Advertise.com v. AOL Advertising

Citation: Advertise.com, Inc. v. AOL Advertising, Inc., Nos. 10-55069, 10-55071 (9th Cir. Aug. 3, 2010)(full-text).

Factual Background
AOL owns federal trademark registrations covering various stylized representations of the mark “ADVERTISING.COM.” On August 17, 2009, AOL filed a complaint against Advertise.com, followed by a motion for a preliminary injunction, alleging that the Advertise.com domain and name were infringing upon the ADVERTISING.COM mark held by AOL.

District Court Proceedings
The district court granted AOL’s motion for a preliminary injunction and enjoined Advertise.com from using “any design mark or logo that is confusingly similar to the stylized forms of AOL’s ADVERTISING.COM marks” and from using the designation and trade name Advertise.com, but not from using the existing domain. The district court’s decision was based upon a finding that AOL was likely to show that the ADVERTISING.COM marks are descriptive, and therefore, protectable under trademark law.

Appellate Court Proceedings
Advertise.com appealed the decision and the grant of the preliminary injunction, arguing that AOL’s marks are generic; the Ninth Circuit Court of Appeals agreed with Advertise.com and reversed the lower court’s decision and vacated the preliminary injunction.

Because ADVERTISING.COM is a registered trademark, there is “a presumption of validity,” which “places the burden of proving genericness upon the defendant,” Advertise.com. In order to show that the associated marks are generic, Advertise.com is required to show that the terms refer to “the genus of which the particular product or service is a species,” i.e., the name of the product or service itself. The services offered by AOL under the ADVERTISING.com marks are (1) developing relationship with web publisher for the placement of third-party ads on publisher’s sites, and (2) selling online advertising space and marketing campaigns to web marketers.

According to the court, “advertise” is concededly generic and the term “.com” refers generically to an online organization or any internet component of an existing business. The two components of AOL’s marks therefore are generic by themselves. While two generic terms brought together may create a distinctive mark, the court went on to find that this was not the case for AOL after applying the “who-are-you/what-are-you” test.

A valid and protectable trademark answers the buyer’s questions “Who are you?” and “Where do you come from?” Alternatively, a generic mark answers the question “What are you?” In applying this test the court determined that AOL’s marks were largely generic. If any of AOL’s competitors were to answer the question “What are you?” it would be appropriate for them to respond “an advertising.com” or “an advertising dot-com,” the use of “.com” in AOL’s marks do not add any secondary meaning to the generic term “advertising” but instead refer to the common usage of an online business.

AOL presented an interesting argument to counter a finding of genericness by stating that because only one business can hold the “.com” designation for any given mark or trade designation, then consumers will understand that any use of “ADVERTISING.COM” can only refer to their services. The court rejected this argument to avoid creating a per se rule in which the addition of any top level domain indicator (“.com,” “.org,” “.biz,” etc.) would lead to a protectable mark. Granting AOL such expansive trademark rights would enable it to bring suits against any of the various domain names using some form of “advertising.com” and severely limit the ability of its competitors to accurately describe their services.

Ultimately, a consumer is likely to associate a domain name with a source based on the second-level domain indicator, this case the “advertising” component of “advertising.com.” When a generic second-level domain indicator is used there is less certainty that a consumer will understand the website belongs to a specific brand or source and not a generic use of the associated term.