Deltona Transformer Corporation v. The Noco Company
The Eleventh Circuit affirmed in part, reversed in part, and remanded for a new trial on damages following jury verdicts and a bench trial on equitable relief. Deltona Transformer Corporation owns the federally registered trademarks "Battery Tender" and "Deltran Battery Tender" for specialized vehicle-battery chargers. The NOCO Company was accused of infringing these marks by: (1) bidding on Deltona's marks as keywords to trigger NOCO ads in Amazon search results; (2) using "battery tender" in the text of its own Amazon ads; (3) incorporating "battery tender" in product descriptions on Amazon; and (4) referring to its chargers as "battery tenders" in communications with marketing firms and customers. The jury found for Deltona on § 32 trademark infringement, § 43(a)(1)(A) unfair competition and false designation of origin, common-law trademark infringement, Florida FDUTPA claims, and § 43(a)(1)(B) false advertising, awarding $1.3 million in actual damages and $5.75 million in punitive damages. The district court ordered $12.1 million in disgorgement and issued a permanent injunction prohibiting NOCO from using "Battery Tender," "Deltran Battery Tender," "Deltran," or "Tender" (except for keyword purchases and comparative advertising). The Eleventh Circuit held that Deltona's marks are at least descriptive with acquired secondary meaning rather than generic, that keyword bidding alone does not constitute infringement, but that NOCO's visible use of the marks in ad text and communications did infringe.
The court's keyword-bidding holding establishes circuit precedent on a question of first impression: the mere purchase of a competitor's trademark as a search-engine keyword, without the mark appearing in the resulting advertisement, cannot constitute trademark infringement under the Lanham Act because consumers do not see the behind-the-scenes keyword purchase and thus cannot be confused by it—only distracted by the alternative products displayed. The court joined unanimous authority from the Second, Fifth, Ninth, and Tenth Circuits in holding that likelihood of confusion "turn[s] on what the consumer s[ees] on the screen," rejecting any theory that invisible keyword use alone satisfies the confusion requirement. On the validity question, the court afforded substantial weight to federal registration as "prima facie evidence" of validity and characterized "battery tender" as at minimum a descriptive mark that had acquired secondary meaning through three decades of use, promotional investment, co-branding relationships, and industry recognition—rejecting NOCO's consumer survey showing 78% perceived the term as generic on methodological grounds relating to whether respondents constituted the "relevant public." The court held that NOCO's visible uses of Deltona's marks in ad text (e.g., "More than just a Battery Tender") and in communications with customers constituted "wheelhouse trademark infringement" because they expressly held out NOCO's products as "battery tenders," with evidence of knowing intent rendering NOCO's claim that "sponsored" labels dispelled confusion unpersuasive.