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Lawsuit Says Google's Sale of Keywords Is Illegal 247

Posted by Soulskill
from the search-is-mightier-than-the-sword dept.
Hugh Pickens writes "Google encourages advertisers to purchase other companies' trademarks as targeted search terms, and they're expanding the practice into 190 countries. When Audrey Spangenberg typed the name of her small software company into Google and saw the ads of competitors that had paid Google to display their marketing messages whenever someone searched for FirePond, a registered trademark, she was furious. This week, her company filed a class-action suit against Google in federal court, saying that Google had infringed on her company's trademark, and challenged Google's policies on behalf of all trademark owners in the state. Legal experts said it was the first class-action suit against Google over the issue. Google's acceptance of such competitive uses of trademarks has irked many other companies, including the likes of American Airlines and Geico, who have filed suits against Google and settled them. Many brand owners say the practice abuses their brands, confuses customers and increases their cost of doing business. 'I know of several companies spending millions of dollars a year in payments to Google to make sure that their company is the very first sponsored link' on searches for their own names, said Terrence Ross, a partner at Gibson Dunn, who represented American Airlines in its suit against Google. 'It certainly smacks of a protection racket,'"
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Lawsuit Says Google's Sale of Keywords Is Illegal

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  • by computerchimp (994187) on Saturday May 16, 2009 @09:23AM (#27978351)
    Selling a T-Shirt with McDonalds name on it and selling advertising with McDonalds name on it.

    When they are both done without permission is there a difference?
  • by Anonymous Coward on Saturday May 16, 2009 @09:28AM (#27978385)

    Selling a T-Shirt with McDonalds name on it and selling advertising with McDonalds name on it.

    When they are both done without permission is there a difference?

    Neither one of those is what Google did.

  • by Absolut187 (816431) on Saturday May 16, 2009 @09:33AM (#27978417) Homepage

    The primary focus is *not* protecting the trademark owner.
    Trademark law is all about protecting consumers from being deceived about the source of goods/services.
    But Google is not confusing anyone.
    If Google was displaying the word "FirePond" as a hyperlink to a competitor, THAT would be closer to trademark infringement because there would at least be "initial interest confusion" (where a consumer ends up at the wrong website).
    But Google isn't doing that. Google is simply promoting competition by displaying competitor's ads when you search for a trademark. The sponsored links, as everyone knows, are displayed in a separate section from the "organic" links.
    That doesn't confuse anyone, it just gives them more options. Obviously, nobody likes it when you give their customers other options. But it's not trademark infringement.

  • by gnapster (1401889) on Saturday May 16, 2009 @09:40AM (#27978469)
    What Google did is more like walking around in front of a Ford dealership while wearing a sandwich board advertising Chevrolet.
  • Shocking. (Score:4, Insightful)

    by moogied (1175879) on Saturday May 16, 2009 @09:46AM (#27978523)
    Google, once again, is just using the basic idea of competition to drive a market. There is nothing to see here but some whiney person who is shocked to discovered the world does not revolve around them.
  • by OrangeTide (124937) on Saturday May 16, 2009 @09:52AM (#27978563) Homepage Journal

    First, your analogy does not apply here. And yes, if I sell T-shirts with a trademark on them without permission(McDonalds, Nike, NHL team names, whatever) then I am opening myself up to a very simple trademark case, one that I will lose badly (if I don't settle, which is the wise thing to do). I can mention trademark names as part of a discussion, but just sticking them on a T-shirt would be a problem.
    Now if you have a T-shirt that says "McDonalds sucks" and/or a picture of Ronald being bitch-slapped by Hamburglar then that would be protected as free speech because it is parody. They might come after you to surpress it, but they likely won't win. But most people will settle anyways because they can't afford a legal siege, even if they are right.

  • by _KiTA_ (241027) on Saturday May 16, 2009 @10:10AM (#27978685) Homepage

    What Google did is more like walking around in front of a Ford dealership while wearing a sandwich board advertising Chevrolet.

    Which is legal. Public sidewalks, and all that. A local pizza joint has a guy out on the street corner with signs telling them to stop on by and get a pizza from a locally owned mom and pop pizza joint.

    Mind you, the street corner he stands on is about 3 blocks away from said joint, and coincidentally right next to a local Pizza Hut...

    And you're forgetting one important thing, which makes it even more legal.

