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

Filing 263

Memorandum in Opposition AMERICAN BLIND & WALLPAPER FACTORY, INC.'S OPPOSITION TO GOOGLE'S 230 MOTION FOR SUMMARY JUDGMENT filed byAmerican Blind & Wallpaper Factory, Inc., American Blind & Wallpaper Factory, Inc.. (Phillips, Robert) (Filed on 1/26/2007) Modified on 1/29/2007 (gm, COURT STAFF).

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Google Inc. v. American Blind & Wallpaper Factory, Inc. Doc. 263 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 1 of 43 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 ROBERT N. PHILLIPS (SBN 120970) ETHAN B. ANDELMAN (SBN 209101) HOWREY LLP 525 Market Street, Suite 3600 San Francisco, CA 94105 T: (415) 848-4900 F: (415) 848-4999 DAVID A. RAMMELT (Admitted Pro Hac Vice) SUSAN J. GREENSPON (Admitted Pro Hac Vice) KELLEY DRYE & WARREN LLP 333 West Wacker Drive, Suite 2600 Chicago, IL 60606 T: (312) 857-7070 F: (312) 857-7095 Counsel for Defendant/Counter-Plaintiff American Blind and Wallpaper Factory, 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 1-100, INCLUSIVE, Defendant. CASE NO. C 03-5340 AMERICAN BLIND & WALLPAPER FACTORY, INC.'S OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT Date: February 16, 2007 Time: 9:00 a.m. Judge: Hon. Jeremy Fogel AMERICAN BLIND & WALLPAPER FACTORY, INC., a Delaware corporation d/b/a decoratetoday.com, Inc., Counter-Plaintiff, v. GOOGLE, INC., Counter-Defendant. REDACTED VERSION CH01/RAMMD/216530.3 Dockets.Justia.com Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 2 of 43 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 3 of 43 TABLE OF CONTENTS 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 OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 Page 2. D. 1. 2. a. b. c. d. e. f. g. E. F. IV. The American Blind Marks Have Acquired Secondary Meaning ............................ 21 American Blind Has Raised Substantial Issues of Material Fact That Google's Use of the American Blind Marks Results in a Likelihood of Confusion .................... 23 The "Initial Interest Confusion" Doctrine Is Not Dead, As Google Suggests .......... 24 Google's Use of the American Blind Marks Results in a Likelihood of Confusion .................................................................................................................. 25 The American Blind Marks Are Strong ................................................................ 26 The Goods and Services Advertised on the Google Search Results Page Are Identical to Those Long Offered by American Blind ........................................... 27 The Keywords Sold by Google to American Blind's Competitors Are Identical to the American Blind Marks................................................................. 27 The Use of the American Blind Marks As Keywords Results in Actual Confusion .............................................................................................................. 27 American Blind's Products and Services Are Offered in Identical Marketing Channels................................................................................................................ 30 Search Engine Users Are Not Sophisticated......................................................... 30 Google Knowingly and Willfully Trades Upon The Goodwill of the American Blind Marks.......................................................................................... 30 American Blind Has Raised Substantial Issues of Material Fact Concerning Google's Dilution of the American Blind Marks.......................................................... 31 Google's "Unclean Hands" Argument is Specious....................................................... 33 CONCLUSION............................................................................................................ 34 - ii - Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 4 of 43 TABLE OF AUTHORITIES 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 CASES 1-800 Contacts v. WhenU.com, Inc., 414 F.3d 400 (2d Cir. 2005).................................................................................................. 19 800-JR Cigar, Inc. v. GoTo.com, Inc., 437 F. Supp. 2d 273 (D.N.J. 2006) ........................................................................... 17, 19, 20 Academy of Motion Picture Arts and Sciences v. Creative House Promotions, 944 F.2d 1446, 1454 (9th Cir. 1991)............................................................................... 23, 29 Adidas America, Inc. v. Kmart Corp., 2006 WL 2044857 (D. Or. June 15, 2006) ........................................................................... 32 American Scientific Chemical, Inc. v. American Hospital Supply Corp., 690 F.2d 791, 793 (9th Cir. 1982)................................................................................... 22, 23 AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979)................................................................................................... 2 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)................................................................................................. 12 Australian Gold, Inc. v. Hatfield, 4 36 F.3d 1228 (10th Cir. 2006)................................................................................... 16, 17, 20 Barlow v. Ground, 943 F.2d 1132, 1136 (9th Cir. 1991)..................................................................................... 12 Bosley Medical Inst., Inc. v. Kremer, 403 F.3d 672, 676 (9th Cir. 2005)......................................................................................... 24 Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1058 (9th Cir. 1999)......................................................................... 26, 27, 31 Burke v. Pitney Bowes, Inc. Long-Term Disability Plan, No. C 04-4483 MHP, 2005 WL 1876103 at *4 (N.D. Cal. August 8, 2005) ........................................................... 13 Buying For The Home LLC v. Humble Abode LLC, 2006 U.S. Dist. LEXIS 76371 (D.N.J. Oct. 20, 2006).......................................................... 18 Cairns v. Franklin Mint Co., 24 F. Supp. 2d 1013 (C.D. Cal. 1998) .................................................................................. 29 Campana, LLC v. Aetna Ins., 2006 WL 82911 (W.D. Wash. 2006) .................................................................................... 25 Celotex Corp. v. Catrett, 477 U.S. 317 (1986) .............................................................................................................. 12 Century 21 Real Estate Corp. v. Sandlin, 846 F.2d 1175 (9th Cir. 1988)............................................................................................... 26 -i- Page OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 5 of 43 TABLE OF AUHORITIES 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 OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 Clicks Billiards, Inc. v. Sixshooters Inc., Page 251 F.3d 1252, 1265 (9th Cir. 2001).................................................................................... 24 Committee for Idaho's High Desert, Inc. v. Yost, 92 F.3d 814, 822 (9th Cir. 1996)........................................................................................... 23 Dollar Systems, Inc. v. Avcar Leasing Systems, Inc., 890 F.2d 165, 173 (9th Cir. 1989)......................................................................................... 34 Downing v. Abercrombie & Fitch, 265 F.3d 994 (9th Cir. 2001)................................................................................................. 12 Dreamwerks Production Group v. SKG Studio, 142 F.3d 1127 (9th Cir. 1998)............................................................................................... 