The 2nd Circuit Federal Court of Appeals ruled against Google in a trademark lawsuit stemming from AdWords ads, saying that allowing a trademark term to trigger a search ad is a “use in commerce”, within the meaning of federal trademark laws.
Google was sued by computer repair shop, Rescuecom, for allowing rivals to appear as sponsored listings when consumers typed “rescuecom” into the query box. A district court judge dismissed the case before trial on the theory that allowing a word to trigger an ad didn’t violate trademark law because it wasn’t a use in commerce.
Judge Pierre Leval, who wrote the appellate opinion, disagreed with that conclusion.
Leval sent the case back to the federal district court for a trial, on whether search ads potentially confused consumers.
So far, Google and Yahoo have successfully defended themselves in other lawsuits on similar issues.
Google may appeal the ruling and the matter still has to go back to the trial court for disposition on the issues.
However if the decision holds search engines could be on the hook for trademark infringement for selling ads under trademarked terms.
this will be very, very interesting to watch.
As someone who works on a brand every day, it is incredibly frustrating to watch competitors bid on keywords when someone searches for your company name.
that said, i’m not sure exactly where I stand on this as it is a bit of a slippery slope.
Free Fico Scores says
This a case that everyone must watch as google cant afford to lose this case.
It will have serious impact on domainers if google cant overturn this ruling.
Serious imapact? Negatively……are you saying? I see it as positive for generic domain owners.
If companies could not bid on a competitor’s TM then they would be forced to buy generic search traffic and that would make those generic keyword clicks more expensive and generic domain owners would reap the some of the extra expenditures laid out for those searches.
I agree with Johnny, generic domains only become more valuable if you can’t jump on the tail of a trademark brand. The only real option is to advertise on the generic domain for the product or service. Or you could always start building your own brand. 🙂
Johnny is right and I agree this is good news. I’d be pissed if I was Rescuecom and I couldn’t afford the bid price on the keyword “rescuecom”. Why would I want to build up brand recognition if my brand could be abused as such. No different than TM domain names IMHO.
Of course I also see google’s quandary in that how on earth will they police this in the long run. Realistically the only way I can see making sure that nobody bids on TM keywords would be to have a whitelist of keywords (all generic terms) that are acceptable to bid on. Of course doing so will make these “whitelist” keywords very expensive for the advertisers to bid on, but then again if google had to monitor every keyword bid upon for TM infringement that would be so expensive for google to maintain that they would have to raise the minimum bid to cover it. Ends up the same either way.
I think the moral of the story is just because you are google doesn’t mean you are immune from the same realities that the rest of us face.
jp is right – it will be impossible to enforce.
It is one thing to stop people from bidding on the keyword “sony” but imagine the long tail for sony? There have to be hundreds of thousands of search terms with the word sony in them. But sony wants people to bid on some of them, just not all of them.
what a nightmare.
I dont think google would have a problem. Google could make a advertiser liable if using trademark terms on PPC including this in there Adword terms.
So this would be positive for all domainers just like Johnny commented.
Also it would take a large chunk of business out of Google and Yahoo.
Advertisers would have no choice but going after Generic or phrase names.
Some see a Storm coming. I see the clouds clearing up and the sun shining thru.
Google can’t rid themselves of liability by putting it on the advertiser.
The advertiser might be liable as well, but if Google gets sued for putting ads on their network which are found to violate federal trademark law, they can’t just pass this is liability on.
We will see what the trial court does with it now that they are getting the case back
Dual use is the issue here, as well as generic words that are trademarked with a tld.
If GoDaddy can police their own parked domains to make them non-Trademark infringing than Google can definitely make their ads not infringe on anyones rights.
Where do you see Godaddy.com policing their own parked domains for trademarks?
We have written on many occasions about all the domains Godaddy.com sells through their action system, which are first parked by them.
Here is an article talking about their patent, but I did not originally read this story their. I believe it was from an ex-employee of GoDaddy that they give the recommendation to the parking clients to not specify any words and their system would automatically avoid trademark phrases.
Google never lose!!!
They might lose this one, but they will always with the WAR.
Never say Never. Just ask the banks. If google continues to make bad decisions that are either not productive or that steps on the feet of others, their day will come too. You just have to be patient.
Steve M says
Like a number of others, I also see this–if it holds up–as a positive for owners of generic names.
Take away their trademark bidding, and where else they gonna go?
And Mike’s right on the legal liability. Google cannot pass it off on the advertisers, as they are running the operation that permits this infringement.
Josh–adding a tld to the end of otherwise non-trademarkable, generic words & terms no longer qualify for trademarks.
PPC Advertiser says
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