    What Google did is more like walking around in their own business in front of a Ford salesman that they invited into their business while wearing a sandwich board advertising Chevrolet.

    www.Google.com is not public property. We go to their private servers and bring them our business because they have the best search resource available to us, and because they are mostly neutral.

    But they don't have to be. They are, but they are not legally required to be. And no one would ever accuse them of being neutral on the "Sponsored links" sections.

  • by liquidpele (663430) on Saturday May 16, 2009 @10:18AM (#27978761) Journal
    Exactly. Google isn't taking money to put competitors higher in the search results, or to even lower Firepond in the search results. They are taking money to pop up specific advertisements when people search for a certain term. A precedent that says they can't sell advertisements for any trademark word is retarded... they couldn't sell them for Kleenex, movie names, song names, website names, etc etc.... basically every single useful search word is probably trademarked somewhere.
  • Re:its not right (Score:4, Insightful)

    by Aladrin (926209) on Saturday May 16, 2009 @10:20AM (#27978785)

    They aren't messing with the -results- of the search. They are merely adding advertisements around the search. You'll still be able to find all the wacky Al Harrington products you want.

  • by AndGodSed (968378) on Saturday May 16, 2009 @10:30AM (#27978883) Homepage Journal

    I read all these analogies on what it is that Google did and here is my take:

    For the purpose of this analogy imagine Google owns a telephone directory where your number gets listed for free for your business, but there is also a "Yellow Pages" section, where you can pay to have your business listed with number and some info - now imagine you only have your number listed in the free section, and a competitor of yours bought an add, put YOUR company name in it with THEIR number.

    Google adwords is so powerful that it is in essence putting another IP address behind your company/domain name.

    And in fact: Google "did" nothing - they offer a product that some competitor of this company has found a way to abuse.

    That they allow such practices bears study though - I am unsure if the laws of the world has caught up with this business model though.

    I would suggest that they notify the owner of the trademark name that someone is interested in buying an adword for that name, and to decide not to allow it, or maybe even get some of the addwords cash - it is their trademark after all. They could in essence cause the addword to be too expensive for the competitor to buy...

    This is in fact similar to someone selling your personal details, google is selling other trademarks... hmm...

  • by DerekLyons (302214) <fairwater@gmai l . c om> on Saturday May 16, 2009 @10:33AM (#27978901) Homepage

    If you don't understand the language, maybe you aren't the target market.

  • by Allicorn (175921) on Saturday May 16, 2009 @10:48AM (#27979005) Homepage

    Placing a physical ad in proximity to a plot of land belonging to a competitor does not specifically depend on the exploitation of the competitor's trademark - a mark which they have to pay for and which supposedly affords them a degree of legal protection versus others exploiting it to their benefit.

    Placing a web ad effectively "on" a competitor's trademark does - it could be argued (and seems likely to be the thrust of the lawsuit) - does mean that the ad's existence entirely depends on that trademark. The party selling the keyword is - again it could be argued - effectively selling the misuse of competitor's protected trademarks - definitely a no-no.

    The fact that earlier one-to-one cases with Google vs large corporates resulted in settlements would seem to suggest to (IANAL) me that Google themselves may be concerned that there could be a case to answer here.

  • In 1-800 Contacts v. WhenU, WhenU didn't run into trouble because their ads popped up in a separate window. That's not the case with Google (though they do clearly say "Sponsored Link").

    A separate window from what, the content of the site in question? Google isn't displaying ads next to the content of the site. They are displaying ads next to a fair-use sized snippet of the content on the site, namely the search result. This very tiny piece of text is carefully constructed so as not to violate any legal guidelines by people much smarter than either one of us (probably) and is in any case a de facto allowable amount of content to display for the purpose of helping a search engine user decide whether that is the result they're looking for. When you click through the site, there are no more google ads.

  • by Thing 1 (178996) on Saturday May 16, 2009 @10:51AM (#27979025) Journal

    So I'm not really sure what the problem is.

    Uh, the problem is systemic.

    We like car examples here, so: your mechanic keeps breaking a different part when you come in, so that you have to pay him to fix it a few weeks from now. You catch him at it, and he fixes that broken part for free, and your car never again has mysterious parts broken.

    However, he continues this practice with all his other customers.

    The class action suit is to get him to stop breaking anyone's cars, not just your own.

  • by multisync (218450) on Saturday May 16, 2009 @11:06AM (#27979135) Journal

    How is it illegal for Ford to place an advertisment next to a GM dealership?

