{1} After you graduate from law school, you boldly decide to start your own law firm. Unfortunately, business has been slow and you begin to worry how you will pay back your student loans. Just as you are about to close up shop and join a larger firm, the Director of Marketing for HerbalFit Inc. [2] walks into your office and hands you the cease and desist letter his company just received from Herbalife, one of HerbalFit's competitors. Herbalife's letter states that if HerbalFit does not remove all references to Herbalife's products from HerbalFit's web page, Herbalife will sue HerbalFit for trademark infringement and false designation of origin.
{2} The Director of Marketing explains that both Herbalife® and HerbalFit are weight loss supplements that use Chinese herbs to stimulate the body's metabolism. He produces a copy of the side by side comparison of the two products that is published on HerbalFit's web page. You note that although the ingredients of both products are virtually identical, HerbalFit's product costs significantly less.
{3} The Director of Marketing then informs you that the company would like to use its competitor's trademarks in its web site and the company will not remove the references to Herbalife unless you advise it to do so. Naturally, you smile and tell the Director of Marketing that you would like to do some research before offering your opinion and you will fax a written opinion to his office by the end of business today. The Director of Marketing leaves and you are in your office, dumbfounded by your good fortune in acquiring such a client.
{4} Your minds drifts for a moment as you imagine all the ways in which you will spend the exorbitant fee that you plan on charging HerbalFit Inc. Then suddenly, reality comes crashing down on you as your mind is flooded by the myriad of common law, state and federal trademark and unfair competition laws that your client may be violating by using its competitors' trademarks.
{5} Since the basis for a trademark infringement or false designation of origin claim is the likelihood of confusion, you decide to approach the problem as if you were a potential Herbalife customer. You begin to surf the Internet [3] in order to find information about Herbalife's weight loss supplement. Unfortunately, you do not know the exact address (domain name) that will lead you to the information you desire. [4] You have two options: (1) you can fumble about in cyberspace, hoping that you'll stumble on to the company's web page; or (2) you can you use a search engine. [5]
{6} Being the practical individual you are, you decide to use the yahoo! search engine. Within seconds, yahoo! returns a list of "relevant" web pages. Instead of finding a single web page, you are horrified to learn that there are 9608 web pages that are listed as "matches." [6] You glance quickly at the pages your search engine has listed. Strangely, you find a web page for Diet Magic, a competitor of Herbalife, listed within the top forty web pages. When you turn to another search engine, you are even more surprised to see an Internet marketing company appear in your lists of relevant sites. [7]
{7} Annoyed and frustrated, you realize that someone is manipulating the rankings of Internet web pages. Unfortunately, you still do not know how these rankings are being manipulated or why they are being manipulated. You realize that in order to understand how these rankings are being manipulated, you first need to understand the relevant technology that enables the web pages to be seen by consumers.
{8} Many companies like Herbalife create Web pages to provide consumers with information about their products. These individual web pages consist of data files written in HTML (Hypertext Markup Language). [8] Over one billion web pages are now available on the World Wide Web. [9]
{9} Each web page is assigned a domain name to distinguish it from the millions of other pages. A domain name is comprised of two main parts: a second level domain and a top level domain. First, the second level domain ordinarily consists of a term that describes a company's product (i.e. a company's trademark). Second, the top level domain indicates the type of organization that is operating the web page. [10] For example, Herbalife.com is the domain name for Herbalife.
{10} If a consumer wants to learn more information about Herbalife's products, the consumer could use an Internet browser like Microsoft Explorer or Netscape and type the company's domain name, herbalife.com, in the box immediately beside the word, location. If the consumer does not know Herbalife's domain name, he or she will use a search engine like Excite, [11] AltaVista, [12] or Yahoo!, [13] to locate the web page.
