Intellectual Property Law

Text of Ninth Circuit Decision: Network Automation v Advanced System (Keywords)

By Marty Schwimmer

Advanced Systems and Network Automation are head-to-head competitors for expensive ($1k to $10k) software packages. Advanced Systems owns the trademark ActiveBatch, which Network Automation purchased as a keyword on Google and Bing.

Its keyword ads:  " . . . begin with phrases such as ?Job Scheduler,? ?Intuitive JobScheduler,? or ?Batch Job Scheduling,? and end with the company?s web site address, www.NetworkAutomation.com.   The middle line reads:  ?Windows Job Scheduling + MuchMore.  Easy to Deploy, Scalable. D/L Trial."

Although Network did provide its URL in the ad, the Court later states that Network "did not clearly identify itself" (page 3250).

Advanced Systems had prevailed at the lower court, obtaining a preliminary injunction.  Network Automation appealed to the Ninth Circuit.

First time reading of the case:

1.  Ninth Circuit agrees with Second Circuit that purchase of a trademark as a keyword is use in commerce by the advertiser.

2.  If every one uses the same marketing channel (the Internet), then the identity of marketing channels between the parties is not an important Sleekcraft confusion factor. (page 3245).  Me: Maybe the Internet (or Google) isn't one marketing channel.

3.  It can no longer be assumed that consumers show a low degree of care when searching on the Internet (page 3247).  After all, they are now shopping for $10k software packages.

4.  In comparison to search engines at the time of Playboy v Netscape, search engine results are more clearly identified these days (lessening the effect of defendants who do not 'clearly identify themselves' (page 3250).

Short summary: district court made too many errors in the Sleekcraft confusion analysis to support a finding of source confusion.  The prelim was reversed.

What I think is notable about the decision is (1) the number of times that the Court noted that things are different now from the 1999 MOVIE BUFF decision (Brookfield v West Coast Entertainment, 174 F.3d 1036 (9th Cir 1999)); (2) it could have gone the Initial Interest Confusion route on this one, and didn't.

I look forward to reading reactions from folk like Prof Goldman on this one.

Decision Network Automation

Full post as published by Trademark Blog on March 08, 2011 (boomark / email).