I know your thinking this must be the all Google blog this week, but everyday news is coming out on Google and today’s is not good.
As we wrote yesterday, Google announced the further expansion of its policy regarding allowing rivals to buy keywords under trademarked terms in up to 200 countries (you can read that post here).
Today it appears, Google is facing a new lawsuit for allowing companies to use trademarks to trigger pay-per-click ads. (It does not appear Google knew of this suit when it made its policy announcement yesterday.
In a lawsuit was filed this week in federal court in the eastern district of Texas, by software development company Firepond which also seeks class-action status on behalf of all Texas trademark holders whose names have been used to trigger search per per click ads under their trademarks.
Firepond, based in Marshall, Texas, alleges that consumers are “duped into clicking through to a competitor’s sponsored link” when they search for Firepond and are served ads for another company.
Firepond is asking the court for monetary damages and an injunction ordering Google to stop allowing trademarks to serve as ad triggers. Firepond’s lawyer, Scott Kline with the firm Andrew Kurth in Dallas, says he is seeking to represent as many as 200,000 Texas trademark holders in the lawsuit.
The lawsuit states that the search giant’s AdWords policy “enables Google and plaintiff’s competitors to use the ‘Firepond’ trademark to place their advertising hyperlinks in front of consumers who specifically search for the plaintiff, thereby confusing Internet users and diverting a percentage of such users from plaintiff.”
Late last year, a federal district court judge in Illinois declined to allow an unrelated trademark infringement lawsuit against Google to proceed as a class-action. That case, brought by golf club manufacturer Vulcan Golf, stemmed from Google’s parked domain program, which populates typosquatting sites with search ads. Vulcan Golf complained that other companies were harnessing its brand name by creating sites like vulcanogolf.com, and then collecting ad revenue when people landed on such sites after incorrectly typing its URL.
This case is different because the question revolves around Google allowing the sale of keywords for trademarked terms, as I believe it is the first type of this suit where the plaintiff is seeking class action status for trademarked keywords.
Eric Goldman, director of the High Tech Law Institute at Santa Clara, says it’s unlikely that the court will allow the class-action. “Every trademark is different, the identity of each competitive (or other) advertiser is different, every AdWords ad copy is different, the informational needs of every trademark owner’s customers are different,” he says in a blog post about the lawsuit.
The issue is critical because the ramifications of a class-action lawsuit could be far more sweeping than the consequences of losing a narrower case. If Firepond alone obtained an injunction against Google, that wouldn’t have nearly the same effect as an order that could apply to hundreds of thousands of trademarks. “If a plaintiff’s lawyer could win an injunction on behalf of every trademark owner in the state of Texas, that could bring Google to its knees,” Goldman writes.
Regardless of whether the case goes forward as a class-action, Firepond can only prevail if it proves that consumers were confused when they typed “firepond” into the search box and were served ads for a rival.
This is certainly going to be one of the HOT issues in the domain world this year.
Google has faced numerous lawsuits regarding this issue in some form or fashion. I assume that the reason gogole decided that they would organize the availability to advertise on competitor keywords and actively promote it is because they looked at the legal risks and proceeded to move forward. This is not their first lawsuit and will not be the last. It should be interesting to say the least.
Steven
It would be the first class action filed against Google on this issue if it is allowed to proceed as such
I can understand not allowing this to be done to famous trademarks but if we start saying any trademark goes, isn’t that going to mean pretty much every decent/searched dictionary word could give rise to ad problems?
Reece
Yes
and this is why I’m saying its such an important issue to domainers
Why would anyone purchase a Google ad triggered on the known trademark of an established company? On principle alone, this is wrong due to creating confusion in the marketplace. Perhaps I’m not following a subtle distinction.
For example, I have blog. But I would never run a self-promoting Google ad triggered on a blog search of “TheDomains.com” or “DomainNameWire.com”.
I might post on your site with a link back to mine, but I won’t mess with your trademark. That’s YOUR property. 🙂
Max
Think the problem is that a lot of less than reputable companies do this.
See this previous post:
http://www.thedomains.com/2009/02/09/think-trademark-domains-are-bad-look-what-google-yahoo-are-doing-with-itunes/
So if you were Apple and saw people buying keywords under the term “itunes” and calling themselves the official itunes site, and making people think they are visiting the itunes site, you wouldn’t be happy.
There is a difference between that and Ford buying a keyword under “Jeep”
No rest for the wicked.
What a potential mess. Some trademarks are obvious – most are not – it comes down to usage – especially those on common words.
“So if you were Apple and saw people buying keywords under the term “itunes” and calling themselves the official itunes site, and making people think they are visiting the itunes site, you wouldn’t be happy.”
Yeah but it should be the buyers problem, not Google’s problem. It’s like someone buys gun and shoot someone – should that be the (legal) gun seller problem ?
If the domainers will take a stand against Google’s monopoly and enforce the removal of all references of domains in their portfolio from being listed, this Godzilla Google would be brought to its knees and tamed to display just boring untargetted stuff.
crinux.com
@MHB – “So if you were Apple and saw people buying keywords under the term “itunes” and calling themselves the official itunes site, and making people think they are visiting the itunes site, you wouldn’t be happy.”
Completely agree. And there are keywords that are gray area TM’s like the Jeep example you provide (which are more problematic than itunes). There’s the slippery slope.
If I understand this correctly, the issue is potentially much more subtle:
***Hypothetical Below For Purposes of Discussion Only***
Let’s say Rhapsody is the highest Adword’s bidder for the trademarked keyword, “iTunes”. Now when somebody does an “iTunes” search, each and every time the search results are displayed, the Rhapsody ad will appear in the no. 1 position for sponsored ad links.
In other words, in this hypothetical, Rhapsody would be challenging the competition by piggybacking on a protected mark. A mark they had specifically targeted. This is far different than reaching out to a particular shared demographic. This is paying to be front and center whenever a potential iTunes customer is looking for iTunes products or services.
This goes far beyond TM issues relating to potential customer confusion and addresses fundamental issues of trademark ownership and control. In many ways, this is not much different than embedding the trademark of a competitor in metatag data in order to attract a competitor’s customers to your website. Clearly, this is not allowed. What makes paying for a protected keyword within a CPC program any different?