{11} Typically, a search engines acts like a "spider". [14] This "spider" retrieves as many web pages as possible. [15] Another program called an indexer then scans the web pages [16] and records the web page's visible and invisible text. [17] They periodically update the information stored on old pages and continually scan new sites. [18] Everything the spider retrieves is catalogued by the indexer and then assembled into the index. When a user enters a term, the search engine sorts through this self-created index to find web pages that contain the term. [19] Once these sites are identified, the search engine uses an algorithm to rank the web page in terms of relevancy. [20]
{12} Metatags are HTML code that web page designers use to describe the contents of their web pages. "Metatags" are lengthy bits of coded information embedded in the bowels of a Web page. They are invisible to the reader, but can be scanned by search engines. [21]
{13} There are several types of metatags that are important for search engine indexing but the most important two are the description and keyword tags. [22]
{14} First, the keyword metatag specifies a list of terms that the web page designer wants search engines to associate with the web page. [23] Herbalife's keyword metatag includes the terms, Herbalife, weight loss, lose weight, home based business, nutritional products, video streaming, audio, financial freedom. [24] When a user enters the term, Herbalife, a search engine will return a list of web pages that contain matching keyword metatags. [25]
{15} Second, the description metatag often varies in length and usually contains a description of the web page's content [26]. Herbalife's description metatag reads <META name= "description" Content="Herbalife web site includes: Herbalife Distributor Headquarters, Herbalife Broadcast Network with live audio and video streaming, Herbalife product information, online training and 8 different country/language sites."> [27]
{16} Both the keyword metatag and the description metatag are invisible to the Internet user [28] but search engines use these metatags to identify and rank the relevancy of web pages. The more often a term appears in the visible and invisible text of a web page, the more likely the web page will appear on a list compiled by a search engine in response to an Internet user's query. Interestingly, only thirty-four percent of all web pages include "keyword" and "description" metatags. [29]
{17} Nonetheless, metatags have emerged as an important feature in a web page's marketing strategy. [30] While search engines incorporate complicated algorithms to rank the relevancy of web pages and deliver a list of a thousand possible matches, Internet users rarely look beyond the first twenty sites on the list. [31] Indeed, "[t]he consensus is that most users of search engines do not look beyond the first 10 or 15 returned sites, if that, so Web designers scramble for position." [32] Many web page designers now embrace metatags and emphasize the importance of using metatags in maximizing a web page's visibility. [33]
{18} While some web page designers have been satisfied with their site's ranking after they incorporated their company's trademarks as metatags, other designers have resorted to unscrupulous tactics to improve their site's rank. One unscrupulous tactic is to use a competitor's trademarks as metatags. Then, when an Internet user enters that term, the user is directed to the unscrupulous designer's site. These unscrupulous designers hope to lure customers away from their competitors' sites. [34] The unscrupulous designer hopes that once the customer is lured away to the designer's site, the customer will be satisfied with the site's content, and possibly purchase a product. [35]
{19} Indeed, our client, HerbalFit hopes to capitalize on Herbalife's popularity by using Herbalife's trademarks as metatags. By placing the term, Herbalife, in the invisible text of HerbalFit's web page, HerbalFit is attempting to lure some unsuspecting customers to its site. Naturally, the Director of Marketing believes that once the consumer has "found" HerbalFit's web page and seen the side by side comparison of the two products, the consumer will want to purchase HerbalFit.
{20} As we will soon see, by including his competitor's trademarks as metatags in his web page, the unscrupulous web page designer is violating the Lanham Act. However, before we can discuss the way in which the unscrupulous web page designer is violating the Lanham Act, it is necessary to understand what trademarks are and what they do.
{21} The text of the Lanham Act boldly proclaims that trademarks include "any word, name, symbol, or device or any combination thereof . . . ." [36] Most individuals automatically associate trademarks with words, brand names or slogans. Tide, Ford, Coca-Cola, Pepsi, Heinz 57, Dole, Blockbuster and Pinesol are all examples of words that serve as trademarks. "Don't Leave home without it" is the familiar slogan used by American Express.
{22} Trademarks, however, are not confined to mere words. [37] A trademark can be a stylized logo or an artistic design like Nike's Swoosh. A company's trademark can also be a color. [38] For example, Ownes Corning registered the color pink for its fiberglass insulation. [39] Sound can also function as a company's trademark. For example, NBC registered its three chimes. Companies can also register scents and smells. For example, Clark's OSEWEZ registered scented yarn. [40]
B. The Rational Basis for Trademark Protection
{23} Legal protection for trademarks [41] can be traced back into the annals of history to the first human commercial interactions. [42] In essence, trademarks identify the source of commercial products. [43] Trademarks serve two purposes. [44] First, trademark law protects "the public from deceptive and misleading trademark practices, without fostering unnecessary monopolization of language that would impede free competition." [45] Second, trademark law protects the trademark owner's investment of "time, energy, and money in presenting to the public the product from the misappropriation of its trademark by pirates and cheats." [46]
{24} Companies utilize trademarks primarily to distinguish their products from those of their competitors. For instance, the Coca-Cola Company uses the trademark, Diet Coke®, to differentiate its diet soft drink from its competitor's Diet Pepsi®. In other words, when consumers purchase Diet Coke®, they will attribute their experience with the beverage, whether satisfying or disappointing, with the Coca-Cola Company. [47] Likewise, our client, HerbalFit Inc. uses the trademark, HerbalFit, to differentiate its weight loss supplement from its competitors' Herbalife®, Metabolife 356® and Metabolize and $ave. When dieters purchase HerbalFit, they will attribute their experience with the weight loss supplement, whether satisfying or disappointing, with HerbalFit Inc.
