No initial interest confusion in metatags case

In Designer Skin LLC v S & L Vitamins Inc (Case CV 05-3699-PHX-JAT, May 20 2008), the US District Court for the District of Arizona has held that an online reseller's use of a manufacturer's trademark in the metatags of its website results in initial interest confusion only if such use is deceptive and likely to confuse an appreciable number of people as to the source of the goods. The district court was "not persuaded" by the reasoning of the Tenth Circuit in Australian Gold Inc v Hatfield, in which the court had held for the manufacturer/trademark owner under similar circumstances.

Metatags are HTML codes that describe the contents of a website and increase the probability that a website will be seen by a customer who has typed a particular search into a search engine. In November 2005 Designer Skin LLC (a manufacturer of indoor tanning products) filed a district court action against S & L Vitamins Inc (an internet reseller) for various claims, including trademark infringement. Designer Skin argued that S & L's use of Designer Skin's trademarks in the metatags of its websites and as keywords to inform internet consumers searching for Designer Skin's products that those products were for sale on S & L's websites caused initial interest confusion. S & L counterclaimed for a declaratory judgment of non-infringement, arguing that its use of the marks truthfully identified the trademark owner's product and was not likely to confuse consumers.

Both parties moved for summary judgment on their claims. Recognizing its tension with Hatfield, the district court granted summary judgment in S & L's favour with regard to the trademark infringement claim, noting that an opposite holding would "stym[ie] access to the world of goods and services lawfully available on the Internet".

The Ninth Circuit developed the initial interest confusion doctrine in Brookfield Communications Inc v West Coast Entertainment Corp, in which it held that the Lanham Act bars a defendant from using a competitor's mark (or one that is confusingly similar to its competitor's mark) in its metatags, unless the use truthfully identified the competitor's goods or was for purposes of comparative advertising.

In Hatfield, the Tenth Circuit expanded the initial interest confusion doctrine (which developed in the context of competitors) to hold that the Lanham Act bars an internet reseller from including a manufacturer's mark in its metatags. The court reasoned that such internet resellers "used the goodwill associated with [the manufacturer's] trademarks in such a way that consumers might be lured to [the products of the manufacturer's] competitors".

The Designer Skin court rejected the Tenth Circuit's reasoning, finding a distinction between "using a mark to attract potential customers to a website that offers only products of the mark holder's competitors", which would cause initial interest confusion, and "using a mark to attract potential customers to a website that offers the mark holder's genuine products as well as the products of competitors", which would not. The court found that S & L’s use of Designer Skin's trademark fell into the latter category, and therefore did not cause initial interest confusion.

Ron D Dreben and Juan Valdivieso, Morgan Lewis, Washington DC