Rescuecom Corp. v. Google Inc.

Rescuecom Corp. v. Google Inc
Court	United States Court of Appeals for the Second Circuit
Full case name	'Rescuecom Corp. v. Google Inc.
Argued	April 3 2008
Decided	April 3 2009
Citation(s)	562 F.3d 123
Case history
Prior action(s)	Rescuecom Corp. v. Google Inc., No. 5:04-CV-1055 NAM/GHL (N.D.N.Y Sep. 28, 2006) (granting Google's motion to dismiss Rescuecom's complaint on the grounds that Google did not make a trademark 'use in commerce' of Rescuecom).
Holding
Google's recommendation of the Rescuecom trademark to advertising customers constitutes a 'use in commerce' by Google. The Second Circuit's holding in 1-800 CONTACTS, INC. v. WhenU. com, Inc. does not require dismissal of Rescuecom's claims. The case is remanded to the district court.
Court membership
Judge(s) sitting	Pierre Leval, Guido Calabresi and Richard Wesley
Case opinions
Majority	Pierre Leval
Laws applied
15 U.S.C. § 1125(a), 1125(a), § 1114, § 1127

Rescuecom Corp. v. Google Inc. 562 F.3d 123 (2nd Cir. 2009), was a United States Court of Appeals for the Second Circuit case in which the court held that recommending a trademark for keyword advertising was a commercial use of the trademark, and could constitute trademark infringement. The case involved Rescuecom, a computer repair and support company, and Google, a web search and advertising company. Prior to the case's resolution, Google recommended the 'Rescuecom' trademark to businesses (including Rescuecom's competitors), that were buying keywords through Google's AdWords product.

The case was first heard by the United States District Court for the Northern District of New York in 2006. The court ruled in favor of Google and held that Google's use of the Rescuecom trademark did not constitute a "use" under the Lanham Act. As a result, Rescuecom's claims of infringement did not apply. The Second Circuit vacated this ruling in 2009, ruling that Google's actions constituted commercial use and that Rescuecom's claims could not be immediately dismissed. The case was sent back to the district court for reconsideration.

Background

Keyword advertising case law

The use of trademarks in the United States is governed by the Lanham Act (Title 15, Article 22 of the United States Code). Prior case law in the area of keyword-triggered trademark use consisted at the time of a series of cases involving WhenU (heard by district courts outside the Second Circuit), as well as 1-800 CONTACTS, INC. v. WhenU. com, Inc., a case heard by the Second Circuit appeals court. Both the district and appeals court in Rescuecom discuss these cases extensively.

The WhenU cases

Main article: 1-800 Contacts, Inc. v. WhenU.com, Inc.

WhenU, an advertising company developed a piece of advertising software called Save Now. When installed on a user's computer, Save Now would respond to a user's actions by generating pop-up advertisements. In particular, when a user browsed to a URL that WhenU possessed advertisements for, WhenU would open a window showing advertisements. Cases were filed against WhenU in 2003 by plaintiffs whose sites were found in WhenU's index. District Courts within the Sixth and Fourth Circuits ruled that WhenU's use of the plaintiff's trademarked URLs did not constitute a use of the plaintiff's trademarks because this use was restricted to the operation of WhenU's software.

The Second Circuit in 1-800 Contacts v. WhenU.com Inc. upheld the above line of reasoning, holding that usage of a trademark in an "unpublished directory of terms" and the appearance of "separate, branded ads" triggered by a trademark do not constitute "use" of the trademark as per the Lanham Act. This decision is noteworthy for discussion of Rescuecom due to stare decisis and the binding precedent established by an appellate court.

Complaint

AdWords is a system used by Google through which advertisers can purchase keywords. When a user searches for a purchased keyword, Google displays the advertiser's ad and link. Google also provides advertisers a "Keyword Suggestion Tool", a system that recommends additional keywords for an advertiser to purchase. Prior to Rescuecom litigation, Google recommended trademarks, and in particular, the Rescuecom trademark to advertisers.

Rescuecom therefore filed suit against Google on six counts: (1) that Google infringed on the Rescuecom trademark, (2) that Google's use causes "false designation of origin" 15 U.S.C. § 1125(a)(1)(A), (3) federal dilution 1125(c)(1), (4) common law trademark infringement, (5) state law dilution claim, and (6) tortious interference with economic advantage.

Procedural history

The district court drew heavily from the Second Circuit's decision in 1-800 and granted Google's motion to dismiss Rescuecom's claims. The court held that Rescuecom had "prove[d] no facts in support of its claim ... [of] trademark use". Given that a trademark "use" is required under the Lanham Act for infringement to occur, the district court dismissed Rescuecom's first three claims. The last three counts at issue were viewed by the court as issues of state law. Although the district court had jurisdiction to consider those claims under 28 U.S.C. § 1367(c)(3), it declined to exercise these claims as it had already dismissed Rescuecom's federal law claims.

Opinion of the Court

The Second Circuit vacated the district court's decision, holding that Google's use of the "Rescuecom" trademark constituted a "use in commerce" under the Lanham Act.

The court noted this case as distinct from 1-800, rejecting the argument advanced by Google and accepted by a number of district courts in the Second Circuit, that the inclusion of a trademark in an internal computer directory cannot constitute trademark use. The court proceeds to distinguish that Google had made direct use of the 'Rescuecom' trademark, whereas WhenU did not make direct use of the '1-800 Contacts' trademark (instead it displayed ads that were triggered by the plaintiff's mark):

"Google’s recommendation and sale of Rescuecom’s mark to its advertising customers are not internal uses. Furthermore, 1-800 did not imply that use of a trademark in a software program’s internal directory precludes a finding of trademark use. Rather, influenced by the fact that the defendant was not using the plaintiff’s trademark at all... If we were to adopt Google and its amici’s argument, the operators of search engines would be free to use trademarks in ways designed to deceive and cause consumer confusion. This is surely neither within the intention nor the letter of the Lanham Act."

The court further distinguished the appearance of ads in 1-800 Contacts compared to Rescuecom. In 1-800 Contacts, ads were displayed in a different window and did not affect the end-user's ability to access the plaintiff's website (note that the ads appeared in synchrony with the plaintiff's website). The court accepted Rescuecom's assertion that Google's placement of "sponsored links" above organic search results could lead to user confusion as required under Rule 12(b)(6) of the Federal Rules of Civil Procedure. As a result, Google's argument that a sponsored link is analogous to placement of a generic brand next to a trademarked brand was rejected by the court.

Subsequent developments

In March 2010, Rescuecom discontinued further proceedings against Google, filing a statement of dismissal and issuing a press release declaring victory in the case. However, Google apparently made no new concessions to Rescuecom to get it to drop the lawsuit; instead, the changes that Rescuecom claimed as victory were made by Google five years earlier.

See also

• Rosetta Stone Ltd. v. Google, Inc.
• Trademark infringement
• Lanham Act