{25} Since consumers associate a product's trademark with the quality of the merchandise, the manufacturer of products is encouraged to maintain and improve the quality of the goods so he can "reap the financial reputation-related rewards associated with" producing a desirable product. [48]
{26} If a competitor of HerbalFit used the HerbalFit's trademark on its products, the competitor would divert some of HerbalFit's reputation rewards into its own coffers. The competitor might even damage HerbalFit's reputation and goodwill if it affixed the HerbalFit mark to inferior weight loss products or associated the mark with an ignominious idea or issue. [49] Since most consumers link a company's goodwill with its trademark, many companies spend millions of dollars every year to promote their trademarks. [50] Consequently, granting trademarks legal protection not only rewards the producers of quality merchandise but "reduces the customer's costs of shopping and making purchasing decisions; for it quickly and easily assures a potential customer that this item--the item with this mark--is made by the same producer as other similarly marked items that he or she liked in the past." [51]
C. The Lanham Act and Metatags: An Uncomfortable Fit?
{27} A trademark owner's federal rights are delineated in the Lanham Act. [52] A trademark owner can use two powerful weapons to recover damages if anyone misappropriates his trademark: federal trademark infringement and federal false designation of origin.
{28} First, Section 32 of the Lanham Act prohibits the use in commerce of "any reproduction, counterfeit, copy, or colorable imitation" of a registered trademark or service mark where "such use is likely to cause confusion, or to cause mistake, or to deceive." [53] To prevail on a traditional infringement claim, a plaintiff must prove that: (1) the mark is valid; (2) the mark is owned by plaintiff; and (3) the defendant's use of the mark is likely to create confusion [54] among the relevant customer base. [55]
2. False Designation of Origin
{29} Second, Section 43(a) forbids the use of "any word, term, name . . ." which "is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection or association." [56] A defendant can be held liable for false designation of origin if the defendant's use of the mark is likely to cause consumers to believe that the defendant's goods or services are somehow sponsored or affiliated with the plaintiff's goods. [57]
{30} Interestingly, the statutory definitions of trademark infringement and false designation of origin seem to contemplate that the consumers will see the marks. After all, to determine the likelihood of confusion, the court must consider the strength of the mark, the similarity of the marks used by the plaintiff and the defendant, and the extent to which customers were actually confused. The courts seem to comfortably side step this issue by relying on the doctrine of initial interest confusion.
{31} The Lanham Act's protection of trademarks under Section 32 and Section 43(a) is not limited to confusion at "the point of sale." [58] "Infringement can be based upon confusion that creates initial customer interest, even though no actual is finally completed as a result of the confusion." [59] The trademark violation exists simply from the initial confusion.
{32} For example, in Blockbuster Entertainment Group v. Laylco Co., the court found that defendant's use of the name, Video Buster, was confusingly similar to BlockBuster. [60] The court held that even though "a customer would recognize that Video Busters is not connected to Blockbuster after entry into a Video Busters store and viewing the Video Busters membership application, brochure, video cassette jacket, and store layout," this was "unimportant." [61] The court found that the crux of the matter was whether the defendant was attracting customers based on the similarity of its name to Blockbuster. [62] The court held that "because the names are so similar and the products sold are identical, some unwitting customer might enter a Video Busters store thinking it is somehow connected to Blockbuster. Those customers probably will realize shortly that Video Busters is not related to Blockbuster, but . . . that is irrelevant." [63]
{33} While the Blockbuster example dealt with a visible trademark, the potential for initial interest confusion is even greater when web page designers use metatags to lure Internet surfers away from one site and directed them towards another. The courts seem to agree with Lance Rose that "[i]t's a no brainer . . . . If you can manipulate a search engine to pull people to the wrong Web site, that's false designation of origin under the Lanham Act." [64] Consequently, the courts seem willing to apply these statutes to metatag cases.
