Suit Settled Over Use of Rival's Name

U.S. District Court, Minnesota District, 2006: Edina Realty Inc. v.

September 1, 2006

A Minnesota federal court decided to let an action brought by a real estate company against a rival for using the company’s name as an Internet search term proceed. In the suit, Edina Realty Inc., an affiliate of HomeServices of America Inc., charged that another brokerage competing in the same market used the trademarked name “Edina Realty” as an embedded search term on its site to capture Internet leads.

The U.S. District Court for the District of Minnesota rejected’s argument that the trademark wasn’t used in commerce, since TheMLSonline had used the trademark in paid advertisements on search engines.

The court also considered TheMLSonline’s defense that its use of “Edina Realty” was a nominative fair use. To show nominative fair use, a defendant must demonstrate, among other things, that using the trademark is necessary to describe both parties’ products. The court found that TheMLSonline’s use of the trademark didn’t provide an accurate picture of the relationship between the companies since it used Edina Realty’s name more prominently than it did its own in some ads.

The court referred the questions of whether the competitor used the trademark with the intent of passing off its services as those of the trademark owner to the trial court. After this ruling, the parties settled.