[00:00:02] Speaker 02:
I'm only two for two on name pronunciations today, so I'm not even going to try here.

[00:00:08] Speaker 02:
Counsel for the appellants, Mr. Gagan, you may begin when you're ready.

[00:00:14] Speaker 02:
Each side will have 15 minutes, and you'll keep your own time.

[00:00:18] Speaker 03:
Good morning.

[00:00:19] Speaker 03:
May it please the court?

[00:00:20] Speaker 03:
My name is Andrew Gagan.

[00:00:21] Speaker 03:
I'm on behalf of plaintiff, appellants, learner, and row.

[00:00:24] Speaker 03:
We ask that this court reverse the grant of summary judgment in favor of defendants, and we offer several independent

[00:00:32] Speaker 03:
the sufficient reasons why this Court should do so.

[00:00:35] Speaker 03:
The most glaring error committed by the District Court was its conclusion regarding the 236 documented instances of actual confusion in this case.

[00:00:46] Speaker 03:
This conclusion was a break with Ninth Circuit precedent, which said that one or two or several instances of documented actual confusion may be sufficient on their own

[00:00:57] Speaker 03:
to survive summary judgment?

[00:00:59] Speaker 04:
Isn't this situation different?

[00:01:01] Speaker 04:
Usually when I have trademark cases, somebody presents some evidence, and you don't know what the denominator is, you don't know what it comes from, but there are Yelp reviews, there are letters written, et cetera, et cetera.

[00:01:12] Speaker 04:
So you see 3 or 4, 5, 10, 20, 100, but you don't know whether it represents

[00:01:17] Speaker 04:
what kind of sampling that is.

[00:01:18] Speaker 04:
Here, you do seem to have a sampling.

[00:01:21] Speaker 04:
That is, the call logs, I assume that's the point of entry for all people.

[00:01:26] Speaker 04:
You know, how else do you, they're not going to visit the firm, so once they see the website, they make a call, or it's going to result in some kind of conversation, right?

[00:01:35] Speaker 03:
That's correct.

[00:01:35] Speaker 04:
So it captures the universe of those

[00:01:38] Speaker 04:
who saw the ad or somehow enticed by the ad.

[00:01:41] Speaker 04:
So you've kind of got the whole universe there.

[00:01:44] Speaker 04:
And then from that, you can see what percentage or how many appear to have some degree of confusion.

[00:01:51] Speaker 04:
There's a debate whether all 236 or 338 really evidence confusion.

[00:01:55] Speaker 04:
Some may just be saying a referral.

[00:01:58] Speaker 04:
There's an argument that only a fraction of those actually show confusion.

[00:02:02] Speaker 04:
But it's out of a universe of like 100,000 or something, right?

[00:02:05] Speaker 04:
It's like 0.25 percent according to your opponent.

[00:02:09] Speaker 03:
That is not the correct universe, Your Honor.

[00:02:12] Speaker 03:
Defendants imported over tests from the 10th Circuit in the 1-800 context case where they looked at 25 clicks versus approximately 1,000 impressions to get a very low percentage.

[00:02:24] Speaker 03:
There was only one instance of actual confusion similar to the calls in this case.

[00:02:29] Speaker 03:
The 1-800 context case looked at the number of clicks versus the number of impressions, and that was one of the main reasons why they found a de minimis amount of confusion in that case.

[00:02:40] Speaker 03:
Were we to do that in this case, we would not be looking at the 236 calls recorded by accident law group's intake department.

[00:02:47] Speaker 03:
We would be looking at the over 7,000 clicks.

[00:02:51] Speaker 03:
It's apples and oranges, first of all, regarding whether or not we should be looking at click-through rates versus the threshold of appreciable confusion in surveys.

[00:03:02] Speaker 03:
That's, again, something very different.

[00:03:04] Speaker 03:
But if we were even to do that, we're not using the right number.

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The 0.02% is essentially meaningless.

[00:03:12] Speaker 03:
It's not with actually being compared.

[00:03:15] Speaker 04:
I'm not sure I understand.

[00:03:17] Speaker 04:
What are we missing if you only look at the .22%?

[00:03:21] Speaker 04:
What are the instances of actual confusion that are not being picked up?

[00:03:25] Speaker 03:
So that, if we were to compare, if we were to look to the number of impressions as the denominator, which we argue is not reliable anyways because it doesn't account for individuals who viewed ads multiple times or people who viewed ads without the purpose of seeking to

[00:03:43] Speaker 03:
hire Lerner and Rowe for representation.

[00:03:45] Speaker 03:
Myself, for example, I have looked at number of ads.

[00:03:48] Speaker 02:
So you would agree with me that the owner of the mark has to demonstrate the likely confusion, right?

[00:03:55] Speaker 03:
Yes.

[00:03:55] Speaker 02:
Okay, so that's your burden, that's your client's burden to show.

[00:03:58] Speaker 02:
And what we have here are really the numbers that Chen just referenced, which are the 236 calls, and compared to the overall number of

[00:04:11] Speaker 02:
calls, which was something in the 110,000 range.

[00:04:13] Speaker 02:
Excuse me, Your Honor.

[00:04:15] Speaker 03:
The number of total calls was approximately 10,000.

[00:04:18] Speaker 03:
The number of impressions of the ads was approximately 109,000.

[00:04:22] Speaker 03:
OK.

[00:04:22] Speaker 02:
So you're combining, as the universe, both things that you're talking about, the impressions plus the calls, correct?

[00:04:30] Speaker 03:
No.

[00:04:31] Speaker 03:
So the number of impressions is the number of times the ad was shown to somebody who entered a search for Lerner and Rowe.

[00:04:38] Speaker 03:
The ads will come up.

[00:04:40] Speaker 03:
lots of times.

