Corporate Counsel Daily, Law firm did not infringe by purchasing rival’s mark as Google Ads keyword, (Oct 23, 2024)

By Thomas Long, J.D.

Evidence that the defending firm’s ads confused consumers was “de minimis,” and online shoppers were savvy enough to distinguish between ads and organic search results.

The sophisticated nature of online consumers, the lack of evidence of actual confusion, and other factors weighed against finding that there was a likelihood of confusion from a personal injury law firm’s purchase of a rival firm’s mark, “Lerner & Rowe,” as a Google Ads keyword, the U.S. Court of Appeals in San Francisco has held. Therefore, the appellate court affirmed a district court’s grant of summary judgment in favor of the defending firm—which did business as The Accident Law Group—on Lerner & Rowe’s trademark infringement claims. Confusion was unlikely even though Lerner & Rowe’s mark was strong. Another factor weighing against a likelihood of confusion was the appearance and labeling of the advertisements at issue, along with the surrounding context on the Google search results screen, which identified them as ads clearly enough that they would not “lure reasonably prudent online shoppers into unwittingly clicking on them in search of Lerner & Rowe’s website.” Although the likelihood of confusion was ordinarily a fact-intensive issue, this was one of the rare instances in which the mark owner’s case was so weak that summary judgment was appropriate, in the Ninth Circuit’s view (Lerner & Rowe PC v. Brown Engstrand & Shely LLC, No. 23-16060 (9th Cir. Oct. 22, 2024)).

The plaintiff, Lerner & Rowe PC, an Arizona personal injury law firm, held several federally registered trademarks, including the name “Lerner & Rowe.” The defendant, Brown, Engstrand & Shely, LLC, doing business as The Accident Law Group (ALG), purchased the term “Lerner & Rowe” as a keyword for search engine operator Google’s “Google Ads” service. This meant that users running searches on the Lerner & Rowe name were served advertisements for ALG along with the ordinary (or “organic”) search results. Lerner & Rowe filed suit against ALG, asserting that ALG’s purchase of the mark as a Google Ads keyword constituted trademark infringement. ALG moved for summary judgment, and the district court granted the motion, concluding that no reasonable juror could find a likelihood of confusion. Lerner & Rowe appealed to the Ninth Circuit. The Ninth Circuit went through the relevant “likelihood of confusion” factors before affirming the district court’s order.

Strength of the Lerner & Rowe mark. ALG did not dispute the district court’s finding that Lerner & Rowe’s mark was strong. The mark was federally registered, and Lerner & Rowe had spent millions of dollars advertising the mark, which had resulted in significant business success. This factor weighed in favor of Lerner & Rowe, according to the Ninth Circuit. However, it was the only factor that did so.

Actual confusion evidence. The sparse evidence of actual confusion weighed against the complaining law firm. Lerner & Rowe pointed to 236 phone calls to ALG’s intake department during which the caller mentioned Lerner & Rowe when asked how they found ALG’s phone number. The court compared this number to data from Google showing that searches for “Lerner & Rowe” had resulted in over 109,000 displays of ALG’s ads. Therefore, if the evidence regarding the phone callers constituted evidence of actual confusion, these instances only constituted only 0.216% of the total number of users exposed to the challenged ads. Additionally, users clicked on ALG’s ads less than 7% of the time Google displayed them. A survey commissioned by ALG found that ALG’s ads confused between 0% and 3% of consumers. Lerner & Rowe did not dispute these statistics and did not commission its own consumer survey. In the appellate court’s view, the district court correctly regarded the actual confusion evidence as “de minimis.” According to the Ninth Circuit, no reasonable jury could find a likelihood of confusion based on the evidence proffered by Lerner & Rowe.

The court noted that due to the difficulties in obtaining evidence of actual confusion, the absence of such evidence is generally deemed not noteworthy in the likelihood of confusion analysis. However, in this case, the court explained, “the nature of the actual confusion evidence paints a picture that affirmatively contradicts Lerner & Rowe’s assertions that ALG’s advertisements were likely to confuse an appreciable number of consumers, compelling us to conclude that this factor should weigh substantially in favor of ALG.”

