Thursday, June 26, 2008

Hearts on Fire Sues Blue Nile in another sponsored link “adword” trademark dispute

On June 20, 2008, Hearts on Fire Company, LLC (“HOF”), the company behind the “Hearts On Fire” diamond (a/k/a The World's Most Perfectly Cut Diamond) (pictured above), filed a trademark infringement lawsuit against Blue Nile, Inc. (“Blue Nile”), an online retailer of certified diamonds and jewelry, in the U.S. District Court for the District of Massachusetts. See Hearts on Fire Company, LLC v. Blue Nile, Inc., Case No. 08-cv-11053 (D. Mass. June 20, 2008). A copy of the complaint can be viewed here (HT: Marty Schwimmer’s Trademark Blog). News stories on the lawsuit can be found here and here.

HOF holds numerous federal trademark registrations for the HEARTS ON FIRE mark (the “HOF Mark”) on goods ranging from cut diamonds and jewelry to golf towels and bottled drinking water. At issue in HOF’s complaint is Blue Nile’s purchase of the HOF Mark as a “keyword” term so that a link to Blue Nile’s website appears as a Sponsored Link when an internet user does a search for the term “hearts on fire.” HOF argues that such use of HOF’s Mark by Blue Nile improperly diverts “potential consumers of HOF diamonds and jewelry to the Blue Nile website.”

According to HOF’s complaint, Blue Nile purchased the HOF Mark keyword from such that when a search is done for the term “hearts on fire,” one of the search results’ top ranked links is Blue Nile’s sponsored link stating: “Idea Cut Diamonds at Blue Nile. Find hearts on fire diamonds at Forbes Favorite Online Jeweler.” HOF also claims that when a user types in “Hearts on Fire” in Blue Nile’s own website search engine, the user is “directed to links to web pages selling diamonds and jewelry containing diamonds, none of which are HOF diamonds or jewelry.”

Because Blue Nile is not an authorized "Hearts on Fire" retailer, HOF claims that Blue Nile’s use of the HOF Mark is likely to cause confusion, mistake and deception among the general public as to the origin of Blue Nile's goods and/or as to sponsorship by, affiliation with, and/or connection to HOF. HOF’s causes of action are for federal trademark infringement under 15 U.S.C. § 1114, federal unfair competition under 15 U.S.C. § 1125(a), common law unfair competition, and deceptive trade practices under Massachusetts state law (Mass. Gen. Law Ch. 93A). HOF is seeking injunctive relief, unspecified damages, treble damages, and costs.

Vegas™Esq. Comments:
First of all, it’s not entirely clear that Blue Nile purchased the “adword” from WebCrawler as HOF maintains. WebCrawler is known for being a search engine that searches other search engines. When I first began writing this blog post, the WebCrawler search results clearly reflected that the sponsored link was found on Ads by Google. When I went back later in the day, it later reflected that the sponsored link was found on Internet Picks. Why doesn’t HOF sue WebCrawler for placing sponsored links at the top of its search results? Second, when I did a search using the Google search engine, HOF’s website was the highest ranked link – with Blue Nile’s website being a sponsored link listed on the side (interestingly, when I searched later in the day, Blue Nile’s sponsored link no longer appeared on Google.) Third, when I did a WebCrawler search for “hearts on fire,” the link that appeared has been changed to read “Find the Perfect Diamond. Shop Signature Ideal Cut Diamonds at Forbes Favorite Online Jeweler.” And when I went back again later on, the link was completely different. Any reference to “hearts on fire” had been removed (if it ever existed).

HOF’s case had a modicum of merit when (and if) Blue Nile’s sponsored link indeed read “Find hearts on fire diamonds at Forbes Favorite Online Jeweler.” That case scenario is much like the Storus v. Aroa Marketing “Smart Money Clip” case (previously blogged here) which found infringement (“initial interest confusion”) under similar circumstances. However, as noted above, Blue Nile appears to have changed already the text of its sponsored links – and might even be removing them altogether if the disappearance of the Google Adword sponsored link is any indication.

The real 800 lb “trademark” gorilla, however, is whether Blue Nile’s purchase and continued use of HOF’s mark as a keyword for a sponsored link evenconstitutes “trademark use” (a hot issue in the trademark world these days -- and one that has yet to be definitively resolved.) But again, Blue Nile may be removing its sponsored links altogether making the issue moot going forward.

As for HOF’s ridiculous allegations regarding Blue Nile’s own website search engine results, the complaint fails to mention that the website search results for “hearts on fire” lead to such jewelry as a “heart” pendant and a ring design that will add even more “fire” to a white gold wedding set. None of the search result in the products reflected therein state anything about “hearts on fire” or make any suggestion of connection or affiliation. HOF apparently wants to hold Blue Nile liable for the fact that its search engine returned any kind of search results when a user happens to put in the words “hearts on fire” – even though the search engine would likely return the same kind of results for almost any search using the words “fire” and/or “heart.”

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