How Brands Use Trademark Law to Gain Competitive Advantage Online

by David N. Sharifi

There is a virtual war taking place in the realm of online marketing – one fueled by search queries, big data, and unprecedented levels of interactive brand engagement.  But the theater for this war is not storefronts, print ads, and billboards – it is Google, Facebook, Twitter, Amazon, mobile app stores, and many other digital platforms where consumers find their favorite brands, and advertisers hunt shoppers.

Today’s brands use a variety of creative and technical tools to identify themselves on the web, and to target, speak to, and “connect with” their loyalists online.  In cases where these digital tools – typically consisting of product names, company names, slogans, domain names, QR Codes, social media handles, search keywords, and hashtags (collectively “Digital Marketing Insignia”) – fall under trademark subject matter, brand owners can control valuable digital real estate through trademark protection and gain competitive advantage on the web.

Trademark Infringement in Digital and Social Marketing

Trademarks provide the exclusive right to promote goods and services under distinguishable words, phrases, symbols, designs or a combination thereof.  Rooted in consumer protection law, a trademark is legally a source identifier, a shortcut that communicates the source of the goods and services being promoted.  In some cases Digital Marketing Insignia such as domain names, hashtags, or even stylized QR codes contain trademark subject matter, and that’s when trademark protection is a useful weapon to help monopolize key areas on the web when a consumer is searching or shopping online.

To bring a prima facie trademark infringement case, a plaintiff must prove:

  • Ownership of a valid trademark;
  • Priority;
  • Use in commerce in connection with the sale of goods or services; and
  • Likelihood of consumer confusion.

When brands use Digital Marketing Insignia to promote their products online, trademark law can help protect valuable digital real estate where competitors may piggyback on famous marks. Vigilant trademark monitoring and enforcement can help defend against these unfair and often illegal practices.

As an example, consider one of the most famous trademarks of McDonald’s Corporation, U.S. Registration No. 2035587  for BIG MAC filed under “sandwiches for consumption on or off premises” in international class 030.  As owner of the BIG MAC trademark,  McDonald’s Corp. may choose to promote its famous sandwich on the web at http://www.bigmac.com, or at  facebook.com/bigmac, or under the social media handle @bigmac (Instagram and Twitter), or in search results under Google keyword: Big Mac, or in social media search results under hashtag: Big Mac (#bigmac).

Trademark Enforcement Online

If a competing restaurant promotes its products when a user searches the web for “Big Mac,” or if a competitor hosts a twitter party under #BigMacSucks (yes there is such a thing as twitter parties), or sets up a website under the domain name http://www.BigMacSale.com, do any of these uses of Digital Marketing Insignia constitute trademark infringement?  The answer depends on whether the brand owner can prove the four elements of trademark infringement (above).  Many courts have ruled, for example, that keyword triggering fulfills the use in commerce requirement of trademark infringement, and if the other elements can be proven (such as likelihood of consumer confusion), then infringement exists. (See Buying for the Home v. Humble Abode, 459 F. Supp 2d 310 (D.N.J. Oct. 20, 2006), Edina Realty v. The MLSonline.com, 2006 WL 737064 (D. Minn. Mar. 20, 2006), Hearts on Fire Co. v. Blue Nile, Inc. 2009 WL 794482 (D. Mass., March 2009)).  Other courts have ruled to the contrary. (See Site Pro-1 v. Better Metal, 506 F. Supp 2d 123 (E.D.N.Y. May 9, 2007), and Tiffany v. eBay, 2008 WL 27557897 (S.D.N.Y. July 14, 2008)).

Therefore, at least in the area of keyword triggering, there is room for trademark enforcement, although the issue is far from settled.  From a practical standpoint, brand owners may have leverage to enforce trademark rights through a cease and desist letter and settlement agreement, avoiding costly litigation in a legal area that is currently unpredictable.  And aggressive marketers may be amenable to limiting their use of competitors’ trademarks in Digital Marketing Insignia, rather than defending their positions in costly litigation which may swing either way.  Presumably, the use of hashtags containing protected trademarks triggers a similar analysis to keyword search issues, which have been heavily litigated.  In addition, courts have long settled the issue of use of domain names containing protected trademarks in cybersquatting cases and the enactment of the Anticybersquatting Consumer Protection Act (ACPA) in the late 1990s.

Owners of registered trademarks can also work directly with websites that host infringing content.  Most popular online platforms from Google and Bing, to Twitter and YouTube, to Etsy and Amazon, have copyright and trademark complaint policies available for brand owners to pursue a take down action.  Brand owners have these options to force competitors to comply, but trademark ownership and registration is usually a necessary requisite.

Trademarks Provide Competitive Advantage Online

Today’s brands, whether on the cusp of launching their first assault, or fully engaged in the trenches of competitive warfare online, can use trademark law not only to police their marks in traditional ways, but also to monopolize an assortment of Digital Marketing Insignia and dominate the online real estate where consumers shop and engage with products.  Without having strategic trademark protection and enforcement as a major part of a marketer’s arsenal, a brand online would be fighting a losing battle.

David N. Sharifi is a Los Angeles based intellectual property and business attorney concentrating in digital media and advertising, trademarks law, startups and mobile publishing.  A version of this piece first appeared on David’s blog, The LA Tech & Media Law Blog

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