In today's ever-evolving online world, the intersection between trademark infringement and the use of trademarks as meta tags is an issue receiving more and more attention. In a drawn-out dispute spanning more than five years , the United States District Court for the Eastern District of Pennsylvania in Penn Engineering & Manufacturing Corp. v. Peninsula Components, Inc. added its opinion on the topic. On cross motions for summary judgment, the court faced the question of whether a likelihood of confusion could arise from the use of another party's mark in meta tags within an internal search tool that searches only the company's own website and returns results for only the company's products. On these facts, the answer was "no."
The plaintiff in this lengthy dispute is Penn Engineering & Manufacturing Corp. ("Penn Engineering"), a company that designs and manufactures various types of fasteners. Penn Engineering brought a number of claims against Peninsula Components, Inc. ("Peninsula") for trademark infringement, trademark counterfeiting, unfair competition, and false advertising based on, among other things, Peninsula's use of Penn Engineering's PEM trademarks in the meta tags used by the internal search tool on Peninsula's website.
Specifically, Peninsula's website contained a search tool that permitted customers to search for information on Peninsula's site. Once a search query was entered, Peninsula's search tool provided users with a list of Peninsula's products that the algorithm deemed relevant to the user's search term(s). Penn Engineering alleged that a customer who searches using Penn Engineering's PEM trademark on Peninsula's internal search tool will receive results for Peninsula's products, not Penn Engineering's products. This, according to Penn Engineering, constituted trademark infringement.
Peninsula disagreed and moved for summary judgment on Penn Engineering's claim. In that motion, Peninsula made two arguments: (1) the customer inputting Penn Engineering's marks into the search tool did not constitute Peninsula's use of Penn Engineering's trademarks, and (2) there was no likelihood of confusion when a user searched for Penn Engineering's mark on Peninsula's website and was then presented with Peninsula's products as the results of that search. The Court disagreed with Peninsula as to its trademark use argument but agreed that there was no likelihood of confusion in this case.
With respect to use, the court found that Peninsula was using Penn Engineering's PEM marks in commerce for purposes of establishing trademark infringement. Even though users—not Peninsula—performed the searches on Peninsula's website, Peninsula was ultimately responsible for the content on its own website, including what resulted from customers' searches. Here, Peninsula was using Penn Engineering's marks in meta tags associated with its product pages such that its search algorithm would produce images of and links to Peninsula's products when consumers searched for Penn Engineering's PEM trademark. Ultimately, because Peninsula used Penn Engineering's marks in its meta tags to direct consumers to potentially purchase Peninsula's products, the court found Peninsula's "search tool constitutes use under the Lanham Act."
Turning to Peninsula's second argument, the court found—at least on the facts of this case—that Peninsula's use of Penn Engineering's marks as meta tags in its internal search tool was unlikely to create consumer confusion. First, the court found that use of Penn Engineering's mark as meta tags for Peninsula's internal search tool did not result in initial-interest confusion. Initial-interest confusion occurs when consumers are diverted away from a mark owner's website to a third party's website. Here, according to the court, there was no diversion because the user would have already been on Peninsula's website in the first instance when using Peninsula's search tools. Next, the court concluded that no reasonable jury could find a likelihood of confusion arising from the search results because users of the search tool were presented with only Peninsula's products under a large banner at the top of the website that clearly denoted to customers that they were on Peninsula's website. The court likened this to searching Samsung's website for "Apple iPhone" and being presented with a list of Samsung phones; according to the court, "that customer could not possibly be confused into thinking he or she was purchasing an Apple iPhone when Apple and Samsung are two separate companies selling two separate and distinct products." The court also noted that Penn Engineering had not pointed to any evidence of actual confusion.
Despite finding no likelihood of confusion here, the court was careful to note that "[t]his does not mean that a company's internal website search tool could never infringe on another's marks in violation of the Lanham Act." The court offered a couple of examples of factual scenarios that might lead to a different result, such as: "[i]f a company's internal search tool stated, 'Search for Competitor Products Here' and the results then read 'Buy These Competitor Products' with the infringing company's own products underneath, that may . . . indicate a likelihood of confusion." After articulating these caveats, the court stated its holding on the facts before it: "a company's website search tool that displays 'Search Results for' a product that the customer him or herself enters that then displays only that company's products with those product names under the banner of the website itself does not create a likelihood of confusion when no facts indicate otherwise."
Peninsula also sought summary judgment on Penn Engineering's false advertising claim related to Peninsula's use of sales drawings of Penn Engineering's products to sell Peninsula's products, but the court denied this part of the motion, finding a genuine issue of material fact existed as to whether Peninsula was targeting a broad enough class of consumers such that it was engaging in commercial advertising. For its part, Penn Engineering moved for summary judgement for a second time on its infringement claims. As it did when Penn Engineering first moved for summary judgment, the court found genuine issues of fact and once again denied Penn Engineering's motion.
The case is Penn Engineering & Manufacturing Corp., v. Peninsula Components, No. 19-513 (E.D. Pa. Dec. 18, 2023).
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