With consumers’ increasing use of Internet search engines to find the products they want, search engine optimization has become a key element in many businesses’ overall marketing strategy. One way to achieve this result is to purchase keywords from a search engine (Google calls them ‘Adwords’). Keyword advertising refers to advertisements that appear alongside or above natural search results (usually called the ‘Sponsored Ads’) in response to keywords in the user’s query.

For a number of years, courts have been faced with the question of whether it is trademark infringement for ABC Company to purchase the keyword “XYZ Company” so that when a consumer types in “XYZ Company” into a search engine, ABC Company’s sponsored advertisement appears.

While there has been no absolute uniformity among the courts, the trend has been towards a policy permitting third parties to purchase others’ trademarks as keywords, while prohibiting use of the trademarked terms in the text of the advertisements themselves.

In what, at first blush, appears to be a departure from this trend, the U.S. District Court for the Southern District of New York recently denied a motion to dismiss a complaint alleging keyword infringement claims.

In Romeo & Juliette Laser Hair Removal, Inc. v. Assara I LLC (08-CV-442 (TPG)(FM) 2014 BL 263647 (S.D.N.Y. September 23, 2014), the plaintiff Romeo & Juliette Laser Hair Removal, Inc. alleged that the defendant purchased the search phrase “Romeo & Juliette” as an Adword from Google “and used it in hidden links and text on its websites in order to deceive the public into believing plaintiff sponsored defendant’s hair-removal services.” The Court agreed that these allegations set forth a claim for trademark infringement, trademark dilution, and related state and common law claims. The Court explained “a person searching . . . using plaintiff’s marks stood a strong chance of being directed to defendant[’s] website.”

This ruling may not be as broad a departure from the trend as it first appears. While most courts (and the leading search engines’ internal policies) tend to permit the purchase of competitors’ trademarks as “hidden” keywords, they have been less sanguine about use of the purchased terms in the actual text of sponsored advertising. Indeed, the two parties at issue in this case have litigated the issue before. In Romeo & Juliette Laser Hair Removal, Inc. v. Assara I, LLC, 2009 WL 750195 (S.D.N.Y. 2009), the Court found that, due to the use of the trademark in both the advertisement and the website, there was a possibility that consumers could be confused.

Although the Court here did not state explicitly that its ruling was based on the defendant’s use of “Romeo & Juliette” as text on the defendant’s website, this reasoning would be consistent with its ruling in the earlier hearing, and with Google’s own policy (“Google will investigate and may restrict the use of a trademark within ad text. Ads using restricted trademarks in their ad text may not be allowed to run” – Click here to view policy). One may expect the existing trend in the court and on search engines’ policies to continue.