Google Inc. v. American Blind & Wallpaper Factory, Inc.

Filing 234

MEMORANDUM in Support re 230 MOTION for Summary Judgment filed byGoogle Inc., Google Inc.. (Related document(s)230) (Krishnan, Ajay) (Filed on 12/26/2006)

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Google Inc. v. American Blind & Wallpaper Factory, Inc. Doc. 234 Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 1 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 KEKER & VAN NEST, LLP MICHAEL H. PAGE - #154913 MARK A. LEMLEY - #155830 KLAUS H. HAMM - #224905 AJAY S. KRISHNAN - #222476 710 Sansome Street San Francisco, CA 94111-1704 Telephone: (415) 391-5400 Facsimile: (415) 397-7188 Attorneys for Plaintiff and Counter Defendant GOOGLE INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA GOOGLE INC., a Delaware corporation, Plaintiff, v. AMERICAN BLIND & WALLPAPER FACTORY, INC., a Delaware corporation d/b/a decoratetoday.com, Inc., and DOES 1100, inclusive, Defendants. AMERICAN BLIND & WALLPAPER FACTORY, INC., a Delaware corporation d/b/a decoratetoday.com, Inc., Counter-Plaintiff, v. GOOGLE INC., Counter-Defendant. Case No. C 03-5340-JF (RS) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT Date: January 30, 2006 Time: 9 a.m. Courtroom: 3, 5th Floor Judge: Hon. Jeremy Fogel 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Dockets.Justia.com Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 2 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IV. B. C. III. I. II. TABLE OF CONTENTS Page INTRODUCTION ...............................................................................................................1 FACTS .................................................................................................................................2 A. B. C. Google's search engine. ...........................................................................................2 Google's AdWords program....................................................................................3 Google's trademark policy.......................................................................................5 ARGUMENT.......................................................................................................................6 A. ABWF's claims fail because using a trademark as a selection criterion for displaying an ad does not constitute a "use in commerce" under the Lanham Act..............................................................................................................6 1. 2. 3. Google's motion to dismiss. ........................................................................6 The trademark "use in commerce" requirement is met only if the defendant uses a trademark as a trademark...........................................7 Using a trademark as a triggering criterion for the display of advertisements is not trademark use. ...........................................................9 All of ABWF's claims fail because the only alleged mark for which it attempts to prove confusion--"American Blinds"--is not enforceable................14 ABWF's infringement and common-law claims fail, because ABWF's survey was so flawed that ABWF cannot prove either actual confusion or a likelihood of confusion. ..................................................................................18 ABWF's claims also fail because ABWF cannot prove initial interest confusion, given that ABWF's study never examined the allegedly confusing websites of its competitors. ...................................................................24 ABWF's dilution claims fail because ABWF's failure to perform a fame survey means that there is no evidence that the ABWF marks are famous....................................................................................................................26 All of ABWF's claims are barred by the doctrine of unclean hands, because ABWF engages in precisely the same conduct that it challenges...............................................................................................................31 D. E. F. CONCLUSION..................................................................................................................33 i 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 3 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) Cases 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400 (2d Cir. 2005) ....................................................................................... 8, 9, 10, 11 A.B.C. Carpet Co., Inc. v. Naeini, No. 00-CV-4884-FB, 2002 WL 100604 (E.D.N.Y. Jan. 22, 2002) ............................................................................. 27 Acad. of Motion Picture Arts and Scis. v. Network Solutions, Inc., 989 F. Supp. 1276 (C.D. Cal. 1997) ........................................................................................... 7 Anheuser-Busch Inc. v. Andy's Sportswear Inc., No. C-96-2783 TEH, 1996 WL 657219 (N.D. Cal. Aug. 28, 1996) ........................................................................... 28 Avery Dennison Corp. v. Sumpton, 189 F.3d 868 (9th Cir. 1999) .............................................................................................. 27, 28 BigStar Entertainment, Inc. v. Next Big Star, Inc., 105 F. Supp. 2d 185 (S.D.N.Y. 2000) ................................................................................ 28, 29 Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672 (9th Cir. 2005) ...................................................................................................... 7 Breuer Elec. Mfg. Co. v. Hoover Co., No. 97 C 7443, 1998 WL 427595 (N.D. Ill. Jul 23, 1998)................................................................................. 28 Commerce Nat'l Ins. Servs., Inc. v. Commerce Ins. Agency, Inc., 214 F.3d 432 (3rd Cir. 2000) .................................................................................................... 15 DaimlerChrysler AG v. Bloom, 315 F.3d 932 (8th Cir. 2003) ...................................................................................................... 8 Discovery Commons, Inc. v. Animal Planet, Inc., 172 F.Supp.2d 1282 (C.D. Cal. 2001) ...................................................................................... 26 Edina Realty, Inc. v. TheMLSonline.com, No. Civ. 04-4371 (JRT/FLN), 2006 WL 737064 (D. Minn. Mar. 20, 2006) ............................................................................ 12 Grotrian v. Steinway & Sons, 523 F.2d 1331 (2d Cir. 1975) ................................................................................................... 24 Hotmail Corp. v. Vans$ Money Pie Inc., No. C-98-20064 JW, 1998 WL 388389 (N.D. Cal. Apr. 16, 1998) ............................................................................ 28 I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27 (1st Cir. 1998)....................................................................................................... 28 Interactive Prods. Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d 687 (6th Cir. 2003) .................................................................................................. 8, 9 Karl Storz Endoscopy-America, Inc. v. Surgical Techs., Inc., 285 F.3d 848 (9th Cir. 2002) ............................................................................................ 8, 9, 14 Lamparello v. Falwell, 420 F.3d 309 (4th Cir, 2005), cert. denied, 126 S. Ct. 1772 (2006)......................................... 25 Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352 (9th Cir. 1985) (en banc) .................................................................................. 