

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