Buying for the Home, LLC v. Humble Abode, LLC, 459 F.Supp.2d 310 (D.N.J. 2006) (full-text).
Factual Background Edit
Plaintiff and defendant competed in the online retail furniture business. Plaintiff operated under the TOTAL BEDROOM mark through its website at “totalbedroom.com,” and defendant sold furniture under the HUMBLE ABODE mark through “humbleabode.com.”
Trial Court Proceedings Edit
Plaintiff alleged that defendant bought the keyword “total bedroom” from Google, and sued for false designation of origin and common law trademark infringement and unfair competition. Defendant counterclaimed for trademark infringement, unfair competition, and false advertising based primarily on plaintiff’s use of defendant’s marks in comparative advertising on plaintiff’s website.
Defendant moved for summary judgment on all of plaintiff’s claims and several of its counterclaims. The court denied defendant’s motion for summary judgment on plaintiff’s claims. The court initially found genuine issues of material fact regarding the protectability of the TOTAL BEDROOM mark.
It next examined plaintiff’s allegation that defendant purchased the “total bedroom” keyword from Google. Although defendant disputed this allegation and plaintiff had no direct evidence on this point, considering all facts and logical inferences in favor of plaintiff as the non-moving party, the court drew the inference that defendant purchased the keyword. Plaintiff’s evidence included testimony that Google searches for “total” or “bedroom” did not produce any sponsored ads for defendant but such ads did appear when “total bedroom” was searched.
The court then turned to the “unsettled” question of whether the purchase of another party’s protected mark as a search engine keyword constituted unfair competition or trademark infringement. It discussed the various cases addressing whether the purchase or sale of trademark-related keywords constituted a “trademark use” or “use in commerce” under the Lanham Act. Ultimately, the court held that the alleged keyword purchase was “in commerce” and “in connection with any goods or services” and satisfied the “use” requirement because it was: (1) a commercial transaction in that it traded on the value of plaintiff’s mark, and (2) used both “in commerce” and “in connection with any goods or services” because plaintiff’s mark “was allegedly used to trigger commercial advertising which included a link to Defendant’s furniture retailing website.”
The court “stresse[d]” that this finding did not determine whether defendant’s actions were unlawful as plaintiff still had to prove a likelihood of confusion. However, because neither party addressed the element of likelihood of confusion for plaintiff’s unfair competition and infringement claims, it denied defendant’s motion for summary judgment on those claims. The court next denied defendant’s motion for summary judgment on its counterclaims for infringement, unfair competition, and false advertising.
The court focused its analysis entirely on defendant’s HUMBLE ABODE mark because it could not conclude from the evidence presented that defendant’s unregistered product names were protectable. In response to defendant’s counterclaims, plaintiff argued that truthful comparison of competing products in advertising was neither trademark infringement nor unfair competition. The court noted that plaintiff’s comparative advertising defense was a form of nominative fair use.
Applying the likelihood-of-confusion factors relevant to a nominative fair use case, however, the court found genuine issues of fact and denied summary judgment. The court also found genuine issues of material fact on defendant’s false advertising counterclaim. Finally, the court granted plaintiff’s motion to strike defendant’s request for attorneys’ fees on its counterclaims because: (1) nothing in the facts presented to the court showed that plaintiff’s actions “rose to the level of bad faith, fraud, malice, knowing infringement or the like,” (2) this case involved “novel issues of Internet advertising rather than flagrant violations of well-settled trademark law,” and (3) plaintiff consulted with legal counsel regarding its use of defendant’s marks and plaintiff used trademark disclaimers on its website.
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