[00:04:42] Speaker 03:
The number of calls is different than the number of clicks on those ads.

[00:04:48] Speaker 03:
You can click on the ad, go to the website, and ultimately decide that you're not interested in talking to the firm that you just clicked on.

[00:04:56] Speaker 03:
That's why the number of calls is a more important and more informative

[00:05:02] Speaker 02:
Okay, so let's go with that.

[00:05:04] Speaker 02:
So if we're looking at the number of calls, what we have is this pretty de minimis percentage by wave percentages, right?

[00:05:11] Speaker 02:
It's something like 0.2 percent, which is a far cry from what the other cases utilize as sort of a meaningful data point for confusion.

[00:05:24] Speaker 02:
And don't our cases require an appreciable number of instances of actual confusion?

[00:05:31] Speaker 02:
for that factor to tip in Lerner and Rowe's favor?

[00:05:34] Speaker 03:
Yes.

[00:05:35] Speaker 03:
And this circuit has held that even a single digit, not single digit percentage, but single digit number of confusion can tip that factor in favor of the plaintiff.

[00:05:47] Speaker 03:
And this court has said that because of the difficulty of proving confusion in these types of cases, even a few instances, one or two or several instances,

[00:05:58] Speaker 04:
can weigh strongly enough in plaintiff's favor to survive summary judgment.

[00:06:14] Speaker 04:
some pop out of the woodwork, and so that's a pretty good indicator something is going on out there, and that's one of the eight factors, so I could see that.

[00:06:21] Speaker 04:
But when you have this unusual case where we do have, whether it's the calls, maybe you're right, you just look at the calls that came, and that is the point of entry.

[00:06:27] Speaker 04:
Did you say 7,000 or 9,000?

[00:06:29] Speaker 03:
There were approximately 7,400 clicks on the 109,000 ads.

[00:06:36] Speaker 03:
That is a click‑through rate of just under 7%.

[00:06:39] Speaker 04:
All right.

[00:06:39] Speaker 04:
So that's the portal by which there could be some confusion, right?

[00:06:44] Speaker 04:
I mean, if people didn't even click, don't worry about it.

[00:06:47] Speaker 03:
Maybe.

[00:06:49] Speaker 03:
We don't know if someone didn't click because they were confused.

[00:06:51] Speaker 03:
There's no way of knowing.

[00:06:52] Speaker 03:
We don't know anything about that other 100 percent.

[00:06:54] Speaker 04:
Well, but it didn't result in a transaction.

[00:06:57] Speaker 04:
having occurred because of a confusion, thinking they were hiring one versus the other.

[00:07:03] Speaker 04:
So we do have this unusual situation just based on the way the nature of this case is.

[00:07:08] Speaker 04:
We do have a universe.

[00:07:09] Speaker 04:
We may dispute which is the proper universe, but we do have a universe and we have a proportion that we can actually see through the call log.

[00:07:17] Speaker 04:
So this is not like looking for the tip of the iceberg.

[00:07:20] Speaker 04:
We have the whole iceberg here we can assess.

[00:07:22] Speaker 04:
So that's why this case seems different than the usual

[00:07:25] Speaker 04:
We get a handful of complaints, people write letters, people write Yelp reviews where people are confused or on Amazon, you know, where some people respond to people who don't.

[00:07:35] Speaker 04:
Here you have everyone, it seems to me, or virtually everyone.

[00:07:40] Speaker 03:
I would say a fair approximation of the universe, yes.

[00:07:42] Speaker 04:
So it's as if it were a survey.

[00:07:44] Speaker 04:
If you had a survey that was done, let's say the expert hired by the court did a survey and they came out with a percentage of, whether it's 2% or 0.2%,

[00:07:52] Speaker 04:
Would that meet the appreciable number or significant portion test of trademark infringement?

[00:07:58] Speaker 03:
Courts have pretty uniformly stuck to a 10 percent threshold of appreciable confusion in surveys, but that is not the test for real world confusion.

[00:08:08] Speaker 03:
No courts have adopted that threshold specifically as we need to have 10 percent of all callers or anything.

[00:08:15] Speaker 03:
That would be completely novel.

[00:08:17] Speaker 03:
And the reason why is that these types of advertisements are not meant to have 80, 90 percent click through rates.

[00:08:26] Speaker 03:
universally across all industries, very low, single digit click through rates across any industry and in the legal industry as our expert put in his report, the average during the relevant period was between one and a half percent and three and a half percent clicks total.

[00:08:41] Speaker 03:
And that's not just limited to Lerner and Rowe or Accident Law Group or anybody.

[00:08:45] Speaker 03:
That's one and a half percent to three and a half percent across the industry.

[00:08:49] Speaker 03:
And here we have two to five times that rate of click through because of these ads and their nature.

[00:08:58] Speaker 03:
And as we argued in our brief, how they use generic language.

[00:09:02] Speaker 03:
They have a descriptive name.

[00:09:04] Speaker 00:
Council, let me interrupt you here.

[00:09:07] Speaker 00:
I believe you provided or your client provided a summary sheet with what appears to be every instance consumers mistakenly called ALG.

[00:09:15] Speaker 00:
There's an assertion that there's 236 instances of confusion, but we noted that in that summary sheet there was only 186 instances.

[00:09:25] Speaker 00:
Which one do we credit?

[00:09:26] Speaker 00:
Does it matter?

[00:09:27] Speaker 03:
That was a summary sheet prepared by defendants and they left off some.

[00:09:33] Speaker 03:
That was later corrected.

[00:09:34] Speaker 03:
236 is the correct number.

[00:09:39] Speaker 04:
What about when you look at the context and the degree of sophistication of the consumer here, which is, of course, one of the factors.

