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 © 2025 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

Florida AG Sues EU-Based Adult Companies for Failing to Age-Verify Users

Florida Attorney General James Uthmeier filed a lawsuit Monday with the 12th Judicial Circuit Court of Florida against five EU-based adult companies for allegedly failing to require age verification before allowing access to adult content.

SkyPrivate Launches 'Telegram Pay-Per-Minute' Feature

SkyPrivate has launched a new pay-per-minute (PPM) private show option on Telegram.

Pineapple Support to Host 'Money and Mental Health' Online Event

Pineapple Support is hosting a free, online event to help performers balance financial wellbeing with mental health, Aug. 18-19.

Arcom Warns 5 Adult Sites Over Age Verification

French media regulator Arcom has sent enforcement notices to the operators of five adult websites that the agency says have failed to implement age verification as required under France’s Security and Regulation of the Digital Space (SREN) law.

MojoHost Launches NVIDIA Blackwell GPU Hosting

MojoHost has launched NVIDIA Blackwell hosting with RTX Pro 6000 MaxQ GPUs.

FSC: Identity Theft Targeting Adult Performers

The Free Speech Coalition has put out an alert warning of an individual found to be targeting adult performers for identity theft.

Assylum.com Implements New Age Verification System

Assylum.com has introduced an age verification system across its member sites.

European Commission to Assess Pornhub, XVideos, XNXX Compliance With Digital Services Act

The European Commission plans to conduct a study to determine how well adult sites Pornhub, XVideos and XNXX are addressing illegal content and other potential harms under the EU’s Digital Services Act.

German Higher Court Upholds Ban on PornHub, YouPorn

The Higher Administrative Court of Rhineland-Palatinate on Thursday upheld a “network ban” on Aylo-owned adult sites Pornhub and YouPorn for failing to comply with German age verification regulations.

Alabama Notifying Adult Sites of New Tax Set to Take Effect Sept. 1

The Alabama Department of Revenue has begun sending notices to adult site operators about a new 10% tax on their revenues, set to be enforced starting Sept. 1.

Show More