31 E. & J. Gallo Winery v. Consorzio Del Gallo Nero, 782 F. Supp. 457 (N.D. Cal. 1991) ....................................................................................... 28 E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280 (9th Cir. 1992)......................................................................................... 25, 29 Eclipse Assoc. Ltd. v. Data General Corp., 894 F.2d 1114 (9th Cir. 1990)............................................................................................... 23 Edina Realty, Inc. v. TheMLSonline.com, 2006 WL 737064 (D. Minn. March 20, 2006)................................................................ 17, 20 Eli Lilly & Company v. Natural Answers, Inc., 233 F.3d 456 (7th Cir. 2000)................................................................................................. 32 Empresa Cubana Del Tabaco v. Culbro Corp., 2004 WL 602295 (S.D.N.Y. 2004) ....................................................................................... 29 Flow Control Indust., Inc. v. AMHI, Inc., 278 F. Supp. 2d 1193 (W.D. Wash. 2003)............................................................................ 34 Ford Motor Co. v. Lloyd Design Corp., 184 F. Supp. 2d 665 (E.D. Mich. 2002)................................................................................ 32 Fuddruckers, Inc. v. Doc's B.R. Others, Inc., 826 F.2d 837 (9th Cir.1987).................................................................................................. 22 GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199,1208 (9th Cir. 2000)...................................................................................... 27 Government Employees Insurance Co. v. Google, Inc., 2005 WL 832398 at *5 (N.D. Cal. 2005).............................................................................. 16 Government Employees Insurance Co. v. Google, Inc., 330 F. Supp. 2d 700 (E.D. Va. 2004)........................................................................ 16, 20, 29 Grey v. Campbell Soup Co., 650 F. Supp. 1166, 1173 (C.D. Cal. 1986) ........................................................................... 23 - ii - Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 6 of 43 TABLE OF AUHORITIES 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 Page Int'l Star Class Yacht Racing Ass'n v. Tommy Hilfiger USA, Inc., 80 F.3d 739, 754 (2d Cir. 1996)............................................................................................ 31 International Profit Assoc., Inc. v. Paisola, 2006 U.S. Dist LEXIS 82971 at *9 (N.D. Ill. November 14, 2006)..................................... 18 Interstellar Starship Services, Ltd. v. Epix, Inc., 304 F.3d 936, 942 (9th Cir. 2002)......................................................................................... 25 Interstellar Starship Services, Ltd. v. Epix, Inc., 184 F.3d 1107 (9th Cir. 1999) ................. 12, 13 J.G. Wentworth, S.S.C., Ltd. Partnership v. Settlement Funding LLC, 2007 WL 30115 at *11 (E.D. Penn. January 4, 2007) .......................................................................... 18 Japan Telecom, Inc. v. Japan Telecom America, Inc., 287 F.3d 866, 870 (9th Cir. 2002) ..................................................................................................................................... 33 Jockey Int'l, Inc. v. Burkard, 185 U.S.P.Q. 201 (S.D. Cal. 1975)............................................... 28 Karl Storz Endoscopy-America, Inc. v. Surgical Technologies, Inc., 285 F.3d 848, 855 (9th Cir. 2001)................................................................................................................ 24 Kelley Blue Book v. Car Smarts, Inc., 802 F. Supp. 278, 291 (C.D. Cal. 1992) ........................ 34 Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1356 (9th Cir. 1985)................... 12, 13, 22 Mattel, Inc. v. MCA Records, Inc., 28 F. Supp. 2d 1120 (C.D. Cal. 1998)................................. 29 Meeker v. Meeker, 2004 WL 2457793, No. C 02-0741 JSW (N.D.Cal., July 6, 2004) ..................................................................................................................................... 23 Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 2006 WL 1418616 (S.D.N.Y. May 24, 2006)...................................................................................................... 20 Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 425 F. Supp. 2d 402 (S.D.N.Y. 2006) .................................................................................................................... 20 Morningside Group, Ltd. v. Morningside Capital Group, LLC, 182 F.3d 133, 139 (2d. Cir. 1999) ....................................................................................................................... 26 Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 433 (2003)................................................. 32 Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 223-24 (2d Cir. 1999)..................................... 32 New West Corp. v. NYM Co. of Cal., Inc., 595 F.2d 1194, 1201-02 (9th Cir. 1979) ................. 23 New West Corp. v. NYM Co. of Cal., Inc., 595 F.2d 1194, 1202 (9th Cir. 1979)....................... 27 Nissan Motor Co. v. Nissan Computer Corp., 378 F.3d 1002 (9th Cir. 2004) ........................... 24 Panavision International L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998) ............................ 5, 24 Park `N Fly, Inc. v. Dollar Park and Fly, Inc., 782 F.2d 1508, 1509 (9th Cir. OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 - iii - Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 7 of 43 TABLE OF AUHORITIES 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 1986) ....................................................................................................................................Page . 27 Plasticolor Molded Products v. Ford Motor Co., 698 F. Supp. 199, 201 (C.D. Cal. 1988) ......................................................................................................................... 12, 29, 31 Playboy Enterprises, Inc. v. Netscape Communications Corp., 2000 WL 1308815 (C.D. Cal. 2000 ............................................................................................................... 14, 15 Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004) ....................................................................................................................... passim Re/Max Int'l, Inc v. Help-U-Sell, Inc., 20 U.S.P.Q.2d 1945 (C.D. Cal. 1991) ........................... 28 Rescuecom Corp. v. Computer Troubleshooters USA, Inc., 2005 WL 4908692 (N.D. Ga. September 16, 2005) ...................................................................................... 18, 20 Rescuecom Corp. v. Google, Inc., 2006 U.S. Dist. LEXIS 70409 (N.D.N.Y. September 28, 2006) ............................................................................................................. 20 Savin Corp. v. Savin Group, 391 F.3d 439, 452-53 (2d Cir. 2004) ............................................ 32 Sega Enterprises Ltd. v. Maphian, 948 F. Supp. 923, 938 (N.D. Cal. 1996).............................. 24 SMC Promotions, Inc. v. SMC Promotions, 355 F. Supp.2d 1127 (C.D. Cal. 2005) ................. 25 STX, Inc. v. Trik Stik, Inc., 708 F. Supp. 1551 (N.D. Cal. 1988) ................................................ 29 Surfvivor Media, Inc. v. Survivor Productions, Inc., 406 F.3d 625, 634 (9th Cir. 2005) ..................................................................................................................................... 31 T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987)....................................................................................................................... 12 Thane Int'l Inc. v. Trek Bicycle Corp., 305 F.3d 894, 901 (9th Cir. 2002)........................... 