Online Publishing Law

In Venture Tape Corp. v. McGills Glass Warehouse, 540 F.3d 56 (1st Cir. 2008), a case where a company embedded a competitor’s trademarks in its website via metatags and invisible white-on-white text, the First Circuit held that the company infringed its competitor’s marks and upheld the district court’s award of $230,339, representing the defendant’s estimated net profits during the period of infringement, and $188,583 in attorneys fees to the plaintiff.

Metatags are invisible terms embedded into the code of websites, and once upon a time, circa 1995 and 1996, keyword metatags were used by search engines to help them rank sites in search results. Google and most other search engines ignore metatags for search engine ranking purposes, and although the white on white text may have had a nominal effect, the defendant basically wasted about half a million dollars for an activity that may have diverted no customers. It is also critical to note that the Venture Tape court held that, although there was no evidence of actual confusion, actual confusion is not a necessary prerequisite of finding a Lanham Act violation. While formulaically correct in its legal analysis, let’s look at the practical result of the court’s holding. Basically, this holding means that a business entity may be ordered to turn over profits (in fact, all of the profits – 3 years worth) made during a period of embedding a competitor’s trademarks in its metatags and hidden text, even if there are no diverted customers and no customers are even aware of such use, let alone confused, at least in the First Circuit.

The federal courts are, in fact, divided on the issue of whether embedding a competitor’s trademark into metatags of one’s website constitutes a trademark violation. For example, in FragranceNet.com, Inc. v. FragranceX.com, Inc., 493 F.Supp.2d 545 (E.D.N.Y. 2007), the Eastern District of New York held that embedding a competitor’s trademark into the metatags of one’s website is not a “use in commerce” under the Lanham Act. However, in J.G. Wentworth, S.S.C. Ltd. Partnership v. Settlement Funding LLC, No. 06-0597, 2007 WL 30115 (E.D.Pa. January 4, 2007), the Eastern District of Pennsylvania held that such use was a “use in commerce” under the Lanham Act, but the court found that there was no likelihood of confusion arising out of such use. “Due to the separate and distinct nature of the links created on any of the search results pages in question, potential consumers have no opportunity to confuse defendant’s services, goods, advertisements, links or websites for those of plaintiff.” Id. at 8. However, as noted above, some courts, such as the Venture Tape court, will punish you sorely for using a competitor’s trademark in your website’s metatags.