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Internal Search Results Aren’t Trademark Infringing–PEM v. Peninsula

This is a case involving a trademark owner and a competitive keyword advertiser. The trademark owner memorably (and ridiculously) characterized the rival as engaging in “keyword conquesting,” a term I encourage you never to use. The court already sent that trademark claim to the jury (my blog post on that ruling). However, the trademark owner remains so convinced of its rightness that it sought summary judgment one more time. I guess they subscribe to the lesson my grandma taught me: “if you don’t ask, the answer is always no.” However, not all questions are worth asking, and the judge responds to this motion as if the trademark owner is the backseat passenger asking “are we there yet?” for the 16th time.

The trademark owner is hopping mad about the rival website’s internal search function, where customers can search for the trademark owner’s trademarks and get search results displaying the rival’s offerings. The court says the rival makes a trademark use in commerce by using the trademarks in its “metatags” (ugh). Cite to the 17 year old JG Wentworth ruling. The court doesn’t define what it means by a metatag or establish that “metatags” were the technical mechanism that associated the rival’s products with the trademark owner’s trademark. These omissions would be frustrating if the court didn’t reject the trademark owner on other grounds.

The court continues that the internal search engine’s results don’t create any likelihood of consumer confusion:

there is no issue of customers being diverted from Penn Engineering’s website onto Peninsula’s website because the user is already on Peninsula’s website in the first place. Or, in the terms that the Court of Appeals for the Third Circuit has used, there is no “bait and switch” where Peninsula is trying to get its foot in the door because Peninsula has already gotten its foot in the door by the fact that the consumer is on Peninsula’s website.

The trademark owner argued that the customers may have been directed via initial interest confusion to the rival website. However, that issue has already been sent to the jury. The court says there can’t be MULTIPLE instances of INITIAL interest confusion:

By definition, initial interest confusion is “confusion that creates initial customer interest.” Just as there cannot be two start times for one person running a marathon or two first days of work for someone starting a new job, it logically follows that there cannot be two points of initial interest for a customer. Although the customer may experience initial customer interest when clicking on Peninsula’s Google ad with Penn Engineering’s marks, that user cannot experience yet another instance of initial interest once directed to Peninsula’s website

I have a better idea: perhaps the entire concept of initial interest confusion is illusory, so it occurs never; not once, twice, or more times in the same search.

 

The trademark owner argued that the search results didn’t disclaim an affiliation between the companies, but it had no evidence to support that concern and thus it couldn’t survive summary judgment.

Indeed, because the activity is taking place on the rival’s site, with the rival’s internal search engine, the court says a reasonable consumer conducting that search wouldn’t be confused. The court gives several examples essentially mocking the trademark owner’s position:

Like a person searching for Domino’s Pizza on Pizza Hut’s website could not be confused that they are purchasing Domino’s Pizza when being presented with Pizza Hut options, a customer searching for Penn Engineering products on Peninsula’s website that presents Peninsula products could not be confused into thinking he or she is buying Penn Engineering products…

If a customer went on to Samsung’s website, searched for “Apple iPhone” and then was presented with a list of Samsung Galaxy phones labeled as such, that customer could not possibly be confused into thinking he or she was purchasing an Apple iPhone when Apple and Samsung are two separate companies selling two separate and distinct products. Likewise, if a customer went to the Toyota website, searched for “Honda Civic” and was presented with a list of cars clearly labeled as Toyota Corollas, that person could not think that such presented options included a Honda Civic. The only difference here is that, instead of Peninsula’s search results directly stating the name Peninsula, they include the part name. A customer could not be confused that a part name, wholly different from the part name entered in the website search tool, is in fact that same part name

(Protip: If you are searching for Domino’s Pizza on Pizza Hut’s website, you are probably too baked for pizza and should instead go straight for Taco Bell ).

To be fair, the court assumes that the searching consumer already knows the taxonomy of marketplace players and their independence. That’s certainly true for high-profile and well-advertised consumer items like fast food chains, mass-market phones, and major car labels, but is it true in this particular niche? I raised this taxonomical issue with the Network Automation case, which involved niche-y job scheduler software where a consumer who is new to the niche might not know the various brands when starting a search. Still, this concern is constrained by the fact that in this case, the consumer is already at the rival’s website and getting search results that don’t contain the same part numbers as the trademark owner’s.

The court hedges its position about internal search engines, saying there might be confusion if:

the trademark owner shows that consumers don’t understand the source of the items listed in the internal search results.
the rival included ad copy telling consumers they were buying the trademark owner’s items when they weren’t.

The court ends with an exasperated plea to the parties to just stop it:

Penn Engineering brought its initial complaint against Peninsula almost five years ago in February 2019. In that time, the parties have waged innumerable formal battles over seemingly everything available to parties in civil litigation: countless discovery disputes, motions for sanctions, and two rounds of summary judgment. The informal battles total at least three times three. The parties now face the stark reality that, at least, there is no magical third time for summary judgment. Unless they can resolve this matter on their own, they will next face a jury, which will bring this liability saga to a close.

Sorry, your honor, a jury trial isn’t likely to bring this saga to a close. The parties will surely enjoy a full cycle of appeals if they can’t settle.

Remarkably, the opinion doesn’t mention the Multi-Time Machine v. Amazon case, the leading trademark decision regarding internal search engines. Even though that decision is from another circuit (the 9th, while this district court is in the 3rd), I’m baffled by its omission. However, the results are consistent with each other.

Case citation: Penn Engineering & Manufacturing Corp. v. Peninsula Components, Inc., 2023 WL 9051998 (E.D. Penn. Dec. 28, 2023)

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Yet More Evidence That Keyword Advertising Lawsuits Are Stupid–Porta-Fab v. Allied Modular
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1-800 Contacts Loses YET ANOTHER Trademark Lawsuit Over Competitive Keyword Ads–1-800 Contacts v. Warby Parker
Court Dismisses Trademark Claims Over Internal Search Results–Las Vegas Skydiving v. Groupon
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Competitive Keyword Advertising Claim Fails–Reflex Media v. Luxy
Think Keyword Metatags Are Dead? They Are (Except in Court)–Reflex v. Luxy
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Ohio Bans Competitive Keyword Advertising by Lawyers
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