15 Lockheed Martin Corp. v. Network Solutions, Inc., 985 F.Supp. 949 (C.D. Cal. 1997) .......................................................................................... 8, 9 ii 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 4 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (cont'd) Page(s) Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, No. 1:06cv321(JCC), 2006 WL 3182468, at *7 (E.D. Va. Nov. 3, 2006) ............................... 27 M2 Software, Inc., v. Madacy Entm't, 421 F.3d 1073 (9th Cir. 2005) ............................................................................................ 18, 28 Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894 (9th Cir. 2002) .................................................................................................... 28 Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 425 F.Supp.2d 402 (S.D.N.Y. 2006) .................................................................................. 11, 12 Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 431 F.Supp.2d 425 (S.D.N.Y. 2006) .............................................................................. 1, 11, 12 Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003).................................................................................................................. 31 Nissan Motor Co. v. Nissan Computer Corp., 378 F.3d 1002 (9th Cir. 2004) .................................................................................................. 26 Panavision Intn'l, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998) .................................................................................................. 26 PepsiCo, Inc. v. Reyes, 70 F.Supp.2d 1057 (C.D. Cal. 1999) ........................................................................................ 28 Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004) ................................................................................ 10, 11, 24, 25 PostX Corp. v. docSpace Co., Inc., 80 F.Supp.2d 1056 (N.D. Cal. 1999) ........................................................................................ 28 Republic Molding Corp. v. B. W. Photo Utilities, 319 F.2d 347 (9th Cir. 1963) .................................................................................................... 32 Rescuecom Corp. v. Google Inc., -- F.Supp.2d --, No. 5:04-CV-1055 (NAM/GHL), 2006 WL 2811711 (N.D.N.Y. Sept. 28, 2006)................................................................... 13, 14 Star Markets, Ltd. v. Texaco Refining & Marketing, Inc., 950 F. Supp. 1030 (D. Haw. 1996)..................................................................................... 27, 28 Sunset House Distrib. Corp. v. Coffee Dan's Inc., 240 Cal. App. 2d 748 (1966) ...................................................................................................... 7 TCPIP Holding Co. v. Haar Commc'ns, Inc., 244 F.3d 88 (2d Cir. 2001) ................................................................................................. 28, 29 Thane Int'l v. Trek Bicycle Corp., 305 F.3d 894 (9th Cir. 2002) .............................................................................................. 27, 28 Thompson Med. Co. v. Pfizer, Inc., 753 F.2d 208 (2d Cir. 1985) ..................................................................................................... 16 Toho Co. v. Sears, Roebuck & Co., 645 F.2d 788 (9th Cir. 1981) ...................................................................................................... 7 Toys "R" Us, Inc. v. Akkaoui, No. C 96-3381 CW, 1996 WL 772709 (N.D. Cal. Oct. 29, 1996) ............................................................................ 28 iii 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 5 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (cont'd) Page(s) Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992).................................................................................................................. 15 Vision Sports, Inc. v. Melville Corp., 888 F.2d 609 (9th Cir. 1989) .................................................................................................... 16 Statutes 15 U.S.C. 1065........................................................................................................................... 15 15 U.S.C. 1111........................................................................................................................... 15 15 U.S.C. 1114........................................................................................................................... 18 15 U.S.C. 1125.................................................................................................................... passim 15 U.S.C. 1127............................................................................................................................. 8 Other Authorities Eric Goldman, Deregulating Relevancy in Internet Trademark Law, 54 Emory L.J. 507 (2005)......................................................................................................... 14 Restatement (Third) of Unfair Competition 32 (1995)........................................................ 31, 32 Zachary Zweihorn, Searching for Confusion: The Initial Interest Confusion Doctrine and Its Misapplication to Search Engine Sponsored Links, 91 Cornell L. Rev. 1343 (2006)......... 24 iv 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 6 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION The primary issue in this case is whether product placement--a practice that is entirely legal under trademark law in the physical world--suddenly becomes illegal when it takes place on the Internet. A common form of product placement is for the manufacturer of a lesser-known brand to pay a store to display its products next to a well-known competitor, with the hope that when customers seek the well-known brand they will notice the competing product and purchase it instead. That is why other colas are found next to Coke, and generic ibuprofen next to Advil, on grocery store shelves. This practice does not violate trademark laws because the manufacturer paying for product placement is not using the well-known brand to identify the source of its products. Instead the manufacturer is using the trademarks to identify potential customers and inform them that different products and services exist. As one federal court recently ruled, search engines such as the one operated by Google Inc. engage in "the electronic equivalent of product placement." Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 431 F.Supp.2d 425, 427 (S.D.N.Y. 2006). And American Blind & Wallpaper Factory, Inc. ("ABWF") wants to stop it. ABWF wants to prevent Google from allowing ABWF's competitors to display advertisements next to a list of the hundreds of thousands of search results that appear when a Google user conducts a search using ABWF's alleged trademarks. It is undisputed that these ads do not contain ABWF's alleged trademarks. And in any event, like the hundreds of thousands of other search results, these competing ads are relevant to ABWF's potential customers since they offer services that compete with the services marketed under the alleged ABWF marks. While this sort of comparative advertising has always been legal, ABWF is hoping to use the relative novelty of targeted Internet advertising to convince the Court to rule that trademark law should be applied differently in cyberspace. It should not. Both on and off the Internet, there can be no trademark infringement if there is no trademark use. Thus, since as a matter of law Google does not use ABWF's trademarks, it does not infringe them and the Court should grant this summary judgment motion. Aside from the fact that Google does not use ABWF's trademarks, there are several additional and independent reasons why ABWF's claims cannot survive summary judgment: 1 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 7 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A. First, ABWF's claims that Google infringes its two purported common law marks--"American Blind" and "American Blinds"--must fail because ABWF cannot prove that it has any rights in those marks. These are descriptive marks. For a common law descriptive mark to be valid, it must have secondary meaning. ABWF has presented no evidence that these marks have secondary meaning. Second, ABWF's claims that Google has violated its rights to its three registered trademarks must fail because ABWF has presented no evidence that Google's alleged used of these marks is likely to cause confusion. ABWF's only likelihood of confusion evidence is a survey, but this survey focuses on only one of ABWF's common law marks and does not mention its registered marks. Third, ABWF's survey shows no likelihood of confusion because it has no probative value. The survey lacks a control and is entirely based on the false premise that "American Blinds" is a brand of window blinds when no such brand exists. These fundamental problems make the survey unreliable and leave ABWF without any evidence of likelihood of confusion. Fourth, even if ABWF's confusion survey were reliable, it would be insufficient to establish confusion as a matter of law because it did not analyze the websites of ABWF's competitors. ABWF's sole theory of confusion is the oft-criticized doctrine of "initial interest confusion" ("IIC"). But to establish IIC in the internet context, the trademark holder must analyze the website to which traffic was allegedly diverted. ABWF did not do this, and therefore cannot establish IIC. Fifth, ABWF's dilution claims must fail because there is no evidence that any of ABWF's marks are "famous," which is a necessary element of a dilution claim. Indeed, the only relevant evidence suggests that ABWF's own customers have difficulty recognizing ABWF's asserted marks. Further, ABWF has not even attempted to prove actual dilution, as the statute requires, for its damages claim. Finally, all of ABWF's claims should fail under the unclean hands doctrine. ABWF actively engages in the exact same type of advertising that it wants Google to stop its rivals from conducting. While ABWF claims that Google violates a host of state and federal laws because Google allows advertisers to display their ads when users search for ABWF's trademarks, ABWF displays ads on Google when users search for its competitors' trademarks. The unclean hands doctrine prohibits such hypocrisy and bars ABWF from pursuing its claims. II. FACTS Google's search engine. Familiar to millions of Internet users, Google offers a free Internet search engine. To conduct a search, a user types one or more search terms (the words or phrases that describe the information sought), and hits the "Enter" key or clicks on the "Google Search" button. In response, Google produces a results page that lists the web pages related to the search terms, with the most relevant page appearing first, then the next, and so on. See Google, Google Help Center, http://www.google.com/help/basics.html (last visited Dec. 18, 2006). For example, when 2 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 8 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 a computer user searches for "american blinds and wallpaper factory," the results page lists the first ten results and indicates that approximately 600,000 additional results are listed on subsequent pages. See Declaration of Klaus H. Hamm in Support of Google Inc.'s Motion for Summary Judgment ("Hamm Decl.") Ex. A. B. Google's AdWords program. Google's AdWords programs allows advertisers to place targeted advertising on the results page of a Google search.1 Specifically, when a user types a query into Google's search engine, that query can trigger advertisements--or Sponsored Links--that will be displayed in two special sections of the search results page: (1) the right hand column of the page, under a heading titled "Sponsored Links," and (2) above the natural search results, with a colored background, next to an insignia that says "Sponsored Links." The ads contain text and a link to the advertiser's website. Id., Ex. A. In order to have their ads appear on Google's search results page, hundreds of thousands of Google advertisers bid on keywords or keyword phrases. If a user's search terms "match" the keyword or keyword phrase, the advertiser's ad might be displayed on the search results page. Whether the ad actually appears on the search results page depends on numerous factors, including how much the advertiser bid vis--vis other advertisers, how frequently users have clicked on the ad in the past, and the comparative relevance of the advertiser's website to the user's query. There are several ways in which an advertiser's choice of keywords or keyword phrases can be "matched" to the search terms entered by the user.2 For instance, an advertiser can designate desired keywords or keyword phrases as "broad match" terms, which is the default choice. As its name suggests, broad match is an expansive matching algorithm. Broad match keyword phrases--such as "tennis shoes"--will match with user queries as long as each word in The following explanation of how the AdWords program functions derives from the AdWords Help Center, Google's published instructional materials for potential advertisers. See Hamm Decl. Ex. B. The look, feel, and operation of the AdWords program can also be gleaned by visiting www.google.com, and performing actual searches. 2 The following discussion of "matching" options also derives from the AdWords Help Center. Hamm Decl. Ex. C. 3 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) 1 386387.02 Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 9 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the keyword phrase (or variant or select synonym thereof) is included in the query, regardless of order. So, an advertiser who designates "tennis shoes" as a broad match keyword phrase will match with any of the following search queries: "tennis shoe," "shoes tennis," "red tennis shoes," "tennis red shoes," "buy tennis shoes," "tennis sneaker," and "buy tennis sneakers." By contrast, "exact match" is a selective matching algorithm. A keyword phrase designated as an exact match will match with a user query only when the keyword phrase and the query are identical. So, an advertiser who designates "tennis shoes" as an exact match keyword phrase will match with only one user query--"tennis shoes"--but will fail to match with queries such as "tennis shoe stores." In addition to choosing a matching algorithm, an advertiser can also designate "negative" keywords. A keyword phrase containing a negative keyword will not match with a search query that includes the negative keyword. So, an advertiser who designates "tennis shoes" as a broad match keyword phrase, but designates "red" as a negative keyword, will match with the queries "blue tennis shoes" and "good tennis sneakers," but not with the term "red tennis shoes." Let's apply these concepts to this case. ABWF sells, among other things, window blinds and wallpaper online. This case arises out of ABWF's claim that when a Google user searches for ABWF's alleged trademarks--such as "American Blinds" or "American Blind Factory"3--no ads for ABWF's competitors should appear on the search results page. Google permits advertisers to bid on keywords that are identical to a registered trademark. See infra II.C ("Google's trademark policy"). Thus, when ABWF's competitors bid on the keyword phrase "American Blind Factory," and the competitors' ads appear on a search results page listing results relevant to the query "American Blind Factory," ABWF claims its trademark has been infringed. But given the nature of the broad match algorithm, ABWF's competitors' ads also appear in response to a user query for "American Blind Factory" even though the competitor never bid ABWF has asserted the following purported trademarks against Google: "American Blind," "American Blinds," "American Blind & Wallpaper Factory," "American Blind Factory," and "Decoratetoday." ABWF's Answer, Affirmative Defenses, and Counterclaims (Docket Item No. 24) ("ABWF's Counterclaims"), 17 & 18. 