LERNER & ROWE PC, an Arizona corporation v. BROWN ENGSTRAND & SHELY LLC, DBA Accident Law Group, an Arizona corporation; JOSEPH L. BROWN, an individual
No. 23-16060
United States Court of Appeals for the Ninth Circuit
October 22, 2024
D.C. No. 2:21-cv-01540-DGC
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
LERNER & ROWE PC, an Arizona corporation, Plaintiff-Appellant,
v.
BROWN ENGSTRAND & SHELY LLC, DBA Accident Law Group, an Arizona corporation; JOSEPH L. BROWN, an individual, Defendants-Appellees,
and
DOES, 1-10, inclusive, Defendant.
Appeal from the United States District Court for the District of Arizona
David G. Campbell, District Judge, Presiding
Argued and Submitted May 14, 2024 Phoenix, Arizona
Filed October 22, 2024
Opinion by Judge de Alba;
Concurrence by Judge Desai
SUMMARY**
Lanham Act
The panel affirmed the district court‘s grant of summary judgment in favor of defendants in a trademark infringement action under the Lanham Act.
Plaintiff Lerner & Rowe, PC, a personal injury law firm based in Arizona, had three registered trademarks, including the name “Lerner & Rowe.” In a strategy known as “conquesting,” defendant Brown, Engstrand & Shely, LLC, doing business as The Accident Law Group, or ALG, purchased the term “Lerner & Rowe” as a Google Ads keyword.
The panel affirmed the district court‘s grant of summary judgment on Lerner & Rowe‘s trademark infringement claim on the ground that Lerner & Rowe failed to establish that ALG‘s use of the mark was likely to cause consumer confusion. The panel concluded that the strength of the
Concurring in the majority opinion in full, Judge Desai wrote separately to urge the court to reconsider en banc the holding of Network Automation, Inc. v. Advance Systems Concepts, Inc., 638 F.3d 1137 (9th Cir. 2011), that keyword bidding and purchasing constitutes a “use in commerce,” which is required to show a likelihood of confusion under the Lanham Act.
COUNSEL
Andrew Gaggin (argued), Lerner & Rowe PC, Tucson, Arizona, for Plaintiff-Appellant.
Maria C. Speth (argued) and Aаron K. Haar, Jaburg Wilk PC, Phoenix, Arizona, for Defendant-Appellee.
DE ALBA, Circuit Judge:
“What‘s in a name?” WILLIAM SHAKESPEARE, ROMEO AND JULIET act 2, sc. 2, l. 46. According to Juliet Capulet, not much. Romeo Montague‘s last name, though charged with meaning, does not confuse her about who he is. In this keyword advertising trademark dispute, the district court saw most consumers as discerning Juliets. Appellant, however, likens them to the larger Capulet clan, a group more prone to confusion. As explained below, we disagree and affirm the district court‘s grant of summary judgment.
I. Factual and Procedural Background
Appellant Lerner & Rowe, PC (“Lerner & Rowe“), and Appellee Brown, Engstrand & Shely, LLC—which does business as The Accident Law Group (“ALG“)—are both personal injury law firms based in Arizona. Founded in 2005, Lerner & Rowe is the larger of the two firms with nineteen offices throughout the state. It has three registered trademarks: on June 14, 2011, it registered the phrase “Lerner & Rowe Gives Back;” on March 3, 2015, it registered the name “Glen Lerner;” аnd, on May 19, 2020, it registered the name “Lerner & Rowe.” Lerner & Rowe has spent over $100 million promoting its brand and trademarks in Arizona.
