Are Advertising Keywords the Next Frontier in Trademarks?

A district court judge in Connecticut has denied a motion for summary judgment in part for Provide Commerce, an internet retailer of gift baskets and flowers, in a trademark lawsuit from Edible Arrangements over the use of keyword search terms matching Edible Arrangements’ protected marks.

Edible Arrangements, which sells fresh fruits shaped like floral arrangements, has been using EDIBLE ARRANGEMENTS as a trademark since 1998, and registered two marks in 2005.

Edible Arrangements then filed suit.

Like most businesses, Provide Commerce uses “keyword advertising” to promote its products. Companies bid on keywords to have their businesses appear when consumers use search terms that match them. Provide Commerce bids on thousands of keywords, including “fruit,” “edible fruit” and “fruit bouquets.” It also bids on “edible arrangements” and other associated terms like, “edible arrangements locations,” “edible arrangements coupons,” “edible arrangements promotional code,” “edible arrangements bouquet,” and “cheap edible arrangements.” It had even once used “edible arrangements” in its actual advertising slogan in online ads before Edible Arrangements sent that first cease-and-desist letter.

In order to succeed on the motion for summary judgment, Provide Commerce had to show that there were no genuine issues of material facts on the trademark infringement, trademark dilution, and cybersquatting claims.

Using what’s come to be known as the Polaroid factors, the judge determined that the strength of the Edible Arrangements mark, the similarity of the competing marks, the similarity of the competing products, and Provide Commerce’s bad faith in using the mark weighed in favor of Edible Arrangements on the question of the likelihood of confusion over the use of “edible fruit arrangement” in the ads. With regards to infringement on purchased keywords, Provide Commerce had argued that “no one court in the entire country has ever held a defendant liable for trademark infringement by finding a likelihood of confusion based solely on the defendant’s keyword bidding.” The court, however, said that it was the combination of the keyword bidding and advertising “that creates a search results page that is misleading to the consumer.” Some of the Polaroid factors were then reviewed from the perspective of a consumer using a search engine. The court found that a jury could conclude: (1) that Provide Commerce’s purchase of “edible arrangements” as a keyword could result in a likelihood of confusion by “directing consumers to a search results page in which it advertised ‘edible fruit arrangements’ in a text advertisement in which the seller is only identified in the small print of the URL,” and (2) that Provide Commerce’s purpose in purchasing the keyword was to mislead consumers. Provide Commerce’s fair use argument of using “edible” and “arrangements” for the ordinary meaning of the words failed because the judge thought a jury could conclude that that words chosen together was done in bad faith to cause consumer confusion. The court also found that there were genuine issues of material fact as to both trademark dilution by blurring and tarnishment.

The judge dismissed the cybersquatting claim against Provide Commerce. Edible Arrangements had claimed that Provide Commerce was benefitting from “typosquatting,” when misspelled versions of Edible Arrangements’ domain name led to traffic being directed to Provide Commerce’s website. The judge found that Edible Arrangements could not prove that Provide Commerce was the registrant of those domains, which is required under the Anticybersquatting Consumer Protection Act.

This case highlights one of the many ways the web has changed how consumers come across trademarks, even when they can’t see them. Depending on how this matter proceeds further, it could impact how businesses plan their keyword strategies and advertising online to avoid lawsuits.

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