Second Circuit Rules that the Mere Purchase of a Search Engine Keyword Advertisement That is a Competitor’s Trademark Does Not Constitute Trademark Infringement

The Second Circuit’s ruling in 1-800 Contacts v. Warby Parker confirms that the purchase of a competitor’s trademark as a keyword ad on a search engine, without any other use of the competitor’s trademark, is not enough to prove trademark infringement.

Both 1-800 Contacts and Warby Parker have sold contact lenses online via their respective websites since 2019. In 2021, Warby Parker purchased keyword advertisements that included the term “1 800 Contacts” and other trademarks owned by 1-800 Contacts. When keywords or terms are input into most search engines, there are two types of linked results: organic results and sponsored, or paid, results. At the time of this dispute, the paid results populated by the Google Ads purchased by Warby Parker included a small designation labeling the result as an “Ad” in the top left corner to indicate that it was not an organic result.

1-800 Contacts complained to a federal court that a potential customer who typed the search term “1 800 contacts” into Google’s search engine would be diverted to Warby Parker’s website to purchase contact lenses, and away from 1-800 Contacts’ website, due to Warby Parker’s purchase of the search engine keywords. Among other arguments lodged by 1-800 Contacts, the “1 800 contacts” Google search result page at issue in this dispute is displayed below:

Photo from court proceedings with annotations added

The main question in this case was whether 1-800 Contacts sufficiently alleged a likelihood of confusion arising from Warby Parker’s purchase of 1-800 Contacts’ trademarks in the context of keyword advertising. To answer this question, the Second Circuit consulted the Polaroid likelihood of confusion factors and found the “similarity of the marks” factor dispositive.

In the search advertising context, the Second Circuit analyzes the “similarity of marks” factor by comparing the asserted trademark to what appears on the paid advertisement’s results page (and not to the purchased keyword). Fatal to 1-800 Contacts’ claims is that it failed to allege Warby Parker used any of its trademarks anywhere during the search advertising process outside of its initial purchase of the keyword ad.

As shown in the image above, Warby Parker’s paid search result does not use any 1-800 Contact trademark in its paid advertisement included on the search results page (instead displaying the phrase “15% Off First Contacts Order – 90 Daily Contacts for Only $55”), in the domain name of the linked URL www.warbyparker.com, or on the landing webpage displayed to consumers who click on the Warby Parker URL in the paid advertisement. In fact, the landing page for Warby Parker’s linked URL prominently displays Warby Parker’s trademark at the top of the webpage, and Warby Parker’s trademarks do not contain any reference to numbers or 1-800 Contacts.

Ultimately, the Second Circuit held that “the mere act of purchasing a search engine keyword that is a competitor’s trademark does not alone, in the context of keyword search advertising, constitute trademark infringement.” Indeed, the Court found that “Warby Parker’s practice of bidding on competitors’ trademarks during search advertising auctions is a permissible and standard industry practice.” Without any other use of 1-800 Contacts’ trademarks by Warby Parker, there was no infringement.