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

Syren De Mer, Eddie Patrick Cap AEBN's Top Stars for 1st Quarter of 2026

AEBN has revealed its most popular performers in straight and gay theaters for the first quarter of 2026.

Tennessee Bill Would Require Warnings on Adult Stores

The Tennessee Senate has passed a bill requiring adult stores, theaters and other establishments in the state to post warning signs cautioning patrons that they “may be contributing” to sexual assault and human trafficking.

Report: Irish Regulator Seeks 'Industry Input' on AV Compliance

Irish media regulator Coimisiún na Meán (CnaM) will draw on “industry input” to help establish a framework for assessing platforms’ compliance with Ireland’s Online Safety Code and the EU’s Digital Services Act, news organization MLex reports.

'iDealgasmPlus' Launches Through PAYSITE

iDealgasmPlus.com has officially launched through PAYSITE.

Canadian Senate Approves National Age Verification Bill

Canada’s Senate on Wednesday passed bill S-209, the “Protecting Young Persons from Exposure to Pornography Act,” which would require commercial adult websites to verify that Canadian users are at least 18 years old.

Sara Jay Relaunches Site Through PAYSITE

Sara Jay has relaunched her membership site, WydeSyde, through PAYSITE.

European Commission: Age Verification App Ready For Use

The European Commission’s age verification app is now technically ready and will soon be available for EU citizens to use in order to prove their age when accessing online platforms, European Commission President Ursula von der Leyen announced Tuesday.

UK House of Commons Moves to Tone Down Porn Amendments

The House of Commons has modified amendments to the U.K.’s pending Crime and Policing Bill, including provisions regulating “step” content, content featuring adults role-playing as minors, and performers’ ability to withdraw consent.

AEBN Reveals Ariel Demure as Top Trans Star for Q1 of 2026

AEBN has named its top trans stars for the first quarter of 2026, with Ariel Demure landing atop the leaderboard.

Final IRS 'No Tax on Tips' Rule Excludes Pornography

The Internal Revenue Service on Monday published final regulations on the “No Tax on Tips” provision included in the “One Big Beautiful Bill Act,” offering new tax deductions for tip workers but excluding revenue received for “pornographic activity.”

Show More