4 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) 3 386387.02 Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 10 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 on the keyword phrase "American Blind Factory" or anything like it. For instance, if ABWF's competitors designated "blinds" as a broad match keyword, their ads would be triggered by a search for "American Blind Factory." The only way to be sure that none of ABWF's competitors ads appear in response to a query for "American Blind Factory," is to identify all of ABWF's competitors, and require them to designate "American Blind Factory" as a negative keyword phrase. Indeed, this is precisely what ABWF has asked Google to do. Hamm Decl. Ex. D. As noted below, however, ABWF itself refuses to designate its competitors' trademarks as negative keywords in its own Google advertising. C. Google's trademark policy. As mentioned above, Google permits advertisers to trigger Sponsored Links with trademarks. But Google does not permit advertisers to use trademarks in the text of ads unless the trademark holder authorizes them to do so. Id., Ex. E at GGLE 00018826. As Google's website states: "When we receive a complaint from a trademark owner, we only investigate the use of the trademark in ad text. If the advertiser is using the trademark in ad text, we will require the advertiser to remove the trademark and prevent them from using it in ad text in the future. Please note that we will not disable keywords in response to a trademark complaint." Google, Trademark Complaint Procedures, http://www.google.com/tm_complaint_adwords.html#1 (last visited Dec. 18, 2006) (emphasis in original); see also Hamm Decl. Ex. E at GGLE 00018826. When Google receives a trademark complaint, it investigates it. Id., Ex. F at 91:2-93:22. If the trademark is valid, Google blocks the offending ads, and adds the trademark to its trademark monitor list. Id. Ads containing in their text trademarks from the list will be automatically blocked on Google. Id. ABWF has notified Google that it has three registered trademarks: American Blind & Wallpaper Factory, American Blind Factory, and Decoratetoday. ABWF's Counterclaims, 18. Each of these trademarks, as well as several variations, are on Google's trademark monitor list, which means that only companies who have permission from ABWF may use them in the title or text of a Google Sponsored Link. Hamm Decl. Ex. F at 110:2-110:25. 5 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 11 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A. III. ARGUMENT ABWF's claims fail because using a trademark as a selection criterion for displaying an ad does not constitute a "use in commerce" under the Lanham Act. Google moves for summary judgment on each of ABWF's causes of action because Google does not use ABWF's registered trademarks as trademarks. Instead of using ABWF's trademarks to identify the source of Google's search engine or any of its advertisers' (other than ABWF's) products or services, the undisputed fact is that Google uses these trademarks only as a triggering criterion for determining when and where to display ads. In concrete terms, Google does not brand its search engine with ABWF's trademarks and Google does not permit advertisers to use ABWF's trademarks in the text or title of their Sponsored Links without ABWF's permission. Given these undisputed facts, Google does not use ABWF's registered trademarks in commerce, as required by the Lanham Act. As a result, ABWF's claims cannot succeed as a matter of law. 1. Google's motion to dismiss. As the Court recalls, this is the not the first time Google has made this argument. Earlier in this litigation, Google moved to dismiss ABWF's trademark infringement and related causes of action on the ground that Google's use of ABWF's alleged trademarks to trigger third-party advertisements does not constitute "use in commerce" of ABWF's marks under the Lanham Act. The Court denied this part of Google's motion, but not because it disagreed with Google. Indeed, the Court signaled its willingness to consider this argument in the future. The Court wrote that it "concludes that resolution of the novel legal questions presented by this case should await the development of a full factual record." Order Granting in Part and Denying in Part Counter-Defendant's and Third-Party Defendant's Motion to Dismiss ("March 30, 2005 Order") (Docket Item No. 48) at 16. In so ruling, the Court emphasized "that it expresses no opinion as to whether Defendants ultimately will prevail in trying to prove that they are not liable to American Blind on these claims. This Order should be understood only as allowing American Blind's counterclaims and third-party claims to proceed beyond the motion-to-dismiss stage, 6 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 12 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 which will enable the Court to consider both the relevant facts and the applicable law in the context of a fuller record." Id. More than two years have passed since Google moved to dismiss and, in that time, the parties have engaged in all manner of discovery. Before closing, discovery included the production of more than 100,000 pages of documents and numerous depositions. At the same time, the legal questions involved are no longer so novel. In 2005, the Second Circuit became the first--and so far only--federal appellate court to rule on whether Internet advertising triggered by trademarks is a trademark use (it is not), and three district court opinions have applied that ruling to hold that when Google triggers Sponsored Links with keywords that resemble trademarks there is no trademark use. The time has come for the Court to consider, on the basis of what evidence ABWF could adduce, whether the use of a trademark as a selection criterion for the appearance of an ad constitutes "use in commerce." 2. The trademark "use in commerce" requirement is met only if the defendant uses a trademark as a trademark. Somewhat confusingly, two use-in-commerce requirements exist under the Lanham Act. The first of these requirements is "simply a jurisdictional predicate to any law passed by Congress under the Commerce Clause" of the United States Constitution, requires a showing only that the conduct at issue are the type that Congress may regulate under the Commerce Clause, and is not at issue in this case. Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 677 (9th Cir. 2005). Rather, the Lanham Act's second use-in-commerce requirement is the obstacle that ABWF cannot overcome and that should serve as the basis for granting summary judgment for Google on ABWF's remaining claims.4 All of ABWF's remaining claims against Google share this "use in commerce" requirement. See Acad. of Motion Picture Arts and Scis. v. Network Solutions, Inc., 989 F. Supp. 1276, 127981 (C.D. Cal. 1997) (federal trademark infringement and dilution claims and state law unfair competition claims require that defendant "used" another's mark without permission in connection with its own goods and services); Toho Co. v. Sears, Roebuck & Co., 645 F.2d 788, 793 (9th Cir. 1981) (dilution doctrine codified in Business and Professions Code protects trademark holder from harm due to defendant's "use" of its mark); Sunset House Distrib. Corp. v. Coffee Dan's Inc., 240 Cal. App. 2d 748, 753 (1966) (state law trademark infringement and unfair competition claims require defendant's "use of a confusingly similar tradename" to tradename used by plaintiff); 15 U.S.C. 1125(a)(1) (false representation actionable under Lanham Act if party "uses in commerce" a "false or misleading representation of fact"). For 7 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) 4 386387.02 Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 13 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The "use in commerce" requirement at issue in this case comes straight from the Lanham Act's definition of the phrase. See Karl Storz Endoscopy-America, Inc. v. Surgical Techs., Inc., 285 F.3d 848, 855 (9th Cir. 2002):5 The term "use in commerce" means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. For purposes of this Act, a mark shall be deemed to be in use in commerce-- (1) on goods when-- (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce, and (2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services. 15 U.S.C. 1127. The test for whether a party uses a trademark under the Lanham Act's definition of "use in commerce" has been succinctly summarized as whether a party is using the mark to identify the source of goods or services: the question is "whether defendants are using the challenged mark in a way that identifies the source of their goods. If defendants are only using [the] trademark in a `non-trademark' way--that is, in a way that does not identify the source of a product--then trademark infringement and false designation of origin laws do not apply." Interactive Prods., 326 F.3d at 695. Or, put even more succinctly, the issue is whether the defendant uses the trademark so that it "function[s] as a trademark." Lockheed Martin Corp. v. Network Solutions, Inc., 985 F.Supp. 949, 956 (C.D. Cal. 1997). If the alleged infringer is not using the trademark as a trademark, then it is not using the trademark "in connection with the simplicity's sake, this argument often refers to ABWF's trademark infringement claim and the federal Lanham Act. But, as noted, the argument applies equally to each of ABWF's state and federal claims. 5 In addition to the Ninth Circuit, other circuits, including the Second, Sixth and Eighth Circuits, have articulated this same requirement. See 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400, 412 (2d Cir. 2005); Interactive Prods. Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d 687, 695, 698 (6th Cir. 2003); DaimlerChrysler AG v. Bloom, 315 F.3d 932, 936 (8th Cir. 2003). 8 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) 386387.02 Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 14 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 sale, distribution or advertising of goods and services," and the use "is not prohibited by trademark law." Id. at 957. This use requirement is a predicate to a finding of trademark infringement. While several circuits have made it clear that courts should consider use before considering likelihood of confusion, the Ninth Circuit does not impose a rigid order for considering the requirements of an infringement claim. Compare 1-800 Contacts, 414 F.3d at 412 (holding that considering likelihood of confusion before use "puts the cart before the horse. Not only are `use,' `in commerce,' and `likelihood of confusion' three distinct elements of a trademark infringement claim, but `use' must be decided as a threshold matter because, while any number of activities may be `in commerce' or create a likelihood of confusion, no such activity is actionable under the Lanham Act absent the `use' of a trademark.") and Interactive Prods., 326 F.3d at 698 (trademark use is a "preliminary question" and when there is no trademark use it is "unnecessary for the district court to examine the eight factors traditionally used to determine likelihood of confusion") with Karl Storz, 285 F.3d at 853-57 (considering likelihood of confusion before considering use). But, just as in other circuits, in the Ninth Circuit use is an independent and necessary requirement for a finding of trademark infringement. For example, in Karl Storz, the district court granted summary judgment for the alleged infringer Surgi-Tech on the separate grounds that it did not use Storz's trademarks and that there was no likelihood of confusion. On appeal, the Ninth Circuit reversed. First, it found there was a triable issue of fact that a likelihood of confusion existed. Id. at 855. Having made that determination, before reversing, the court held that it "must address whether Surgi-Tech used Storz's trademark in commerce." Id. If Surgi-Tech had demonstrated either that there was no likelihood of confusion or there was no use, it would have been entitled to summary judgment. Thus, if Google can show that it does not use ABWF's marks, it cannot infringe them, and Google is entitled to summary judgment. 3. Using a trademark as a triggering criterion for the display of advertisements is not trademark use. Since the Court ruled on Google's motion to dismiss, the Second Circuit became the first federal appeals court to consider the trademark-use requirement in the context of internet 9 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 15 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 advertising.6 1-800 Contacts, 414 F.3d at 400. In a detailed opinion, the Second Circuit held that the use of a term similar to a trademark to trigger a pop-up ad is not trademark use. The trademark holder, 1-800 Contacts, sued WhenU, a company that delivers Internet advertising on behalf of third parties, because WhenU displayed pop-up ads when computer users searched for the term "www.1800contacts.com" in a search engine or entered it as an address in an internet browser. Id. at 404. WhenU, however, did not place that term on or in the pop-up ads. Because of this fact, the Court held that WhenU "does not `use' 1-800's trademark in the manner ordinarily at issue in an infringement claim: it does not `place' 1-800 trademarks on any goods or services in order to pass them off as emanating from or authorized by 1-800." Id. at 408. It then relied on this principle--that an ad does not use a trademark if the ad does not contain the trademark--when it ruled that the "fatal flaw" of the district court's holding was its failure to recognize that the "popup ads do not display the 1-800 trademark." Id. at 410 (emphasis added). Instead of using the trademark to identify source, the court held that WhenU used the trademark only as an internal triggering criterion for delivering relevant advertising to computer users--an act that does not violate trademark laws: A company's internal utilization of a trademark in a way that does not communicate it to the public is analogous to a [sic] individual's private thoughts about a trademark. Such conduct simply does not violate the Lanham Act, which is concerned with the use of trademarks in connection with the sale of goods or services in a manner likely to lead to consumer confusion as to the source of such goods or services. Id. at 409. Although the Ninth Circuit has applied trademark law to internet advertising, it has never applied the trademark-use doctrine in these circumstances. Indeed, Google is not aware of any district court opinion within the Ninth Circuit that has considered this issue, aside from this Court's consideration of Google's motion to dismiss. As this Court's order on Google's motion to dismiss acknowledges, the Ninth Circuit opinion Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004), "did not undertake a separate discussion of the element of trademark `use'" and that the opinion's discussion of trademark use "concerned only the jurisdictional requirement of use `in commerce' and not the separate requirement of trademark `use.'" March 30, 2005 Order at 14 (emphasis in original). 