Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

The Chicago Tribune ran a story on the front page of Wednesday's Business section about the use of trademarks in keyword internet advertising:  Trademark Battlefield.  The story discussed various efforts to stop internet search engines (like those offered by Google, Yahoo and Microsoft) from selling trademarked terms as search keywords.  For example, the story suggested that State Farm, an insurance company, may have purchased the name of its chief competitor, Allstate, from Google.  As a result, if you google "Allstate" Allstate's websites will come up first in the search results, but in the upper right corner of the search results page, you will see a State Farm ad. 

The story also discussed comments from a Google trademark lawyer, Rose Hagan, during a standing-room-only panel at the International Trademark Association's ("INTA") meeting on Monday, which was held in Chicago.  Hagan said that Google sells advertising space, not trademarks.  The story also notes that Utah has passed a law which prohibited the use of a competitor's trademarks as advertising keywords.  For more on the Utah law, check out Eric Goldman's Technology & Marketing Law Blog (via Marty Schwimmer's Trademark Blog).  The Utah law and the various lawsuits against Google, Yahoo and Microsoft on this issue are all evidence that this is a very unsettled area of trademark law.  A Yahoo attorney, Laura Hauck Covington, explained that "[w]e're all trying to find the right, reasonable balance for the owners of trademarks, consumers and advertisers."

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Civix-DDI, LLC v. National Assoc. of Realtors, No. 05 C 6869, 2007 WL 178318 (N.D. Ill. Jan. 22, 2007) (St. Eve, J.).

Judge St. Eve granted defendant Hotels.com summary judgment that certain of its alleged activities are protected by plaintiff Civix's covenant-not-to-sue with Hotels.com covenant-provider MapQuest and denied summary judgment as to activities that might be covered by Civix's similar covenant-not-to-sue with Hotels.com content-provider Navteq.  Another opinion on a similar issue with defendant Yahoo in the case is discussed in this post.  The Court held that both covenants prevented suits against the licensee's customers or end users with respect to or relating to the licensee's technology.  But in the case of the Navteq agreement, there was an issue of fact as to whether a third party in the stream of commerce between Navteq and Hotels.com added independent value to Hotels.com thereby giving Hotels.com more than the Navteq technology and kept Hotels.com from benefiting from the covenant-not-to-sue.  In the case of the MapQuest technology, there was no such third party in the stream of commerce and, therefore, no question that Hotels.com was protected by MapQuest's covenant-not-to-sue.

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Civix-DDI, LLC v. National Assoc. of Realtors, No. 05 C 6869, 2006 WL 3210504 (N.D. Ill. Nov. 6, 2006) (St. Eve, J.).

Judge St. Eve denied defendant Yahoo! Inc.'s ("Yahoo") summary judgment motion which argued that plaintiff Civix-DDI's ("Civix") patent infringement claims were barred by Civix's covenant not to sue in its settlement agreement (the "Settlement Agreement") with third party Navteq, a provider of relevant navigation data to Yahoo.  The Court held that Yahoo was a third party beneficiary of the Settlement Agreement because Yahoo purchased the data at issue from Navteq and that the Settlement Agreement protected such third parties from suit.  But the Court found an issue of material fact as to whether each of Yahoo's accused activities "relate in any way" to the Navteq technology and information, as required by the covenant not to sue. 

Practice Tip:  Make sure to both make all of your arguments and respond to each of your opponent's arguments.  In this opinion, the Court repeatedly noted that neither party offered sufficient arguments to allow for a definitive ruling regarding the scope of the covenant not to compete.  For example, the Court stated:

Civix and Yahoo! offer insufficient arguments to support their respective positions and they do not rebut each other's arguments as to whether the scope of "with respect to or in any way relating" is a "function" within a "service" or an entire "service."

It is much harder for a court to rule in your favor if you do not explain (and support) why it should.

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