Notes & Comment
Vol. 2004, No. 1
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"Highjacking 'Playboy'" and other trademark unmentionables in cyberspace
Like frontier justice during the Wild West days, Internet law continues to be pushed to the edge by pioneering innovation, imagination, commerce and skin. This is demonstrated in a new cyberspace trademark decision issued by the U.S. Court of Appeals for the Ninth Circuit in Playboy Enterprises, Inc. v. Netscape Communications Corporation (January 14, 2004), a companion case to Playboy Enterprises, Inc. v. Welles, 279 F.3d 796 (9th Cir. 2002) (February 1, 2002).
Both cases, argued and submitted on September 11, 2001, involved similar issues, were decided two years apart by the same three-judge panel, and reached different results. (Opinions available at www.ca9.uscourts.gov, Opinions tab, search by name or month).
Check those "Playboy" metatags at the door!
In Netscape, two major search engines sold advertisements on their sites through the use of "keying," a practice that allows advertisers to push banner ads to search result pages based on search terms selected by web users. In this instance, the search engines required adult entertainment advertisers to encode some 400 terms, or "metatags" (HTML-coded identifiers that act like magnets to bring surfers and others, including advertisers, together on a web page), including trademarks held by Playboy Enterprises.
For example, one might key-in the term "playboy" in the search engine window, and, along with a menu of scantily clad search results, would receive banner ads from advertisers unrelated to Playboy Enterprises. These banner ads often were graphic and did not identify their origin. If a user then clicked the banner ad, he would leave the search results page and go directly to the advertiser's website.
Playboy Enterprises objected to including its trademarks on the search engines' metatag lists. In essence, they claimed that by requiring use of their trademarks, the search engines allowed advertisers to gain access to more users, which in turn improved ad sales for the search engines. Playboy Enterprises asserted that this was trademark infringement and diluted its famous marks. The trial had granted the search engines' motion for summary judgment, but the Court of Appeals reversed.
The essence of any trademark infringement case is likelihood of confusion. The Ninth Circuit engaged in a detailed analysis of the evidence, concluding that because there were triable issues of fact regarding likelihood of confusion in that case, it must go to trial. The Court then discussed defenses raised by the search engines, including the main defense of nominative use.
That doctrine -- nominative use -- permits a technical trademark infringement if three factors are met: (i) the challenged goods or services cannot be readily identified without using the trademark, (ii) only so much of the trademark is used as is necessary, and (iii) the user of the trademark must do nothing to suggest the trademark owner supports or endorses his or her use of its mark.
The search engines, according to the Ninth Circuit, did not engage in nominative use of Playboy Enterprises' trademarks. They did not use Playboy's trademarks as metatags to move traffic to Playboy's websites, but instead to unrelated third party advertisers. The anonymous banner ads that appeared did not identify the sponsors; accordingly, a patron who searched for "playboy" wouldn't know if Playboy or someone else sponsored the ad.
Furthermore, there was no comparison, in the banner ads, between Playboy and the unrelated advertisers' products or services; thus, a surfer searching for "playboy" content could not meaningfully choose between Playboy and other products or services. Finally, the search engines didn't need to include the trademarks in their required metatag list; they gratuitously included "playboy" and "playmate", among 400 other generic terms, to generate additional traffic and improve ad revenue.
The Ninth Circuit also sent the case back for trial on a claim of trademark dilution. The facts, they held, were sufficient to raise a question about whether the search engines had also misused the "famous" Playboy Enterprises trademarks under the federal trademark anti-dilution statute.
In a concurring opinion, Judge Berzon called for reexamination of a prominent Ninth Circuit decision from the ancient days of cyberlaw (1999) that metatags in the form of another's trademarks could amount a trademark infringement if they generate "initial interest confusion." See, Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999).
Troubled by the concept of "initial interest confusion" in the context of metatags, Judge Berzon wrote that Brookfield draws no qualitative distinction between anonymous "highjacking" of a trademark, as occurred in Netscape, and where someone is drawn to a website but there is no confusion thereafter: "I do not think it is reasonable," Judge Berzon concurred, "to find initial interest confusion when a consumer is never confused as to source or affiliation, but instead knows, or should know, from the outset that a product or web link is not related to that of the trademark holder because the list produced by the search engine so informs him."
The Other Playboy Case: not so fast on those metatags!
Contrast the result in Netscape with the decision in Playboy Enterprises, Inc. v. Welles, 279 F. 3d 796 (9th Cir. 2002), which, as noted above, was argued the same day but decided two years ago by the same three judge panel. In that case, Playboy's 1981 Playmate of the Year employed its trademarks as metatags on her website and in banner advertisements. She prevailed under the nominative use defense, however, because she was somewhat more respectful of the intellectual property: she was only able to identify herself in a meaningful way by use of Playboy’s trademarks (how could she say she was 1981 Playmate of the Year without using the mark?), her website generally used the trademarks minimally, including limited use as metatags (although her repeated use of a Playboy abbreviation as a background watermark (wallpaper) on webpages was deemed unnecessary and excessive), and her website specifically disclaimed endorsement by Playboy Enterprises of her use of the name. As for claims of trademark dilution, the Court held that any dilution Welles might have achieved was protected by nominative use.
Summary and Conclusion
The two Playboy Enterprises metatag cases, while seemingly in conflict, can be easily reconciled. Considered side by side, they permit some use of another's trademarks as metatags, provided that there are no other meaningful ways to otherwise identify oneself or accomplish one's purpose, such use is limited, no effort is made to mask the source of origin and the trademark owner's identity, and the consumer always has a choice.
In Netscape, for example, the banner ads that consumers saw when they keyed in "playboy" were anonymous and of unknown origin; they didn't know if it was a Playboy Enterprises ad or a promo for "Debbie Does Dallas" until they looked at the ad -- queries which, by the way, improved the search engines' ad revenues.
By comparison, the former playmate's banner ad in Welles disclaimed Playboy as the sponsor, her website made (mostly) limited use of its trademarks, and she gave the consumer a clear choice. For Judge Berzon, based on her troubled concurrence in Netscape, metatagging trademarks should not always be problematic provided that the consumer, even if initially confused, is on notice about the origin of the goods or services and is given a choice.
© Matthew Joseph 2004. Law Offices of Matthew Joseph, San Mateo, California, practices in the areas of intellectual property licensing, commercial real estate leasing, and corporate and business transactions. No legal advice is intended by the information provided herein and recipients should independently consult counsel before taking any action related to this subject matter.