Chicago Business Litigation Lawyer Blog
Our Chicago Internet trademark infringement litigation lawyers were interested to see a recent lawsuit with a new twist on the trademark infringement claims corporations are bringing against online companies. According to the Dallas Business Journal, Mary Kay v. Yahoo!, a pending lawsuit filed July 6 in Dallas federal court, does not allege that Yahoo! violated the cosmetics seller’s trademarks by selling keywords in advertisements. Instead, Mary Kay claims its copyrights are violated when its independent sales associates send email to clients with Yahoo! email accounts, because Yahoo! adds advertisements for competitors and third-party resellers into the messages. Mary Kay claims dilution, trademark infringement and unfair competition in its lawsuit, and seeks damages and an injunction against the practice.
The case comes shortly after a victory for Mary Kay in a related case. In Mary Kay v. Weber, the defendants were not advertisers, but a reseller of Mary Kay products that authorized sales consultants couldn’t sell. As David Johnson’s Digital Media Lawyer blog explained, Amy and Scott Weber sell Mary Kay cosmetics (along others) at touchofpinkcosmetics.com, often at a discount because they are discontinued or expired. Mary Kay sued them on several legal theories and won on its trademark claims, although the judge in that case did make a summary judgment ruling favorable to the Webers on nominative fair use grounds.
Nominative fair use allows businesses to use another’s trademark in a way that’s not likely to cause confusion, such as a car repair shop advertising that it focuses on fixing Volvos. As Johnson explains, a nominative fair use defense can be used in the Fifth Circuit if the alleged infringers had only used as much of the trademark as necessary to identify the products and did not do anything to suggest that they were sponsored by, endorsed by or affiliated with the trademark holder. However, the jury ultimately found that the Webers’ use of Mary Kay’s trademarks went beyond fair use, in part because their advertisements did suggest sponsorship by Mary Kay. Importantly for Illinois online trademark infringement litigators like us, however, the judge found that the Webers’ purchase of Google keyword ads using Mary Kay’s trademarks did not inherently make a fair use defense unavailable.
Keyword issues will come up more explicitly in Mary Kay’s current suit against Yahoo! Mary Kay alleges that Yahoo! is violating its trademarks by allowing them to be used as keyword ads in text and pop-up ads for third parties, inserted into messages to Yahoo! users. As with all trademark infringement lawsuits, Mary Kay will have to prove that this creates a likelihood of confusion among consumers. Similar lawsuits against Google, largely based on its Google AdWords program, were pending when this was filed. Trademark infringement lawyers interviewed in a Dallas Business Journal thought the makeup seller’s claim was weak, but Johnson suggested that a fair use defense might be difficult for Yahoo! because the sponsored ads show up in emails, which could legitimately confuse consumers not accustomed to seeing them there. Ultimately, a jury will decide whether consumers could realistically be confused by the practice.