Branded keyword advertising (“BKA”)—bidding for your company’s website to feature prominently near a search engine’s results for branded or trademarked terms—has been around for over a decade. Under this practice, search engines auction off keywords, and the highest bidders receive advertising space adjacent to search results for those terms. Brand owners commonly bid on their own keywords and those of their competitors and related third parties.

Concerns that BKA runs afoul of trademark, false advertising, and unfair and deceptive trade practices laws were largely put to rest in 2013 and 2014, when a wave of court decisions held that, on its face, the practice does not constitute trademark infringement or cause customer confusion. However, a new challenge to BKA emerged earlier this year with the filing of Tichy v. Hyatt Hotels Corp., No. 1:18-cv-01959 (N.D. Ill.). In Tichy, a putative class of online consumers alleges that six major hotel chains violated antitrust laws by conspiring with each other and with third-party online travel agencies like Expedia and Priceline to refrain from bidding on each other’s branded keywords. Continue Reading Exposure for Branded Keyword Advertising in Hospitality and Retail

The Ninth Circuit will decide whether Great Lakes Reinsurance must defend clothing company, In and Out, against a trademark infringement suit by Forever 21. The dispute focuses on exclusionary language in the general liability policy issued by Great Lakes to In and Out, which broadly bars coverage for claims stemming from violations of intellectual property rights, but which also excepts from the exclusion claims for copyright, trade dress and slogan infringement occurring in the company’s advertisements. The appeal concerns last year’s ruling by a California federal judge that Great Lakes owed a defense because the underlying complaint raised a potential that In and Out’s advertising infringed Forever 21’s trade dress. Continue Reading Ninth Circuit to Decide Whether IP Exclusion Applies to Forever 21 Trademark Suit

On August 8, 2016, the Federal Trade Commission sued 1-800 Contacts, alleging that it entered into anticompetitive bidding agreements with 14 of its rivals. According to the administrative complaint, these bidding agreements are an unfair method of competition because they unreasonably restrain competition for bidding on online search advertising auctions and restrict truthful, non-misleading ads. Previously, 1-800 Contacts alleged that its rivals had engaged in trademark infringement by purchasing advertising space from online search engines when consumers searched for “1-800 Contacts.” Most of 1-800 Contacts’ rivals agreed to settle or avoid lawsuits by entering into the allegedly anticompetitive bidding agreements, which prohibit parties from bidding on their rivals’ trademarked terms. Additionally, all but one of the contracts also require the use of “negative keywords,” which will prevent an advertiser’s name from appearing if a rival’s name is used as a search term.

Continue Reading FTC Sues 1-800 Contacts, Alleges Anticompetitive Agreements Among Competitors for Online Search

On June 14, 2016, two lawyers in Hunton’s Insurance Coverage Counseling and Litigation practice, Syed Ahmad and Jennifer White, published an article in Risk Management Magazine about how commercial general liability (“CGL”) policies may help policyholders looking to recover attorney’s fees or fund settlements in trademark infringement litigation. Historically, CGL policies were the wrong place to look for coverage, and insurers raised often successful defenses to covering such trademark infringement cases under CGL policies. Or, policyholders would avoid CGL insurance altogether in favor of intellectual property (“IP”) insurance, which usually covers the cost of sitting on either side of the “v.” when enforcing or defending IP rights. But recent case law signals that businesses may want to take another look at the CGL policies that once spurned their IP advances.

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On Tuesday, December 22, 2015, the US Court of Appeals for the Federal Circuit issued a much-anticipated opinion regarding the constitutionality of the prohibition against “disparaging” trademarks. In an 9-3 en banc opinion, the Federal Circuit held that the exclusion of disparaging trademarks under Section 2(a) of the Lanham Act violates the First Amendment.

Many of the marks rejected as disparaging convey hurtful speech that harms members of stigmatized communities. But the First Amendment protects even hurtful speech …. The  government cannot refuse to register disparaging marks because it disapproves of the expressive  messages conveyed by the marks. It cannot refuse to register marks because it concludes that such marks will be disparaging to others.

Continue Reading First Amendment Protects Hurtful Speech, Even Hurtful Trademarks

The Eighth Circuit recently issued an opinion in the Interstate Bakeries Corporation bankruptcy case reversing its previous holding that a perpetual royalty-free trademark license constituted an executory contract that could be assumed or rejected in bankruptcy.  The Eighth Circuit, in a rehearing en banc on its earlier decision in Interstate III2, determined that the contract at issue should be considered part of an integrated agreement with another contemporaneously executed deal. When the Eighth Circuit expanded the parameters of the contract being considered, it determined that certain unperformed obligations by the bankrupt were not material and the contract was not executor.

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