Advertiser OKd to Buy Search Ads With Rival's Trademarks

PASADENA, Calif. — In a ruling of significant interest to online companies, a federal appeals court has decided that a company can continue to advertise on search engines using keywords that include the name of a competitor's product.

The 9th U.S. Circuit Court of Appeals vacated on Tuesday a preliminary injunction that blocked Network Automation from using a competitor's trademarked keyword, which a lower court found was likely to infringe on Advanced Systems Concepts copyright and cause consumer confusion.

The case got its start after Network Automation purchased “ActiveBatch” as a keyword from Google AdWords and a comparable program offered by Microsoft’s Bing search engine.

Advanced Systems, which sells scheduling and management software under the brand name AutoMate, demanded that Network Automation cease and desist from using its name as an advertising keyword, claiming that the use infringed on its copyright.

After Network Automation refused, Advanced Systems sued the company at U.S. District Court in Los Angeles.

The lower court was confronted with the question whether Network Automation’s use of ActiveBatch to advertise its products was a clever and legitimate use of readily available technology, such as Google’s AdWords, or a likely violation of the Lanham Act.

A federal judge in Los Angeles ruled in April that consumers would likely be confused because the marks were so similar and the products nearly identical. The court issued a preliminary injunction against Network Automation's use of the ActiveBatch keyword.

But on Tuesday a three-judge appeals panel disagreed, finding that Advanced Systems had failed to show that "sophisticated" Internet consumers would be confused by the advertising strategy.

"A sophisticated consumer of business software exercising a high degree of care is more likely to understand the mechanics of Internet search engines and the nature of sponsored links, whereas an un-savvy consumer exercising less care is more likely to be confused," the 9th Circuit ruling said.

9th Circuit Judge Kim Wardlaw, who wrote for the majority, prefaced the ruling with a passage from a 12-year-old case decided by the appeals court in Brookfield Communications vs. West Coast Entertainment Corp.: “We must be acutely aware of excessive rigidity when applying the law in the Internet context; emerging technologies require a flexible approach.”

The case is Network Automation Inc. vs. Advanced Systems Concepts Inc., No. 10-55840.

Related:  

Copyright © 2026 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

German High Court Puts Pornhub, YouPorn 'Network Ban' on Hold

A German high court on Friday temporarily barred a state media regulator from ordering internet providers to cut off access to Aylo-owned adult sites Pornhub and YouPorn in Germany, pending further action by Cypriot and European Union authorities.

Luxembourg Media Regulator Fines LiveJasmin for AV Noncompliance

The Luxembourg Independent Audiovisual Authority (ALIA) has levied a fine of 25,000 euros (approximately $28,000) against webcam platform LiveJasmin for failing to comply with provisions of the country’s Electronic Media Law.

AdultHTML Introduces Subscription Option for Website Owners

AdultHTML has added a subscription option for its web development service, allowing site owners to pay a monthly fee for access to developers and tools.

French Parliament Rejects Ban on Purchase of 'Remote' Sexual Services

The French National Assembly has backed off from a proposal to criminalize the purchase, and/or facilitation by online platforms, of sexual services performed remotely by streamers and custom content creators.

2027 XBIZ Exec Awards Pre-Nominations Period Opens

XBIZ is pleased to announce that the pre-nomination period for the 2027 XBIZ Exec Awards, the adult industry’s preeminent career honors, begins Wednesday and runs through Oct. 14.

Takedown Piracy Reports Infiltration, Monitoring of Mega.nz

Takedown Piracy has reported that it successfully infiltrated Mega.nz folders and identified and removed nearly two million instances of stolen content.

Pornhub Unblocks Australia Users on iOS Devices, Citing Apple AV Effectiveness

Pornhub parent company Aylo on Tuesday announced that users in Australia will once again be able to access the popular site if they are using Apple devices and have confirmed their age through Apple’s Australian age-verification process.

California Governor Signs Bill Limiting CIPA Claims

Governor Gavin Newsom has signed into law a bill to narrow the scope of the California Invasion of Privacy Act (CIPA), to prevent abusive lawsuits targeting online businesses, including adult websites.

California Enacts Stricter UGC Rules for Adult Sites

Governor Gavin Newsom has signed into law a bill to impose tighter compliance standards for user-generated content (UGC) on adult websites accessible in California.

Minister: UK Aims to Begin Enforcing 'Choking' Ban Before Year's End

The U.K. will soon begin enforcement of a new law criminalizing depictions of “non-fatal strangulation” in adult content, according to a Ministry of Justice official.

Show More