13, 28 Toho Co., Ltd. v. Sears, Roebuck & Co., 645 F.2d 788, 790 (9th Cir. 1981) ............................. 13 U-Haul International, Inc. v. Jartran, Inc., 522 F. Supp. 1238, 1252 (D. Ariz. 1981), aff'd, 681 F.2d 1159 (9th Circuit 1982)..................................................................... 29 Walt Disney Productions v. Filmation Associates, 628 F. Supp. 871, 880 (C.D. Cal. 1986).............................................................................................................................. 25 Wells Fargo & Co. v. Stagecoach Properties, Inc., 685 F.2d 302, 307 (9th Cir. 1982) ..................................................................................................................................... 34 Wendt v. Host Int'l, Inc., 125 F.3d 806, 814 (9th Cir. 1997) ...................................................... 29 Whirlpool Props., Inc. v. LG Electronics, No. 1:03-cv-414, 2006 WL 62846, at * 3 (W.D. Mich. January 10, 2006) ......................................................................................... 29 White Swan, Ltd. v. Clyde Robin Seed Co, Inc., 729 F. Supp. 1257, 1264 (N.D. Cal. 1989).............................................................................................................................. 21 Yellow Cab Company of Sacramento v. Yellow Cab of Elk Grove, Inc., 419 F.3d OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 - iv - Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 8 of 43 TABLE OF AUHORITIES 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 OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 925, 930 (9th Cir. 2005)........................................................................................................ 22 Page STATUTES 15 U.S.C. 1125(c)(2)(A) ......................................................................................................... 32 OTHER AUTHORITIES 5 McCarthy, McCarthy on Trademarks and Unfair Competition 32.178 (4th ed. 2006)............................................................................................................................... 29 Trademark Manual of Examining Procedure ("TMEP") 1215.02 (4th ed.) ............................. 4 RULES Fed.R.Civ.P. 56(c)................................................................................................................ 12, 13 -v- Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 9 of 43 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 American Blind & Wallpaper Factory ("American Blind") and its predecessors have been in the window treatment and wall covering business for over 50 years and have painstakingly built its brand name and reputation, spending over $65 million in the last five years alone on advertising ranging from magazines to the Internet. Today, it is one of the largest direct-to-consumer provider of these products in the United States. American Blind's name and trademarks are critical to its success. The company has spent enormous resources to protect its brand by, among other things, registering its trademarks, registering hundreds of domain names containing variations of its brand and marks, and actively policing the use of its marks. The U.S. trademark laws were developed precisely to protect this kind of effort and hard work. Google makes a handsome profit selling American Blind's trademarks (and those of thousands of other companies) to others. It is undisputed that Google recommends and sells American Blind's trademarks to the highest bidder, usually American Blind's direct competitors, so that their advertisements will appear at the top (and along the sides) of Google's search results as "Sponsored Links" when users input a query with American Blind's marks. Google purposely does not define "Sponsored Links" or call them what they are paid advertisements because doing so would reduce user confusion. Indeed, independent studies show that Internet users generally don't understand the difference between genuine search results and paid results, and Google's own research shows that (a) there is a "high rate of confusion among participants when confronted with search displays involving advertisements," and (b) "click-throughs" to ads would decrease if the ads were actually called paid advertisements. Nor does Google use the clear, automated trademark disclaimer system that Google's own trademark policy team has patented. Google does not clearly identify its ads because, for Google, confusion is good. Google is not really a search company. It is an advertising agency. Google likes to say that its advertisements deliver "relevant information" to the consumer. Of course, during their OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 -1- Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 10 of 43 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 depositions in this case, no one at Google not even founder Larry Page himself could point to any empirical evidence inside or outside Google to support this claim. Google's advertising formula is simple: the more people that "click-through" to the ads on Google's website, the more money Google makes. To Google, it does not matter if the user knows they are being served an advertisement, stays on the advertiser's website, or actually buys anything from the advertiser. The instant a user clicks on an ad, Google is paid. Google's motion, which ignores the standard required for summary judgment entirely, should be denied for at least three reasons. First, the practice of auctioning and profiting by the sale of anther company's trademark as a keyword in Internet advertising is a "use in commerce" under the Lanham Act in the Ninth Circuit, e.g., Playboy, as well as every federal court outside of New York. Second, American Blind's trademarks are protectable. And third, there are genuine issues of material fact regarding the controlling issue of likelihood of confusion under the eight-factor test articulated in AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979), which test Google disregards completely. This case will have enormous repercussions on the way that business is conducted over the Internet. As the International Trademark Association explained to the Ninth Circuit in its amicus curiae brief in a case involving similar advertising practices over the Internet, Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004): "This appeal will have a significant precedential value in shaping Internet advertising practices. INTA urges this Court to make clear that traditional principles of trademark law ... and the types of uses that can trigger infringement claims, apply to cases involving the Internet just as they do in more conventional contexts." To Google, the stakes are equally as high, which explains why it was Google that brought this lawsuit and seeks a broad, sweeping declaration that its advertising practices are legal. II. STATEMENT OF FACTS A. American Blind's Business American Blind is one of the largest direct-to-consumer retailers of custom order window treatments and wall coverings in the United States. (Declaration of Jeffrey Alderman in -2- OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 11 of 43 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 Support of American Blind & Wallpaper Factory, Inc.'s Opposition to Google Inc.'s Motion for Summary Judgment ("Alderman Decl.") at 3, 4.) American Blind promotes, offers for sale and sells its home decorating products across the United States through its website, a network of thousands of on-line marketing affiliates, product catalogues, a shop at home service, a showroom in Michigan, and toll-free telephone numbers. (Id. at 5.) Over eight million customers have purchased draperies, window blinds, wallpaper and related products from American Blind. (Id. at 6.) American Blind's net sales of its products and services over the past five years well exceeds $500 million. (Id. at 7.). 