Initial Interest Confusion and the Internet: When your Competitor Takes Advantage of your Trademark


With the advent of the Internet, the use and value of a trademark has become even more critical to the success and goodwill of business. A trademark used in a particular domain name, which easily reflects a business title, like macys.com, will make it easier for a consumer to find a particular site. What happens, however, when the words in a domain name are exploited so that a search engine directs you to a competitor’s site? This is exactly what happens when search engines use “sponsored links.” In this scheme, a competitor can pay a search engine to be included in the search results when someone searches for a competitor’s name. When one reflects on the fairness, or lack of, directed to the rightful trademark owner, a number of legal issues become obvious and are currently at stake. This interdisciplinary and cutting edge application of both trademark and Internet law has been coined “pay for play” as well as “initial interest confusion.”

Initial interest confusion, as coined by the Ninth Circuit, is a brand of confusion particularly applicable to the Internet. In researching the topic of “Initial Interest Confusion,” case law acknowledges that this type of case is not a standard trademark case and does not lend itself to the systematic application of the eight factors. Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1062-64 (9th Cir.1999). The eight factors normally applied to a trademark infringement are commonly known as the Polaroid Factors and include the following: (1) strength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used by the parties; (6) type of goods and degree of care likely to be exercised by the purchaser; (7) defendant’s intent in selecting the mark; and (8) likelihood of expansion of the product line.

According to Brookfield Communications, Inc. v. West Coast Entertainment Corp., “[g]enerally speaking, initial interest confusion may result when a user conducts a search using a trademark term and the results of the search include web sites not sponsored by the holder of the trademark search term, but rather of competitors.” In addition, the case of Dr. Seuss Enterprises, L.P. v. Penguin Books USA, Inc. 109 F.3d 1394 C.A.9 (Cal.),1997 explicitly recognized that the use of another's trademark in a manner calculated "to capture initial consumer attention, even though no actual sale is finally completed as a result of the confusion, may be still an infringement."

Initial interest confusion was also examined in the case of Playboy Enterprises, Inc. v. Netscape Communications 55 F.Supp.2d 1070 C.D.Cal.,1999. In that case, the holder of trademarks "Playboy" and "Playmate" sued seeking to bar providers of an Internet search engine from arranging for a certain combination of advertisements to appear on a results screen when a user selected words "playboy" or "playmate" as search terms. Although the trademark holder moved for a preliminary injunction, the District Court held that: (1) the holder failed to show that the providers used trademarks in interstate commerce, as opposed to the common English language words "playboy" and "playmate;" (2) necessary likelihood of confusion was not shown; (3) no trademark dilution was shown; (3) providers' use of search words was protected by First Amendment; and (4) in any event, the doctrine of fair use covered the providers' utilization of words.

In retrospect, the trademark owner with the strongest case for initial interest confusion is the one whose mark is either arbitrary or fanciful and, at times, even suggestive. Judge Friendly developed the following commonly used test for the inherent distinctiveness of trademarks in Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 11 (2d Cir.1976). In that case, verbal marks were classified into the four following categories: (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful. While generic words or phrases may never serve as trademarks; descriptive marks, while not inherently distinctive, may be trademarks upon a showing of secondary meaning; and suggestive, arbitrary and fanciful terms are inherently distinctive trademarks even without a showing of secondary meaning. These classifications may be better appreciated with the following examples: “Camel cigarettes” is an arbitrary mark, “Kodak film” is a fanciful mark, and “Tide laundry” detergent is a suggestive mark.

The selection of a domain name should not be taken lightly. Although frustrating for the virtual market, whether it be the trademark owner or the consumer, initial interest confusion is a very real issue. As with any intellectual property, prudent planning and sound advice can help build the foundations of a strong investment, which can further serve to prevent or at least punish potentially harmful infringements down the line.

© HASEEB R. JABBAR, 2003