[00:09:49] Speaker 04:
Not only do you have people looking for a personal injury lawyer, and not only do you have people searching the internet, which our court has recognized has some special qualities, but these are folks who actually, as I understand it, punched in in the search engine name Lerner and Rowe.

[00:10:09] Speaker 04:
there's an argument that cuts both ways because they're looking for learner in a row and they may be more susceptible to being deceived when they see the listings pop up.

[00:10:21] Speaker 04:
On the other hand, they already have in mind what they're looking for.

[00:10:23] Speaker 04:
They're not just looking for any personal injury attorney.

[00:10:25] Speaker 04:
They're looking for something specific.

[00:10:26] Speaker 04:
And so as they go through this list, one could argue that they're even sort of even more sophisticated than just somebody who's looking for a personal injury lawyer on the internet.

[00:10:36] Speaker 04:
They've already been equipped

[00:10:38] Speaker 04:
knowing that this is a firm they want to look at or do some research on, and wouldn't that make it tougher for them to be fooled, especially given the display every time your competitor lists their listing appears?

[00:10:54] Speaker 04:
It says add there and it has the URL, et cetera, et cetera.

[00:10:58] Speaker 04:
Wouldn't somebody looking for Lerner and Rowe be able to discern and look further down to find Lerner and Rowe and kind of get through the haze there?

[00:11:06] Speaker 03:
Sometimes, perhaps, as we pointed out in our brief, there are a number of reasons why that wouldn't happen.

[00:11:13] Speaker 03:
For starters, Learn or No also advertises on its own name, so the Learn or No ads may also come up in the first position, which our SEO experts testified in our 30b6 deposition that that is the prime real estate for searchers.

[00:11:30] Speaker 03:
When they do a search for something specific, they expect that the most germane results are closest to the top.

[00:11:37] Speaker 03:
Google has become the dominant market leader in search, not because they provide the most options, but because their algorithm is designed to put the most relevant, most germane options front and center for the searchers.

[00:11:50] Speaker 03:
They rely on that relevance for why they choose Google versus Bing or something else.

[00:11:58] Speaker 03:
So a competitor,

[00:12:00] Speaker 03:
getting into that first position is valuable in and of itself.

[00:12:04] Speaker 03:
And then as for the ads themselves, the context of the ads themselves, not only is it the generically descriptive name accident law group as opposed to something more distinctive like Lerner and Rowe or Joe Brown law or something like that, that contributes to the ease of confusion that consumers may fall into when they

[00:12:29] Speaker 03:
click on something, especially when that URL you mentioned is, first of all, not an active link.

[00:12:34] Speaker 03:
It is the smallest font in the ad.

[00:12:36] Speaker 03:
The bright blue large text is often, that is what draws the eye itself.

[00:12:42] Speaker 03:
And in many cases, the advertisements used by Accident Law Group is a click to call ad.

[00:12:47] Speaker 03:
It is just a phone number.

[00:12:48] Speaker 03:
It doesn't say this is Accident Law Group.

[00:12:50] Speaker 03:
It doesn't say this is Joe Brown Law.

[00:12:53] Speaker 03:
I searched for Lerner and Rowe.

[00:12:54] Speaker 03:
The first thing that came up was a phone number.

[00:12:57] Speaker 03:
I clicked on that phone number, and now I'm at a different law firm than what I intended.

[00:13:00] Speaker 04:
Is it not denominated ad?

[00:13:03] Speaker 03:
It does have a small logo up in the corner.

[00:13:06] Speaker 03:
During the relevant period, Google puts not just ad up in that exact location, but for the organic results as well, something called a favicon, which can be like a little logo that each result has something up in that corner.

[00:13:20] Speaker 02:
So why isn't this case just like the multi-time

[00:13:23] Speaker 02:
machine case.

[00:13:24] Speaker 02:
I mean, the facts are slightly different, but the point is that the URL name is available.

[00:13:30] Speaker 02:
The person searching can look to see it's an ad or they can see there are different pieces of information that they can determine that this is not the thing that they were searching for.

[00:13:41] Speaker 03:
The chief difference between this case and the multi-time case is that in multi-time there were no evidence of confusion, no examples of consumers who

[00:13:52] Speaker 03:
expressed confusion.

[00:13:54] Speaker 03:
The plaintiff, during oral arguments, even conceded that there was no evidence of confusion in that case.

[00:14:01] Speaker 03:
So because that factor was already dispensed with, the court looked to, again, a different scenario assessing how Amazon displayed its results versus how a competitor targets another competitor and takes advantage of the goodwill associated with their brand by what's called conquesting in Google ad parlance.

[00:14:22] Speaker 03:
And in the multi-time case, the court listed numerous factors as to why those ads were so clearly labeled that no reasonable searcher could be confused.

[00:14:33] Speaker 03:
And none of those factors cited in that case are present in this case.

[00:14:38] Speaker 03:
So the court can't.

[00:14:39] Speaker 02:
Why isn't the presence of the URL a factor or the sort of notation that it's an advertisement?

[00:14:48] Speaker 02:
Why can't we consider that to be some of the factors that were

[00:14:52] Speaker 02:
considered like the brand name or the model number in the multi-time case?

[00:14:58] Speaker 03:
It could be considered, but it also comes back to how it was displayed in the Amazon results versus the Google ad results.

[00:15:07] Speaker 03:
Google has taken steps over the past decade to make their ads look more uniform with the organic results, specifically to get people to click on the ads

[00:15:17] Speaker 03:
more often instead of clicking on the organic results because they make money off of clicks.

[00:15:25] Speaker 04:
And I think all of us have noticed that over the years.

[00:15:27] Speaker 04:
It used to be on the side banner and stuff and we could ignore it.

