11th Circuit Rules on Web Page Meta Tags and Trademark Infringement

April 7, 2008. The U.S. Court of Appeals (11thCir) issued its opinion [33 pages in PDF] in North American Medical Corporation v. Axiom Worldwide, a trademark infringement case involving the use of meta tags in the source code of web pages.

Summary. The District Court held that when a product manufacturer holds trademarks for its product names, and a competing manufacturer uses those trademarked terms in the meta tags of its web site, this can constitute trademark infringement. It held that in this case the defendants infringed trademarks.

The District Court also granted a preliminary injunction based upon a presumption, rather than a showing, of irreparable harm.

The Court of Appeals upheld the District Court as its finding of trademark infringement, but overturned the preliminary injunction.

It remanded the case to the District Court to consider the Supreme Court's May 15, 2006, opinion [12 pages in PDF] in eBay v. MercExchange, which held that the traditional four factor framework that guides a court's decision whether to grant an injunction applies in patent cases.

See, story titled "Supreme Court Rules on Availability of Injunctive Relief in Patent Cases" in TLJ Daily E-Mail Alert No. 1,371, May 16, 2006.

Background. North American Medical Corporation (NAM) makes physiotherapeutic spinal devices to treat lower back pain. Moreover, it has registered trademarks for the names of two of its products. Adagen Medical International, Inc. distributes what NAM makes.

Axiom Worldwide, Inc., makes a product that competes with NAM's products. Axiom also operates a web site. It included NAM's trademarked product names in the meta tags in the source code of it web pages.

The Court of Appeals wrote this description. "Meta tags consist of words and phrases that are intended to describe the contents of a website. These descriptions are embedded within the website’s computer code. Although websites do not display their meta tags to visitors, Internet search engines utilize meta tags in various ways. First, when a computer user enters particular terms into an Internet search engine, the engine may rank a webpage that contains the search terms within its meta tags higher in the list of relevant results. Second, when a particular webpage is listed as a relevant search result, the search engine may use the meta tags to provide the searcher a brief description of the webpage."

To view an example of meta tags (using Microsoft's browser) visit the Tech Law Journal home page, right click with the mouse, select "View Source", and a window will appear that contains the source code of the page. Meta tags are near the top of the page. Two relevant meta tags are as follows:

NAM and Adagen filed a complaint in U.S. District Court (NDGa) against Axiom and two of its officers alleging trademark infringement and false advertising. They also sought injunctive relief.

Axiom stopped using NAM's trademarks in its meta tags. The District Court issued a preliminary injunction in favor of NAM and Adagen, prohibiting Axiom from using NAM’s trademarks within meta tags.

Also, separately from the meta tag issue, the District Court enjoined Axiom from making false statements about its own product. (Since that false advertising claim is not technology related, it is not discussed further in this article.)

Axiom brought the present appeal.

Statute. 15 U.S.C. § 1114(1)(a) provides, in part, that "(1) Any person who shall, without the consent of the registrant (a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive ... shall be liable in a civil action by the registrant ..."

Court of Appeals. The Court of Appeals affirmed the District Court's finding of trademark infringement, but vacated the injunction, and remanded to the District Court with instruction to consider eBay v. MercExchange.

The Court of Appeals quoted the 11th Circuit standard for issuance of a preliminary injunction: "(1) a substantial likelihood of success on the merits of the underlying case, (2) the movant will suffer irreparable harm in the absence of an injunction, (3) the harm suffered by the movant in the absence of an injunction would exceed the harm suffered by the opposing party if the injunction issued, and (4) an injunction would not disserve the public interest."

Axiom argued that meta tags are not "use in commerce" within the meaning of Section 1114, and that there was no likelihood of confusion.

The Court of Appeals concluded that "Because Axiom’s use of NAM’s trademarks constitutes a ``use in commerce´´ in connection with the advertisement of goods, and because the district court did not clearly err in its factual finding that a likelihood of confusion exists, NAM and Adagen demonstrated a likelihood of success on the merits of their trademark infringement claims."

It wrote that "we readily conclude that the facts of the instant case do involve a ``use´´ as contemplated in the Lanham Act – that is, a use in connection with the sale or advertisement of goods. ... The facts of the instant case are absolutely clear that Axiom used NAM’s two trademarks as meta tags as part of its effort to promote and advertise its products on the Internet. Under the plain meaning of the language of the statute, such use constitutes a use in commerce in connection with the advertising of any goods."

Axiom also relied upon the 2nd Circuit's 2005 opinion [PDF] in 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400. However, the Court of Appeals distinguished that case on the grounds that it involved use of unprotected domain names, rather than protected trademarks. It also added that the 2nd Circuit's "analysis is questionable".

The Court of Appeals also affirmed the District Court's finding of likelihood of confusion. It noted that the evidence showed that if an internet user entered the trademarked terms for NAM's products into a Google search, then Google produced as the second result a listing and description of Axiom's web page, with the two trademarked terms.

The Court of Appeals elaborated that "Consumers viewing these search results would be led to believe that Axiom’s products have the same source as the products of the owner of the ... trademarks, or at least that Axiom distributed or sold all of the products to which the brief description referred, or that Axiom was otherwise related to NAM. This, of course, is misleading to the consumer because Axiom is not related in any way to NAM, nor does Axiom distribute or sell the products of NAM."

However, the Court of Appeals held that NAM failed to show that it would suffer irreparable harm in the absence of an injunction. The District Court presumed irreparable harm. The Court of Appeals vacated the preliminary injunction.

The Court of Appeals wrote that while "our prior cases do extend a presumption of irreparable harm once a plaintiff establishes a likelihood of success on the merits of a trademark infringement claim", the Supreme Court's opinion in eBay Inc. v. MercExchange "calls into question" this line of cases.

The Court of Appeals wrote that "Although eBay dealt with the Patent Act and with permanent injunctive relief, a strong case can be made that eBay’s holding necessarily extends to the grant of preliminary injunctions under the Lanham Act."

Hence, "we conclude that the Supreme Court’s eBay case is applicable to the instant case." But, it then qualified this conclusion.

"However, we decline to express any further opinion with respect to the effect of eBay on this case", the Court of Appeals added. "For example, we decline to decide whether the district court was correct in its holding that the nature of the trademark infringement gives rise to a presumption of irreparable injury. In other words, we decline to address whether such a presumption is the equivalent of the categorical rules rejected by the Court in eBay."

It explained. "We decline to address such issues for several reasons. First, the briefing on appeal has been entirely inadequate in this regard. Second, the district court has not addressed the effect of eBay. Finally, the district court may well conclude on remand that it can readily reach an appropriate decision by fully applying eBay without the benefit of a presumption of irreparable injury, or it may well decide that the particular circumstances of the instant case bear substantial parallels to previous cases such that a presumption of irreparable injury is an appropriate exercise of its discretion in light of the historical traditions."

This case is North American Medical Corporation, et al. v. Axiom Worldwide, Inc., et al., U.S. Court of Appeals for the 11th Circuit, an appeal from the U.S. District Court for the Northern District of Georgia.