6 10 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 16 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In making this critical distinction between using a trademark in ad text and using it as an ad-display selection criterion, the Second Circuit analogized the sort of internal processing of ads Google does here to "product placement." Using a trademark to determine when to display an ad for competing products on the Internet is, for purposes of trademark law, equivalent to placing a less-popular competing brand next to a more-popular one with the intent that consumers will consider the less-popular brand when they initially seek the popular one: Indeed, it is routine for vendors to seek specific `product placement' in retail stores precisely to capitalize on the competitors' name recognition. For example, a drug store typically places its own store-branded generic products next to the trademarked products they emulate in order to induce a customer who has specifically sought out the trademarked product to consider the store's lessexpensive alternative. WhenU employs this same marketing strategy by informing [users] who have sought out a specific trademarked product about available coupons, discounts, or alternative products that may be of interest to them. Id. at 411; see also Playboy Enters., 354 F.3d at 1035 (using product-placement analogy and stating "There is a big difference between hijacking a customer to another website by making the customer think he or she is visiting the trademark holder's website ... and just distracting a potential customer with another choice, when it is clear that it is a choice.") (Berzon, J., concurring) (emphasis in original). The 1-800 Contacts court did not expressly decide how its rules for trademark use should be applied to keyword advertising. 414 F.3d at 409, n.11. Since 1-800 Contacts issued, three district court opinions relied on it in a single six-month period to hold that when a search engine triggers Sponsored Links with a trademarked term, there is no trademark use and no violation of trademark law. The first two decisions are from a case in which the plaintiff claimed that a trademark violation takes place when ads for a pharmacy appear as Sponsored Links on Google when a user enters the trademark "ZOCOR" into the search engine. Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 425 F.Supp.2d 402 (S.D.N.Y. 2006); Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 431 F.Supp.2d 425 (S.D.N.Y. 2006). In the first opinion, the court ruled that this triggering was not trademark use because "defendants do not `place' the ZOCOR marks on any goods or containers or displays or associated documents, nor do they use them in any way to indicate source or sponsorship. Rather the ZOCOR mark is `used' only in 11 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 17 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the sense that a computer user's search of the keyword `Zocor' will trigger the display of sponsored links to defendants' websites. This internal use of the mark `Zocor' as a key word to trigger the display of sponsored links is not use of the mark in a trademark sense." Merck & Co., Inc., 425 F. Supp. 2d at 415. The Merck court issued a second ruling on this same issue two months later when it denied Merck's motion for reconsideration. Using the product-placement analogy, the court explained once again that the use of the trademark ZOCOR as a keyword trigger is not trademark use: Rather, the marks are used only in the sense that a computer user's search of the keyword "Zocor" will trigger the display of sponsored links to defendants' websites. This internal use of the keyword "Zocor" is not use of the mark in the trademark sense; rather, this use is more akin to the product placement marketing strategy employed in retail stores, where, for example, a drug store places its generic products alongside similar national brand products to capitalize on the latter's name recognition. The sponsored link marketing strategy is the electronic equivalent of product placement in a retail store. Merck & Co., Inc., 431 F. Supp. 2d at 427 (internal citations omitted). The court also tackled the argument that WhenU.com's pop-up ads are distinguishable from Google's Sponsored Links. The court held that "[t]here is a difference, but not ... a meaningful one for these purposes." Id. It held that for purposes of trademark use analysis, Google's AdWords program is indistinguishable: The search engine companies included the keyword "Zocor" in their internal directories of keywords. When a computer user typed in the keyword Zocor, she would be offered, by virtue of the internal search engine processes, sponsored links to defendants' websites, in addition to the actual websites generated by the search engine program using neutral and objective criteria. This internal use of the keyword `Zocor' is not use of the ZOCOR mark to indicate source or sponsorship. It may be commercial use, in a general sense, but it is not trademark use. Indeed, if anything, keywording is less intrusive than pop-up ads as it involves no aggressive overlaying of an advertisement on top of a trademark owner's webpage. Id. at 428.7 The Merck court correctly disagreed with a district court that found advertisers liable for selecting keywords in ways that might have confused consumers. 425 F. Supp. 2d 402, 431 F. Supp. 2d at 426-27 (disagreeing with Edina Realty, Inc. v. TheMLSonline.com, No. Civ. 04-4371 (JRT/FLN), 2006 WL 737064 at *3 (D. Minn. Mar. 20, 2006)). It is worth noting that the decision Merck declined to follow held only that advertisers who actually choose keywords might be engaging in trademark use, not that a search engine that accepts those ads is doing so. 12 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) 7 386387.02 Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 18 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Merck court is correct that for purposes of trademark-use analysis no meaningful difference exists between Sponsored Links and WhenU.com's pop-up advertising, and that neither qualifies as trademark use. In both situations, a user types in a trademark or a term similar to one. And in both situations, the user is then presented with an advertisement that does not use the trademark in the text of the ad. It's also true that Google's Sponsored Links present a more clear-cut case of non-trademark use than WhenU.com's pop-up ads. Not only are Sponsored Links less intrusive than pop-up ads, but in addition Google users who type in a search term that is a trademark do not expect Google automatically to link the user to the trademark owner's webpage. Google simply does not work that way. When a user types a query into Google, Google's proprietary algorithms generate a listing of web pages (in some cases, hundreds of thousands of them) that are contextually relevant to that query. It pushes far beyond the bounds of reason to argue that a person would expect that all of these listings