[00:15:30] Speaker 04:
Now you've got to scroll down like five rolls of the scroll to get to what you want.

[00:15:35] Speaker 04:
But it seems like most people know that now.

[00:15:38] Speaker 04:
And that's just part of the sophistication of the internet user.

[00:15:41] Speaker 04:
You know whether you're on Google or looking for a restaurant on Yelp or whatever.

[00:15:48] Speaker 04:
you got to get through the sponsored ads, the ad ads and all sorts of stuff before you get to the organic ads.

[00:15:54] Speaker 04:
Isn't that a fact of life that people using the Internet, especially if you're looking for a specific law firm for personal injury, the reasonable user would know that.

[00:16:04] Speaker 04:
The first thing that pops up is not necessarily it.

[00:16:07] Speaker 03:
I think it's a reasonable conclusion in many circumstances.

[00:16:10] Speaker 03:
I would also point out that Google continues to change the layout of their display page.

[00:16:15] Speaker 03:
So it is constantly changing.

[00:16:18] Speaker 03:
You need to constantly update your priors on that.

[00:16:20] Speaker 03:
But then also, it does not explain how so many people called one firm and asked for another firm and said explicitly, I thought you, Accident Law Group, were Lerner and Rowe.

[00:16:33] Speaker 03:
I'm calling for Lerner and Rowe.

[00:16:34] Speaker 03:
I wanted Lerner and Rowe.

[00:16:36] Speaker 03:
these people were confused, and it's impossible to ignore that.

[00:16:40] Speaker 04:
And there's some confusion, but I guess the ultimate test is appreciable number, significant portion, and I don't know, how do you define that?

[00:16:48] Speaker 04:
At what point do you find that that threshold has been crossed?

[00:16:53] Speaker 03:
It is a question of fact for possibly the jury to weigh.

[00:16:56] Speaker 03:
In my opinion,

[00:16:57] Speaker 03:
that factor should be essentially a binary test.

[00:17:01] Speaker 03:
Is there evidence of confusion or is there not?

[00:17:03] Speaker 02:
And then if there is, a follow-on question of is it so... Do you have an authority that you can cite for the idea that this should be a binary test if there is evidence and it should go to a jury and if that's the only way you can get summary judgment, if there's absolutely no evidence of confusion?

[00:17:17] Speaker 03:
No, that's my interpretation of cases like network automation, like Reardon, like jail beverage,

[00:17:26] Speaker 03:
Ironhawk and Stone Creek and California Darts and Rosetta Stone, all of these cases look as a preliminary matter as to whether or not there is confusion.

[00:17:36] Speaker 03:
And in many cases, if there is no confusion, they move on.

[00:17:40] Speaker 02:
They determine whether or not there's confusion by weighing the data, the percentages, and whether there's an appreciable number of actually confused consumers.

[00:17:54] Speaker 02:
I'm sorry, could you repeat that?

[00:17:54] Speaker 02:
Yeah, so your point is that there should be a binary test.

[00:17:59] Speaker 02:
If there's any evidence of confusion, even one call, it should go to a jury.

[00:18:02] Speaker 02:
But that, I think, flies in the face of the holdings of some of those cases that you rattled off, where really they're looking at whether there's an appreciable number.

[00:18:12] Speaker 03:
And that is correct.

[00:18:13] Speaker 03:
I apologize if I misspoke.

[00:18:15] Speaker 03:
I think it should be essentially a two-part test for that factor.

[00:18:19] Speaker 03:
Is there confusion or is there not?

[00:18:21] Speaker 03:
And if there is, look at the context.

[00:18:23] Speaker 03:
And if it is so clearly de minimis, if it is just isolated cases, one call, one complaint, a handful, something like that,

[00:18:31] Speaker 03:
then I believe it is reasonable for a court to conclude that that is de minimis, especially in the context of a larger possible universe of confusion.

[00:18:40] Speaker 03:
But if it is not so clear, then it should go to the jury to see whether or not they agree that this is an appreciable amount of confusion.

[00:18:49] Speaker 03:
I think if it's even a close call at all, given what courts have acknowledged about the difficulty in procuring this type of evidence, this should be a fact question that should go to the jury.

[00:18:59] Speaker 02:
You're out of time, and you didn't indicate that you wanted any rebuttal time, but we'll put two minutes on the clock for you for rebuttal.

[00:19:04] Speaker 03:
Thank you, Your Honor.

[00:19:15] Speaker 01:
May it please the Court?

[00:19:19] Speaker 01:
No reasonable jury could find that 0.2% is an appreciable amount of actual confusion.

[00:19:28] Speaker 01:
Your Honor, this is a keyword advertising case.

[00:19:30] Speaker 01:
It is different than a traditional trademark infringement case.

[00:19:33] Speaker 01:
In traditional trademark infringement cases, there's two competitors using two different trademarks that may or may not be confusingly similar.

[00:19:41] Speaker 01:
Here, we have only one trademark, learner and row.

[00:19:46] Speaker 01:
And the question is whether or not accident law group bidding on that keyword or paying for that keyword has caused confusion or is likely to cause confusion.

[00:19:56] Speaker 01:
Unlike traditional cases, which are very fact-intensive, the sleek craft factors are not well suited for keyboard advertising cases.

[00:20:04] Speaker 01:
And as Judge Chen pointed out, unlike traditional cases, in this case, we actually know the universe of people who were exposed to the ad.

[00:20:16] Speaker 01:
Treatise on trademark law observed that courts almost always find no likelihood of confusion if all the defendant has done is use another's mark as a key word to trigger an ad for the defendant in which the other's trademark does not appear.

[00:20:31] Speaker 01:
Here, accident law group's ads did not display the Lerner and Rowe trademark, were clearly labeled in bold as ads.