    That's about the best analogy I've read so far. There's a car angle and everything.

    Google is simply firing ads at users based on the search string they entered. If they wanted to give Fold ads to people who searched for 'peanut butter' that's their business.

    How is Google supposed to know a word is violating someone's trademark? They're not all as obvious as Xerox, or IBM. Is Google expected to do a trademark search on every word and phrase their advertising customers want to purchase? That's going to get awfully expensive.

    Or should the customer have to sign an agreement stating that none of their adsense words violate anyone's trademark anywhere, and provide some sort of notification/counter-notification system? I guess the customer should be doing a trademark search anyway, if they are going to compete in the international marketplace.

    Why isn't this woman suing the company who purchased her name as an adsense word? If anyone has violated her trademark, it's them.

    Here's another analogy, if I bought an ad in a national magazine advertising my company, who's name happens to be trademarked by another another company in the same industry that I may or may not have known about, is that company going to sue the magazine that ran the ad, or me? Can the magazine be responsible for doing a trademark search on every ad they run?

    How about other IP laws? Is Google responsible because I bought an adsense word to advertise my new software that violates someone else's software patent? Or violates the GPL?

    Is Google responsible because I advertised a site with a bunch of bit torrent trackers to illegal copies of Wolverine?

    It will be interesting to see where this one goes.

  • by S*arter (1066532) on Saturday May 16, 2009 @11:06AM (#27979145)
    Why is there such a fuss about this? Apparently there would not be an issue if the names and trademarks in question were not already owned by other parties. the injured parties are suffering the stealing of their images and names for the profit and "fun" of persons who have not at least requested permission from the true owners, for their usage- who of you would not mind their trademarked names or images used for purposes other than the recognizability and profit of their brand and companies? seems kinda dumb to have an argument that says google is within their right to sell the usage of trademarks that were created paid for and owned by the companies they represent. Google does not own the names and trademarks of other companies they sell and should not allow anyone other than the rightful owners to use them- you know copyright and trademark infringement? DUH! The analogies are stupid! Do I have the right to used Sprint's trademark to further my business or to profit? How is it that so many are allowing the boundaries of ownership versus theft to become blurred? Simply put again, google does not own the properties they sell under the representation of advertising, and they should require that interested parties own the information publicized on their servers. I see a crippling or regulation of the keyword business coming. One good thing out of this argument may the that copyright laws are once again the debate to be resolved.
  • by langelgjm (860756) on Saturday May 16, 2009 @11:10AM (#27979165) Journal

    A separate window from what, the content of the site in question?

    Yes.

    This very tiny piece of text is carefully constructed so as not to violate any legal guidelines

    The thing is, this is not settled, black-letter law. The best "guidelines" are probably case law, and if you looked at the 1-800 Contacts v. WhenU case, you'll notice that other courts have ruled in different directions.

    by people much smarter than either one of us (probably) and is in any case a de facto allowable amount of content to display for the purpose of helping a search engine user decide whether that is the result they're looking for.

    More informed about the relevant law? Sure. Smarter? Maybe, but not necessarily. You don't necessarily have to be "smart" to be a lawyer (though I'm sure Google's lawyers are better than the average one).

    Furthermore, just because they're very smart doesn't mean other very smart people won't disagree with them, and convince a court that this behavior is infringing. Lots of large companies have good lawyers, and still have to deal with lawsuits. If it were just a matter of looking at the law and tailoring your action accordingly, things would be a lot less complex.

  • by MoonBuggy (611105) on Saturday May 16, 2009 @11:24AM (#27979243) Journal

    But Google does accurately provide the link to the brand you asked for. It's almost invariably the top link of the actual search results, which are freely included and not interfered with by Adsense payments. In fact, for any moderately popular brand there will be pages upon pages filled entirely with various suppliers of precisely the trademarked brand name you searched for.

    The search results - the 'true' product of your search, include only the keyword Armani. To me this is akin to being placed in the Armani section of the hypothetical store. Surrounding the search results, but separate from them, are the context adverts - these point to other brands you are likely to be interested in. Akin to flyers, or posters on the wall, in my opinion.

    I think the key issue is that they do not redirect or alter the main body of your search. Only the data presented alongside, related to but not part of the search is for sale.