1. The American Blind Marks Long prior to Google's infringing actions, American Blind adopted and used, and has continued to use, the names and marks AMERICAN BLINDS (and/or AMERICAN BLIND), AMERICAN BLIND FACTORY, DECORATETODAY, AMERICAN BLIND AND WALLPAPER, and AMERICAN BLIND & WALLPAPER FACTORY (hereinafter collectively identified as the "American Blind Marks") in connection with home decorating products and related services offered for sale and sold in interstate commerce. (Id. at 8.) Plaintiff's company has long been known to customers and prospective customers as, simply, "American" or "American Blinds." (Id. at 9, 11; see also 10, Ex. A.) With the exception of a brief period in 1999-2000, the corporate and/or trade names used by American Blind for over twenty years have featured the name "American Blind(s)." (Id. at 12.) Indeed, of the five American Blind Marks, four feature the name "American Blind(s)." Likewise, American Blind for many years has advertised and promoted its private label products under the designation "American" or "American Blinds." (Id. at 13, Ex. B.) As a result of this advertising, together with the manner in which American Blind's private label blinds have long been sold, American Blind's products and services are commonly known to customers and potential customers under the mark AMERICAN BLIND(S). (Id. at 11, 13.) a. AMERICAN BLINDS The mark AMERICAN BLINDS is registered in the United States Patent and Trademark Office (the "USPTO") for "mail order catalog services and online ordering services featuring OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 -3- Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 12 of 43 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 blinds, draperies, wall and window coverings, and home furnishings" under Registration Number 3,149,175. (Declaration of Paul W. Garrity in Support of Defendant American Blind & Wallpaper Factory, Inc.'s Opposition to Google Inc.'s Motion for Summary Judgment ("Garrity Decl."), Ex. A.) The AMERICAN BLINDS mark was registered by the USPTO as an inherently distinctive mark, and has been in commercial use since 1986. American Blind identifies itself, together with the products and services which it offers, using the mark AMERICAN BLINDS in multiple different advertising medium, including television and radio commercials, yellow pages listings, magazine advertisements, and postcards mailed to customers and prospective customers. (Alderman Decl. at 14.) American Blind's sales catalogues prominently feature the AMERICAN BLINDS mark (as the display URL for the American Blind's Website) on the cover, and the AMERICAN BLINDS mark is used throughout the pages of each catalogue, appearing on at least every other page. (Id. at 15, Ex. C.) American Blind's sales catalogue, identifies American Blind's products only by product type, American Blind's color number, color name and size. (Id. at 15.) American Blind's sales agents use sales scripts when answering calls from customers using these catalogues. These sales scripts repeatedly identify American Blind and the products and services offered in the catalogues using the AMERICAN BLINDS mark. (Id. at 16, Ex. D.) The AMERICAN BLINDS mark is the display URL for the American Blind's Website. (Id. at 17.) The mark appears prominently on each of the "blinds" category pages of the American Blind's Website. (Id. at 17.) Finally, the AMERICAN BLINDS name and mark appears on the actual products ordered from American Blind. The private label blinds sold by American Blind, together with product samples of such blinds sent to prospective customers, identify and mark American Blind's products with the designation American Blinds, Wallpaper & More together with the AMERICAN BLINDS mark. (Id. at 21, Ex. E.)1 No other name or Google claims that Trademark Manual of Examining Procedure ("TMEP") 1215.02 (4th ed.) demonstrates that American Blind's use of AMERICAN BLINDS in the domain name OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 1 -4- Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 13 of 43 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 designation appears anywhere on or in connection with the products or the packaging for the products. (Id.. at 22.) Indeed, the sales and shipping invoices accompanying American Blind's product samples and American Blind's private label products identify American Blind's products only by product type, color number, color name and size. (Id. at 22, Ex. F.) b. AMERICAN BLIND FACTORY The mark AMERICAN BLIND FACTORY is registered for "window blinds" in the USPTO under Registration Number 1,463,548. (Garrity Decl., Ex. B.) The AMERICAN BLIND FACTORY mark was registered by the USPTO as an inherently distinctive mark, and has been in use in commerce since 1986. The AMERICAN BLIND FACTORY mark has been used on and in connection with window blinds and advertising and promotion for American Blind's products and services. (Alderman Decl. at 23, 24.) c. DECORATETODAY The DECORATETODAY mark has been in use since 2000. (Garrity Decl., Ex. C.) DECORATETODAY is registered for "retail store services and on-line retail mail order services in the field of wall and window coverings and home decorating products" in the USPTO under Registration Number 2,470,542. (Id.) The DECORATETODAY mark is used as the destination URL for the American Blind Website and is used on the site. (Alderman Decl. at 25, see also 26.) d. AMERICAN BLIND & WALLPAPER The AMERICAN BLIND & WALLPAPER mark2 has been in use since 1986. www.americanblinds.com does not constitute trademark use. However, TMEP 1215.02 actually supports American Blind's position, in that it notes that "[w]hen a trademark . . . is comprised, in whole or in part, of a domain name, neither the beginning of the URL ("www") nor the TLD (e.g., ".com") have any source-indicating significance." Here, American Blind's mark is AMERICAN BLINDS, which does not include either the beginning of the URL or the TLD. Use of the AMERICAN BLINDS mark on products and catalogues as part of the domain name www.americanblinds.com, which directs users to its online store, is use under the Lanham Act. Cf. Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998) (finding defendant's registration and use of www.panavision.com domain name actionable as "use" under Lanham Act). 2 It is noted that, subsequent to the commencement of this litigation, American Blind's mark AMERICAN BLINDS, WALLPAPER & MORE was registered in the USPTO for "mail order catalog services and online ordering services featuring blinds, draperies, wall and window coverings, and home furnishings" under Registration Number 2,923,867. (Garrity Decl., Ex. D.) OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 -5- Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 14 of 43 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 (Alderman Decl. at 28.) The AMERICAN BLIND & WALLPAPER mark is used on order forms for use in purchasing American Blind's products and services. (Id. at 30.) e. AMERICAN BLIND & WALLPAPER FACTORY American Blind owns two registrations for the mark AMERICAN BLIND & WALLPAPER FACTORY in the USPTO, one for the mark with a design for "retail mail order services in the field of wall and window coverings" (Registration No. 2,022,925) and the other for "mail order catalog services and online ordering services featuring blinds, draperies, wall and window coverings, and home furnishings" (Registration Number 2,991,126). (Garrity Decl., Ex. E.) The mark has been in commercial use since 1986. Registration No. 2,022,925 issued from the USPTO as an inherently distinctive mark, and has achieved incontestable status. American Blind makes widespread use of the AMERICAN BLIND & WALLPAPER FACTORY mark. The mark is used in multiple different advertising medium, including yellow pages listings, magazine advertisements, catalogue display cases, and postcards mailed to customers and prospective customers. (Alderman Decl. at 31, 32, Ex. G.) The AMERICAN BLIND & WALLPAPER FACTORY mark appears on company letterhead, order forms, business cards, and apparel. Id. American Blind's showroom is identified on both exterior and interior signage under the AMERICAN BLIND & WALLPAPER FACTORY mark. (Id.) The AMERICAN BLIND & WALLPAPER FACTORY mark is used throughout the American Blind's Website. (Id. at 33.) 