[00:20:40] Speaker 01:
were partitioned from the other search results and clearly included accident law groups names.

[00:20:44] Speaker 00:
So, counsel, then how do you respond to the 236 instances of confusion?

[00:20:51] Speaker 00:
I understand that you say it's point whatever that percentage is, so it's irrelevant.

[00:20:56] Speaker 00:
It doesn't matter.

[00:20:57] Speaker 00:
But, I mean, there's evidence that there is confusion.

[00:21:00] Speaker 01:
Yes, and evidence of confusion at 0.2% of the universe is actually evidence of no likelihood of confusion.

[00:21:07] Speaker 01:
Because as we know from the case law, confusion has to be probable or likely and not just possible.

[00:21:13] Speaker 00:
But we also know in our court, the Ninth Circuit here, the Ironhawk case, the court there said that nevertheless, de minimis evidence is still, and I quote, evidence a reasonable jury could rely on to support a finding of actual confusion or when assessing a likelihood of confusion under the totality of the circumstances.

[00:21:32] Speaker 01:
But Ironhawk was a traditional trademark infringement case.

[00:21:34] Speaker 01:
It was not a keyword case, Your Honor, where the factors are different.

[00:21:38] Speaker 01:
So in network automation and in multi-time machine, this court said, we're not looking at all of the sleek craft factors.

[00:21:45] Speaker 01:
We're looking very specifically at just a couple of factors that are relevant in a keyword advertising context.

[00:21:50] Speaker 02:
OK, what about that entrepreneur media case?

[00:21:52] Speaker 02:
That is a case.

[00:21:53] Speaker 02:
that says one proven instance of confusion among the clients is sufficient.

[00:21:57] Speaker 01:
Yes.

[00:21:58] Speaker 01:
Again, not a keyword advertising case.

[00:22:00] Speaker 01:
In entrepreneurial media, there was no, we had no idea what the universe was of exposure to the confusingly or arguably confusingly similar trademark.

[00:22:13] Speaker 01:
Here, what we know is we know that 108,000 people, 109,000 people were served up this ad, these ads.

[00:22:21] Speaker 01:
109,000 people typed in Lerner and Rowe,

[00:22:23] Speaker 01:
and saw as an ad accident law group.

[00:22:28] Speaker 01:
Now, many of those were actually not the result of anything accident law group did, but I'll come back to that.

[00:22:34] Speaker 01:
But some of them were the result of accident law group paying for Lerner and Rowe as a keyword.

[00:22:39] Speaker 01:
Out of the 109 people who saw it, we have 265 at

[00:22:45] Speaker 01:
best, who even mentioned Lerner and Rowe in a telephone call to accident law group.

[00:22:51] Speaker 01:
And if we look at the case, the 1-800-contacts-versus-Lenzco case, which is a 10th Circuit case, but it is squarely on all fours with this case, the outer limit of possible confusion, as Judge Chen pointed out, is going to be the click-through rate.

[00:23:08] Speaker 01:
And in our case, the click-through rate was 6.82 percent.

[00:23:12] Speaker 01:
Now, Mr. Gagan,

[00:23:15] Speaker 01:
asserted that the normal click-through rate would be something like 1 percent, but that is contrary to the record in this case.

[00:23:22] Speaker 01:
The record in this case at ER 330 shows that when my client was bidding on non-brand keywords, their click rate was 5.45 percent.

[00:23:31] Speaker 01:
So when they were bidding on learner and row keywords, it was 6.82 percent.

[00:23:35] Speaker 01:
That's only a difference of one and a half percent.

[00:23:38] Speaker 01:
So it is

[00:23:41] Speaker 01:
The outer limit, according to 1-800-CONTACTS, is the worst case scenario.

[00:23:46] Speaker 01:
And that outer limit in this case is well below 10%, which many courts have recognized as not an appreciable number.

[00:23:54] Speaker 01:
No reasonable jury could determine that there's a likelihood of confusion where only 0.2% of the people who saw the ads called and only 6.8% of the people who saw the ads even clicked on it.

[00:24:09] Speaker 04:
Is appreciable number the term that is used?

[00:24:12] Speaker 04:
Is that an absolute number or a percentage?

[00:24:15] Speaker 01:
I think it has to be a percentage, Your Honor.

[00:24:17] Speaker 01:
If you don't know the universe, it's difficult to determine what an appreciable number is, which is why I think we see some of these outlier cases that say just a couple of instances would at least weigh in favor, in a traditional sense under the sleek craft factors, would at least weigh in favor.

[00:24:32] Speaker 01:
But here, again, where it's a keyword advertising case and we know the universe,

[00:24:37] Speaker 01:
I think it absolutely is not an absolute number.

[00:24:40] Speaker 01:
It is a percentage.

[00:24:41] Speaker 01:
It has to be a percentage.

[00:24:43] Speaker 01:
We know the denominator.

[00:24:44] Speaker 01:
We know the numerator.

[00:24:45] Speaker 01:
We know exactly how many people were exposed.

[00:24:48] Speaker 04:
And is there, what's your strongest authority on the percentage approach as opposed to an absolute number?

[00:24:53] Speaker 01:
I think the best argument or the best case law for that would be the 1-800-contacts case in the 10th Circuit, but that's for a click-through rate.

[00:25:03] Speaker 01:
There are many, many cases that have talked about needing an appreciable number.

[00:25:08] Speaker 01:
And there's a fun case in the district of Delaware that talked about the numerator and the denominator.

[00:25:17] Speaker 01:
And they said, we know the numerator, but what's the denominator?

[00:25:19] Speaker 01:
But here in this circuit, every case that has looked at it, including Sleekcraft itself, has said that it has to be an appreciable number, has to be a significant amount of confusion.

