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We spend a lot of time here at Free Enterprise discussing intellectual property--why you should register, how to protect it, and how not to infringe upon another's. This is especially true in the case of the Internet.
Luckily for businesses, the 9th Circuit is providing a bit more leeway in the field of Internet advertisement--specifically in the context of search engines.
In a clever move, Network Automation bought the keyword of its rival "ActiveBatch" from Google Adwords. Basically, this means that when a consumer searches for ActiveBatch, an advertisement and link to Network Automation appears in a separate sponsored link section. ASC filed suit alleging that this infringes upon their ActiveBatch trademark.
One of the main reasons a business registers a trademark is so customers can properly differentiate products and properly associate them with a certain level of quality. Trademark infringement law therefore is designed to protect against consumer confusion.
Besides being sectioned off, the offending ads did not actually contain any mention of ActiveBatch or ACS. The 9th Circuit felt that consumers may just be sophisticated enough to understand the difference between actual search results for ActiveBatch and related links that have been sponsored. It therefore determined that this sort of advertisement practice isn't necessarily illegal.
If the case of ActiveBatch is giving you new advertisement ideas, keep in mind that the court also didn't say that this practice is never illegal. Whether you can rightfully use a competitor's trademark as a keyword advertisement term is a determination that will require the help of a Trademark attorney. There are at least eight complicated factors that must be considered and they are all fact dependent.