Court Rules That Use of Competing Trademark in Metatags Supports Finding of Infringement

On May 10, 2018, the Ninth Circuit issued an opinion that affirmed in part and reversed in part an Oregon district court’s preliminary injunction prohibiting Skechers USA, Inc. from selling shoes that allegedly infringe and dilute Adidas America, Inc.’s Stan Smith trade dress and Three-Stripe mark.

Affirming in part, the court held that the district court did not abuse its discretion in issuing the preliminary injunction as to Adidas’s claim the Skechers’s Onix shoe infringed on Adidas’s unregistered trade dress of its Stan Smith shoe. It concluded that Adidas was likely to succeed on the merits of this claim because the trade dress was nonfunctional, the trade dress had acquired secondary meaning, and there was a substantial likelihood of confusion between the parties’ products.

The court relied in part on Skechers’ use of Adidas Stan Smith metatags in support of its findings that there was a likelihood of confusion and that the Stan Smith trade dress had acquired secondary meaning.

“[P]roof of copying strongly supports an inference of secondary meaning.” Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 615 (9th Cir. 1989). Skechers placed metadata tags on its website that directed consumers who searched for “adidas Stan Smith” to the page for the Onix shoe. “Using another’s trademark in one’s metatags is much like posting a sign with another’s trademark in front of one’s store.” Brookfield Commc’ns, Inc. v. W. Coast Entm’t Corp., 174 F.3d 1036, 1064 (9th Cir. 1999).

With respect to the likelihood of confusion issue, the Ninth Circuit found that “the evidence supports an inference that Skechers intended to confuse consumers; it not only created a nearly identical shoe to the Stan Smith, but then used metadata tags to direct consumers who searched for ‘adidas stan smith’ to the Onix web page.”

Relying on Multi Time Machine, Inc. v. Amazon.com, Inc., 804 F.3d 930 (9th Cir. 2015), Skechers argued that its use of metadata tags clearly identifying the source of the product being sold is indicative only of an intent to compete, not an intent to infringe. However, the court believed such reliance to be misplaced.

In Multi Time, a watch manufacturer brought an action alleging that an online retailer’s listing of competitors’ products in response to a search for the manufacturer’s mark constituted trademark infringement. Because the defendant there did not create any of the competing products, the use of the metadata was not probative of its intent to exploit the existing secondary meaning of a competitor’s mark or trade dress. Here, however, the court believed that Skechers’s use of the metadata was probative of its attempt to capitalize on the Stan Smith by both creating and selling the similar-looking Onix.

You can read the opinion, here.

Contact the author at [email protected] to discuss complex intellectual property litigation, including disputes under the Lanham Act.

Richard B. Newman is an Internet marketing compliance and regulatory defense attorney at Hinch Newman LLP focusing on advertising and digital media matters. His practice includes conducting legal compliance reviews of advertising campaigns, representing clients in investigations and enforcement actions brought by the Federal Trade Commission and state Attorneys General, commercial litigation, advising clients on promotional marketing programs, and negotiating and drafting legal agreements. Follow him on LinkedIn at FTC Advertising Lawyer.  

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