Since its founding in 2015 until 2021, ALG purchased the term “Lerner & Rowe” as a Google Ads keyword, which prompted ALG‘s advertisements to appear near the top of Google‘s search results list whenever someone searched for “Lerner & Rowe.” This strategy, known as “conquesting,” is a common internet marketing tool by which companies
On September 8, 2021, Lerner & Rowe filed a complaint alleging claims for (1) trademаrk infringement, unfair competition, false designation of origin, and false description under the Lanham Act; (2) state trademark infringement and unfair competition; and (3) unjust enrichment. In a May 18, 2023, order, the district court granted summary judgment in favor of ALG on the trademark infringement and unjust enrichment claims but denied summary judgment on the unfair competition claims. ALG moved for reconsideration, and the district court subsequently entered summary judgment as to all claims. Lerner & Rowe timely appealed that ruling. We have jurisdiction pursuant to
II. Legal Standard
We review grants of summary judgment de novo. Multi Time Mach., Inc. v. Amazon.com, Inc., 804 F.3d 930, 935 (9th Cir. 2015). “[O]n a defendant‘s motion for summary judgment, not only does the movant carry the burden of establishing that no genuine dispute of material fact exists, but the court also views the evidence in the light most favorable to the non-moving party.” JL Beverage Co., LLC v. Jim Beam Brands Co., 828 F.3d 1098, 1105 (9th Cir. 2016). A genuine dispute of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “If the evidence is merely
III. Discussion
“To prevail on a claim of trademark infringement under the Lanham Act,
(1) the strength of the mark; (2) the evidence of actual confusion; (3) the type of goods and degree of care likely to be exercised by the purchaser; and (4) the labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page.
Id. at 1154. Other, less relevant factors include the “proximity of the goods, similarity of the marks, marketing channels used, defendant‘s intent in selecting the mark, and likelihood of expansion of the product lines.” Id. at 1145 (quoting AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–49 (9th Cir. 1979)) (cleaned up). These factors are “not a rote checklist,” and we must be flexible when analyzing them. Id. Depending on the circumstances of a given case, certain factors may be more important than others. Id. at 1148; see also Multi Time Mach., 804 F.3d at 937, 939 (affirming grant of summary judgment based on two factors: “evaluation of the web page at issue and the relevant consumer“).
This case primarily concerns “initial interest confusion,” which occurs when an alleged infringer uses a competitor‘s mark to direct consumer attention to its product.1 See
A. Strength of the Mark
Strong trademarks receive greater protection because “a user searching for a distinctive term is more likely to be looking for a particular product, and therefore, could be more susceptible to confusion when sponsоred links appear that advertise a similar product from a different source.” Network Automation, 638 F.3d at 1149. Courts measure a mark‘s strength both conceptually—by its “inherent distinctiveness“—and commercially—by its “actual marketplace recognition.” Id. (quoting Brookfield Commc‘ns, 174 F.3d at 1058). Even when a mark is not
The district court correctly found, and ALG does not dispute, that Lerner & Rowe‘s mark is strong. Not only is the mark federally registered, but Lerner & Rowe has spent millions of dollars advertising it, garnering the business of over 100,000 clients. This factor weighs in favor of Lerner & Rowe.
B. Evidence of Actual Confusion
“[A] showing of actual confusion among significant numbers of consumers provides strong support for the likelihood of confusion.” Playboy Enters., 354 F.3d at 1026. In fact, if a plaintiff can demonstrate “that an ‘apprеciable number’ of people are confused,” that fact, alone, might entitle the plaintiff to a trial on the likelihood of confusion. Thane Int‘l, Inc. v. Trek Bicycle Corp., 305 F.3d 894, 902 (9th Cir. 2002), superseded on other grounds by statute, Trademark Dilution Revision Act of 2006, Pub. L. No. 109-312, 120 Stat. 1730-33, as recognized in Blumenthal Distrib., Inc. v. Herman Miller, Inc., 963 F.3d 859, 870 (9th Cir. 2020) (quoting Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1151 (9th Cir. 2002)). Nevertheless, because actual confusion evidence is difficult to gather, “the absence of such evidence is not dispositive.” Off. Airline Guides, Inc. v. Goss, 6 F.3d 1385, 1393 (9th Cir. 1993).
