The District Court for the Northern District of California has held that the use of online marketing channels, such as advertising on social networking sites and via e-mail marketing campaigns, is evidence that is likely relevant in trademark infringement actions. Denying Defendants Mattel’s and Fisher-Price’s motion for partial summary, the District Court ruled that although "[t]he mere existence of online advertising" does not establish consumer confusion, such advertising might ultimately be found to contribute to such confusion via the likelihood of confusion factors." Quia Corp. v. Mattel Inc., No. 10-1902 (N.D. Cal. ____, 2011).

Plaintiff Quia, now known as "IXL Learning Inc.," develops educational technology products, including a web-based product known as "IXL" that was launched in 2007. Quia registered its "IXL" mark with the Patent and Trademark Office ("PTO") for "educational services, namely, online instruction in the fields of math, science, English, and foreign languages" in March 2009, and advertises online via search engines, social networking sites, and education-related websites via Google’s advertising network. In 2010, Fisher-Price launched its own "iXL Learning System," which is a handheld device for children that features a storybook, game player, notebook, art studio, music player, and photo album. Fisher-Price’s parent corporation, Mattel, filed an application with the PTO for the "iXL" mark for "[c]hildren’s educational toys and devices" in January 2010. After receiving a cease-and-desist letter from Quia, Mattel abandoned its "iXL" application, but refiled an application for "handheld mobile computer." Quia sued Fisher Price and Mattel, asserting trademark infringement and unfair competition.

Defendants moved for partial summary judgment to, inter alia, preclude Quia from pursuing a theory of harm from the alleged infringement based on the relative placement of the disputed mark by various search engines. Noting that trademark laws aim to protect against mistaken purchases and not general confusion due to coexistence, the Court held that the fact that hyperlinks to two distinct products are intermingled by a search engine is not evidence of consumer confusion and that a mark holder alleging trademark infringement must demonstrate likely confusion, "not mere diversion." However, the Court recognize the importance of implementing a flexible approach when applying the law in an area of emerging technologies and found that the use of online marketing channels, such as social networking sites and online advertising campaigns, may be relevant to "the question of whether the two products are sold through convergent marketing channels that increase the likelihood of confusion."

Accordingly, the Court denied summary judgment on that point, allowing Quia to pursue its theory of trademark infringement by providing evidence regarding the use of online marketing channels to support the likelihood of consumer confusion between the trademarks at issue.