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Advanced Systems Concepts, Inc.

Logo: advsyscon.com4

Court case decided on March 8, 2011

Network Automation, Inc. v. Advanced Systems Concepts, Inc., 638 F.3d 1137 (9th Cir. 2011) was a court case decided on March 8, 2011, where the United States Court of Appeals for the Ninth Circuit ruled that the use of a competitor's trademark as an Internet search advertising keyword did not constitute trademark infringement.2 It was founded in 1981.1 It is headquartered in Wilmington, United States.1 Wikipedia text CC BY-SA 4.0

Last updated Oct 21, 2026.

Overview

1981Founded1
  • Industrysoftware industry1
  • HeadquartersWilmington, United States1
  • Websitewww.advsyscon.com
  • Legal formCorporation3
  • LEI254900R6IJPUWSQVFO123
  • StatusActive3
  • LEI statusIssued and current3
  • Registered address251 LITTLE FALLS DRIVE, 19808 Wilmington, United States3
  • Registered withDivision of Corporations, Department of State, 103936013

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Network Automation, Inc. v. Advanced Systems Concepts, Inc., 638 F.3d 1137 (9th Cir. 2011) was a court case decided on March 8, 2011, where the United States Court of Appeals for the Ninth Circuit ruled that the use of a competitor's trademark as an Internet search advertising keyword did not constitute trademark infringement. In the case, Network Automation advertised their own competing product in search queries that contained Advanced Systems Concepts' "ActiveBatch" trademark. In determining whether trademark infringement occurred, the court evaluated factors relevant to the likelihood of customer confusion outlined in AMF Inc. v. Sleekcraft Boats and concluded that confusion was unlikely.2

The story

Background

Google and other Internet search engines and e-commerce sites have made search engine keyword advertising ubiquitous. Network Automation ("Network") and Advanced Systems Concepts ("Systems") both sold job scheduling and management software that were advertised on search engine results. Network's product was called Automate, and Systems' product was called ActiveBatch. Network decided to buy the keyword "ActiveBatch" so that when users searched for "ActiveBatch", Network's website would be displayed as a sponsored link in separate sections from search results, including Google Search and Microsoft Bing. Systems sent a letter to Network saying Network's usage of "ActiveBatch" as a keyword was infringing Systems' trademark rights. As a result, Network filed a lawsuit seeking declaratory judgement of non-infringement. Subsequently, Systems counterclaimed, and asserted trademark infringement under the Lanham Act, 15 U.S.C. § 1114 and therefore sought a preliminary injunction against Network's usage of "ActiveBatch".

Trademark infringement background

An essential condition for trademark infringement is customer confusion. A 1979 Ninth Circuit Court case, AMF Inc. v. Sleekcraft Boats, identified eight factors in determining whether confusion between related goods was likely:

strength of the mark

proximity of the goods

similarity of the marks

evidence of actual confusion

marketing channels used

type of goods and the degree of care likely to be exercised by the purchaser

Read the full text

defendant's intent in selecting the mark

likelihood of expansion of the product lines

In 1999, another Ninth Circuit Court case, Brookfield Communications, Inc. v. West Coast Entertainment Corp., determined that of the eight Sleekcraft factors, three of them were the most significant for cases involving the Internet, which are known as the "Internet trinity" or "Internet troika".

the similarity of the marks

the relatedness of the goods and services offered

the simultaneous use of the Internet as a marketing channel

The Brookfield case also emphasized flexibility in applying the law to the Internet, a new, emerging technology:

We must be acutely aware of excessive rigidity when applying the law in the Internet context; emerging technologies require a flexible approach.

From Wikipedia’s article on Advanced Systems Concepts, Inc., shared under CC BY-SA 4.0.5

Products and brands

Marketing Channels

The federal court decided that this factor is less important when the marketing channel is not obscure. Internet advertising was becoming ubiquitous, so sharing the same marketing channel does not reveal any information on the likelihood of consumer confusion. The district court incorrectly weighed this factor in favor of Systems.

Likelihood of Expansion of the Product Lines

The district court correctly disregarded this factor, since the likelihood of expansion does not apply when the two companies are direct competitors.

Other Relevant Factors

The eight Sleekcraft factors were never meant to be an exhaustive list. The appearance of the advertisements were also an important factor. The district court correctly analyzed the advertisement texts, and concluded that the text did not clearly identify the source, which could have led to consumer confusion. However, the Ninth Circuit Court found that the advertisements for both Google Search and Microsoft Bing were segregated from the search results, and were labeled as "sponsored links", so confusion was less likely.

From Wikipedia’s article on Advanced Systems Concepts, Inc., shared under CC BY-SA 4.0.5

Timeline

  1. 1981Founded Founded1

Sources

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