D. Mass. Notes Split Re Whether Purchasing a Sponsored Link Associated with Another's Trademark Constitutes Lanham Act Trademark Use

Per Boston Duck Tours, LP v. Super Duck Tours, LLC, --- F.Supp.2d ----, 2007 WL 4465464 (D. Mass. Dec. 05, 2007):

The question of whether purchasing a sponsored link associated with a plaintiff's trademark constitutes Lanham Act trademark use has not been addressed in this circuit. Courts elsewhere have split on the issue. In the Southern and Eastern Districts of New York, purchasing sponsored links has been found not to be Lanham Act use. Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 425 F.Supp.2d 402 (S.D.N.Y.2006) (dismissing trademark-violation claim based on sponsored linking); Site Pro-1, Inc. v. Better Metal, LLC, 506 F.Supp.2d 123 (E.D.N.Y.2007) (same); Fragrancenet.com, Inc. v. FragranceX.com, Inc., 493 F.Supp.2d 545 (E.D.N.Y.2007) (denying as futile plaintiff's motion for leave to amend complaint to include a count alleging trademark infringement by sponsored linking).

Those decisions are consistent with the holding of the Second Circuit Court of Appeals that other forms of internal use of a trademark in website operation are not “use” in that sense. 1-800 Contacts, Inc. v. WhenU.Com, Inc., 414 F.3d 400 (2d Cir.2005) (reversing trial court's grant of a preliminary injunction against use of plaintiff's mark to trigger pop-up advertising). The reasoning emphasizes the fact that the use of the trademark is entirely internal: the customer sees only the defendant's advertisement, which makes no mention or other use of the trademarked phrase. That “internal utilization”, the Second Circuit concludes, “is analogous to an individual's private thoughts about a trademark.” 414 F.3d at 409.

The Eastern District of Pennsylvania, the District of New Jersey and the Eastern District of Virginia, however, have found to the contrary. J.G. Wentworth, S.S.C. Ltd. P'ship v. Settlement Funding LLC, 2007 WL 30115 (ED Pa.2007) (finding trademark use in sponsored linking but allowing defendant's motion to dismiss on other grounds); Buying for the Home, LLC v. Humble Abode, LLC, 459 F.Supp.2d 310 (D.N.J.2006) (denying defendant's motion for summary judgment on plaintiff's trademark infringement claim based on sponsored linking); Gov't Employees Ins. Co. v. Google, Inc., 330 F.Supp.2d 700 (E.D.Va.2004) (same). The Ninth and Tenth Circuit Courts of Appeals have also held, contrary to the Second Circuit, that similar internal uses of a plaintiff's mark are “use” under the Lanham Act. Playboy Enters., Inc. v. Netscape Commc'ns Corp., 354 F.3d 1020 (9th Cir.2004) (reversing trial court's allowance of summary judgment in favor of defendant who allegedly used plaintiff's mark to trigger pop-up advertisements); Australian Gold Inc. v. Hatfield, 436 F.3d 1228 (10th Cir.2006) (same). The reasoning applied in those cases is that “the mark was used to provide a computer user with direct access (i.e. a link) to defendant's website.” Buying for the Home, 459 F.Supp.2d at 323.

In short, the emerging view outside of the Second Circuit is in accord with the plain language of the statute. Because sponsored linking necessarily entails the “use” of the plaintiff's mark as part of a mechanism of advertising, it is “use” for Lanham Act purposes.