7th Circuit Finds Use of Competitor’s Metatags Constitutes Trademark Infringement

A recent decision by the U.S. Court of Appeals for the 7th Circuit has held that the use of a competitor’s trademark as metatags in a company’s Web site constitutes trademark infringement of that mark. Promatek Industries, Ltd. v. Equitrac Corp., No. 00-4276 (Aug. 13, 2002). In this case, Equitrac was in the cost-recovery business and placed the term of a competitor’s equipment, “Copitrak” (misspelled as “Copitrack”), in the contents of Equitrac’s Web site as a metatag. Although Equitrac provided maintenance and service on Copitrak equipment, the owner of the Copitrak trademark (“Promatek”), sued Equitrac for trademark infringement, claiming the result of using Copitrak as a metatag in Equitrac’s Web site was to attract Internet users who are searching for Copitrak to Equitrac’s Web site. The 7th Circuit agreed, holding that the metatag use constituted “initial interest” trademark confusion in directing consumers who are searching for Copitrak to the Equitrac Web site.

The court admitted that consumers would be only briefly confused since the metatags are not visible, and therefore, consumers who are directed to the Equitrac Web site would find no reference there to Copitrak. However, the 7th Circuit relied on a 1999 case from the 9th Circuit regarding the term "movie buff," stating that use of another’s trademark in one’s metatags “is much like posting a sign with another’s trademark in front of one’s store.”

Interestingly, the court held that it would not have been infringing for Equitrac to advertise on its Web site that it services Copitrak equipment or even to place information on its Web site comparing Equitrac and Copitrak equipment. While those visible uses of Copitrak would also result in directing people searching for Copitrak to the Equitrac Web site, the court distinguished those legitimate uses of a competitor’s name from the (now) unlawful use of a competitor’s mark in one’s metatags. The court ordered Equitrac not only to remove the metatags, but to place a disclaimer on its Web site directing consumers to Promatek’s Web site if the Equitrac site is reached in error by a consumer searching for Copitrak.

By contrast, in February of this year, the 9th Circuit upheld the right of a former Playboy Playmate to use the terms “Playboy” and “Playmate of the Year” as metatags on her Web site under the theory of fair or “nominative” use.

The Equitrac case has already become a heated topic of debate among trademark experts, some of whom see nothing wrong with using a competitor’s marks as metatags, since consumers would know immediately upon reaching the Equitrac Web site that it was not the site they were seeking. In fact, these experts point out that one can tell from the search results alone (without even visiting the Web site) that the Web site belongs to Equitrac. Those who disagree with the court’s opinion argue that it is similar to standing in front of a restaurant handing out coupons for a competitor’s restaurant, which would not be illegal or (they argue) confusing to consumers.

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