A. Playboy Enterprises, Inc. v. Calvin Designer Label [65]
{34} In order to enter the lucrative cyberporn [66] industry, Calvin Designer Label (Calvin) capitalized on the industry leader's name and established two adult web sites, www.playboyxxx.com and www.playmatelive.com. [67] Hoping to lure customers away from Playboy, Calvin used the marks, "Playboy" and "Playmate," as metatags on its web sites and placed the words, "Playboy" and "Playboy Magazine" in the websites' "hidden text." [68] By listing Playboy's trademarks in the web site's visible and invisible text, Calvin's site often appeared as the first or second site in response to a search for the words, Playboy and Playmate. [69]
{35} Playboy alleged that Calvin's conduct constituted federal trademark infringement, false designation of origin under the Lanham Act, federal dilution, trademark counterfeiting and common law infringement. [70] The District Court agreed with Playboy and issued a temporary restraining order, [71] followed by a preliminary injunction, which enjoined Calvin from using Playboy's trademarks as domain names or metatags. [72] Recently, the District Court granted Playboy summary judgment on all five of its claims and entered a permanent injunction against Calvin. [73]
B. Playboy Enterprises, Inc. v. Asiafocus International, Inc.
{36} In Playboy Enterprises, Inc. v. Asiafocus International, Inc., Playboy filed claims of federal trademark infringement, false designation of origin, federal unfair competition, federal trademark dilution, common law infringement, and common law unfair competition against the defendants for their use of Playboy's trademarks on defendant's adult web sites. [74]
{37} The District Court found that the defendants had:
purposefully employed deceptive tactics to attract consumers to their Web site under the guise that their sites are sponsored by or somehow affiliated with [Playboy]. Specifically, the defendants embedded [Playboy's] trademarks 'playboy' and 'playmate' within the Web sites' computer source code which is visible to 'search engines' that look for Web sites containing specific words or phrases specified by the computer user. [75]
{38} The District Court noted that an Internet user who entered the term, Playboy, would receive a list of web pages in response to his query that included the defendant's "Asian-playmates" web sites. [76] The court further remarked that "[t]hrough the defendants' willful deception, consumers have been mislead into believing that the asian-playmates Web site is connected with, or somehow sponsored by, [Playboy]." [77] In light of the defendants' willful infringement, the District Court entered a default judgment for three million dollars against the defendants. [78]
C. Playboy Enters., Inc. v. Global Site Designs, Inc.
{39} In yet another case involving Playboy Enterprises, Playboy filed claims of federal trademark infringement, federal false designation of origin, federal dilution and false representation against Global Site Designs, Inc. [79] Global Site Designs, Inc. registered two domain names that incorporated Playboy's trademarks, www.playmatesearch.net and www.playboyonline.net. [80] The Defendants entitled their web page, "welcome to Playboyonline.net," and used the phrase in the machine readable code. [81] The Southern District Court of Florida issued a preliminary enjoined defendants from using the plaintiff's Playboy's trademarks, Playboy and Playmate, as metatags or as part of a domain name. [82]
D. Oppedahl & Larson v. Advanced Concepts
{40} In Oppedahl & Larson v. Advanced Concepts, plaintiff brought an action against defendants for federal unfair competition, false designation of origin, federal dilution and common law trademark infringement. [83] Oppedahl & Larson alleged that the defendants used the law firm's name as a metatag to lure potential customers to defendant's web page. [84] Five of the eight defendants removed the offending metatags from their web pages and consented to the entry of a permanent injunction against them but the case is still pending against the other three defendants. [85]
{41} In SNA v. Array, the Eastern District Court of Pennsylvania permanently enjoined defendants from using plaintiffs' trademark, Seawind, as a metatag. [86] The District Court found that the defendants' use of plaintiffs' mark as a metatag and its insertion of a block of text repeating the words, "seawind," "SEAWIND," "Seawind" on its web page constituted unfair trade practices. [87] The court ultimately concluded that "defendants intentionally used plaintiffs' mark in this way to lure Internet users to their site instead of [the plaintiffs'] official site. This is true whether the meta tagging is visible or hidden in the code, no matter what the website's domain name is." [88] In the court's view, these actions amounted to "a bad faith effort to confuse Internet users . . . ." [89]