2. American Blind's Use of the American Blind Marks For over 20 years, American Blind has advertised and promoted its products and services sold under the American Blind Marks to customers and potential customers throughout the United States. American Blind has distributed between ten and twelve million mailings nationwide in each of the past ten years bearing the American Blind Marks. (Id. at 35.) American Blind maintains a database of over five million e-mail addresses, which it uses for The mark has been in commercial use since 2003. The AMERICAN BLINDS, WALLPAPER & MORE mark is in widespread use on American Blind's sales catalogues, the American Blind Website, and is the only mark, in addition to AMERICAN BLINDS, appearing on American Blind's products. (Alderman Decl. at 27.) OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 -6- Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 15 of 43 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 extensive e-mail campaigns run multiple times each month. (Id. at 36.) Since 2001, American Blind has spent in excess of $50 million advertising, marketing and promoting its goods and services under the American Blind Marks in medium other than the Internet ("Off-Line Marketing"). (Id. at 37.) This amount is in addition to the tens of millions of dollars invested by American Blind in such marketing of the American Blind Marks in the fifteen years the marks were in use before 2001. (Id. at 38.) American Blind's Off-Line Marketing efforts using the American Blind Marks include television and radio commercials, direct mail pieces (including catalogues and postcards), newspaper and magazine advertising, Yellow Pages advertising, trade shows, third party package insert programs, third party catalogue "blow-in" programs, cooperative advertising mailings, and magazine advertising. (Id. at 39.) American Blind also promotes the American Blind Marks through its third party partner programs. (See Id. at 40-41, Ex. H.) Under such programs, American Blind advertises its products and services in print programs through partners such as the U.S. Postal Service, G.M.A.C. Real Estate, and American Express. (Id. at 40.) 3. American Blind's Advertising, Promotion and Use of the American Blind Marks On-Line A significant and critical amount of American Blind's business is conducted via the Internet. Over fifty percent of American Blind's sales transactions are consummated through the American Blind Website. (Id. at 42.) The American Blind Website receives over thirty thousand visits each day by customers or potential customers. (Id.) American Blind makes over four hundred thousand sales transactions over the American Blind Website each year. (Id.) American Blind has spent over $10 million developing its website, and spends in excess of an additional $1 million each year in maintaining, enhancing and updating the American Blind Website. (Id. at 43.) American Blind since 2001 has spent over $15 million advertising, marketing and promoting its goods and services under the American Blind Marks exclusively in Internet marketing programs ("Internet Marketing") since 2001. (Id. at 44.) American Blind's Internet Marketing programs include affiliate campaigns, participating in on-line shopping networks and -7- OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 16 of 43 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 catalogue aggregation programs, data feed programs, and paid search programs, namely, keyword advertising. (Id. at 45.) Indeed, American Blind has to date paid Google over $5 million to advertise products and services under the American Blind Marks. (Id. at 46.) American Blind owns dozens of domain name registrations for iterations of each of the American Blind Marks, and uses each one of the marks in e-mail campaigns and in keyword advertising for its products and services. (Id. at 18, 19; see also 29.) American Blind's online affiliates actively use each one of the American Blind Marks on and in connection with thousands of websites and affiliate marketing campaigns advertising and promoting American Blind's products and services. (Id. at 20, 34.) Internet Marketing of the American Blind Marks also includes programs with credit card companies such as Visa, MasterCard, and Discover Card which have featured links to the American Blind Website. (Id. at 47.) American Blind's strategic marketing alliances also have an Internet Marketing component. Target, for example, promotes American Blind as a "Featured Partner" on its website. (Id. at 48, Ex. I.) Target's on-line customers are directed to a co-branded website on which products and services are advertised and offered for sale under the American Blind Marks. (Id.) Target has also sold American Blind products directly through Target's own website. Customers searching the Target website using the American Blind Marks, such as AMERICAN BLINDS, would receive search results identifying various styles and colors of American Blind's products. (Id.) B. Google's Conduct Google operates an Internet search engine. Google, however, alters the search engine experience and profits from it by delivering to the user advertisements called "Sponsored Links" on top of the genuine search results users expect. Most independent studies show that Internet users do not know the difference between paid search results and genuine search results. (Id., Ex. F.) Google's own evidence shows it counts on the ensuing confusion. 1. Google's "Old" Trademark Policy Is A Telling Admission Today, Google's policy is that it will not prevent companies from bidding upon trademarks owned by other companies as keywords so long as those trademarks are not also OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 -8- Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 17 of 43 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 18 of 43 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 19 of 43 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 20 of 43 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 21 of 43 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 2002), quoting Fed.R.Civ.P. 56(c). For this reason, the Ninth Circuit has "cautioned that district courts should grant summary judgment motions regarding the likelihood of confusion sparingly, as careful assessment of the pertinent factors that go into determining likelihood of confusion usually requires a full record." Id. at 901-902. Indeed, the Ninth Circuit has admonished, "[b]ecause of the intensely factual nature of trademark disputes, summary judgment is generally disfavored in the trademark arena." Interstellar, 184 F.3d at 1109 (emphasis added); Levi Strauss, 778 F.2d at 1356 n.5; see also Toho Co., Ltd. v. Sears, Roebuck & Co., 645 F.2d 788, 790 (9th Cir. 1981) (likelihood of confusion is a question of fact, and can seldom be resolved by summary judgment). B. Google Profits By Selling American Blind's Trademarks To Others, Which Clearly Is A "Use In Commerce" Under The Lanham Act Google sells, and its advertising customers hope to purchase, the possibility that they will intercept consumers who, due to American Blind's extensive advertising, name and reputation, are trying to find one of the nation's largest and most respected and trusted direct-to-consumer retailer of window treatments and wall coverings. In this advertising scheme, Google admits that it sells American Blind's trademarks to advertisers, and it further admits that it profits from the sale of these trademarks. Yet, without disclosing to this Court the full body of case law in this developing area,3 Google argues that it is not making "use in commerce" of American Blind's trademarks, as that phrase is interpreted under the Lanham Act. Although not evident from Google's brief, this position is contrary to Ninth Circuit law and the law in most other courts. 