Internet Law

9th Circuit: Savvy Online Software Shoppers Not Misled by Rival’s Use of Trademarked Keywords

A federal appeals court has found that consumers were not likely to be misled by an online software advertiser that purchased a trademarked keyword of its competitor.

In its ruling yesterday, the San Francisco-based 9th U.S. Circuit Court of Appeals vacated an injunction that had barred Network Automation from buying the keyword, “ActiveBatch,” the trademarked name of a rival company’s software, according to stories by the Online Media Daily, Courthouse News Service and Network Automation’s website was listed as a sponsored link when people searched online for “ActiveBatch.”

The appeals court noted that Google and Microsoft Bing partition their sponsored ads in separately labeled sections. As a result, the sophisticated consumers searching for ActiveBatch would not be confused when they saw Network Automation’s pay-per-click ad, the court said.

“The nature of the goods and the type of consumer is highly relevant to determining the likelihood of confusion in the keyword advertising context,” the appeals court said in its March 8 opinion (PDF). “A sophisticated consumer of business software exercising a high degree of care is more likely to understand the mechanics of Internet search engines and the nature of sponsored links, whereas an un-savvy consumer exercising less care is more likely to be confused.”

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