Google Wins U.S. Keyword Case
by David Mirchin
Can Google or other search engines sell keywords registered as trademarks?
For example, can Coca-Cola buy the keyword "Pepsi-Cola" so that every
time a searcher enters the term in a search engine, advertisements for Coca-Cola
The practice is quite permissible, according to an important case recently
settled in the U.S. This ruling is particularly important because several cases
have ruled against Google and other search engines in France on this issue,
and several lawsuits in the U.S. and other countries (including Israel) are
Google operates a phenomenally successful program called AdWords that allows
companies to purchase keywords for advertising purposes. When an Internet user
searches on that keyword, it triggers both the traditional Google search results
(organic listings) and advertisements (sponsored links).
In the English-language version of Google, the organic listings appear on
the left, and the sponsored links appear either in a shaded box above the organic
listings or on the right side of the page and separated by a vertical bar.
Advertisers may purchase the use of keyword triggers such as
"shoes" or trademarked words such as "Nike."
If a trademark owner objects to Google's use of its trademark, Google
has one complaint policy for the U.S. and Canada and another for those in the
rest of the world (http://www.google.com/tm_complaint_adwords.html#1).
If a trademark owner outside the U.S. or Canada objects to a company using
its trademarked terms in the actual content of the advertisement or in the
keywords that trigger an advertisement, Google will investigate and require
the advertiser to remove the term from the content of the ad or keyword list.
It will also prevent the advertiser from using the trademarked term in the
future. For example, suppose British Airways (BA) complains that Japan Airlines
(JAL) purchased the use of the "British Airways" keyword to trigger
JAL ads. Upon BA's presentation of certain proof as set forth in Google's trademark
policy, Google will prevent Japan Airlines from continuing to use the
trademarked term to trigger JAL-sponsored links.
Google's policy in the U.S. and Canada is different. If Microsoft complains
that Apple is using the word "Microsoft" in the heading or text of
its sponsored link advertisement, Google will require Apple to remove the word.
But if Microsoft objects to Apple's purchase of the word "Microsoft"
as a keyword trigger, Google will not take any action. It was exactly this
issue that the court addressed in Government Employees Insurance Company
v. Google, Inc. and Overture Services, Inc., which was decided by the U.S.
District Court for the Eastern District of Virginia in August.
GEICO, a U.S. car insurance firm, positions itself as a low-cost insurance
provider. About 40 percent of its business is Internet-driven.
In its lawsuit, GEICO claimed that Google infringed upon its trademarks and
engaged in unfair competition when it sold the GEICO trademark as a keyword
to a competitor. This caused the competitor's sponsored links to appear next
to the organic listings that include links to GEICO itself. The company claimed
that the sponsored links were likely to confuse consumers into thinking that
the source of those links was GEICO. It also claimed that the links were misleading,
because they implied an association between GEICO and those other companies
that appeared in the sponsored links.
No Trademark Infringement for Use of Keyword Triggers
According to the U.S. Trademark Act, to be liable for trademark infringement,
a defendant must use the trademark "in commerce" and
"in connection with the sale, offering for sale, distribution, or advertising
of goods and services." Google had argued previously in this same case
that it only used GEICO's trademark in its computer coding and that such an
invisible process could not constitute infringement. In a 2004 ruling, the
court discovered that Google had indeed used GEICO's marks "in commerce." Therefore,
the issue at hand was whether Google's use of a trademarked word as a keyword
trigger was likely to confuse consumers as to the source of the sponsored links.
In order to succeed on a trademark infringement claim, GEICO needed to prove
that Google's use of its trademark was "likely to confuse an
‘ordinary consumer' as to the source or sponsorship of the goods." The
court pointed out that GEICO did not need to prove actual confusion and that
the sophistication of the consuming public could be a relevant factor.
To make its point, GEICO presented survey data, which is the typical method
of proving confusion. The court opinion analyzed the data at length and concluded
that it did not prove that consumers were confused about whether GEICO was
the sponsor of competitors' advertisements. An important observation that the
court also made was that "initial interest confusion" is a more difficult
claim to make on the Internet.
In the Internet context, the term "initial interest confusion" describes
the distraction or diversion of potential customers from the Web site they
were seeking to another site, based on the belief that the second site is associated
with the one originally sought. The crux of this concept is that the users
will be satisfied with the second site or be sufficiently distracted so that
they will never arrive at or return to the site they initially wanted.
In the physical world, it may be time-consuming or expensive to retrace your
steps if a billboard that confused you by using another party's trademark sent
you to a store other than the one you were originally seeking. But in the Internet
world, all you need to do is click the Back button.
On a less important point, however, the court did conclude that GEICO's survey
results supported the argument that consumers were confused when the heading
or text of advertisements included GEICO's trademarks. As a result, Google
could not dismiss this claim at this stage. This should have less relevance
for Google since the company claims that it removes trademarked terms
from advertisements (both in North America and worldwide) that use the terms
without the owners' permission.
Important Case, Unresolved Issues
The court left several liability issues open, and, reportedly, the parties
have recently settled this case under terms of confidentiality. While trademark
infringement cases such as this are heavily dependent on their individual facts,
this holding is important for Google because it gives the company a meaningful
victory after several recent losses in the keyword cases.
For example, in March 2005 in Google France v. Societe Viaticum & Societe
Luteiciel, the Paris Appeals Court faulted Google's AdWords program in
that it failed to perform preliminary checks on whether its keywords infringed
the trademarks of third parties. The court also found that Google suggested
keywords that violated third-party trademarks to potential advertisers.
The victory in GEICO could give Google much more flexibility in
how it responds to claims of keyword trigger trademark infringement. This holding
also may influence other pending cases, both in the U.S. (American Blind
and Wallpaper Factory, Inc. v. Google) and in Israel.
We should also note what the GEICO case did not address. GEICO only
sued Google; it did not sue the advertisers who purchased its trademark.
Therefore, the case did not address the liability of advertisers that purchase
the trademarked keywords to trigger sponsored links. That case will have to
wait for another day.
David Mirchin is the former vice president and general counsel of SilverPlatter
Information. His law practice focuses on information, software, and technology
companies. His e-mail address is email@example.com. Send your comments about
this article to firstname.lastname@example.org.