1. The Ninth Circuit's Decision in Playboy Enterprises, Inc. v. Netscape Communications Corp Google returns to the argument that it is not "using" American Blind's trademarks because it does not "brand" its own products or services with the American Blind Marks. Google failed to cite to any adverse authority in its brief. Most of the current cases have refuted the position advanced by Google in this case, but were not cited, addressed or distinguished by Google. Generally, a party has an ethical duty to make the Court aware of adverse authority. See Burke v. Pitney Bowes, Inc. Long-Term Disability Plan, No. C 04-4483 MHP, 2005 WL 1876103 at *4 (N.D. Cal. August 8, 2005). This was not done here not even once. OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 3 - 13 - Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 22 of 43 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 However, as the Ninth Circuit recently held in Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004), "branding" one's own goods is not a required element of a trademark infringement or dilution claim. In that case, Playboy alleged that two search engines committed trademark infringement by selling Playboy's trademarks as keywords to advertisers that wanted their ads to appear on the search results page when Playboy's trademarks were used as search terms. Importantly, none of the ads in question actually displayed Playboy's marks or used them in the ad text; rather, as is the case here, Playboy's marks were the triggering mechanism for the advertisers' unlabeled advertisements. Under the mistaken belief that "Defendants do not use [Playboy's] trademarks qua trademarks," the district court granted the search engines' motion for summary judgment. 2000 WL 1308815 (C.D. Cal. 2000). The Ninth Circuit reversed, holding that the search engines had indeed engaged in a "trademark use" of Playboy's marks and that Playboy had established a genuine issue of material fact regarding the infringement and dilution of those marks. Applying the wellestablished "initial interest confusion" doctrine, the court had no difficulty finding that "defendants clearly used the marks in commerce," and, further, that the "use in commerce" requirement for purposes of bringing such a claim under the Lanham Act "sweeps as broadly as possible." 354 F.3d at 1024 and n.11. Considering plaintiff's claims of infringement, the court found: Some consumers, initially seeking PEI's sites, may initially believe that unlabeled banner advertisements are links to PEI's sites or to sites affiliated with PEI.... The Internet user will have reached the site because of defendants' use of PEI's mark. Such use is actionable. Id. at 1025-26 (emphasis added). The Ninth Circuit specifically addressed, and rejected, the argument that the Lanham Act did not apply because the search engines did "not label their own goods with [Playboy's] marks." Id. at 1033. The International Trademark Association ("INTA") filed an amicus curiae brief urging the precise outcome reached by the Ninth Circuit. INTA interceded on behalf of its thousands of members because it feared, rightly so, that accepting the search engine's novel and OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 - 14 - Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 23 of 43 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 unprecedented argument would re-write decades of trademark jurisprudence: The District Court also reached the erroneous legal conclusion that Excite and Netscape had made a "non-trademark use" as to "which the infringement laws simply do not apply." [] Whether the District Court relied on ... the fact that the defendants used [Playboy's] marks in connection with their advertiser's products and services rather than their own products and services, this was error. **** This appeal will have a significant precedential value in shaping Internet advertising practices. INTA urges this Court to make clear that traditional principles of trademark law, including those regarding secondary meaning and the types of uses that can trigger infringement claims, apply to cases involving the Internet just as they do in more conventional contexts. 2001 WL 34355151 at pp. 3-4 (emphasis added). (See also Garrity Decl., Ex. O ("limiting initial interest confusion cases to uses by competitors ... would eliminate the review of key factors of the traditional likelihood of confusion analysis." (emphasis added).) Google cannot, and does not, distinguish its conduct from the behavior of the search engines that the Ninth Circuit expressly ruled to be a "use" of the Playboy marks in commerce. The underlying conduct in both cases is analogous, if not practically identical: both involve the practice of Internet advertising based upon "keying" search terms, 4 even though the trademarks in question are not displayed to the consumer anywhere in the ad text. 354 F.3d at 1022-23. the defendants in both cases are the search engines who sold the trademarked terms, not the advertisers who bid upon those terms. in both cases the offending advertisements are displayed at the top and along the side of the genuine search results page. Id. at 1023. in both cases the advertisements are not clearly labeled as "PAID ADVERTISEMENTS". Likewise, neither Google nor the search engines in Playboy had any requirement that advertisers actually identify themselves on their advertisement. Id. in both cases the search engines actively monitor "click-through" rates and would profit from each click-through to an advertisers' website, yet the search engines would do "nothing to prevent click-throughs that result from confusion." Id. at 1028. The Ninth Circuit in Playboy described "keying" as advertisements triggered by inputting search terms, including trademarks. 354 F.3d at 1022-23. OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 4 - 15 - Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 24 of 43 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 25 of 43 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 these actions were attempts to divert traffic to Defendants' Web sites.... Thus, Defendants used the goodwill associated with Plaintiffs' trademarks in such a way that consumers might be lured to the lotions from Plaintiffs' competitors. This is a violation of the Lanham Act. 436 F.3d at 1239. Keyword advertising was again before a court in Edina Realty, Inc. v. TheMLSonline.com, 2006 WL 737064 (D. Minn. March 20, 2006). The court expressly considered the issue of whether a competitor's purchase and use of a trademark as a keyword on the Google and Yahoo! search engines was an actionable "use in commerce" under the Lanham Act. Like Google here, the defendant claimed it was not engaged in a "use" under the Lanham Act because there was "no public promotion of the mark during the search transaction." 