Network Automation, Inc. v. Advanced Systems Concepts 638 F.3d 1137 (9th Cir. 2010)
Some more direction on keyword cases. Both companies sell directly competing software programs. Network Automation used Advanced System’s registered trademark as a keyword for sponsored link advertisements for its own product. The trial court applied the internet “troika” factors from Brookfield Communications v. West Coast Entertainment (174 F.3d 1036) and issued a preliminary injunction based on success on the merits. The Court of Appeals reversed- holding that considering the troika factors alone is not sufficient for a keywords case.
“In determining the proper inquiry for [keyword] infringement claim, we adhere to two long stated principles: the Sleekcraft factors (1) are non-exhaustive, and (2) should be applied flexibly, particularly in the context of internet commerce. Finally, because the sine qua non of trademark infringement is consumer confusion, when we examine initial interest confusion, the owner of the mark must demonstrate likely confusion, not mere diversion.”
The court offered an apt brick & mortar analogy of a customer who enters Macy’s looking for clothing by Calvin Klein. Just because the customer is diverted by a Charter Club display before reaching the Calvin Klein section does not mean there is initial interest confusion (or confusion at all).
Because the trial court relied solely on the internet “troika” and not all relevant sleekcraft factors, it abused its discretion in issuing the preliminary injunction. The case was remanded to consider the other factors.