Here, Lerner & Rowe‘s proffer of actual confusion consists of 236 phone calls that ALG‘s intake department received during which the caller mentioned Lerner & Rowe
Lerner & Rowe does not dispute these statistics. Nor did it commission its own survey. Rather, it relies on cases like Ironhawk Technologies, Inc. v. Dropbox, Inc., 2 F.4th 1150
Typically, instances of actual confusion present a numerator with no denominator, saying little or nothing about the actual proportion of the consumer population that is confused. In such cases, we see the tip of an iceberg and have no ability to speculate about how much lies below the surface. Here, however, no speculation is necessary—we can sеe the entire iceberg. Because we have both the numerator—the 236 calls representing actual confusion—and the denominator—the 109,322 consumers who saw the advertisements—we can discern with a high degree of precision the proportion of all consumers who were actually confused. See 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 23:14 (5th ed.) (“Evidence of the number of instances of actual confusion must be placed against the background of the number of opportunities for confusion before one can make an informed decision as to the weight to be given the evidence.“). The resulting 0.216% confusion rate is direct
Our conclusion does not conflict with cases like Ironhawk, where we weighed individual instances of confusion without the benefit of knowing the total number of opportunities consumers had for confusion. See 2 F.4th at 1165–66. We surmised that a reasonable jury would likely find the proffered evidence of actual confusion in Ironhawk de minimis, but we could not make that determination ourselves without more data. See id. at 1166. Here, on the other hand, we know how many times сonsumers searched for “Lerner & Rowe” on Google and saw an ALG advertisement. We also know how many of those consumers called ALG and, in a potential expression of confusion, referenced “Lerner & Rowe.” The resulting calculation is simple and telling: unlike in Ironhawk, the evidence of actual confusion here is demonstrably de minimis.
While evidence showing the actual proportion of confused consumers is important, we do not suggest that courts should automatically discount de minimis instances of actual confusion when the record contains additional
C. The Reasonably Prudent Consumer‘s Degree of Care
Sophisticated consumers and those shopping for high-value products are likely to exercise a higher degree of care while shopping and are, therefore, less likely to be confused
We agree that this factor weighs in ALG‘s favor. Since at least 2010, we have recognized that “[c]onsumers who use the internet for shopping are generally quite sophisticаted about” how the internet functions. Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171, 1178 (9th Cir. 2010). For example, regular internet users can readily distinguish domain names associated with the companies they are searching for from those they are not. See id. Additionally, Google‘s search engine is so ubiquitous that we can be confident that the reasonably prudent online shopper is familiar with its layout and function, knows that it orders results based on relevance to the search term, and understands that it produces sponsored links along with organic search results. Moreover, in this case, the relevant consumers specifically typed in “Lerner & Rowe” as a search term, suggesting that they would be even more discerning of the results they received. Therefore, because this case involves shopping on Google by using the precise trademark at issue, this factоr weighs in favor of ALG.5
“[C]lear labeling can eliminate the likelihood of initial interest confusion in cases involving Internet search terms.” Multi Time Mach., 804 F.3d at 937; see also Network Automation, 638 F.3d at 1153 (“In the keyword advertising context the ‘likelihood of confusion will ultimately turn on what the consumer saw on the screen and reasonably believed, given the context.‘” (quoting Hearts on Fire Co. v. Blue Nile, Inc., 603 F. Supp. 2d 274, 289 (D. Mass. 2009))). The district court, after analyzing three screenshots depicting ALG‘s advertisements, concluded that the advertisements would not confuse a reasonably prudent consumer searching online for personal injury legal services.6 We agree.