2006 WL 737064 at *3 (citation omitted). The court flatly rejected this argument: While not a conventional `use in commerce,' defendant nevertheless uses the Edina Realty mark commercially. Defendant purchases search terms that include the Edina Realty mark to generate its sponsored link advertisement. [citing Brookfield] Based on the plain meaning of the Lanham Act, the purchase of search terms is a use in commerce. Id. at *3 (emphasis added). Nor did the court have any difficulty finding a likelihood of confusion: "it is undisputed that defendant uses a mark identical to plaintiff's by purchasing Edina Realty as a search term, placing it in the text of its sponsored link, and placing it in hidden text and links." Id. at *5. In another case not cited or considered by Google, the District of New Jersey confronted keyword advertising in 800-JR Cigar, Inc. v. GoTo.com, Inc., 437 F. Supp. 2d 273 (D.N.J. 2006). In JR Cigar, plaintiff argued that search engine "GoTo.Com" violated the Lanham Act by diverting Internet users seeking to find JR Cigar to its rivals, and by profiting from the unauthorized sale of the JR Cigar's trademarks to its competitors. Id. at 280. Like Google, GoTo prompted the purchase of trademarks as search terms through a "Search Term Suggestion Tool," but argued that it had "not made any trademark use of any JR Cigar search terms" under the theory that "it is the advertiser who selects the search term and uses it in conjunction with the content contained on the advertiser's website." Id. at 282. The court considered and rejected the argument, finding that GoTo's advertising OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 - 17 - Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 26 of 43 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 program was a "use in commerce" under the Lanham Act: GoTo makes trademark use of the JR marks in three ways. First, by accepting bids from those competitors of JR desiring to pay for prominence in search results, GoTo trades on the value of the marks. Second, by ranking its paid advertisers before any "natural" listings in a search results list, GoTo has injected itself into the marketplace, acting as a conduit to steer potential customers away from JR to JR's competitors. Finally, through the Search Term Suggestion Tool, GoTo identifies those of JR's marks which are effective search terms and markets them to JR's competitors. 437 F. Supp. 2d at 285. Accordingly, the court concluded that GoTo was "making trademark use of JR Cigar's trademarks." Id. (also finding material issues in dispute relating to the issue of likelihood of confusion). Likewise, the purchase of plaintiff's descriptive trademark as a keyword (but not used in ad text) in connection with Google's Adwords program was at issue in Buying For The Home LLC v. Humble Abode LLC, 2006 U.S. Dist. LEXIS 76371 (D.N.J. Oct. 20, 2006). While the court acknowledged that the "[d]efendants' alleged use of [p]laintiff's mark is certainly not a traditional `use in commerce,'" it nonetheless found that "[p]laintiff has satisfied the `use' requirement of the Lanham Act." 2006 U.S. Dist. LEXIS 76371 at *26. The court reached this conclusion for two reasons: First, the alleged purchase of the keyword was a commercial transaction that occurred "in commerce," trading on the value of Plaintiff's mark. Second, Defendants' alleged use was both "in commerce" and "in connection with any goods or services" in that Plaintiff's mark was allegedly used to trigger commercial advertising which included a link to Defendants' furniture retailing website. 2006 U.S. Dist. LEXIS 76371 at *26-27. See also J.G. Wentworth, S.S.C., Ltd. Partnership v. Settlement Funding LLC, 2007 WL 30115 at *11 (E.D. Penn. January 4, 2007) (the purchase of trademarks as keywords but not used in ad text in connection with Google's Adwords advertising program was held to be a "use in commerce" under the Lanham Act.); International Profit Assoc., Inc. v. Paisola, 2006 U.S. Dist LEXIS 82971 at *9 (N.D. Ill. November 14, 2006) ("defendants are using terms trademarked by IPA as search terms [but not in ad text] in Google's Adwords program in a manner likely to cause confusion."); Rescuecom Corp. v. Computer Troubleshooters USA, Inc., 2005 WL 4908692 (N.D. Ga. September 16, 2005). - 18 - OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 27 of 43 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 5 These cases are either directly on point or, if distinguishable at all, they are only marginally so. No doubt, Google has not brought these cases to the Court's attention or attempted to distinguish them for one simple reason: as set forth below, no federal court (outside of New York) has agreed with Google. 3. The 1-800 Contacts Case Did Not Address Keyword Advertising And The Only Two Cases Google Relies Upon Are Limited to Their Facts Google's reliance throughout its brief on the Second Circuit's ruling in 1-800 Contacts v. WhenU.com, Inc., 414 F.3d 400 (2d Cir. 2005) is misplaced. 1-800 Contacts involved pop-up ads: an internal unpublished directory of terms used to trigger the delivery of advertising. The Second Circuit expressly distinguished pop-up advertisements from the keyword advertising scheme before the Court here, finding it significant that "WhenU's activities do not ... divert or misdirect [search engine users] away from [plaintiff's] website, or alter in any way the results a [search engine user] will obtain when searching with the [plaintiff's] trademark." Id. at 410.5 Further, the Second Circuit specifically distinguished the defendant's internal use to trigger a "pop-up" advertisement from the actions of "several other internet advertising companies," such as Google, that "`sell' keyword trademarks to ... customers." Id. at 411. In addition, the Second Circuit specifically noted that pop-up ads are distinguishable from Google's AdWords scheme because "WhenU does not ... permit [advertising clients] to request or purchase specific keywords" Id. at 409, and "does not link trademarks to any particular competitor's ads, and a customer cannot pay to have its pop-up ad appear on any specific website or in connection with any particular trademark." Id. at 411. Finally, the pop-up ads at issue were generated in connection with a software program that the user consented to download. Id. at 404. Thus, the conduct before this Court is fundamentally different than that presented to the Second Circuit in 1-800 Contacts. Google is thus left to attempt to hang its "no use in commerce" argument on two district The court in 800-JR Cigar, Inc. v. GoTo.com, Inc., 437 F. Supp. 2d at 273, specifically distinguished the practice of giving prominence in search results to the highest bidder from the pop-up advertising cases like 1-800-Contacts. "Such use," the court observed, "is qualitatively different from the pop-up advertising context, where the use of trademarks in internal computer coding is neither communicated to the public nor for sale to the highest bidder." Id. at 285. OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 - 19 - Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 28 of 43 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 court cases decided in New York after 1-800 Contacts. In Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 425 F. Supp. 2d 402 (S.D.N.Y. 2006) (granting motion to dismiss); and 2006 WL 1418616 (S.D.N.Y. May 24, 2006) (denying reconsideration), the court granted defendants' motion to dismiss trademark infringement claims predicated upon keyword advertising. Quoting language from 1-800 Contacts, the court ruled that the use of the mark ZOCOR to trigger the display of advertising was merely an "internal use" and was "not use of the mark in a trademark sense." 