[00:25:30] Speaker 02:
Okay, I think you made the point that, you know, we've been spending a lot of time on this actual confusion.

[00:25:35] Speaker 02:
I think it's an important question.

[00:25:38] Speaker 02:
But this is one of many factors that we're considering.

[00:25:42] Speaker 02:
And on the degree of consumer care factor, I want to talk for a moment about the argument that Lerner and Rose made, that is, here there have been no costs.

[00:25:54] Speaker 02:
You know, the consumers are not expending any amount of money at all.

[00:25:58] Speaker 02:
because these are contingency fee cases.

[00:26:01] Speaker 02:
And so the people who are looking for somebody to represent them are not really, we can sort of plug them into the various cases that talk about the sophistication of the consumer and say they're really not all that sophisticated.

[00:26:13] Speaker 02:
And I think you make the argument that generally the value of the services is really what we ought to be looking at and not the out-of-pocket cost.

[00:26:22] Speaker 02:
What's your best authority to support that?

[00:26:25] Speaker 02:
position when these cases really do traditionally talk about out-of-pocket costs?

[00:26:31] Speaker 01:
Your Honor, I don't know of any case law that has talked about the degree of care in that context, but as you pointed out, I can think of no greater degree of care than choosing a lawyer, than choosing the person that you're going to have a fiduciary relationship with.

[00:26:46] Speaker 01:
In multi-time machine, they were looking at the value of a watch.

[00:26:49] Speaker 01:
It was like $200.

[00:26:50] Speaker 01:
I just think it's just a matter of common knowledge that you don't want to enter into an attorney-client relationship with somebody you don't trust, and that you're going to use a lot of cash.

[00:27:01] Speaker 00:
Counsel, let me push back on that a little bit, though.

[00:27:03] Speaker 00:
And I can understand that if we're talking maybe a breach of contract case, where you're going to be paying out of pocket, you are a little bit more sophisticated, you understand what's going on.

[00:27:12] Speaker 00:
But the accident law group,

[00:27:13] Speaker 00:
isn't the type of work that they do contingency.

[00:27:18] Speaker 00:
Someone's just been in a car accident.

[00:27:19] Speaker 00:
Someone maybe, you know, can't go back to work because of said car accident.

[00:27:25] Speaker 00:
So they're looking for someone possibly to represent them quickly and start getting them, you know, benefits and getting them, you know, getting this case filed right away.

[00:27:34] Speaker 00:
I don't know that I agree with you that they would necessarily

[00:27:39] Speaker 00:
be able to take the same care.

[00:27:40] Speaker 00:
Maybe they would want to, but other pressures are pushing them to hurry up and get a lawyer, because they feel like, oh, my goodness, if I don't, I'm going to lose my rights, or the insurance company keeps calling me, and I don't know what to do.

[00:27:51] Speaker 01:
I think there's two things, Your Honor.

[00:27:53] Speaker 01:
One is, I would say, in addition to the fact that they're choosing a lawyer, they're also using the internet, and they are searching the internet.

[00:28:00] Speaker 01:
And I do have support for that, and that's a network automation case, which said that reasonable, prudent, and experienced internet customers are accustomed

[00:28:08] Speaker 01:
to exploration by trial and error.

[00:28:10] Speaker 01:
They skip from site to site, ready to hit the back button whenever they're not satisfied.

[00:28:14] Speaker 01:
So network automation observed that the default degree of the consumer is becoming more heightened as the novelty of the internet wears off.

[00:28:21] Speaker 01:
What was network automation about?

[00:28:23] Speaker 01:
Network automation was very much like our case.

[00:28:27] Speaker 01:
It was indeed a case where Active Batch had used, where the competitor had used Active Batch as a key term, which was the network automation trademark.

[00:28:37] Speaker 01:
It was just like our case.

[00:28:38] Speaker 01:
But what were people searching for?

[00:28:39] Speaker 01:
Oh, they were searching for software that did something similar to, I believe, what Salesforce does.

[00:28:44] Speaker 01:
It was sort of a

[00:28:47] Speaker 01:
an enterprise software to be used in the company?

[00:28:50] Speaker 00:
So, factually I don't see it.

[00:28:53] Speaker 00:
I mean, I get it, but I'm saying these are not the same consumers.

[00:28:56] Speaker 00:
You're not looking at the same, I'm talking about people who have just been in a car accident and they can't get to work and they need to move this case forward so they can feed their families.

[00:29:05] Speaker 00:
That, to me, is different.

[00:29:07] Speaker 01:
Understood, Your Honor.

[00:29:08] Speaker 01:
So if we look at ER-568, which is the actual ads in question, that consumer who's distressed, who's looking for a lawyer quickly, they type in Lerner and Rowe.

[00:29:18] Speaker 01:
And what they see, and this is one of the few screenshots that is actually relevant.

[00:29:23] Speaker 01:
I want to talk about that in a minute.

[00:29:24] Speaker 01:
But what they see is they see Accident Law Group, and then right below it, they see Lerner and Rowe.

[00:29:29] Speaker 01:
If we look at ER-566,

[00:29:34] Speaker 01:
or 569, actually 569 is even better.

[00:29:37] Speaker 01:
We see Lerner and Rowe first and then we see accident law group.

[00:29:42] Speaker 01:
No matter how distressed they are in that split second of time, they have choices.

[00:29:47] Speaker 01:
They've run those search and they see what they're exactly looking for.

[00:29:49] Speaker 01:
They were looking for Lerner and Rowe.

[00:29:51] Speaker 01:
They typed in Lerner and Rowe.

[00:29:52] Speaker 01:
They see Lerner and Rowe and they see Accident Law Group.

[00:29:55] Speaker 01:
And some of them decided, oh, let's see what else is out there.

