Rescuecom Corp. v. Google, Inc

Rescuecom Corp. (Plaintiff) is a national computer service franchising company that conducts a substantial amount of business over the Internet.  “Rescuecom” is a registered federal trademark.  Google, Inc. (Defendant) operates an Internet search engine that helps users locate information on the Internet.  If a user is looking for information about a provider’s products and services, Google (Defendant) will direct the user, who types the name of the provider into Defendant’s search engine, to the provider’s website and to information about the provider.  Plus, Defendant may display context-based advertising along with the other search results if an advertiser, having determined that its ad is likely to be of interest to a searcher who enters the particular term, has bought from Defendant the placement of its ad on the screen of the searcher who enters the particular term, has purchased from Defendant the placement of its ad on the screen of the searcher who entered that search term.  Ads such as this contain a link to the website of the advertiser, and if the user links to this website, the user may be offered information about the advertiser, as well as the opportunity to purchase products or services from the advertiser.  Google (Defendant) uses at least two programs to offer context-based links such as: AdWords and Keyword Suggestion Tool.  AdWords is a Google (Defendant) program through which advertisers purchase terms (or keywords).  When entered as a search term, the keyword triggers the appearance of the advertiser’s ad and link on the user’s screen.  Keyword Suggestion Tool is a different Defendant program that recommends keywords to advertisers to be purchased for use in AdWords.  Defendant allegedly makes 97 percent of its revenue from selling advertisements through its AdWords program, and therefore has an economic incentive to increase the number of advertisements and links that appear for every term entered into its search engine.  Through its Keyword Suggestion Tool, Defendant recommended the Rescuecom trademark to Rescuecom’s (Plaintiff) competitors as a search term to be purchased through AdWords, so that whenever a user launches a search for the term “Rescuecom,” seeking to be connected to Rescuecom’s (Plaintiff) website, the competitors’ advertisement and link will appear on the searcher’s screen.  Plaintiff brought suit for trademark infringement, claiming that this practice made it possible for Plaintiff’s competitors to deceive and divert users searching for Plaintiff’s website by causing the searcher to believe mistakenly that a competitor’s advertisement and website link was sponsored by, endorsed by, approved by, or affiliated with Rescuecom (Plaintiff).  The district court dismissed the action, finding that Defendant’s use of the Rescuecom trademark was not made in commerce, which is a required element of a trademark infringement claim under the Lanham Act, because the competitors’ advertisements triggered by Defendant’s programs did not exhibit Plaintiff’s trademark.  The court rejected the argument that Defendant “used” Plaintiff’s mark in recommending and selling it as a keyword to trigger competitor’s advertisements because the court read the decision in 1-800 Contacts, Inc. v. WhenU.com, Inc. 414 F.3d 400 (2d Cir. 2005) (1-800) to compel the conclusion that this was an internal use and therefore could not be a “use in commerce” under the Lanham Act.  The court of appeals granted review.