In a recent decision, Judge Vanessa L. Bryant shed some light on a significant new issue: trademark infringement in the world of internet keyword advertising. In a case with important implications for online marketing strategies, Judge Bryant denied Provide Commerce’s request for partial summary judgment against trademark owner Edible Arrangements, which had filed a suit for trademark infringement against one of its main competitors in fruit and gift basket sales.

With online advertising increasingly crucial to companies’ marketing strategies, many companies seek ways to ensure that their advertisements appear before as many interested consumers as possible. This sometimes takes the form of “bidding,” or paying fees to search engines to ensure that their advertisements appear when consumers search on particular relevant keywords. According to Edible Arrangements, Provide infringed Edible Arrangements’ trademark by placing “bids” on search terms that resemble Edible Arrangements’ mark, even though they do not describe any of Provide’s actual products. And Provide included in its ads terms very similar to Edible Arrangements’, such as “Edible Fruit Arrangements.” Edible Arrangements also asserted claims against Provide under the Anticyerbersquatting Consumer Protection Act, claiming that Provide engaged in “typosquatting” (a type of “cybersquatting”), or utilizing misspelled domain names similar to Edible Arrangements’ web address to direct traffic to Provide’s website.

Judge Bryant denied Provide’s motion for summary judgment on Edible Arrangements’ trademark infringement and dilution claims, but granted Provide’s motion for summary judgment on Edible Arrangements’ anticybersquatting claims. Analyzing Edible Arrangements’ trademark, Judge Bryant found that Edible Arrangements’ mark had acquired distinctiveness in the market place. Importantly, according to Judge Bryant, Edible Arrangements had also shown that Provide’s advertisements were similar to its own, and that that similarity could have an effect on purchasers. This rejected Provide’s argument that the use of the term “fruit” made Provide’s advertisements distinguishable from Edible Arrangements’ mark – as Judge Bryant noted, fruit offered for sale is expected to be edible, so the addition of the word “fruit” couldn’t differentiate the two companies’ advertisements.

What’s more, Judge Bryant also determined that a reasonable juror could find that Provide had acted in bad faith – thereby rejecting Provide’s argument that the term “arrangements” in its advertising was meant to describe how Provide “deliberately placed” its coated fruit products in a box in order to look appealing or to avoid damage in transit. To Judge Bryant, such “arrangements” did not describe the product to the consumer, but were merely standard packaging that a consumer would expect.

After finding that Edible Arrangements’ trademark infringement case could withstand summary judgment, Judge Bryant next considered its claims that Provide’s keyword search purchases could create a likelihood of confusion. For its part, Provide argued that its practice of “bidding” on the phrase “edible arrangements” for search engine advertisement does not create a likelihood of confusion because it is common practice to purchase search engine keyword phrases similar to your competitors’ products.

However, the Judge observed that the effect of the keyword bidding, when combined with the look of Provide’s advertisements, was the crux of the issue here. A reasonable trier of fact could find that Provide’s purchase of certain keywords could create a likelihood of confusion by directing consumers to Provide’s similar advertisement. Furthermore, although Provide attempted to assert a defense of fair use, the Judge rejected that defense, finding that the words “edible fruit arrangements” are redundant and descriptively misleading.

The decision did not run wholly in Edible Arrangements’s favor, however. Although Provide benefited from the misspelled domains which redirected web traffic to Provide’s website, and Provide’s agents may have played a role in facilitating the redirection of web traffic to Provide’s website, Judge Bryant nevertheless dismissed the cybersquatting claim. Edible Arrangements failed to prove that Provide or its agents were the registrants or licensees of the domains, as required under the Anticybersquatting Consumer Protection Act (“ACPA”).

This case is a significant one for businesses that conduct on-line marketing. Judge Bryant’s opinion illustrates how web keyword search advertising, when paired with advertisements containing confusingly similar phrases to a distinctive mark, could result in trademark infringement. The decision also highlights the importance of specific proof of cybersquatting in order to obtain protection under the ACPA.

The case is Edible Arrangements, LLC, and Edible Arrangements International, LLC v. Provide Commerce, Inc.; Civ. No. 3:14-cv-00250 (VLB), in the District of Connecticut. A copy of the order can be found here.