Google adwords hell breaks loose. Yay!

Originally posted 2009-05-14 20:25:11. Republished by Blog Post Promoter

The Google / ad words / trademarks story, long a mainstay of LIKELIHOOD OF CONFUSION®, may end up needing a blog of its own, so don’t be surprised if you see less and less coverage of it here.  (I just resent stories that outgrow me.)  We’re almost there.  But first, this, from Search Engine Journal:

Google plans to open up trademarked [sic] keywords to AdWords advertisers in June according to Michael Orey of Business Week. Beginning June 4th, companies will be able to bid on the brand names of their competition, which will heat up the AdWords listings throughout Google and lead to head to head battles in the SERPs over branded product, service and company names.

And litigation, litigation, litigation!  Yay!  And guess who’s Defendant Number One?:

Diversion:  Threat or menace?

Diversion: Threat or menace?

Firepond, a software company in Texas, has filed a class-action suit against Google claiming its AdWords service profits by encouraging companies to impinge on one another’s trademarks.

Firepond claims that Google’s sale of its brand name to its competitors amounts to trademark violation because people searching for “Firepond” end up clicking on the sponsored links of other companies, “thereby confusing Internet users and diverting a percentage of such users from [Firepond] and enjoying and benefiting from all the goodwill and ‘buyer’s momentum’ associated with” its trademark, the suit read.

That’s Texas, by the way.  Ask my friend Walter about Texas as a place to file lawsuits.  Here’s the complaint.  So, what’s going to happen?  If it weren’t for the fact that the case involves both Texas and judges, I would rely entirely on the sober analysis of Eric Goldman — who at least tells us what should happen:

This is a well-structured lawsuit that squarely raises the long-contentious debate over the legitimacy of selling trademarked keywords. (I won’t recap that debate here, but I still think this article of mine best explains why plaintiffs’ whining about competitive diversion from search ads is fundamentally misguided). Should this lawsuit reach a final judgment on the merits, we will have a very important answer about what search engines and other keyword sellers can and can’t do.

But, I don’t think this lawsuit will give us that answer because the judge is very unlikely to certify the class. As we saw in the Vulcan Golf lawsuit, where the court denied class certification over Google’s domain name parking program, trademark issues are just too complicated and individualized for class adjudication.  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 (for more on this, see Hearts on Fire’s complicated standard for evaluating consumer confusion), trademark defenses are idiosyncratic, etc. Perhaps the reason no one has sought a trademark class action over AdWords before is that it probably can’t be done.

Really, why bother even thinking when Eric has everything figured out so squarely?  Well, because of Texas.  And judges.  Both of those being what they are.  Yay!

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Author:Ron Coleman

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12 Responses to “Google adwords hell breaks loose. Yay!”

  1. May 16, 2009 at 8:40 am #

    Interesting post. Might be this development has been kicked off by the German courts. There’s a decision from the German Federal Court of Justice (BGH) from January this year (I ZR 30/07, 22 Jan 2009). Bottom line seems to be:
    it’s okay to use trademarked keywords in GoogleAdwords, as long as the keyword is not actually displayed in the ad itself.

    Also in Jan 09, the German Federal Court of Justice has initiated a Preliminary Ruling Procedure at the European Court of Justice (ECJ) to decide if and under what circumstances trademarked keywords may be used in GoogleAdwords(I ZR 125/07 – 22. Jan 2009).

    I have commented on this with some more details here:
    http://german-trademark-blog.com/2009/05/03/using-company-symbols-in-google-adwords-campaigns/

    and here:

    http://german-trademark-blog.com/2009/05/11/keywords-going-bananas/

  2. Tal Benschar
    May 20, 2009 at 4:23 pm #

    The fact that Goldman’s opinion means more work for trademark lawyers is not a reason to support it, right Ron?

    • May 20, 2009 at 4:52 pm #

      Well, of course, Tal.

      After all, I might not even get any of that work. Still, I’d be happy if my friends did, wouldn’t I?

  3. June 1, 2009 at 5:42 pm #

    It’s really interesting that many of the stories on this topic have missed the fact that the current AdWords policy will stay in place for most of Europe and Australia. That being the case, there is a fairly obvious strategy to register a trademark in one of those countries for the purposes of AdWords.

  4. finance
    July 14, 2009 at 11:02 am #

    The fact that Goldman’s opinion means more work for trademark lawyers is not a reason to support it, right Ron?

  5. July 2, 2010 at 2:09 am #

    I totally agree with Ben, Google has not changed his policy for Europe and Australia. If business has registered the trademark their competitor can’t advertise using that name.

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    Google adwords hell breaks loose. Yay! http://bit.ly/GqaGw #postrank #law

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  5. Ray Beckerman - May 24, 2009

    Groklaw: Google adwords hell breaks loose. Yay! http://tinyurl.com/r4deou

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    Wow. Finnish! Cool. — RDC

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