Morningware v. Hearthware Home Prods., Inc., No. 09 C 4348, Slip. Op. (N.D. Ill. Nov. 16, 2009) (St. Eve, J.).

Judge St. Eve denied defendant Hearthware’s Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Morningware’s Lanham Act unfair competition and product disparagement claims, as well as related state law claims.  Hearthware allegedly bought Morningware’s trademarks as Google AdWord keywords so that when a Google user searched for Morningware’s trademarks, a Hearthware "sponsored link" showed up above the standard search results, along with the following text written by Hearthware:

        The Real NuWave® Oven Pro Why Buy an Imitation?  90 Day Gty.

Hearthware did not dispute that the MORNINGWARE mark was protectible or that it was owned by Morningware.  Instead, Hearthware argued that purchasing "Morningware" as an AdWord keyword was not a "use" in commerce.  The Court noted that although the Seventh Circuit had not decided the issue, courts have largely adopted a broad reading of "use" that included AdWords purchases.  But in this case, the Court could not decide the issue without fact-finding which was not appropriate in a Rule 12(b)(6) motion.  The Court, therefore, denied the motion to dismiss.

Hearthware also argued that purchasing AdWords could not create customer confusion.  But the Court held that Morningware pled sufficient facts to show initial interest confusion which is actionable pursuant to the Lanham Act, even if the confusion is only brief and the customer is aware of the true source of the goods by the time a purchase is made.

The Court also held that Hearthware’s alleged "Why Buy an Imitation" advertisement text was sufficient for a disparagement case as a fact-finder could determine that the text could lead a consumer to believe that Morningware’s product was an imitation of Hearthware.  Morningware’s state law claims survived the motion to dismiss for the same reasons as the Lanham Act claims.