F. Niton Corp.v. Radiation Monitoring Devices, Inc.
{42} In Niton Corp. v. Radiation Monitoring Devices, Inc., the District Court of Massachusetts enjoined the defendant from using the plaintiff's trademarks as metatags. [90] Unlike the previous cases, the defendant in this case not only used the plaintiff's trademark as a metatag but the defendant literally copied all of the metatags that Plaintiff had used to design Plaintiff's web page. [91] The Court concluded that the consumers lured to Defendant's web page would probably believe that Defendant's web page is affiliated with or sponsored by the plaintiff. [92]
G. Brookfield Communications, Inc. v. West Coast Entertainment Corp.
{43} As of April 20, 2000, only one federal appellate court, the Ninth Circuit Court of Appeals, has addressed the issue of metatags. In Brookfield Communications, Inc. v. West Coast Entertainment Corp., Brookfield appealed the lower court's denial of its motion for a preliminary injunction to prevent West Coast from using Brookfield's trademark, Moviebuff. [93] Brookfield claimed that West Coast's use of the term, Moviebuff, as a metatag constituted federal false designation of origin and federal trademark infringement. [94]
{44} After performing a likelihood of confusion analysis, the Ninth Circuit reversed the lower court's judgment and ordered a preliminary injunction. [95] The court held that West Coast's use of Brookfield's trademark, Moviebuff, as a metatag would result in initial interest confusion. [96] The court explained that consumers looking for Brookfield's Moviebuff products may be whisked away to defendant's web page as a result of a search performed on the term, Moviebuff. If consumers were directed to West Coast's site, West Coast would reap the reputation related rewards Brookfield had developed in its mark. [97]
{45} The Lanham Act does not completely prevent a company from using its competitor's trademark. It is a hornbook rule of trademark law that a defendant does not infringe the plaintiff's trademark just by using the mark in a commercial setting. For the defendant can raise the defensive shield of 'fair use' under certain circumstances to defeat claims of infringement and dilution. In the burgeoning commercial world of the Internet, opportunities abound to use a plaintiff's mark and broadcast it to millions of consumers. To avoid liability, the user must ensure that the use is deemed 'fair.' [98]
{46} There are two types of fair use defenses: (1) descriptive fair use and (2) nominative fair use that enable a defendant to escape liability.
{47} First, descriptive fair use enables a defendant to use the plaintiff's mark to describe attributes of the defendant's product. [99] For example, in Sunmark, Inc. v. Ocean Spray Cranberries, Inc., the Seventh Circuit Court of Appeals permitted the defendant to use the term, sweet-tart, to describe its bitter-sweet cranberry juice. [100]
{48} Second, nominative fair use enables a defendant to use plaintiff's mark to show the relationship between defendant's products and plaintiff's products. Comparative advertising is a classic example of nominative fair use. However, to avoid liability under the Lanham Act, a company that wishes to use its competitor's trademarks must jump through three hoops: (1) the defendant must use only as much of plaintiff's mark as necessary to identify defendant's product or service, (2) the defendant must be unable to identify plaintiff's product without referring to the mark and (3) the defendant cannot engage in any conduct that suggests that plaintiff endorses or sponsors defendant's web page. [101] For example, in Playboy Enters. v. Welles, the Ninth Circuit held that the defendant could use the mark, Playmate of the Year, to identify herself. [102] The court likened the title, Playmate of the Year, to other prestigious titles including Miss America and Academy Award Winner, and noted that the title Playboy gave Welles became part of her identity and added value to her name. [103]
{49} The fair use defense may not apply in metatag disputes. As one court recently remarked, "where the person viewing a web site may not even see the metatags, it is difficult to see how the use [of another's trademark] could be fair, except in some unusual situations."[104] Thus, the future of the fair use defense remains dubious.
V. Conclusions and Recommendations
{50} After reviewing the relevant case law, I would recommend that HerbalFit remove Herbalife's name from HerbalFit's metatags. The case law reveals that the courts are willing to enjoin companies from using their competitors' trademarks and in some cases, fine companies for using those marks. HerbalFit can effectively market its product by using its own trademark as a metatag, and by using the side by side comparison of ingredients of its weight loss supplement in the visible text of its web page.