So. Let's put a competitor's mark on my site. Not referring to them, but embedded in metatags or by purchasing adwords. OK? or a lawsuit?
The classic metatag case is Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir.1999). In Brookfield, in 1999, the Ninth Circuit concluded that the Lanham Act bars a defendant from including in its meta tags a competitor's trademark or confusingly similar terms. Brookfield, 174 F.3d at 1065. But later, the Ninth Circuit allowed use of a competitor's trademarks in adwords.
First, Brookfield was a case mostly about the use of "moviebuffs.com" as a web address by the Defendant when the Plaintiff had registered "MovieBuff" as a mark. The Defendant had used the tag line “The Movie Buff's Movie Store” prior to Plaintiff's use of MovieBuff. The 9th Circuit said that “The Movie Buff's Movie Store” and “moviebuff.com” are very different, so the argument did not fly. This is a lesson in building a family of marks, and another good story to follow. But, the Plaintiff went on and complained about meta tags, which are now irrelevant (live movie stores), but the case law lives on.
Brookfield reasoned that using another's mark in meta tags could result in what is known as initial interest confusion. They reasoned that web surfers looking for Brookfield's “MovieBuff” products who are taken by a search engine to “westcoastvideo.com” will find a database similar enough to “MovieBuff” so a sizeable number of consumers who were originally looking for Brookfield's product will simply decide to utilize West Coast's offerings instead.
The interesting thing about Brookfield is that it disclaimed source confusion. They reasoned that consumers knew they were patronizing West Coast rather than Brookfield, but there was nevertheless initial interest confusion in the sense that, by using “moviebuff.com” or “MovieBuff” to divert people looking for “MovieBuff” to its web site, West Coast improperly benefitted from the goodwill that Brookfield developed in its mark. The use of another's trademark in a manner calculated “to capture initial consumer attention, even though no actual sale is finally completed as a result of the confusion, may be still an infringement.”
Initial interest confusion is the bane of the web, which is all about attracting surfers.In 2002, the Seventh Circuit agreed with Brookfield. N. Am. Med. Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211, 1218-1224 (11th Cir.2008). Other courts have held that the use of a competitor's trademarks as metatags can create confusion and constitute trademark infringement. See, e.g., Suarez Corp. v. Earthwise Tech., Inc., Nos. C07-5577RJB, C07-2020RJB, 2008 WL 4934055, at *6 (W.D.Wash. Nov.14, 2008); Deltek, Inc. v. Iuvo Systems, Inc. 2009 WL 1073196, 8 (E.D.Va.) (E.D.Va.,2009).
Suddenly, in 2011, the Brookfield case was criticized by the 9th Circuit. They noted that modern search engines such as Google no longer use metatags but instead rely on their own algorithms to find websites. See McCarthy at § 25:69.” Network Automation, Inc. v. Advanced Systems Concepts, Inc. 638 F.3d 1137, 1146 (C.A.9, 2011). But initial interst confusion lives.
The Catch-22 here is that the use of metatags may not cause consumer confusion if they are ineffective. In the Ninth Circuit, a Court must do a complete analysis of the following factors in order to make the determination of whether there is a likelihood of consumer confusion (the Sleekcraft factors): The eight factors we identified in Sleekcraft were: “ strength of the mark;  proximity of the goods;  similarity of the marks;  evidence of actual confusion;  marketing channels used;  type of goods and the degree of care likely to be exercised by the purchaser;  defendant's intent in selecting the mark; and  likelihood of expansion of the product lines.”
Because this is a fact intensive analysis, a court case can be expensive. If the use of metatags works, then it is more likely that the defendant will be found to have caused consumer confusion and be liable. Simply put, success in using metags is what could create liability.