Search-based advertising can be a valuable marketing tool for law firms. Because many consumers search for legal representation on Google, law firms often use search-engine keyword services, such as Google AdWords, to publicize their services. Examples include phrases such as “personal injury attorney” or “truck accident lawyer” that cause preferred advertisements to appear in the search results.
Search-Engine Advertising
This method of search-engine advertising has a drawback—your competitor may bid on your trademarks as keyword advertisements to redirect consumer attention away from your business. A business, for example, called “ABC Widgets” could bid on the trademark “XYZ Widgets” so that customers search for “XYZ Widgets” and see advertisements for “ABC Widgets.” If ABC’s advertisement is generic and does not identify its source, customers may be confused and purchase from ABC instead of XYZ—even if the customers were not originally looking for ABC. While many consider this healthy competition, some contend it is trademark infringement.
Consider the scenario of a law firm bidding on a competitor’s trademarks as keyword advertisements. This led to litigation filed by Jim Adler, the “Texas Hammer,” which was at issue in the Fifth Circuit’s 2021 decision in Jim Adler P.C. v. McNeil Consultants, L.L.C., 10 F.4th 422 (5th Cir. 2021).
The “Adler Marks”
Jim Adler advertises via his trademarks, including JIM ADLER, THE HAMMER, and THE TEXAS HAMMER (the “Adler Marks”). McNeil operates a referral service that refers personal injury cases to lawyers with whom McNeil has a referral agreement. McNeil uses search-engine advertising and bid on Adler Marks as keywords; if a consumer searched for Adler Marks, McNeil’s advertisements appeared near the top of the resulting search.
McNeil’s advertisements did not specify any lawyer or law firm and used generic terms that could apply to any personal injury firm. Adler alleged McNeil’s advertising caused consumers to believe they were interacting with Adler’s advertisements. McNeil’s AdWord campaign also deployed “click-to-call” advertisements—if someone searched on their phone and clicked McNeil’s advertisement, the ad would place a call directly to McNeil’s call center. McNeil’s representatives used generic greetings to convince customers they were speaking with an Adler representative long enough to have them retain a McNeil-referred lawyer. The result, according to Adler, was a likelihood of confusion that risked unfair competition for Adler’s potential customers.
McNeil’s advertisements did not specify any lawyer or law firm and used generic terms that could apply to any personal injury firm. Adler alleged McNeil’s advertising caused consumers to believe they were interacting with Adler’s advertisements. McNeil’s AdWord campaign also deployed “click-to-call” advertisements—if someone searched on their phone and clicked McNeil’s advertisement, the ad would place a call directly to McNeil’s call center. McNeil’s representatives used generic greetings to convince customers they were speaking with an Adler representative long enough to have them retain a McNeil-referred lawyer. The result, according to Adler, was a likelihood of confusion that risked unfair competition for Adler’s potential customers.
The Lanham Act
Adler sued McNeil for trademark infringement under the federal Lanham Act, which required Adler to sufficiently allege: (1) it possessed legally protectable trademarks, and (2) McNeil’s use of the trademarks created a likelihood of consumer confusion. Adler alleged McNeil’s advertisements caused “initial interest confusion”— confusion that creates initial interest in a competitor’s product, even if the confusion is dispelled before a sale occurs. McNeil moved to dismiss Adler’s complaint for failure to state a claim, which the district court granted.
The Adler case was the first time the Fifth Circuit analyzed initial interest confusion in the context of search-engine advertising. The Fifth Circuit reversed the district court and held Adler sufficiently stated a claim for infringement because McNeil: (1) used the Adler Marks as keyword advertisements, and (2) deployed generic advertisements and a misleading call center to confuse consumers who were searching for Adler.
The “Something More”
Adler’s allegations of McNeil’s generic advertisement scheme were essential to the court’s decision. The court noted that allegations that a competitor uses a trademark as a keyword advertisement are not alone sufficient to plead an infringement claim. A claimant must allege something more about how the infringer’s use of the trademarks creates consumer confusion, rather than merely distraction.
In Adler, McNeil’s advertising scheme had the “something more”—Adler alleged McNeil’s advertisements and call center tactics were confusing because they did not identify their affiliation, were generic, and were designed to convince consumers they were affiliated with Adler. Because the pleadings went beyond the mere purchase of trademarks as keywords, the court held Adler sufficiently alleged McNeil’s use of the Adler Marks stated a claim for trademark infringement.
While Google permits bidding on competitors’ trademarks, Adler potentially supports infringement claims against advertisers that dip their toes in competitor waters. Law firms should not be dissuaded from using search-based advertising to keep their advertisements at the top of search results, but they should always be mindful of avoiding the “something more” discussed in Adler. A best practice may be to use advertisements that clearly identify the law firm, its services, and its affiliated attorneys. Or, of course, firms can take the “safe” approach and avoid bidding on competitor trademarks altogether.
Griffith Barbe PLLC
To see the full February 2023 Headnotes | DBA publication, click here.
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