Much has been written about China stealing American intellectual property. Well, what about America stealing American IP? …

I recently reviewed a Harvard Journal of Law & Technology article, “Trademarks as Search Engine Keywords: Much Ado About Something?” (the “Article”). I will refer to the term “trademark owner” in this post as “TMO.” My impression of the Article is that the Article is mostly a survey of whether consumers are confused when a TMO’s competitors use the a TMO’s mark as a “keyword” in their online marketing. The answer is that it is a mixed bag.

The reason the Article is focused on whether consumers are confused appears to be that the flood of litigation that ensued after Google and its ilk started to sell trademarks as keywords seemed to boil down to this one question: Is there a “likelihood of confusion” to consumers stemming from this conduct? At the risk of considerable over-simplification, suffice to say that once the courts decided there was no likelihood of confusion (which is what they did), the last nail was placed in the coffin of TMO’s efforts to seek damages under trademark law (the Lanham Act) from this conduct. I want to be clear – as upsetting as it is, as intuitively “wrong,” as it feels, this country’s federal courts have effectively decided that selling TMO’s trademarks as keywords does not violate the Lanham Act and is not trademark infringement. Incredible, I know.

After I finished reviewing the Article, I sat and thought for a while. I thought to myself, let’s get creative – certainly there must be some avenue of attack. I thought about (1) Conversion (the wrongful taking of the property of another), and (2) Unjust Enrichment (enriching oneself unjustly at the expense of another). The result of my research into these theories was equally unhelpful.

With respect to Conversion, courts have simply decided to defer to trademark law (the Lanham Act):

“Were such a claim of "conversion" viable, it would mean that the tort of conversion could largely displace the IP laws traditionally defining what is an infringement of patents, trademarks and copyrights. For example, could a plaintiff avoid the traditional trademark infringement test of likelihood of confusion and instead simply claim that defendant "converted" its trademark? If so, over 100 years of trademark law would be discarded. . . . [O]ne cannot dispense with the carefully constructed requirements for trademark protection by blithely claiming that defendant "converted" some symbol of plaintiff which may or may not be capable of trademark protection. Trademark law was specifically constructed to balance the private and public interests inherent in commercial symbols: the tort of conversion was not. It is the wrong tool for the job.

The Court agrees that a trademark is not the sort of intangible property which can appropriately give rise to a conversion claim.” East West, LLC v. Rahman, (2012) 873 F. Supp. 2d 721, 731-732, 2012 US. Dist. LEXIS 78205, pp. 21-26 (U.S. Dist. Ct., E. D. Virginia, Alexandria Division).

Hey, Courts … the Lanham Act was enacted in 1946! Things have changed a little since then … or didn’t you get the memo?!

With respect to Unjust Enrichment, in the Rosetta Stone Ltd v. Google, Inc. case, the court said that it would be necessary to show that Google “should reasonably have expect to pay for the use of marks in its keyword query process.” But, Rosetta Stone alleged no such facts, and did not even make such a contention. I read into this that this is because Google does not pay any TMO’s for the use of their trademarks.

“We conclude that Rosetta Stone failed to allege facts showing that it "conferred a benefit" on Google for which Google "should reasonably have expected" to repay. According to Rosetta Stone, the keyword trigger auctions constitute the unauthorized sale of the ROSETTA STONE marks. Rosetta Stone alleges that through the auctions it conferred a benefit "involuntarily" on Google, and that Google "is knowingly using the goodwill established in [the] trademarks to derive . . . revenues." Rosetta Stone, however, has not alleged facts supporting its general assertion that Google "should reasonably have expected" to pay for the use of marks in its keyword query process. Indeed, Rosetta Stone does not contend, and did not allege, that Google pays any other mark holder for the right to use a mark in its AdWords program.” Rosetta Stone Ltd v. Google, Inc., (2012) 676 F.3d 144, 165-167, 2012 U.S. App. LEXIS 7082, pp. 51-56 (U. S. Ct. Appeals, 4th Circ.).

For the time being, it does not appear to be unlawful for Google to sell a TMO’s registered trademarks as keywords.

My personal impression is that in this area, trademark law is in desperate need of revamping. It is broken. Even assuming for the sake of argument that the sale of trademarks as keywords by Google does not violate trademark law, I don’t thing trademark law ever imagined such blatant and rampant “profiteering” from such conduct. I believe that the sale of trademarks as keywords by Google is about as straightforward a case of Conversion as you can have. This is why the Court in the East West, LLC vs. Rahman case basically “punted” and concluded that it would simply defer to federal trademark law. The Court did not even attempt to argue that there was no Conversion, it simply concluded that it would not matter.

Of course, I am sure Google has effectively “communicated” its position on these issues to those in Congress who might be inclined to change things.

I will continue to monitor developments in this area of trademark law.