[00:29:58] Speaker 01:
That is free competition.

[00:30:00] Speaker 01:
That is free market.

[00:30:01] Speaker 01:
That is why keyword advertising cases are different, Your Honor.

[00:30:04] Speaker 04:
Which way does it cut, given the fact that these are consumers who already typed in Lerner and Rowe, looking for Lerner and Rowe,

[00:30:11] Speaker 04:
when they see 568 and 569.

[00:30:14] Speaker 01:
Yes, I think it absolutely, Your Honor, obviously I think it cuts in our favor because they know what they're looking for and they also know anyone who uses Google knows that you're going to get choices.

[00:30:26] Speaker 01:
So they know they're looking for Lerner and Rowe, they know they have choices, maybe they're calling more than one

[00:30:31] Speaker 01:
And this is the problem with the call log, and we didn't talk about this yet, Your Honor, but I believe that the evidence of the caller's statements in the call log is inadmissible hearsay, and I do believe that the district court committed reversible error on this point by letting those calls in as evidence of actual confusion, because we really don't know, and it's not trustworthy for what they were

[00:30:55] Speaker 04:
Well, the first level of hearsay is answered by the business records rule.

[00:30:58] Speaker 01:
That's absolutely right, Your Honor.

[00:30:59] Speaker 04:
And the second level, isn't that answered, if not by the residuary hearsay rule, by indication of state of mind of the caller?

[00:31:08] Speaker 01:
Well, Judge Campbell determined that it was answered by Rule 807A, which is indeed the residual rule.

[00:31:15] Speaker 01:
But in order to satisfy for the residual rule, it has to have sufficient guarantees of trustworthiness, and it has to be more probative on the point for which it is offered than any other evidence that the proponent can obtain through reasonable efforts.

[00:31:28] Speaker 01:
Lerner and Rowe did not take a single deposition or offer a single declaration in this case.

[00:31:33] Speaker 01:
This was not the most probative on the point evidence.

[00:31:38] Speaker 01:
Indeed, it was just the opposite.

[00:31:40] Speaker 04:
I don't believe so, Your Honor.

[00:31:49] Speaker 01:
I don't think the state of I don't believe that the declarant state of mind

[00:31:53] Speaker 01:
is in any way conveyed by the call log.

[00:31:56] Speaker 01:
I think what the call log- Why not?

[00:31:58] Speaker 04:
Is that what we're talking about?

[00:31:59] Speaker 04:
People were confused?

[00:32:00] Speaker 01:
I think it's important to remember the purpose of the call log.

[00:32:03] Speaker 01:
The purpose of the call log was for Accident Law Group to figure out where they wanted to spend their marketing dollars, right?

[00:32:09] Speaker 01:
So all their intake people were instructed to do is figure out did this come from the internet?

[00:32:13] Speaker 01:
Did it come from

[00:32:16] Speaker 01:
TV, billboards, where did it come from?

[00:32:18] Speaker 01:
They were not tasked with determining was that caller confused.

[00:32:23] Speaker 01:
So therefore, it's untrustworthy in determining whether that caller was confused.

[00:32:27] Speaker 01:
If that person was tasked with determining the state of mind of the caller, I would agree with you.

[00:32:32] Speaker 01:
That was not the purpose of the call log.

[00:32:34] Speaker 01:
It was simply to determine, what do we want to spend our marketing dollars?

[00:32:37] Speaker 01:
So I don't believe that these are even admissible.

[00:32:39] Speaker 01:
But if they are admissible, they are all over the board as to what the callers actually said.

[00:32:46] Speaker 01:
And very few of them actually said that they were looking for Lerner and Rowe.

[00:32:50] Speaker 01:
Obviously, Mr. Gaggin focuses on those.

[00:32:53] Speaker 01:
Some of them literally said they were referred by Lerner and Rowe.

[00:32:56] Speaker 01:
And so in that context, I think it's important to go back to your question, Judge De Alba, that that consumer knows what they're looking for.

[00:33:04] Speaker 01:
They're getting choices.

[00:33:06] Speaker 01:
And they're choosing to check out more than one law firm.

[00:33:08] Speaker 01:
That's free competition.

[00:33:09] Speaker 01:
That's exactly what should be happening here.

[00:33:12] Speaker 01:
And not determine- Before you conclude,

[00:33:15] Speaker 02:
You make an argument that the court should affirm, alternatively, if we don't agree with your arguments on, that we've just heard that we can affirm on the grounds that ALG never used the mark in commerce.

[00:33:29] Speaker 02:
But isn't this panel bound by network automations holding that purchasing AdWords are a use in commerce?

[00:33:35] Speaker 01:
Well, I believe that the district court was bound by it, but I believe this panel can overturn its own prior precedent.

[00:33:41] Speaker 01:
And in that section of the brief, that is what we're asking you to do.

[00:33:45] Speaker 01:
At the time that network automation was decided, it was a different world.

[00:33:49] Speaker 01:
It was a different internet.

[00:33:50] Speaker 01:
And today, we know that users are sophisticated, and keyword advertising is well respected.

[00:33:58] Speaker 01:
Indeed, as you will see from the record, Lerner and Rowe used keyword advertising, actually bid on the brands of other law firms.

[00:34:05] Speaker 01:
They did exactly what they vilified us for doing in their brief.

[00:34:08] Speaker 02:
Is there any intervening law since network automation that

[00:34:12] Speaker 02:
that would give us the ability that sort of changes the course.

[00:34:18] Speaker 02:
We'd be the first, you're asking this panel in the first instance to reverse our court's precedent, which, so let me ask you this.

[00:34:25] Speaker 02:
If this court were to decide to take up this issue on Bonk, to reconsider its ruling there, why doesn't ALG's purchase of the learner-in-row keywords meet the Lanham Act's definition of use in commerce?

