Yes, this is 'trademark use.' The judge said that GoTo was not just a neutral platform; it was actively making money from JR Cigar's good reputation. The court explained that GoTo was 'using' the trademark by: 1) selling the brand name to the highest bidder, 2) putting paid ads for rivals above the real search results for JR Cigar, and 3) recommending that rivals buy the 'JR Cigar' keyword. Even though the court decided this was 'trademark use,' it said a full trial was still needed to figure out if this actually confused customers enough to be illegal.

The judge decided that GoTo.com did use JR Cigar's trademarks in a way that could break the law because GoTo.com made money by letting JR Cigar's competitors pay to show up higher in searches. The CDA law doesn't protect GoTo.com from being responsible for its own advertising business. There are still questions about whether customers were actually confused that the judge can't answer now. The judge said JR Cigar's trademarks are famous enough without needing a survey. But GoTo.com didn't break New Jersey's law about tricking customers or the telemarketing law.

—holding that the CDA cannot “shield entities from claims of fraud and abuse arising from their own pay-for-priority advertising business, rather than from the actions of third parties

—on summary judgment, concluding that search engine defendant "used" the plaintiffs' trademarks as required by the Lanham Act where defendants "[1.] accept [ed] bids from those competitors of JR desiring to pay for prominence in search results [thus]... trad [ing] on the value of the marks....[2.] rank [ed] its paid advertisers before any `natural'listings

—allowing trademark claims against a pay-for-priority search engine based on its "sale" of keywords in exchange for prominent placement in search results

—finding mark famous based on trademark registration, sales, and third-party recognition without requiring fame survey

—analysis on the likelihood of confusion and initial interest confusion, all of which appeared detrimental to GoTo' s case, the 800-JR Cigar court noted that GoTo' s “use of JR' s marks... is probably fair in terms of its search engine business... for purposes of comparative advertising.... However,... a fair use defense would be lost, if GoTo wrongfully participated in someone …

The Church & Dwight court acknowledged that some courts had stated in dicta and without analysis that a competitor had standing to bring an NJCFA claim. 2010 WL 5239238, at* 10

I] mmunity under the Act applies to any cause of action that would make service providers liable for information originating with a third-party user of the service

E-Commerce at Glossary 29-30. "A search engine allows users to find information by entering a search term,[for instance, a keyword,] and receiving a list of results."

Dilution claims under New Jersey law are subject to the same considerations as federal dilution claims

—the likelihood of confusion and the impact of initial interest confusion were issues of material fact that precluded both parties' motions for summary judgment.

Yes, a search engine's selling of trademarked keywords is a commercial 'trademark use' under the Lanham Act. The court found that GoTo makes trademark use of JR Cigar's marks in three ways: 1) by accepting bids from competitors and trading on the value of the marks; 2) by ranking paid advertisers before natural listings, thereby steering potential customers away from JR Cigar to its competitors; and 3) by using its 'Search Term Suggestion Tool' to identify and market JR Cigar's valuable marks to competitors. The court distinguished this from cases involving pop-up ads where trademarks were only used in internal computer code, noting that GoTo actively sells the right to link advertising to the trademarks. While the court found trademark use as a matter of law, it determined that whether this use created a 'likelihood of confusion'—the final element for infringement—involved disputed issues of fact (such as GoTo's intent and evidence of actual confusion) that must be decided at trial.

The Court finds that GoTo's use of JR Cigar's trademarks constitutes 'use' under the Lanham Act because GoTo traded on the value of the marks by accepting bids from competitors for prominence in search results. The Court holds that the CDA does not provide immunity to GoTo for its own advertising practices. The likelihood of confusion and initial interest confusion are issues of material fact that preclude summary judgment for both parties. The Court finds the JR Cigar mark to be famous based on trademark registration, sales, and third-party recognition without requiring a fame survey. However, the Court grants summary judgment in favor of GoTo on the New Jersey Consumer Fraud Act and Telemarketing and Consumer Fraud and Abuse Prevention Act claims.

800-JR Cigar, Inc. v. GoTo.com, Inc.

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