Network Automation, Inc. v. Advanced Systems Concepts, Inc.
638 F.3d 1137
| 9th Cir. | 2011Background
- Network and Systems are direct competitors selling competing job scheduling software; Network advertised using Systems' ActiveBatch mark via Google AdWords and Bing; district court granted a preliminary injunction finding likelihood of confusion under Sleekcraft; court emphasized three Internet-focused factors (mark similarity, related goods, Internet marketing channel); on appeal, court held the district court abused discretion by applying a rigid Sleekcraft framework and vacated the injunction; court applied flexible, context-specific Sleekcraft analysis, emphasizing labeling/advertisement context and consumer care; remanded for further proceedings consistent with this opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether keyword advertising using a mark constitutes use in commerce and likelihood of confusion | Systems argues Network uses ActiveBatch to mislead | Network argues lawful comparative advertising | Yes, use in commerce shown; likelihood of confusion not proven under flexible Sleekcraft |
| Appropriate Sleekcraft factors for keyword advertising context | Sleekcraft factors apply as standard | Troika/Internet context require flexibility | Factors must be applied flexibly; Internet troika not controllingHere |
| Whether the district court correctly weighed strength, care, and labeling factors | District court favored Systems based on low consumer care | Care and labeling context not dispositive | District court erred in rigid weighting; examinable factors must align with context |
| Whether absence of actual confusion defeats likelihood of confusion | Actual confusion not required to prove likelihood | Actual confusion would support injunction | lack of actual confusion at preliminary stage does not preclude likelihood of confusion under flexible analysis |
| Whether the district court properly considered labeling/appearance on the results page | Ads not clearly labeled source | Advertising context and labeling reduce confusion | Contextual appearance and labeling are critical; district court erred by not weighing surrounding context |
Key Cases Cited
- Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999) (flexible, internet context; troika factors; avoid rigid application)
- Sleekcraft Boats v. Luxcraft Boats, 599 F.2d 341 (9th Cir. 1979) (eight-factor test; not exhaustive; adapt to fact pattern)
- Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th Cir. 2004) (initial interest confusion; labeling matters; evidence of actual confusion strong but not sole basis)
- GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199 (9th Cir. 2000) (internet troika reference; early keyword advertising context)
- Rescuecom Corp. v. Google Inc., 562 F.3d 123 (2d Cir. 2009) (use of trademarks as search keywords; use in commerce; confirmation by circuit court)