Although several courts have held that Google is not liable for selling ads to a competitor under a trademarked keyword a Federal Court has just held the advertiser is liable for buying the ads.
A California federal district court has just held that a law firm specializing in disability law WAS liable under the Lanham Act for purchasing advertising on Google Adwords under a trademark, in this case, the law firm name “Binder & Binder” .
The case Binder v. Disability Group Inc., C.D. Cal., No. 07-2760, was decided on January 25, 2011.
The court found that the purchase of a competitor’s registered trademark through Google Inc.’s AdWords program for sponsored keyword advertising on the search engine website constitutes use in commerce under the Lanham Act
Having concluded that Binder & Binder held valid trademark registrations, the court applied the eight-factor test for likelihood of confusion as set forth in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 204 USPQ 808 (9th Cir. 1979).
The court found that the factors addressing similarity of the marks, the strength of the plaintiff’s marks, the similarity of services, the intent of the defendant, and marketing channels all weighed in favor of likelihood of confusion.The court also found actual confusion, based on the results of a survey, witness testimony, and other evidence.
The court awarded Binder & Binder $292,000.00 in lost profits and enhanced damages for willful infringement by the competing law firm.
This case does have the possibility of of being a HUGE game changer for Google and Bing/Yahoo.
Since all prior court decisions held in favor of Google saying that Google was allowed to sell adverting to competitors under Trademark terms, this practice has become more and more common place.
Now it seems while the courts have held Google is not liable for selling keyword advertising, the buyer of the advertising is liable and in this case to the tune of $292,000.
This could cause advertisers to stop advertising under trademark terms ultimately costing Google a lot of lost ad revenue.
Yes this could be a game changer.