This article appeared in Pharmaceutical Compliance Monitor, October 4, 2013, and is reproduced with permission.
Social media is a powerful tool that allows businesses to get products directly in front of potential consumers. The appeal of this advertising strategy is not lost on pharmaceutical companies, who have increasingly found ways to target consumers online.
Advertisers purchase keywords from search engines such as Google, Yahoo!, and Bing, and social media sites such as Facebook and Twitter, who in turn display sponsored ads when consumers enter those keywords as search terms. Keywords can be as simple as words that describe an advertiser’s product, or as strategic as a competitor’s trademark. Legal issues may arise when an advertiser uses a competitor’s trademark as a keyword to generate social media ads, including trademark infringement, false advertising, and FDA non-compliance.
First, whether the act of purchasing a competitor’s trademark as a keyword constitutes infringement depends on whether the act is a “use in commerce,” and whether such use is likely to give way to consumer confusion. Historically, some courts found that purchasing a competitor’s trademark does not constitute a “use in commerce,” but as of 2009, courts that have addressed the issue have seemingly come to the consensus that the act of purchase constitutes “use in commerce.” See 1-800 Contacts v. WhenU.Com, 414 F.3d 400 (2d Cir. 2005) (finding no use in commerce); but see Network Automation v. Adv. Sys. Concepts, 638 F.3d 1137 (9th Cir. 2011) (finding use in commerce); and Rescuecom v. Google, 562 F.3d 123 (2d Cir. 2009) (finding use in commerce).
Second, the more substantive question, whether purchasing a competitor’s trademark as a keyword is likely to cause “consumer confusion,” often turns on specific facts related to the content of the ad that is triggered by the relevant keyword. Binder v. Disability Group, 97 USPQ.2d 1629 (C.D. Cal. 2011) (Defendant’s purchase of plaintiff’s trademarks as Google AdWords found to give rise to “a strong likelihood of confusion”); Finance Express v. Nowcom, 564 F. Supp. 2d 1160 (C.D. Cal. 2008) (Court granted a preliminary injunction, finding that the plaintiff established a likelihood of success on the merits where the defendant purchased keywords containing the plaintiff’s mark to trigger banner ads for the defendant); Soaring Helmet v. Nanal, 2011 WL 39058 (W.D. Wash. Jan. 3, 2011) (Defendant’s motion for summary judgment on trademark infringement claim denied).
The heart of likelihood of confusion analysis requires the court to evaluate the content of the ad itself. For example, putting the name of a competitor in an ad may lead the consumer to believe that the ad is sponsored by or associated with the competitor. Further, failing to include the advertiser’s name or product in the ad, essentially obscuring the true source of the ad, may be a basis for finding likely confusion.
A third consideration for advertisers is whether purchasing a competitor’s trademark as a keyword in order to trigger your own sponsored ad constitutes false advertising. A claim for false advertising arises when an advertiser either makes a false statement of fact or a statement that is literally true but has the tendency to mislead consumers. See Johnson & Johnson-Merck Consumer Pharms. Co. v. P&G, 90 Fed. Appx. 8 (2d Cir. 2003) (finding defendant’s claims to be literally false). The truthfulness of an ad is something that the FDA’s Office of Prescription Drug Promotion (“OPDP”) is particular attuned to, when considering whether a prescription drug ad is “truthful, balanced and accurately communicated.”
If an advertiser purchases a competitor’s trademark, but makes no reference to the competitor in the ad content itself, there still may be an underlying implication that the advertiser’s product is somehow related to or associated with the competitor’s product. For example, if Product A is approved for three conditions, but Product B is only approved for one, it’s possible to argue that a consumer having entered Product A into a search engine might be confused into believing that Product B, when displayed as an ad as a result of that search, is also approved for three conditions. See e.g., Rhone-Poulenc Rorer Pharmaceuticals, Inc. v. Marion Merrell Dow, Inc., 93 F.3d 511 (8th Cir. 1996) (finding false advertising when a drug manufacturer circulated ads that implied that its product, which had been approved to treat hypertension, could be freely substituted for a competitor’s medication, which was approved to treat hypertension and angina). This also raises potential FDA compliance issues under 21 C.F.R. § 201.128, which prohibits drug manufacturers from using or relying on advertising that may be different from the drug’s approved or “intended use.” The advertiser, therefore, must strive to limit the likelihood of confusion by making the ad content clear and straightforward.
A final consideration is that search engines make the task of creating truthful ad content more challenging by limiting the number of characters available to the advertiser. For example, Google’s AdWords limits advertisers to 130 characters (including spaces) to generate a headline, ad text, and display URL. Microsoft similarly limits advertisers to 131 characters in total. As a result of the character limit, most sponsored social media ads are FDA “Reminder Ads,” which give the drug’s name (including generic name) but not the use. Satisfying the FDA’s requirements and avoiding legal disputes with a character-limit crutch makes creating truthful, balanced, and accurate content all the more difficult, but no less important.
The overarching rule for all advertising, and not just keyword advertising alone, is that it is important to be truthful, accurate, and not misleading. An advertiser can further reduce the risk inherent in its keyword ads by not using a competitor’s mark in the text of the sponsored ad, unless for making truthful comparisons. If the keyword purchase is truthful and supports the keyword purchase, there is also less likelihood of confusion (e.g., “leading maker of cholesterol-lowering drugs over Competitor A”). Clearly labeling an ad as sponsored ad, or using a disclaimer or disclosure can also lessen the likelihood of confusion, as the likelihood of confusion will ultimately turn on what the consumer sees and reasonably believes, given the context. Finally, an advertiser should consider the ad campaign’s broader context, such as whether the single ad when viewed in conjunction with other promotional efforts on the advertiser’s part will cause confusion among consumers. In all, advertisers may want to take advantage of the advertising reach that social media keyword purchases offer, but should be careful to craft the language of their ad content to avoid confusion or avoid any implication that the ad may mislead consumers.
If you have any questions about this article or would like to discuss this topic further, please contact the authors, Lisa Greenwald-Swire or Kathy Tsai, or your Fish attorney.