[00:34:38] Speaker 01:
It doesn't because,

[00:34:41] Speaker 01:
The way keyword advertising works is that Accident Law Group didn't have to do anything with the learner and row name.

[00:34:49] Speaker 01:
Google said to them, are you interested in keywords?

[00:34:53] Speaker 01:
Here's a suggested list.

[00:34:54] Speaker 01:
They said, OK, we'll bid on those.

[00:34:56] Speaker 01:
And then that's what they did.

[00:34:57] Speaker 01:
And so they didn't display it.

[00:35:00] Speaker 01:
They didn't speak it.

[00:35:01] Speaker 01:
They didn't use it in any way.

[00:35:03] Speaker 01:
And I think it's very important to talk about the causation problem.

[00:35:06] Speaker 01:
There is a disconnect between anything Accident Law Group did.

[00:35:09] Speaker 01:
and the display of these ads.

[00:35:12] Speaker 01:
What we know from the record is that under broad match, broad word matching, Google was serving up the accident law group ads to consumers who typed in Lerner and Rowe whether or not accident law group was paying them to do so.

[00:35:29] Speaker 01:
Because they considered it to be a broad match with, for instance, accident lawyer or auto lawyer.

[00:35:35] Speaker 01:
And if you look in the report of Peter Kent, you can see that it didn't really matter whether Accident Law Group was even paying for it, which is one of the reasons why in today's day and age it's absurd for us to follow a rule that Accident Law Group somehow used the mark.

[00:35:53] Speaker 01:
Nothing Accident Law Group did actually led to these ads popping up.

[00:35:58] Speaker 01:
They were paying, they paid for, I mean, other than paying for ads in general, of course.

[00:36:02] Speaker 01:
But whether or not they paid for Lerner and Rowe, these ads would pop up under a broad match.

[00:36:07] Speaker 01:
And I think that's an important reason to consider this not a use of the trademark.

[00:36:12] Speaker 04:
But you're essentially saying some ads like 568, 569 would have popped up anyway had these words not been purchased and therefore

[00:36:23] Speaker 04:
To the extent there is some confusion, some of that confusion is due to broad word match and not necessarily to the use of the mark here in the search term.

[00:36:31] Speaker 01:
Absolutely, Your Honor.

[00:36:32] Speaker 01:
And in fact, 566, 568, and 569 are the only ones, the only ads that are in the record that were even during the time frame when Accident Law Group was paying for Lerner and Rowe as a keyword.

[00:36:45] Speaker 01:
Every other ad that you see in the record was post May of 2021.

[00:36:51] Speaker 01:
And that's when Accident Law Group stopped paying.

[00:36:53] Speaker 01:
So long after they stopped paying, Google continued to serve up

[00:36:59] Speaker 01:
Now, Mr. Gagan will tell you that it had something, he's going to surmise, that it had something to do with the fact that they in the past had paid for these ads.

[00:37:08] Speaker 01:
But that's not what the experts say.

[00:37:09] Speaker 01:
What the experts say is it's a result of broad word matching and that it just happens automatically.

[00:37:17] Speaker 01:
I believe I am out of time.

[00:37:18] Speaker 01:
You are.

[00:37:19] Speaker 02:
Thank you very much for your argument.

[00:37:21] Speaker 02:
Mr. Gagan, we'll give you two minutes for your rebuttal.

[00:37:25] Speaker 03:
I will just address that last point briefly first.

[00:37:28] Speaker 03:
The broad match algorithm can serve ads, even if a competitor is not paying for them.

[00:37:34] Speaker 03:
But it is simply not true that Accident Law Group did nothing to have their ads served more frequently and in higher position to people who searched for Lerner and Rowe, versus whenever the Google broad match would decide to serve it, based on the connection that Google's algorithm draws

[00:37:54] Speaker 03:
on the relatedness of these two things, which can be contributed to by people searching for Lerner and Rowe, Accent Law Group purchasing ads for Lerner and Rowe, and people clicking on those ads.

[00:38:06] Speaker 03:
That is something that the algorithm can pick up and draw an association therein.

[00:38:10] Speaker 04:
So it had an incremental effect.

[00:38:11] Speaker 03:
Yes.

[00:38:13] Speaker 03:
There is nothing in the record as to what specifically that, like quantifiably, what that incremental effect was, but both

[00:38:21] Speaker 03:
both experts and then our 30B6 deposition as well, all testified that that can be a factor that contributes to the algorithm.

[00:38:29] Speaker 04:
Okay, but looking again, keep going back to the actual confusion evidence, it's fair to assume that some of that may have been due to the broad word match issue versus the purchase of the keyword issue.

[00:38:42] Speaker 04:
We just don't know the proportion.

[00:38:43] Speaker 03:
After they were no longer buying, I would agree, yes.

[00:38:48] Speaker 03:
As to a couple of the quick points, the Adler case in the Fifth Circuit in 2021 addressed the issue of whether or not the use of the trademark in a keyword had to be visible and they declined to adopt a standard that it had to be visible.

[00:39:06] Speaker 03:
So another circuit court did very recently address a similar factual pattern and declined to grant the approach that defendants are asking for regarding use and commerce.

[00:39:19] Speaker 03:
Are there any other questions from the court at this point?

[00:39:22] Speaker 02:
No.

[00:39:23] Speaker 02:
Thank you very much.

[00:39:26] Speaker 03:
Thank you, Your Honor.

[00:39:26] Speaker 02:
Appreciate counsel's arguments.

[00:39:29] Speaker 02:
And I think that concludes our cases for today.

[00:39:32] Speaker 02:
So we will stand in recess.

[00:39:33] Speaker 02:
Thank you.