Network Automation, Inc. v. Advanced Systems Concepts, Inc.

In 2000, Advanced Systems Concepts, Inc. (Systems) (defendant) began using the term ActiveBatch in connection with its job-scheduling-and-management software. Systems obtained trademark registration for the ActiveBatch mark in 2001. Network Automation, Inc. (Network) (plaintiff) was a direct competitor of Systems and marketed its own job-scheduling-and-management software to the same customers in the same marketing channels. Google offered a program called Google AdWords that allowed advertisers to purchase key words that, when entered into Google’s search engine, would return links to the advertisers’ products and services. Network purchased the keyword ActiveBatch so that sponsored results for Network’s service would be returned when web users searched for the term ActiveBatch. In 2009, Systems sent Network cease-and-desist letters requesting that Network stop using Systems’s trademark in commerce. Systems ultimately threatened litigation for trademark infringement. Network responded by filing a suit seeking a declaratory judgment of non-infringement. Systems counterclaimed, alleging trademark infringement and seeking a preliminary injunction. The district court issued a preliminary injunction, holding that a likelihood of consumer confusion existed and that Systems had a strong chance of succeeding on a claim of trademark infringement. Network appealed the decision to the United States Court of Appeals for the Ninth Circuit.