The ruling, which was decided in the U.S. District Court for the Northern District of California, overturned a preliminary injunction granted to J.K. Harris, a tax estimator, on March 22, 2002. At the time, the court had ruled that Taxes.com violated trademark law by hosting Web pages that criticized J.K. Harris and appeared in top rankings of search engine results for the term "J.K. Harris." As part of the ruling, the judge had ordered Taxes.com to alter those pages.
In its revised ruling, the court said that Taxes.com use of its competitor's name, in the course of conveying truthful information about its investigation by federal authorities, does not violate trademark law.
"While the evidence submitted to the court demonstrates that defendants' Web site does contain frequent references to J.K. Harris, these references are not gratuitous; rather, defendants' Web site refers to J.K. Harris by name in order to make statements about it," according to the filing.
The case highlights the sticky nature of accessing information on the Web and the ease with which search engines can call up potentially negative or embarrassing background on businesses or individuals. Search engines regularly crawl, or index, millions or billions of Web pages to create fresh, relevant resources of information on the Net universe. While such technology has served to help revolutionalize how people find information, it has also proved invasive to others.
At the heart of the case, J.K. Harris & Company v. Steven Kassel/Taxes.com, was J.K. Harris' contention that Taxes.com's Web pages were given undue favor in search results for its own site, causing people who may looking for J.K. Harris to discover negative press about the company and turn to its rival for services.
The civil liberties group Electronic Frontier Foundation, which represented Taxes.com in an appeal of the case, applauded the decision.
"The court's decision to reverse an earlier ruling on Taxes.com restores the balance between trademark law and the First Amendment right to publish truthful information," EFF senior intellectual property attorney Fred von Lohmann said in a statement.