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Keyword Ads: Google Unable to Short-Circuit Trademark Infringement Lawsuit

Posted in Advertising, Law Suits, Marketing, Search Engines, Sight, Trademarks

Remember what you were doing back in September 2006? 

Keyword ad trademark infringement lawsuits were being filed left and right (that hasn’t changed much). The hot issue at the time: Does the sale (by a search engine) or purchase (by the competitor of a brand owner) of another’s trademark — as a search engine keyword — constitute "use in commerce," a necessary element of a successful trademark infringement lawsuit?

Search engines and other defendants were hoping that the technical "no use" defense would permit a short-circuiting of these growing number of lawsuits. In fact, this hope was fueled on September 28, 2006 when Google had just prevailed in dismissing such a lawsuit brought by Rescuecom.

A federal district court in New York had dismissed the Rescuecom suit, saying that the sale of Rescuecom’s trademark as part of Google’s AdWords program did not constitute a "use in commerce," so there was no need to even consider the question of likely consumer confusion. For the next few years, other courts followed suit (mostly in NY) and similarly short-circuited and dismissed such claims.

As of last Friday, two and a half years after Google’s initial win, and a full year after oral arguments were made to the Second Circuit Court of Appeals, Rescuecom may be singing, "We’re back!"

In reversing the September 2006 dismissal, the Second Circuit Court of Appeals found sufficient trademark "use" for the case to proceed, relying on Rescuecom’s allegation that "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." As such, the Rescuecom case will proceed and is sent back to the federal district court in New York to determine "whether Google’s actual practice is in fact benign or confusing."

The Trademark Blog provides a helpful link through Scribd to obtain a copy of the court’s 15-page decision (including the 19-page Appendix) here.

Professor Eric Goldman’s detailed analysis can be found at his Technology & Marketing Blog by clicking here

You might remember my keyword advertising post on DuetsBlog from a couple of weeks ago here.

Bottom line: It appears that this latest ruling will pave the way for decisions that actually rule on the critical likelihood of confusion question.