First screenshot:
The most significant feature of the second and third screenshots is the clearly labeled result for Lerner & Rowe‘s website. Though the first screenshot does not display a result for Lerner & Rоwe, we think it reasonable that, based on the other two screenshots, such a result likely appeared immediately after the ALG advertisement. But even if the list of search results did not include an entry for Lerner & Rowe after the ALG advertisement, our conclusion would remain the same. Indeed, we find it difficult to believe that
Nor do we think that ALG‘s advertisements are so confusing as to lure reasonably prudent online shoppers into unwittingly clicking on them in search of Lerner & Rowe‘s website. Lerner & Rowe attempts to demonstrate confusion by distinguishing Multi Time Machine v. Amazon.com, where we held that Amazon‘s search results page was so clearly labeled that no reasonable consumer would find it confusing. See 804 F.3d at 937–38. That case involved Amazon searches for the MTM Special Ops watch, a product that the manufacturer did not sеll on Amazon. Id. at 933. When someone searched for “mtm special ops” on Amazon, the results page listed the search query twice above a “Related Searches” field that contained alternative search queries that might help the consumer find a related product. Id. Below the “Related Searches” field, separated by a gray bar, was a list of products available on Amazon that were similar to the MTM Special Ops watch. Id. at 934. The entry for each of these products included a photograph and listed the name of the product and the manufacturer in “large, bright, bold letters.” Id. at 938.
Lerner & Rowe notes that, unlike in Multi Time Machine, Google‘s search results do not contain a “Related Results” field and do not separate advertisements from organic results with “borders, bars, or shading.” First, it is not surprising that Google styles its search results differently from Amazon; thеy are distinct search engines with distinct functions. Second, Multi Time Machine did not elucidate a list of features that a search engine must incorporate in order for their results to be clearly labeled. Analyzing the search results in the context of the Google results at issue here, we
We acknowledge that some of ALG‘s advertisеments are not models of clarity. As Lerner & Rowe points out, sometimes the content of an advertisement contains generic statements that could apply to any personal injury law firm—for example, “Your Personal Injury Attorney—We Don‘t Win—You Don‘t Pay.” In such cases, the only feature identifying ALG as the source of the advertisement is the URL, which is in a smaller, lighter font. While these features could possibly cause confusion in isolation, our job is to analyze the advertisements within the context of the entire search results page. That page invariably contains a result for Lerner & Rowe that includes the precise search term at issue, dispelling any confusion ALG‘s advertisements might cause. The parties’ presentation of de minimis evidence of actual confusion only bolsters our conclusion that it is only the “[u]nreаsonable, imprudent and inexperienced web-shoppers” who might find the search results pages confusing. Tabari, 610 F.3d at 1176.
E. Other Factors
While the factors above are the most relevant to trademark infringement claims based on keyword advertising, other factors can also be helpful. See Network Automation, 638 F.3d at 1149–54 (weighing nine factors and
1. Proximity of the Goods
When companies provide similar services, consumers are more likely to confuse them. See Network Automation, 638 F.3d at 1150. Nevertheless, “the proximity of the goods . . . become[s] less important if advertisements are clearly labeled or consumers exercise а high degree of care, because rather than being misled, the consumer would merely be confronted with choices among similar products.” Id. The district court correctly noted that, even though ALG and Lerner & Rowe are direct competitors offering similar services, savvy online shoppers would be able to differentiate between the parties’ links on Google. If it has any weight at all, this factor falls in favor of ALG.
2. Marketing Channels
This factor might be relevant if ALG‘s advertisements appeared on a lesser-known or product-specific search engine, but “[t]oday, it would be the rare commercial retailer that did not advertise online, and the shared use of a ubiquitous marketing channel does not shed much light on the likelihood of consumer confusion.” Network Automation, 638 F.3d at 1151. Lerner & Rowe cites a case from the year 2000 to argue that online markеting increases the likelihood of confusion. While that may have been true over twenty years ago when internet advertising was new, our precedent acknowledges that advertising on Google is commonplace today. The district court properly accorded this factor little to no weight.