  • by Blue Stone (582566) on Saturday May 16, 2009 @12:26PM (#27979683) Homepage Journal

    The way I see it is that it's little different to a supermarket having competing brands of say, coffee in the same aisle, or shelf.

    If Dowe Egberts want - or even pay to be next to Percol the fact that they SAY to the supermarket 'put us next to the Percol coffee' doesn't infringe Percol's trademark, and the resulting proximity doesn't create any confusion.

    The search results are an on-the-fly aisle created on the use of a keyword. The keywords are sold simply to REFERENCE the competitor's product so that the 'aisle' can be created.

    I don't think it's so much about trademark law or confusion as brand owners whining that a search for their trademark produces a list of results that is not exclusively about them! Oh my! Someone wanting to buy our trademarked product might be reminded that another competing product exists and might buy that instead!

    In other words they're trying to stifle competition.

  • by 99BottlesOfBeerInMyF (813746) on Saturday May 16, 2009 @12:35PM (#27979751)

    How is Google supposed to know a word is violating someone's trademark?

    They should hire someone to research these things.

    This whole argument fails because it implies that a "word" violates a trademark. Trademarks's are words, phrases, images, and the like that are associated with a specific company or product in a specific market. The same word can be trademarked hundreds of times as it applies to different markets.

    The purpose of trademark laws are to prevent one company from masquerading as another and thus mislead customers. If you offer a product similar to someone else you can't have a name so similar that it would confuse customers. That's the only valid purpose for trademarks.

    So you're saying only large companies deserve trademark protection?

    This is a strawman argument. He said no such thing.

    YES That is why we have trademarks. The IPO (UK trademark office) has a searchable database and I'd bet the US equivalent does too.

    No we have trademarks to prevent one company from fooling consumers into thinking they're buying from someone else. For example, say I do a search for "hydra". The word is trademarked by several companies. Google wants to provide appropriate ads. Suppose they show an advertisement for the services offered by the Hydra Biosciences company. Does this mean they're confusing users since they might think those services are being offered by the same software company that produces the sewage planning software "Hydra" (also trademarked under that name)? If they show ads for other biosciences companies like Phizer, are they misleading consumers into thinking that the advertisements which clearly say "Phizer" in them are actually from the company "Hydra Biosciences"?

    You can make that argument, but it is a bloody weak one. I don't buy it and I don't think the courts will. Presenting me with ads for competitors is not a trademark violation any more than when I go to the grocery store and buy Coke, the company matches a keyword and gives me a coupon for Pepsi. I'm not confused that one is actually the other unless the names and products are confusingly similar. This is just companies looking for any and all ways to use the courts to try to stop competitors from advertising to people who know their brand. Here's a better idea, make products that are better and cheaper, rather than trying to prevent people from hearing about your competitors through legal shenanigans.

  • by Hognoxious (631665) on Saturday May 16, 2009 @01:41PM (#27980193) Homepage Journal
    Fuck off. I've never heard anything so stupid.
  • by Xaoswolf (524554) <Xaoswolf@[ ]il.com ['gma' in gap]> on Saturday May 16, 2009 @01:51PM (#27980265) Homepage Journal
    GO IN and look for adverts.

    I must be doing this whole google thing wrong then. When I use google, I do it for the search results. I rarely look a the ads that pop up...

  • by shmlco (594907) on Saturday May 16, 2009 @04:33PM (#27981345) Homepage

    "...depend on the exploitation of the competitor's trademark..."

    Which is where the confusion lies. Trademark law doesn't exist to completely protect someone from using the trademark in any way, shape, or form.

    Remember the Pepsi Challenge ads? It's perfectly legal to create an ad that says I'm as good as Coke, or better than Coke, or that more people prefer me to Coke. What I can't do, however, is create a competing product and slap a Coke label on it. IOW, I can't market my product under the same name, as that would lead to customer confusion: Which Coke is the real Coke?

    And since that's ALL trademarks do, pretty much anything else falls under fair use.

    Which brings us to Google. Do a search on Coke and Google doesn't display a natural search result that says "Coke" but takes you to Pepsi. That would be infringing. They may, however, display the natural search results AND display an ad that says, "Like Coke? Try Pepsi."

    An action no more illegal than your local grocery store printing a Pepsi coupon when you buy a Coke.

  • Hmm (Score:2, Insightful)

    by tiger32kw (1236584) on Saturday May 16, 2009 @10:41PM (#27983771)
    Who the fuck clicks on the advertisement links?

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