Google’s Sale of Trademarks as Keywords May Violate Law
Google’s practice of recommending and selling keywords that incorporate trademarks may violate the Lanham Act by causing confusion in the marketplace, a court of appeals has found.
The Second Circuit reversed a trial court’s dismissal of a case brought by Rescuecom Corp. The appellate court said the trial court misinterpreted the appellate court’s earlier decision in 1-800 Contracts, Inc. v. WhenU.com, Inc. where the court found there was no Lanham Act violation because the plaintiff in the earlier case did not allege that a trademark was being used in commerce.
Rescuecom alleged that Google, through its Keyword Suggestion Tool, Google recommended the Rescuecom trademark to Rescuecom’s competitors as a search term to be purchased. In addition, when the competitor’s advertisement was shown on a search for Rescuecom, Google did not clearly distinguish the advertised result from the search results.
In distinguishing its earlier opinion from the instant case, the court said: “First, in contrast to 1-800, where we emphasized that the defendant made no use whatsoever of the plaintiff’s trademark, here what Google is recommending and selling to its advertisers is Rescuecom’s trademark. Second, in contrast with the facts of 1-800 where the defendant did not ‘use or display,’ much less sell, trademarks as search terms to its advertisers, here Google displays, offers, and sells Rescuecom’s mark to Google’s advertising customers when selling its advertising services. In addition, Google encourages the purchase of Rescuecom’s mark through its Keyword Suggestion Tool. Google’s utilization of Rescuecom’s mark fits literally within terms specified by 15 U.S.C. § 1127.”
The appellate court said the use of Rescuecom’s trademark was not an “internal” use. Moreover, the court said it was wrong to interpret its opinion in 1-800 to mean “that an alleged infringer’s use of a trademark in an internal software program insulates the alleged infringer from a charge of infringement, no matter how likely the use is to cause confusion in the marketplace. If we were to adopt Google and its amici’s argument, the operators of search engines would be free to use trademarks in ways designed to deceive and cause consumer confusion. This is surely neither within the intention nor the letter of the Lanham Act.”
The appellate court said Rescuecom still must prove that Google’s use of Rescuecom’s trademark in its AdWords program causes likelihood of confusion or mistake.
Rescuecom Corp. v. Google, Inc., 2nd Circuit No. 06-4881-CV, issued April 3, 2009.