Friday, March 17, 2017

Blast from the past: another keyword ad case where TM won't work

Int’l Payment Servs., LLC v., Inc., NO. 2:14-cv-02604, 2015 WL 12656280 (C.D. Cal. Jun. 5, 2015)

Old decision, popped up in Westclip.  Plaintiff has a registration for ELITEPAY GLOBAL for its merchant payment solutions equipment, services and training business in the credit card processing industry. doesn’t provide credit card processing services, but does get paid for running ads from processors.  CPO has a review page using IPS’s logo under the heading “ElitePay Global Review.” The review is written by the website owner; it rated IPS with a “C-” grade or 1.875 out of 5 stars, and there were also more than 40 negative comments or reviews about IPS’s services (hello section 230), as well as links other credit card service processors.  In addition, CPO bought keyword ads for “ElitePay Global.”

Although summary judgment is usually disfavored in trademark cases, nominative fair use can allow it.  IPS’s services weren’t readily identifiable without use of the mark, and there was no substitute for it in defendants’ AdWords campaign. Nor was the use more than necessary, even though the mark was used over 50 times on CPO’s webpage.  CPO was talking about IPS; such referential uses are exactly what the nominative fair use doctrine is designed to allow.  As for the AdWords campaign, there was no evidence that defendants’ link regularly appeared above IPS’s website in search results, meaning there was no genuine issue about whether the use was more than necessary.

Finally, there was no suggestion of sponsorship or endorsement, given the bad grade and associated negative comments and reviews. The court rejected IPS’s argument that “there is no such thing as bad publicity.” Likewise, the use of the mark in AdWords and CPO’s webpage path (, didn’t actively claim affiliation with or sponsorship by IPS. The Ninth Circuit has held that “[o]utside the special case of, or domains that actively claim affiliation with the trademark holder, consumers don’t form any firm expectations about the sponsorship of a website until they’ve seen the landing page,” and that “[s]o long as the site as a whole does not suggest sponsorship or endorsement by the trademark holder, ... momentary uncertainty does not preclude a finding of nominative fair use.”

Some false advertising-related state law claims survived, but the court declined to exercise supplemental jurisdiction over them.

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