are sponsored by the trademark owner. Instead, the user is presented with a selection of relevant links and, then, if the user desires, he may click on a link that interests him. The third, and most recent, opinion to rely on 1-800 Contacts to hold that using trademarks to trigger Sponsored Links does not violate trademark laws, like the current case, considered claims brought directly against Google. Rescuecom Corp. v. Google Inc., -F.Supp.2d --, No. 5:04-CV-1055 (NAM/GHL), 2006 WL 2811711 (N.D.N.Y. Sept. 28, 2006). In holding that this practice is not trademark use, the court focused on the fact that none of the Sponsored Links "display plaintiff's trademark" and that if Google does not place "plaintiff's trademark on any goods, containers, displays, or advertisements, or use[] plaintiff's trademark in any way that indicates source or origin" there is no trademark use. Id. at *6-7. In short, if the trademark is not being used to indicate source, it makes no difference under trademark law if Google is otherwise "capitalizing on the good will of plaintiff's trademark by marketing it to plaintiff's competitors as a keyword in order to generate defendant's own advertising revenues[.]" Id. at *5. Google's current summary judgment motion raises the exact issues considered in the two Merck opinions and the Rescuecom opinion. It is undisputed that Google allows ABWF's 13 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 19 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 competitors to bid on ABWF's registered trademarks for the opportunity to display their ads when Google users enter ABWF's trademarks as search terms. But it is also undisputed that Google's policy allows trademark holders to prevent unauthorized advertisers from using the trademarks in the text or title of their ads. Moreover, it is undisputed that Google monitors ABWF's trademarks and prohibits unauthorized users from displaying those trademarks in the title or text of their Sponsored Links. Thus, neither Google nor its advertisers place ABWF's trademarks "on any goods, containers, displays, or advertisements, or use[]" ABWF's trademarks "in any way that indicates source or origin." Rescuecom, at *7. These are the material facts, and they are not disputed. Under these facts, Google does not use ABWF's trademarks as a matter of law. Id. Since Google does not use these marks, Google does not infringe them, and Google is thus entitled to summary judgment. Karl Storz, 285 F.3d at 855. A contrary decision would throw the search engine business into chaos. Any trademark owner could make it to trial simply by complaining that some ads were showing up in proximity to "its" search results. But the purpose of trademark law is to protect consumers, not to insulate trademark owners from legitimate competition. And since consumers rely on the robust marketplace of search technology to help them find the information they are looking for, see Eric Goldman, Deregulating Relevancy in Internet Trademark Law, 54 Emory L.J. 507, 509 (2005), it would be perverse in the extreme for trademark law to deny those consumers the very information they need to make informed choices under the guise of protecting them from harm. B. All of ABWF's claims fail because the only alleged mark for which it attempts to prove confusion--"American Blinds"--is not enforceable. ABWF's claims also face a basic procedural roadblock it cannot avoid: the only purported trademark for which it even attempts to present evidence of confusion (unsuccessfully, as set forth below) is not enforceable at all in this action, either as a federally registered mark or as a common-law trademark. At the time this action was filed, ABWF owned three federally-registered trademarks: "American Blind & Wallpaper Factory," "American Blind Factory," and "DecorateToday."8 8 See ABWF's Counterclaim at 17 & 18. 14 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 20 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ABWF, however, has chosen not to present evidence of any actual or likely confusion regarding any of those three marks, instead limiting its survey evidence to the "American Blinds" mark. That mark, however, was not even registered at the time this action was commenced, and was not placed in the principal register until September 26, 2006.9 As a result, ABWF does not get the benefit of 15 U.S.C. 1115's statutory presumption of validity and exclusive rights. Under 1115, registration on the principal register confers such a presumption, and that presumption becomes incontestable after five years. 15 U.S.C. 1065. That presumption, however, applies only if the registration predates the first alleged infringing use. Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1358 (9th Cir. 1985) (en banc). Where the registration comes after the first allegedly infringing use commences, as here, the presumption does not apply, and the plaintiff must meet the burden of establishing that it holds an enforceable common-law trademark. Commerce Nat'l Ins. Servs., Inc. v. Commerce Ins. Agency, Inc., 214 F.3d 432 (3rd Cir. 2000). ABWF cannot meet this burden. Where, as here, a claimed mark is merely descriptive (i.e., "American Blinds" for blinds made and sold in America), the plaintiff must establish that the phrase, through widespread and continuous use, has acquired "secondary meaning." Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768-69 (1992). A mark acquires secondary meaning if the public comes to associate the mark with a particular source of goods or services: for example, associating "Holiday Inn" with a particular hotel chain, rather than simply a description of inns in which one spends one's holiday. In fact, ABWF has never given Google notice of this registration, either via actual notice or via displaying the mark with notice pursuant to 15 U.S.C. 1111. See DecorateToday, Blinds, http://www.decoratetoday.com/products/blinds/ (last visited Dec. 13, 2006) (using "American Blinds" mark without an "R" symbol). As a result, ABWF is barred from recovering any damages for alleged infringement of the "American Blinds" mark. 15 U.S.C. 1111 ("no profits and no damages shall be recovered under the provisions of this Act unless the defendant had actual notice of the registration"). Additionally, ABWF asserts the non-plural "American Blind" mark, possibly as a separate mark. That mark is neither registered, nor included in ABWF's confusion survey. Thus, at best, it suffers the same defects as the "American Blinds" mark. 9 15 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 21 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Secondary meaning may be proved by either direct or circumstantial evidence. Direct evidence consists of testimony by consumers, typically in the form of survey evidence. "An expert survey of purchasers can provide the most persuasive evidence of secondary meaning." Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 615 (9th Cir. 1989). ABWF, however, did not conduct a secondary meaning survey, and has adduced no direct evidence of secondary meaning: Q. Okay. Did you do anything to determine whether the term American Blinds has achieved secondary meaning with consumers? A. No. Q. You're familiar with secondary meaning surveys, correct? A. Yes. Q. And you've done them in the past, correct? A. Yes. Q. But you did not do one in this case, correct? A. ... Q. Okay. So you're not -- let me put it this way: As an expert you're not offering an opinion on whether there is secondary meaning, correct? A. Right. That's right. Hamm Decl. Ex. G at 60:11-23 & 62:11-15. Neither can ABWF meet its burden on the basis of circumstantial evidence. Circumstantial evidence of secondary meaning typically includes evidence of long, continual, and exclusive use of the mark, large advertising expenditures promoting the mark, unsolicited media coverage, and the like. Thompson Med. Co. v. Pfizer, Inc., 753 F.2d 208 (2d Cir. 1985). ABWF, however, has made virtually no use of "American Blinds" as a trademark. Although its interrogatory responses claim a brief use of "American Blind" in 1986, that use ceased in 1988, whereupon ABWF proceeded to cycle through a series of other company names. Hamm Decl. Ex. H at 2-3. Moreover, ABWF has produced no evidence of that alleged use, and its Counterclaim makes clear that this alleged early use was actually as "a distinctive part of 16 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 22 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 American Blind's corporate title and trade name," not as an independent mark. ABWF's Counterclaim 19 (emphasis added). ABWF's more recent "use" of "American Blinds" as a mark is nothing but a litigation ploy. ABWF never even sought to register "American Blinds" as a trademark until April 9, 2004 (Hamm Decl. Ex. I), after this lawsuit had commenced and in anticipation of ABWF's filing of its counterclaims. Moreover, that application stated only ABWF's intent to use the mark in the future. Id. The first and only evidence of even arguable actual use of "American Blinds" as a trademark10 is a single screen shot of an internal page of ABWF's website, showing the phrase "American Blinds" in the middle of a page that displays the "American Blinds, Wallpaper & More" and "decoratetoday" trademarks at the top. This page was submitted to the Patent & Trademark Office on May 9 of this year, as ABWF's sole proof of actual use of the purported mark. Hamm Decl. Ex. J. It appears, however, that the words "American Blinds" were first added to that page only days earlier, on May 3, 2006, solely in order to manufacture the evidence of use required by the PTO. Hamm Decl. Ex. N.11 Other than this litigation-driven token use, ABWF cannot establish even that it has used the "American Blinds" mark, let alone establish the sort of continuous, widespread use necessary to establish secondary meaning. Because ABWF cannot meet that burden, summary judgment is mandated on all of ABWF's trademark claims relating to this purported mark. Indeed, the only use ABWF appears to make of "American Blinds" is as a domain name (www.americanblinds.com). Mere use as a domain name, however, does not constitute trademark use, particularly where the website is not itself a separate service, but rather simply a sales outlet for the owner's goods. See Hamm Decl. Ex. K (Trademark Manual of Examination Procedures 1215.02 and cases cited therein); see also United States Patent and Trademark Office, TMEP Chapter 1200, http://tess2.uspto.gov/tmdb/tmep/1200.htm#_T121502. This is particularly true in this case, where ABWF uses several different URL's for its website, and chooses between them based entirely on which one is most descriptive of the goods each user is ordering. Hamm Decl. Ex. L at 122:5-125:6; Id., Ex. M. 11 In fact, it appears that the PTO never sought or obtained any evidence of secondary meaning, despite the clearly descriptive nature of the mark. Accordingly, now that the PTO has placed the mark on the principal register, Google will (in the event this case survives the instant motion) ask for leave to amend its complaint to seek cancellation of the "American Blinds" mark. 10 17 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 23 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C. ABWF's infringement and common-law claims fail, because ABWF's survey was so flawed that ABWF cannot prove either actual confusion or a likelihood of confusion. ABWF's infringement claims fail for the additional, fundamental reason that ABWF cannot present any evidence of either actual confusion or a likelihood of confusion. 15 U.S.C. 1114(1) (requiring likelihood of confusion); 15 U.S.C. 1125(a) (same); M2 Software, Inc., v. Madacy Entm't, 421 F.3d 1073, 1080 (9th Cir. 2005) (requiring likelihood of confusion, and including proof of actual confusion as a factor in the likelihood-of-confusion analysis). ABWF has produced no evidence of actual confusion, instead relying on a survey conducted by Alvin Ossip in an attempt to establish a likelihood of confusion. That survey, however, is of zero probative value, for myriad reasons. Before examining those failings, however, it is important to emphasize that this is not a typical trademark survey. As the Court is no doubt aware, virtually every trademark defendant comes before judge or jury decrying the "fatal flaws" in its opponent's survey. All too often, the defendant then trots out a series of nits about the wording of a particular question or the shape of the universe--objections that go at best to the weight to be accorded the survey. This is not such a case. The mistakes made by Mr. Ossip are far more fundamental. When we say his survey is of zero probative value, we mean precisely that. A crucial error that Mr. Ossip made12 was to omit from his study all three of ABWF's established trademarks, instead limiting his study to the term "American Blinds." At a minimum, therefore, ABWF can produce no evidence of confusion as to any of its other alleged marks, and summary judgment is therefore appropriate as to those marks. And, as set forth above, the one "mark" for which ABWF did try to submit evidence is not enforceable in this action, as its registration long postdates the alleged infringement and the filing of this action. So at best, ABWF can offer a theory of confusion only as to a "mark" it does not in fact own or use. But even if "American Blinds" were an enforceable mark, Mr. Ossip presents no evidence of confusion. His first problem is that he managed to get all the way through 12 We do not seek to impugn Mr. Ossip's abilities unfairly: in many instances, we assume that the mistakes he made were the result of relying on counsel's instructions and decisions. 18 386387.02 MEMO. OF POINTS & AUTHORITIES IN SUPPORT OF GOOGLE'S MOTION FOR SUMMARY JUDGMENT CASE NO. C 03-5340-JF (RS) Case 5:03-cv-05340-JF Document 234 Filed 12/26/2006 Page 24 of 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 designing, fielding, and analyzing his survey, writing his expert report, and preparing for deposition under the mistaken impression that there exists a product with the brand name "American Blinds": Q. A. Q. A. Q. A. Mr. Ossip, what are American Blinds? American Blinds are a brand of window blinds that are sold by a company called American Blinds, Wallpaper and More. Okay. And when you say they are a brand of window blinds, do you mean that there are window blinds out there that say American Blinds on them? That are called -- yeah, that are sold by this company. Okay. And the brand name on them is American Blinds? I don't know about the brand name on them if I looked at the blinds, but that is -- if I went in and asked for that brand, that's the brand that I would be shown. Hamm Decl. Ex. G at 8:17-9:8. In fact, no such product exists. His client, ABWF, contends (albeit without any evidence) that "American Blinds" is a short-form name of the company American Blind & Wallpaper Factory, a.k.a. American Blind Factory, a.k.a. American Blinds, Wallpaper & More, a.k.a. Decoratetoday.com. But whatever one calls the company, it does not sell any products named "American Blinds." Rather, it sells various well-known brands such as Levolor, HunterDouglas, and the like. See American Blinds, Wallpaper & More, Browse Our Blinds, http://www.decoratetoday.c

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