PATENT, TRADEMARK & COPYRIGHT LAW DAILY

Tuesday, December 7, 2004
ISSN 1535-1610
Lead Report

Trademarks
Counsel Previews Issues in Upcoming Trial
On Google Sale of Trademarks to Trigger Ads


Sale of trademarks as search terms to drive Internet traffic to third-party advertisers constitutes trademark infringement and dilution, according to a lawyer for an insurance company that will challenge such practices by the Google search engine in a trial in Virginia's "rocket docket" beginning Dec. 13.
In an address at the 15th Annual PTO Day conference in Washington, D.C., Charles D. Ossola said he will try to persuade the court that Web users are confused when they see the famed "Geico" mark in competitors' ads.

Ossola noted that Government Employees Insurance Co., or Geico, initially filed suit May 4 against Google in the U.S. District Court for the Eastern District of Virginia, challenging Google's "Adwords" advertising program. Government Employees Insurance Co. v. Google Inc., E.D. Va., No. 1:01cv507, 5/4/04. Geico has asked for a permanent injunction, attorneys' fees, and damages.

Geico's principal claim is that by auctioning off the Geico mark as a search term or key word to third-party advertisers, Google is creating "initial interest confusion," Ossola said. This is because the advertisers use the Geico mark to generate "sponsored" listings for their own products and services.

Consumers are diverted to the sponsored listings and when they click on those listings, they are likely to be deceived into believing that they will be provided with information about Geico's auto insurance policies, Google's complaint charges. In fact, however, the sponsored listings provide no information about Geico's policies. By this deceitful conduct, the complaint alleges, Google and Overture are intentionally infringing and diluting the GEICO marks.

To establish trademark infringement, a plaintiff must establish that the defendant's use of the mark constitutes a "use in commerce." Google moved for dismissal for failure to state a claim, arguing that the sale of Geico's mark as a keyword for triggering online advertisements does not constitute a use in commerce under trademark law.

Known for its quick disposition of civil cases, the court by the end of August had rejected Google's motion to dismiss, Ossola told the conferees. In a later bench order, he noted, the court denied Google's motion for summary judgment.


Surveys Show Customer Confusion

At issue in next week's trial, Ossola said, is whether such use of the Geico mark is actionable as trademark infringement and dilution. Geico will provide survey evidence showing that there is customer confusion and that Google's practices are the cause of it, he said.
By denying Google's motion to dismiss, Ossola noted, Judge Leonie M. Brinkema found Geico's allegations of infringement and dilution sufficient to state a claim. In its later denial of Google's motion for summary judgment, the court rebuffed its assertion that Geico's survey evidence showed an insufficient connection between the challenged use of Geico's mark and consumer confusion, he added. Judge Brinkema also refused then to rule as a matter a law that there was no trademark dilution and no damages to Geico, Ossola observed.

Ossola said that one of Google's defenses is that Geico somehow benefits from Google's practices because the keyword searches that they enable also generate genuine, "organic" listings for Geico whose value outweighs any harm Geico may suffer from the sponsored listings that normally appear on the right side of the Web screen. However, Geico will argue that thousands of users who would otherwise go to Geico are diverted to the third-party sites because of the Google system, and that this use of Geico's mark leads to both consumer confusion and a blurring of the distinctiveness of the Geico mark, Ossola said.

According to Ossola, Google is also likely to assert that its use of the Geico mark is analogous to comparative advertising, and that any harm that Geico may be suffering from the competitors' listings cannot be attributed to trademark infringement.


Closely Watched Case

Ossola stressed that this is not an Internet "pop-up" ad or "metatag" case, although Judge Brinkema looked to some of those cases for guidance in her earlier rulings.
However, Ossola said that the outcome of this "closely watched" case will be important to Google and its advertisers, Ossola predicted. Even though Google also enables searches with nontrademark key words, he said, its auctioning off of trademarks for such searches is "not an insignificant part" Google's business.

Google's Adwords advertising program is a significant source of revenue for the search engine and for the sponsored advertisers, Ossola said. Indeed, since larger bids get a higher ranking among the sponsored listings generated by a search, there is strong competition among advertisers for those more favorable positions.

The case will also have implications for trademark owners embroiled in similar disputes, Ossola suggested. "This is the first of many tests," he predicted.

One such test is pending in California: in September, the U.S. District Court for the Northern District of California heard arguments in Google's motion to dismiss a claim by a wallpaper manufacturer challenging Google's sale of its marks to advertisers as keywords to lure customers to competing manufacturers. Google Inc. v. American Blind & Wallpaper Factory Inc., N.D. Cal., No. 5:03-cv-5340, hearing 9/17/04.

Copyright © 2004, The Bureau of National Affairs, Inc.