“Where the two marks are entirely dissimilar, there is no likelihood of confusion.” Brookfield Commc‘ns, 174 F.3d at 1054. Lerner & Rowe argues that this factor favors it because ALG‘s use of Lerner & Rowe‘s mark as a keyword means that ALG uses a mark identical to Lerner & Rowe‘s. Network Automation rejected this exact reasoning, holding that this factor should reflect “what consumers ‘encountered in the marketplace,‘” not what Google‘s algorithm uses to churn out search results. 638 F.3d at 1151. In this case, ALG does not display Lerner & Rowe‘s mark in its advertisements. In fact, the URL above each advertisement displays ALG‘s own mark, albeit in a lower-сase, condensed form. These two marks—“Lerner & Rowe” and “Accident Law Group“—are in no way similar. This factor favors ALG.
4. Intent
“When the alleged infringer knowingly adopts a mark similar to another‘s, reviewing courts presume that the defendant can accomplish his purpose: that is, that the public will be deceived.” Network Automation, 638 F.3d at 1153 (quoting Sleekcraft, 599 F.2d at 354). Apart from an affirmative intent to confuse, an alleged infringer‘s failure to take remedial steps when faced with evidence of confusion can cause a likelihood of confusion. See Playboy Enters., 354 F.3d at 1028–29. We agree with the district court that, because Lerner & Rowe‘s evidence of intent is identical to the evidence it offered to support its likelihood of confusion argument generally, it has failed to distinguish between an intent to deceive and an intent to compete on the part of ALG. Accordingly, this factor bears little to no weight.
“The likelihood of expansion of product lines factor is relatively unimportant where two companies already compete to a significant extent.” Brookfield Commc‘ns, 174 F.3d at 1060. Lerner & Rowe acknowledges that this factor is unimportant to the likelihood of confusion analysis because it competes directly with ALG. The district court correctly acknowledged the same.
IV. Conclusion
The district court was correct to conclude that this is one of the rare trademark infringement cases susceptible to summary judgment. The generally sophisticated nature of online shoppers, the evidence demonstrating that there is not an appreciable number of consumers who would find ALG‘s use of the mark confusing, and the clarity of Google‘s search results pages, convince us that ALG‘s use of the “Lerner & Rowe” mark is not likely to cause consumer confusiоn. The district court‘s judgment is affirmed.7
I concur in the majority opinion in full. But I write separately to urge our court to reconsider whether keyword bidding and purchasing constitutes a “use in commerce” under the
To prevail on a trademark infringement claim, a plaintiff “must prove: (1) that it has a protectible ownership interest in the mark; and (2) that the defendant‘s use of the mark is likely to cause consumer confusion.” Dep‘t of Parks & Recreation v. Bazaar Del Mundo Inc., 448 F.3d 1118, 1124 (9th Cir. 2006). Subsumed in the second element of this test is the requirement that a defendant uses the mark in commerce.
Under the
We have previously suggested that a defendant can “use” a mark in commerce even if the mark is not visibly displayed. See Brookfield Commc‘ns, Inc. v. W. Coast Ent. Corp., 174 F.3d 1036, 1064–65 (9th Cir. 1999) (holding that use of competitor‘s trademark in metatags, which are not visible on a website, is actionable under the
In Network Automation, we answered, yes. 638 F.3d at 1144–45. But we provided no analysis to support this holding, id. at 1145, and we relied on cases with meaningfully different facts. Given that the cases on which Network Automation relied are readily distinguishable, the purpose of trademark infringement actions and modern practice on the internet suggest we may have gotten it wrong.
A. Rescuecom did not consider purchasers of advertising keywords.
Network Automation relied almost exclusively on the Second Circuit‘s decision in Rescuecom Corp. v. Google, Inc., 562 F.3d 123, 129 (2d Cir. 2009), for its conclusion that purchasing advertising keywords satisfies the “use in commerce” definition. 638 F.3d at 1145 (citing Rescuecom and concluding, “[w]e now agree with the Second Circuit that such use is a ‘use in commerce’ under the
Purchasers of keywords do not display the mark. Here, Lerner & Rowe alleges that ALG bid on certain search terms—including “Lerner & Rowe“—and having been the highest bidder, paid Google to place its own advertisement