Purchaser care. Consumers looking for legal representation were likely to exercise a high degree of care in decision-making, in the court’s view. Moreover, given that online commerce was now commonplace, “those accustomed to online shopping are typically savvy enough to differentiate between search engine results,” said the court. Therefore, the factor of the degree of care exercised by a reasonably prudent consumer weighed in ALG’s favor.

Labeling and appearance of ads. The district court had examined and analyzed three screenshots showing ALG’s ads, concluding that the ads would not confuse a reasonably prudent consumer searching online for personal injury legal services. The Ninth Circuit agreed. Two of the screenshots showed search results with a hit for Lerner & Rowe’s website, and the appellate court considered it reasonable that such a result probably appeared after ALG’s ad in the first screenshot. Even if the results didn’t include an entry for Lerner & Rowe, the appellate court found it hard to believe that someone conducting a search with the phrase “Lerner & Rowe” would not choose to click on the link that exactly matched their search query. In addition, the ads themselves were not confusing; each contained the boldface designation “Ad,” which distinguished them from organic search results. The fact that ALG’s ads sometimes appeared above organic results for Lerner & Rowe’s website did not change the analysis, the court said. “We think that reasonably prudent consumers shopping on Google would be accustomed to scrolling past advertisements at the top of a list of search results to find the organic result relevant to their query,” the court reasoned.

Other factors. The Ninth Circuit briefly examined other likelihood of confusion factors and determined that they did not change its conclusion that Lerner & Rowe had failed to provide sufficient evidence that confusion was likely. With respect to the factor of the proximity of the goods, the court said that “even though ALG and Lerner & Rowe are direct competitors offering similar services, savvy online shoppers would be able to differentiate between the parties’ links on Google.” Although both parties advertised on Google, this practice was so commonplace that the similarity of marketing channels was afforded little or no weight. With respect to the similarity of marks, the court noted that ALG’s ads did not display Lerner & Rowe’s mark but instead showed ALG’s own mark. The court also said that Lerner & Rowe failed to distinguish between an intent to deceive and an intent to compete on the part of ALG.

Conclusion. After weighing the factors, the appellate court agreed with the district court that the advertising keyword use of the Lerner & Rowe mark was not likely to confuse consumers. “The district court was correct to conclude that this is one of the rare trademark infringement cases susceptible to summary judgment,” the Ninth Circuit said. Accordingly, the Ninth Circuit affirmed the grant of summary judgment to ALG.

Concurring opinion. Circuit Judge Roopali H. Desai concurred in the majority opinion in full but wrote separately “to urge our court to reconsider whether keyword bidding and purchasing constitutes a ‘use in commerce’ under the Lanham Act.” Noting that the purchase of an advertising keyword “involves no display or presentation of a mark whatsoever,” Judge Desai suggested that the court incorrectly determined that such conduct was “use” of a competitor’s mark in the case of Network Automation, Inc. v. Advance Systems Concepts, Inc., 638 F.3d 1137, 1144–45 (9th Cir. 2011). According to Judge Desai, the panel in that case relied on factually distinguishable cases, in particular a Second Circuit case involving claims against Google as the seller of the keywords at issue, rather than the purchaser (Rescuecom Corp. v. Google, Inc., 562 F.3d 123, 129 (2d Cir. 2009)). “At bottom, trademark law is designed to protect parties against infringing uses of their marks,” Judge Desai said. “Bidding on and purchasing keyword search terms may not constitute such a use. We should take the opportunity to directly address this issue en banc rather than relying on our holding in Network Automation.”

The case is No. 23-16060.

Judge: Alba, A.

Attorneys: Andrew Gaggin (Lerner & Rowe PC) for Lerner & Rowe PC. Aaron Keith Haar (Jaburg Wilk, PC) for Brown Engstrand & Shely LLC d/b/a Accident Law Group.

Companies: Lerner & Rowe PC; Brown Engstrand & Shely LLC d/b/a Accident Law Group

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