For more than 20 years, Texas personal injury lawyer Jim Adler has called himself The Texas Hammer® and more recently El Martillo Tejano®. After spending millions in television, print, and billboard advertising, Jim Adler with his iconic sledgehammer has become one of the most recognizable personal injury attorneys in Texas.
Adler also uses these trademarks in internet advertisements. He purchases Google “keyword ads” using the phrases JIM ADLER, THE HAMMER, TEXAS HAMMER, and EL MARTILLO as search terms. When a consumer performs a Google search using any of these trademarks as a search term, Adler’s advertisements appear.
A legal marketing firm also began purchasing these same phrases as keyword ads so that the firm’s click-to-call ads would appear alongside Adler’s ads. The click-to-call ads caused the user’s phone to make a call to the firm’s call center rather than visiting the website. When the firm’s call center answered the telephone, they used a very generic greeting in what Adler claimed was a clever bait-and-switch effort to convince the consumer to engage lawyers referred through the marketing firm and not Adler’s firm.
Using his Texas Hammer® trademarks, Adler pounded his way into federal court and sought to crush the marketing firm for ripping off his trademarks. Unfortunately for Adler, the trial court effectively determined that Adler’s trademark was a mere paper tiger and granted the marketing firm’s motion to dismiss and also denied Adler’s motion for leave to amend his complaint. The trial court concluded that Adler could not plead a likelihood of confusion as a matter of law because the marketing firm’s advertisements were generic and did not incorporate Adler’s trademarks. The court also found that Adler’s trademark infringement claims would fail as a matter of law, even if amended, because they would be based solely on the marketing firm’s purchase of Adler’s trademarks as keywords for search engine advertising and because the ads did not visibly incorporate Adler’s trademarks.
Undeterred, Adler hammered on the doors of the Fifth Circuit Court of Appeals.
The court of appeals responded and reversed the trial court’s decision. The court of appeals held that in the context of internet searches and search-engine advertising in particular, the critical issue in a trademark infringement action is whether there is consumer confusion. The court found that Adler’s complaint made specific factual allegations describing how the marketing firm’s use of the Adler marks as keyword terms — combined with generic advertisements and misleading call-center practices — caused initial interest confusion by unsuspecting consumers. The court also disagreed with the trial court and determined that Adler had not alleged trademark infringement solely based on the marketing firm’s generic text in its advertisements. Instead, the court found that Adler had alleged trademark infringement based on the marketing firm’s use of the Adler trademarks as keyword ads. The court determined that the generic nature of the marketing firm’s advertisements was relevant because it enhanced the likelihood of initial interest confusion. Finally, the court concluded that whether an advertisement incorporates a trademark that is visible to the consumer is a relevant but not dispositive factor in determining a likelihood of confusion in search-engine advertising cases. The court therefore reversed and remanded the case for further proceedings in the trial court.
The full opinion can be found at Jim S. Adler, P.C. v. McNeil Consultants, L.L.C., 10 F.4th 422 (5th Cir. 2021).