B. Purchasing adwords is not comparable to using metatags.
Network Automation also pointed to a separate line of cases involving metatags to support its holding. Metatags are snippets of HTML code that describe the contents of the website. Brookfield, 174 F.3d at 1045. During the earlier days of the internet, many search engines relied on metatags in code to rank their search results. 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 25A:3 (5th ed. 2024). “The more often a term appear[ed] in the metatags and in the text of the web page, the more likely it [wa]s that the web page [would] be ‘hit’ in a search for that keyword and the higher on the list of ‘hits’ the web page [would] appear.” Brookfield, 174 F.3d at 1045. Internet users took advantage of this system, incorporating their competitors’ trademarks into their website codes to improve the likelihood of appearing in a search for their competitor‘s mark.
We have previously assumed without expressly deciding that this type of conduct with metatags constitutes a “use in commerce.” Id. at 1062–63. In Brookfield, we held that the use of metatags was actionable because it could cause initial
But incorporating metatags consisting of a competitor‘s trademark into a website code is comparable to displaying or presenting a mark. Rescuecom explained, and we appear to have endorsed the view that such “internal” displays still constitute a “use in commerce.” See, e.g., 562 F.3d at 129 (explaining that “use of a trademark in a software program‘s internal directory [does not] preclude[] a finding of trademark use“). Even if metatags do not involve an external display, they are functionally equivalent to “affixing” the competitor‘s mark to the product—a defendant affixes the competitor‘s mark to its website through its code to gain the benefits of thе mark. This is precisely what the “use in commerce” requirement aims at. McCarthy, supra, § 23:11.50 (explaining that the “use in commerce” definition in
A defendant bidding on keywords may not be the same as a defendant incorporating its competitor‘s trademarks into its own website. Although metatags and bidding on keywords are similar because neither involve a visible display of the competitor‘s mark on the defendant‘s website, the visibility of the mark or lack thereof is not what constitutes “use.” Metatags constitute a “use” because the defendant affixes the competitor‘s mark to its website via its code. In contrast, keyword bidding does not require the defendant to display or affix a mark internally or externally—in the advertising of its services.
II. We should reconsider our holding in Network Automation en banc.
Because purchasing keywords is different than selling them or using metatags, Network Automation‘s holding is unsupported by existing case law. When considering whether ALG used or displayed Lerner & Rowe‘s mark in the sale or advertising of its services,
First, trademark infringement typically requires presenting the mark to the allegedly confused consumers. In an ordinary infringement case, the defendant‘s presentation of a similar mark causes consumer confusion about the source of the goods or services. See, e.g., Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 629 (9th Cir. 2005). ALG‘s actions look nothing like the ordinary case. Indeed, ALG never presented Lerner & Rowe‘s marks to the consumer on the other end of the search engine—or to any
Second, the traditional likelihood of confusion factors are not well-suited to address these circumstances. As Network Automation noted, even the Sleekcraft factors that typically apply in the internet context are “a particularly poor fit for the question presented here.” 638 F.3d at 1148. We noted, for example, that an inquiry into the similarity of the marks “is impossible here where the consumer does not confront two distinct trademarks.” Id. at 1151. Ultimately, Network Automation devised an entirely new factor to deal with competitive keyword advertising: “labeling and appearance.” Id. at 1153–54. We give this factor great weight in our analysis. Id. (explaining that “likelihood of confusion will ultimately turn on what the consumer saw on the screen and reasonably believed, given the context“). Rather than continue relying on a nearly dispositive factor created exclusively for this context with little guidance, we should consider correcting our precedent and holding that purchasers of keywords do not “use” their competitors’ trademarks in commerce.
And third, given the predominance of the internet in our lives, this type of advertising has become commonplace. Scrolling through sponsored ads at the top of a results page is often the rule—not the exception—when using a search engine. The familiarity of sponsored ads to those navigating
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Twenty-five years ago, we recognized that “emerging technologies require a flexible approach” in the internet context. Brookfield, 174 F.3d at 1054. But that flexible approach is limited by the plain text and purpose of the