E-Commerce Law Week, Issue 399

Search for Search Engine Trademark Jurisprudence Continues
Trademark law has had a rather rough ride online. Domain names presented a large and entirely new set of issues for trademark owners -- and while processes like the World Intellectual Property Organization arbitration system help resolve disputes, the outcomes of such arbitrations have been legally all over the map. Another tough and emerging issue involves use of trademarks as search terms, where search engines like Google or Yahoo! sell the right for the trademark to trigger advertisements of competitors of a trademark owner. Courts so far have mostly found that such conduct can constitute trademark infringement. But a recent decision of the US District Court for Southern District of New York reaches a different conclusion. In Merck & Co., Inc., v. Mediplan Health Consulting, Inc., the court dismissed such a search engine trademark infringement claim on the grounds that triggering an online advertisement does not constitute "use in commerce." Unlike many of the previous lawsuits involving keyword advertising, this one names the advertisers themselves, rather than the search engine, as the defendants.  And more interestingly, the decision directly contradicts several earlier rulings where courts found that the use of a trademarked name to trigger ads for competing companies was indeed a "use in commerce." See GEICO v. Google, Inc.; Google Inc., v. American Blind & Wallpaper Factory, Inc. for more specific information.

Are Shorter GLBA Privacy Notices On the Horizon?
We're sure you're familiar with those long, dense privacy notices that arrive every year in the mail from your financial institution. Then again, maybe you're not, since a glance at all that fine print is enough to send almost anyone running for a garbage can. Since the Gramm-Leach-Bliley Act (GLBA) went into effect in 2001 -- requiring financial institutions to provide their customers with initial and annual notices of their privacy policies -- the response by banks has been to produce copy that only a lawyer could love. Researchers have found that most consumers do not even read GLBA notices, much less understand them. In an effort to address these shortcomings, six federal agencies that enforce the GLBA initiated a project to explore the development of paper-based, alternative financial privacy notices that would be easier for consumers to understand and use. On March 31, the regulators released the initial findings of this project in a report entitled, Evolution of a Prototype Financial Privacy Notice, which explains the research and rationale behind a new "prototype" privacy notice that seems to be clearer and easier to use than current notices.

Court Upholds Maryland Anti-Spam Statute Against Commerce Clause, Preemption Challenges
Although passed partly to preempt a "patchwork" of state anti-spam laws, the federal "Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003" (CAN-SPAM) leaves quite a loophole by allowing state statutes that prohibit falsity or deception in commercial email. So anyone hoping to challenge a state law that does precisely that better have an argument besides, "Uhh ... it's preempted by CAN-SPAM," up his sleeve. In a recent case, for example, a defendant argued that the "Maryland Commercial Electronic Mail Act" ( MCEMA) (MD Code Com. Law § 14-3001 et seq.) violated the dormant Commerce Clause of the Constitution by placing an undue burden on interstate commerce, as in Beyond Sys. Inc., v. Keynetics, Inc. But even this approach was insufficient to overturn the state statute. The US District Court for the District of Maryland ruled that the significant social and financial burdens spam imposed on Maryland consumers outweighed the burden on out-of-state advertising services, and, accordingly, found that MCEMA did not violate the dormant Commerce Clause.

Questions and comments about E-commerce Law Week are always welcome. Please send your feedback to Sally Albertazzie.