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It is now clear that keyword advertising can, in some cases, constitute trademark infringement. But under what circumstances? 1-800 Contacts once again finds itself on the losing end of that question in a recent case from the Southern District of New York that examines customer confusion and the developing law around the protection of digital intellectual property.
Online advertising is among the largest and fastest growing areas of digital commerce. Unsurprisingly, consumer online spending substantially outpaces ad spending in raw dollars, but in terms of sector growth and technical innovation digital advertising is unsurpassed. Today’s Internet is a highly optimized machine for the delivery of targeted advertising and the techniques and technologies used to personalize and deliver ads grow more sophisticated every day. Hundreds of billions of dollars a year are poured into digital advertising, and at least two of the world’s most valuable companies—Alphabet (Google) and Meta (Facebook)—derive most of their revenue from that source. Consumers may not think of Google and Facebook as ad sales companies, but that’s unquestionably what they are.
Obviously, legal regulation of such an enormous and rapidly changing field presents substantial challenges, and over the past two decades (at least in the United States) that job has fallen primarily on courts. In the absence of a federal statutory scheme specifically aimed at digital advertising practices, the courts have focused on consumer-facing issues covered by existing law, such as privacy, transparency, and deceptive or misleading advertising practices. But digital advertising technology can also present new challenges in less obvious areas of the law, such as copyright and trademark protection.
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