As of today, Google can no longer sell keywords and use the Rescuecom decision as a shield against trademark violation claims. According to the Second Circuit Court of Appeals in an opinion issued today in the case of Rescuecom Corp v. Google, Inc., the lower court misunderstood the Appeals Court’s holding in 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400(2d Cir. 2005) in using that opinion to find that the plaintiff, Rescuecom Corp, failed to allege that Google’s use of the plaintiff’s trademark was a “use in commerce” within the meaning of the Lanham Act. The lower court had dismissed Rescuecom’s case on these grounds, thus giving Google assurance that its sale of keywords could not be a trademark violation because it failed to meet the threshold test of “use in commerce”. The lower court based its holding on the fact that the trademark was never actually displayed in the advertisements triggered by the keyword program. (Without establishing “use in commerce” there can be no trademark violation under the Lanham Act.) This lower court decision had obviously upset many trademark holders, whose valuable trademarks are being sold as Google keywords to anyone willing to pay Google for their use.
In today’s opinion, the Appeals Court explained why the Rescuecom case is different from the 1-800 case. Namely, the Court explained and held that Google’s recommending and selling trademarks to others falls squarely within the Lanham Act’s definition of “use in commerce.” As long as there is a use in commerce, a court can properly examine a trademark infringement case on its merits to determine whether such use constitutes an infringement under the Lanham Act. While expressing no opinion as to whether a trademark violation actually occurred in the Rescuecom case, the Appeals Court reversed the lower court’s dismissal of the case and remanded it back to the lower court. Essentially, today’s decision makes it easier for trademark holders to file trademark infringement claims against Google for selling keywords that potentially infringe their trademarks.
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