Another Google Adwords Suit Dismissed March 17, 2010
On yesterday’s Podcast, we discussed how Rescuecom voluntarily withdrew their trademark infringement suit against Google’s Adwords program. Last week a similar suit against Google, Stratton Faxxon v. Google, was dismissed out of a Connecticut Superior Court. According to Eric Goldman, there have been approximately twelve similar lawsuits to date (primarily against Google) for the sale of trademarked phrases in the Adwords program.
Unlike Rescuecom, Stratton Faxon didn’t claim trademark infringement in this suit. Instead, their claims alleged interference of business relations and unfair competition. The details are somewhat unclear, and I don’t have access to the actual filings, but it appears that Google filed a “Motion for Judgment” which was granted last week. No order or opinion stating the reasoning for the dismissed seems to be publicly available. However, because Stratton Faxon did not sue on a theory of trademark infringement, they are not precluded from refiling another suit in Federal Court on a trademark theory.
The theory behind the bulk of these suits is fairly novel. To summarize, trademark owners are suing Google for selling their registered trademarks to competitors as search terms. After competitor successfully “buys” (or “bids” might be more appropriate) for a search term that consists of a registered trademark of another person, the competitor’s advertisement appears in the sponsored links section on the search Google search result page. This does not affect the organic results where you would presumably see any links related to the trademark owner. Rather, it only affects what appears as an advertisement which is clearly labeled “sponsored link.” The beef these trademark owners seem to have is that they don’t want any links to competitors, sponsored or not, appearing next to their organic search engine results. Unfortunately, not all uses of a trademarked phrase are protected by the law. See e.g., Nominative fair use.
As you might imagine, these suits have been challenged by Google and other defendants on a number of grounds. In an ordinary trademark infringement case, a plaintiff needs to establish that the defendant, (1) used his identical mark, or one that is confusingly similar, (2) in commerce, (3) in connection with the sale of goods or services, (4) and, that the use was causes a likelihood of confusion to the consumer. The two biggest points of contention that defendants have argued is that selling a trademarked phrase is not “in commerce” and that there is no “likelihood of confusion” that results from the sale of the mark. Before Rescuecom withdrew from litigation, the Second Circuit opined that the sale of trademarks in the Adwords program was enough to satisfy the “in commerce” requirement. As far as I know, no court has resolved the the “likelihood of confusion” issue on the merits. Nevertheless, it smells like an awfully tenuous argument given the layout and separation of sponsored links and organic search results.
Hat tip goes to Eric Goldman for his outstanding coverage on Google Adwords litigation.
No related posts.
