Promatek Industries, Ltd. v. Equitrac Corporation
63 U.S.P.Q. 2d (BNA) 2018, 300 F.3d 808, 2002 U.S. App. LEXIS 16207 (2002)
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Rule of Law:
The use of a competitor's trademark in a website's metatags constitutes trademark infringement under the Lanham Act by creating a likelihood of 'initial interest confusion,' which occurs when a consumer is diverted to a competitor's product, thereby allowing the competitor to improperly benefit from the goodwill of the trademark owner.
Facts:
- Promatek Industries, Ltd. (Promatek) and Equitrac are direct competitors in the market for cost-recovery equipment and services.
- Promatek holds the registered trademark for 'Copitrak.'
- Equitrac provides maintenance and service on Copitrak equipment.
- Equitrac's web designer, upon advice from its marketing department, placed the term 'Copitrack' (a misspelling of Copitrak) as a metatag in the code of Equitrac's website.
- Equitrac admitted that it intended to use the correct spelling, 'Copitrak,' as a metatag.
- After being notified of the issue by Promatek, Equitrac removed the metatag from its website and requested that search engines remove any link between the term and its site.
Procedural Posture:
- Promatek Industries, Ltd. filed a lawsuit against Equitrac in the federal district court for violations of the Lanham Act.
- Promatek moved for a preliminary injunction to prevent Equitrac from using its trademark.
- The district court, after reviewing materials from both parties but without holding an evidentiary hearing, granted Promatek's motion for a preliminary injunction.
- The injunction ordered Equitrac to place specific language on its website disclaiming any affiliation with the 'Copitrak' mark.
- Equitrac (appellant) appealed the district court's order granting the preliminary injunction to the U.S. Court of Appeals for the Seventh Circuit.
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Issue:
Does a competitor's use of a registered trademark as a website metatag create a likelihood of 'initial interest confusion' that is actionable as trademark infringement under the Lanham Act?
Opinions:
Majority - Williams, Circuit Judge.
Yes. A competitor's use of a registered trademark as a website metatag creates a likelihood of initial interest confusion, which is an actionable infringement under the Lanham Act. The court found that Promatek had a strong likelihood of success on its Lanham Act claim. The court reasoned that 'initial interest confusion' occurs when a customer is lured to a product by the similarity of a mark, even if the customer realizes the true source of the goods before a sale is completed. By placing Promatek's trademark in its metatag, Equitrac diverted consumers to its own website, thereby improperly reaping the goodwill Promatek had developed in its 'Copitrak' mark. The court stated that even momentary confusion is consequential because it involves the misappropriation of goodwill, comparing the practice to posting a sign with another's trademark in front of one's store to lure customers in.
Analysis:
This decision solidifies the application of the 'initial interest confusion' doctrine to the then-emerging context of internet search and website metatags. It establishes that using a competitor's trademark to divert online traffic is a form of infringement, even if the consumer is not confused at the point of purchase. This precedent became highly influential in shaping how trademark law applies to online advertising, keyword bidding, and search engine optimization, reinforcing that the misappropriation of a trademark's goodwill to gain a competitive advantage online is unlawful.
