The Second Circuit seems to stand alone in holding that the purchase and use of a trademark in connection with “sponsored links” does not constitute trademark “use” within the meaning of the Lanham Act. The SDNY, EDNY and 2d Circuit have found that purchasing sponsored links is not Lanham Act use because it is entirely internal use of a trademark -- the customer sees only the defendant’s advertisement, which makes no mention or other use of the trademarked phrase. To the contrary, the ED Pa., DNJ, ED Va., 9th and 10th Circuits have found that similar internal uses of plaintiff’s mark are “use” under the Lanham Act.
Now, the District of Massachusetts, in Boston Duck Tours v. Super Duck Tours (12/5/07), has analyzed the issue of whether a preliminary injunction against using the phrase “duck tours” as a trademark extended to a prohibition against Defendant’s use of the phrase as a “sponsored link” in which the mark functions as a trigger for the Defendant’s advertising. The Court concluded that the emerging view outside of the 2d Circuit is in accord with the plain language of the statute. Because sponsored linking necessarily entails “use” of the plaintiff’s mark as part of a mechanism of advertising, it is “use” for Lanham Act purposes. In this case, the sponsored linking did not violate the injunction because the thrust of the injunction was to compel Defendant to adopt a new, non-confusing trademark in place of “Super Duck Tours”. The injunction did not prohibit all secondary uses of the Plaintiff’s mark such as that implicated by a sponsored link, namely a descriptive use of the term to indicate there was no affiliation between the respective entities to avoid confusion.
What this means for you: Depending on the jurisdiction where you intend to bring suit, an infringer’s use of your trademark in a sponsored link may be prohibited under the Lanham Act. Also, when requesting a preliminary injunction, it may be useful to specify that the injunction prohibits secondary usage of the mark, including use of the mark in sponsored links. Otherwise, the preliminary injunction may not prohibit a competitor from using your trademark in its sponsored links