Edina Realty v. TheMLSonline.com

Citation: Edina Realty, Inc. v. TheMLSonline.com, 2006 U.S. Dist. LEXIS 13775 (D. Minn. Mar. 20, 2006) (denying cross-motions for summary judgment as to infringement and granting defendant’s motion for summary judgment as to dilution); 2006 U.S. Dist. LEXIS 29117 (D. Minn. May 11, 2006) (denying defendant’s motions for reconsideration and for permission to file interlocutory appeal).

Factual Background
Plaintiff, the largest real-estate brokerage firm in the Midwest, owned the federally registered mark EDINA REALTY and operated a website at www.edinarealty.com. Defendant, a real-estate brokerage firm that directly competed with plaintiff, used plaintiff’s EDINA REALTY mark by: (1) purchasing it as a keyword from Google and Yahoo!, (2) using it in the text of the ads appearing on Google and Yahoo!; and (3) using it in hidden text and links on defendant’s website. The keywords purchased by defendant included “Edina Realty,” “Edina Reality,” “EdinaRealty.com,” and “www.EdinaRealty.com.” The sponsored ad appearing on Google and Yahoo! contained the following underlined headline in a bold font: “EdinaRealtyTM listings -MLS Home Search.” The ad text stated that users could “Find Edina RealtyTM and Twin Cities MN MLS listings” as well as listings of other named agencies. The bottom line of the ad provided defendant’s URL “www.themlsonline.com” in a much smaller font. Defendant’s sponsored ads generally appeared higher on the search results page than did plaintiff’s site in the “regular” web results. The percentage of users that clicked on defendant’s ads instead of plaintiff’s listing ranged from 17.9 to 31.6 percent on Google and reached as high as 39.7 percent on Yahoo! Regarding the hidden text and links, defendant would display on its website phrases such as “Edina Realty information presented at TheMLSonline.com” in white font on a white background.

Trial Court Proceedings
Plaintiff sued for infringement and dilution, among other claims. Plaintiff moved for summary judgment on its infringement and dilution claims, and defendant moved for summary judgment on all claims.

Regarding infringement, the court found that “the purchase of search terms [was] a use in commerce” citing Brookfield, albeit “not a conventional” one. A genuine issue of material fact, however, existed as to likelihood of confusion.

The court rejected defendant’s nominative fair use argument that it used the EDINA REALTY mark “to advertise the fact that [it] legitimately includes Edina Realty listings on its website” because: (1) defendant could have conducted its marketing activities without using plaintiff’s mark (e.g., by stating that it includes all real estate listings in the Twin Cities or by buying search terms like “Twin Cities real estate,” and (2) defendant’s use of the EDINA REALTY mark in its sponsored ads “[did] not reflect the true relationship” between the parties as the EDINA REALTY mark appeared in the headline in underlined, bold font whereas defendant’s name appeared in a much smaller font at the bottom of the ad.

According to the court, “[d]efendant could have done more to prevent an improper inference regarding the [parties’] relationship.” The court thus denied both parties’ motions for summary judgment regarding infringement.

Finally, the court granted defendant’s motion for summary judgment and denied plaintiff’s motion as to dilution. Although the court found that plaintiff’s mark was famous, it held that plaintiff failed to provide any evidence of actual dilution.

Less than two months later, defendant filed a motion to reconsider the court’s order. Defendant alleged that the court made erroneous factual findings and disputed the court’s findings that defendant’s use of plaintiff’s mark did not constitute nominative fair use, and that defendant’s purchase of plaintiff’s mark a search term qualified as a “use in commerce” under the Lanham Act.

Defendant also requested certification of the court’s earlier order to permit an immediate appeal. The court held that defendant failed to show the requisite “extraordinary circumstances” to grant a motion to reconsider. The court stated that all of its findings had support in the record, and that defendant’s legal arguments were simply a “second bite at the apple.” Defendant also cited the Southern District of New York’s recent Merck v. Mediplan decision, but the court distinguished Merck on its procedural posture and noted that Merck applied established law of its circuit and made no new law.

The court also denied defendant’s request for permission to file an interlocutory appeal, finding that neither the lack of an Eighth Circuit decision on the issue of nominative fair use, nor the “scarcity of opinions” on whether purchase of keywords was a “use in commerce,” established grounds for an immediate appeal.

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