HideTechdirt is off for the long weekend! We'll be back with our regular posts tomorrow.
HideTechdirt is off for the long weekend! We'll be back with our regular posts tomorrow.

Legal Issues

by Mike Masnick

Filed Under:
adwords, liability, trademark

google, rescuecom

Dangerous Appeals Court Ruling Opens Up Google To Trademark Liability In AdWords

from the common-sense-is-missing dept

One of our big complaints with the various lawsuits filed over companies buying ads in search engines based on trademarks of their competitors was the idea that somehow the search engines themselves were liable as infringers. That made little sense. The purpose of trademark law is to avoid consumer confusion, not give the mark holder total control over the mark. If the ad itself is confusing, then you could see a reason to sue the company that created the ad -- but it's ridiculous to blame Google or Yahoo, who had no part in actually creating the ad. A variety of lawsuits had agreed -- and, in fact, most of the recent lawsuits on this topic that we'd seen involved companies suing whoever took out the actual ad.

Unfortunately, it looks like that's about to change.

Eric Goldman has an analysis of a new Second Circuit ruling that found that Google is potentially liable for ads bought on trademarked terms, overturning a lower court ruling that made sense. Goldman points to some factual errors made by the court in making this decision, but the oddest bit of reasoning is that the court actually took on a point that we often raise here in discussing these types of cases: no one thinks there's any trademark infringement because a supermarket places multiple brands of soda in the same spot. The supermarket knows that people may be looking for Coca-Cola, but may be tempted to buy the off-brand cola that's on sale. That's not trademark infringement against Coca-Cola and certainly not the store's liability.... or is it. In this ruling, the court noted:
It is not by reason of absence of a use of a mark in commerce that benign product placement escapes liability; it escapes liability because it is a benign practice which does not cause a likelihood of consumer confusion. In contrast, if a retail seller were to be paid by an off-brand purveyor to arrange product display and delivery in such a way that customers seeking to purchase a famous brand would receive the off-brand, believing they had gotten the brand they were seeking, we see no reason to believe the practice would escape liability merely because it could claim the mantle of "product placement."
That implies that Google's placement of search ads somehow tricks users into believing when they click on, say, an ad for Avis, they're actually going to the Hertz website. Yet, there doesn't seem to be any evidence presented that users are regularly fooled by such ads. Most users recognize that ads are ads.

The ruling pins liability on Google because Google "suggests" terms that may be relevant, and since it suggests trademarked terms at times, that dumps the liability onto Google. But, again, that makes little sense. Nothing that Google does is specifically causing confusion. Simply suggesting a trademark isn't confusing anyone. Unfortunately, though, as the EFF points out in its analysis of the ruling, this is likely to lead to a lot of new bogus lawsuits against Google, and (most likely) Google scaling back some of its AdWords tools and programs, giving consumers less ability to find out about competitive offers when we search.

Reader Comments

Subscribe: RSS

View by: Time | Thread

  1. identicon
    Vince, 5 Oct 2009 @ 3:04pm

    This author doesn't make sense

    I've used Google adwords for one of my companies. In my adword account I tried to use the word "chili". Google didn't allow me to use that word, rather they tried to forced me to use "chile". That led me to canceling my account. The point is this: If Google wants to take such strict control over words and ads, then they are in fact becoming an editor of my work and co-author of the ad. They do not allow you to use Google autonomously. They control the ads and make money on the ads. Someone who chooses to use a trademarked name for the purpose of pulling a bait and switch, leads to Google making a profit as a co-conspirator!

    Your comparison to the soda and supermarket is flawed. A more accurate comparison would be this: The supermarket runs an ad in the supermarket's weekly mailer claiming it's offering a deal on "Pepsi" and when you show up and look at the soda isle, you see the a shelf with "Pepsi" advertising, but when you actually grab the soda, the real name is "Coke". You may be able to see the real name on the bottle, but all the ads that led you to that bottle were using a competitors name.

    Now assume that Coke knew Pepsi had a better reputation in this particular part of town, so running Pepsi ads to lure in customers, then pull a "bait and switch" on them, is deceptive advertising and both the supermarket and coke would/should be liable, just as Google and the competitor should be.

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Techdirt Gear
Shop Now: Techdirt Logo Gear
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Report this ad  |  Hide Techdirt ads
Recent Stories
Report this ad  |  Hide Techdirt ads


Email This

This feature is only available to registered users. Register or sign in to use it.