425 F. Supp. 2d at 415. However, the court expressly noted that "it is significant that defendants actually sell Zocor ... on their websites." Id. at 415-416. "Under these circumstances," the court concluded, "there is nothing improper with defendants' purchase of sponsored links to their websites from searches of the keyword `Zocor.'" Id. at 416. The other case relied upon by Google, Rescuecom Corp. v. Google, Inc., 2006 U.S. Dist. LEXIS 70409 (N.D.N.Y. September 28, 2006), should be disregarded for three reasons. First, its reasoning is flawed and contrary to other courts.6 Second, the plaintiff in that case did not allege, as American Blind does here, that Google actively suggested that competitor's buy other companies' trademarks through its "Keyword Suggestion Tool." Thus, as alleged here, there is a display of American Blind's trademarks. Third, the Rescuecom Corp. decision ignores the Playboy case and other binding precedent in the Ninth Circuit. C. American Blind Has Identified Specific Facts Demonstrating That it Has a Protectable Interest In the American Blind Marks The American Blind Marks readily identify and distinguish American Blind's products and services from those of others. The American Blind Marks which are the subject of trademark registrations (AMERICAN BLINDS, AMERICAN BLIND AND WALLPAPER FACTORY, AMERICAN BLIND FACTORY, and DECORATETODAY) are entitled to statutory presumptions of ownership and validity, and, further, American Blind can prove secondary meaning in each one of the American Blind Marks. To reach the result it did, the district court in New York simply disregarded the opposite decisions reached by this Court, the Tenth Circuit in Australian Gold v. Hatfield, the court (twice) in Geico v. Google, the court in Edina Realty v. MSLOnline, the court in 800-JR Cigar, and by a district court in Georgia in a case involving the same plaintiff. Rescuecom Corp. v. Computer Troubleshooters USA, Inc., 2005 WL 4908692 (N.D. Ga. September 16, 2005). OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 6 - 20 - Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 29 of 43 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 1. AMERICAN Formative Marks Are Readily Protectable Google in its brief falsely argues that "AMERICAN" formative marks are inherently weak, second class citizens. This is belied by the existence of some of the most famous marks presently in use in the United States, including AMERICAN BROADCASTING COMPANY, AMERICAN EXPRESS, AMERICAN STANDARD, AMERICAN AIRLINES, and AMERICAN IDOL. Google further suggests that marks comprised of AMERICAN plus a descriptive term are generally not viewed as inherently distinctive by the USPTO, and require a showing of inherent distinctiveness. This is not true. The Patent and Trademark Office has registered each of American Blind's marks AMERICAN BLINDS, AMERICAN BLIND AND WALLPAPER FACTORY, AMERICAN BLIND FACTORY, and DECORATETODAY without requiring a showing that the marks had acquired secondary meaning. Such registrations "certainly [are] an indication of `inherent distinctiveness'" of American Blind's marks. White Swan, Ltd. v. Clyde Robin Seed Co, Inc., 729 F. Supp. 1257, 1264 (N.D. Cal. 1989). Furthermore, the USPTO has registered a wide range of such marks on the Principal Register without requiring the applicant to make any showing of acquired distinctiveness under Section 2(f) of the Lanham Act. In addition to American Blind's registrations, these marks include: AMERICAN STOCK EXCHANGE (Reg. No. 876,068); ) for, inter alia, "securities exchange services namely, providing a market for securities, providing information about securities and corporations issuing securities, compiling and disseminating price level and volume indices" owned by American Stock Exchange LLC; AMERICAN GREETINGS (Reg. No. 878,262) ) for "greeting cards" owned by American Greetings Corporation; AMERICAN FOOTBALL CONFERENCE (Reg. No. 1,092,963) ) for "associated services, namely, promoting the interests of member football clubs, scheduling games, and promoting interest in football" owned by the National Football League. These registrations clearly demonstrate that marks comprised of the term AMERICAN plus a descriptive or generic word are not automatically viewed as descriptive, and may be registered and protected without a need for showing of acquired distinctiveness. 2. The American Blind Marks Have Acquired Secondary Meaning The Ninth Circuit, ruling that the unregistered mark AMERICAN SCIENTIFIC had - 21 - OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 30 of 43 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 acquired secondary meaning as used in connection with chemicals and chemical handling accessories, noted that `[s]econdary meaning has been defined as association, nothing more.'" American Scientific Chemical, Inc. v. American Hospital Supply Corp., 690 F.2d 791, 793 (9th Cir. 1982), quoting Carter-Wallace, Inc. v. Procter & Gamble Co., 434 F.2d 794, 802 (9th Cir. 1970). "[T]he question of secondary meaning is one of fact." Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1355 (9th Cir.1985) (en banc). Notwithstanding the USPTO recognizing the inherent distinctiveness of the American Blind Marks, Google argues that American Blind's names and marks are descriptive. Assuming, arguendo, that the marks herein are properly classified as descriptive, "[t]o determine whether a descriptive mark has secondary meaning, a finder of fact considers: `(1) whether actual purchasers of the product bearing the claimed trademark associate the trademark with the producer, (2) the degree and manner of advertising under the claimed trademark, (3) the length and manner of use of the claimed trademark, and (4) whether use of the claimed trademark has been exclusive.'" Yellow Cab Company of Sacramento v. Yellow Cab of Elk Grove, Inc., 419 F.3d 925, 930 (9th Cir. 2005), quoting Levi Strauss, 778 F.2d at 1358 (internal quotation omitted). American Blind's evidence demonstrates that there is a genuine issue of material fact for trial on the issue of secondary meaning in the American Blind Marks. American Blind has exclusively advertised and promoted its products and services under the American Blind Marks nationwide for over 20 years. American Blind has expended tens of millions of dollars advertising under the American Blind Marks with resultant sales success in the hundreds of millions of dollars. The use of the American Blind Marks has ranged from all forms of advertising to the products themselves. Such efforts undoubtedly result in an association between the American Blind Marks and plaintiff in the minds of purchasers. Indeed, the fact that Google is affirmatively suggesting to its advertising customers that they use keywords comprised in whole or in part of the American Blind Marks itself is evidence of secondary meaning. As recognized by the Ninth Circuit, "deliberate copying may suffice to support an inference of secondary meaning." Fuddruckers, Inc. v. Doc's B.R. Others, Inc., 826 F.2d 837, 844 (9th Cir.1987); cf. Meeker v. Meeker, 2004 WL 2457793, No. C 02-0741 JSW OPPOSITION TO GOOGLE'S MOTION FOR SUMMARY JUDGMENT, Case No. C 03-5340-JF (RS) CH01/RAMMD/216530.3 - 22 - Case 5:03-cv-05340-JF Document 263 Filed 01/26/2007 Page 31 of 43 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 (N.D.Cal., July 6, 2004). Google and its advertising customers deliberately copy the American Blind Marks and use them as keywords in Google's AdWords program. These actions, in themselves, evidence the strength, value, goodwill and secondary meaning in American Blind Marks, resulting entirely from American Blind's efforts herein. In a last ditch effort to assail American Blind's evidence of secondary meaning in the American Blind Marks, Google suggests that American Blind cannot prove secondary meaning in the marks because it has failed to conduct a market survey on secondary meaning. This is false. Although it is true that expert market surveys can be used to evidence secondary meaning, the Ninth Circuit has made it abundantly clear that surveys are not the only means to demonstrate the acquisition of secondary meaning. Committee for Idaho's High Desert, Inc. v. Yost, 92 F.3d 814, 822 (9th Cir. 1996) ("survey evidence is only one of the most persuasive ways to prove secondary meaning, and not a requirement for such proof."); see also American Scientific, 690 F.2d at 793 ("consumer testimony is

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