Google announced yesterday a change in its AdWords policy that will permit advertisers to display the trademarks of other companies in the text of their Google ads. Just so trademark owners will have something interesting to talk about at the International Trademark Association meeting in Seattle tomorrow, I guess.
While I am waiting to be educated about the meaning of all this by Eric Goldman, I will venture the suggestion that this is not all that big of a deal. Google's new policy permits the display of another company's trademark only in certain circumstances:
Ads which use the term in a descriptive or generic way, and not in reference to the trademark owner or the goods or services corresponding to the trademark term.
Ads which use the trademark in a nominative manner to refer to the trademark or its owner, specifically:
Resale of the trademarked goods or services: The advertiser's site must sell (or clearly facilitate the sale of) the goods or services corresponding to a trademark term. The landing page of the ad must clearly demonstrate that a user is able to purchase the goods or services corresponding to a trademark from the advertiser.
Sale of components, replacement parts or compatible products corresponding to a trademark: The advertiser’s site must sell (or clearly facilitate the sale of) the components, replacement parts or compatible products relating to the goods or services of the trademark. The advertiser’s landing page must clearly demonstrate that a user is able to purchase the components, parts or compatible products corresponding to the trademark term from the advertiser.
Informational sites: The primary purpose of the advertiser’s site must be to provide non-competitive and informative details about the goods or services corresponding to the trademark term. Additionally, the advertiser may not sell or facilitate the sale of the goods or services of a competitor of the trademark owner.
So we're talking about re-sellers ("Coca Cola on sale here at Safeway"), component parts ("Our cheapie cable is compatible with your Blackberry"), and informational sites ("Hondas get better gas mileage than Cadillacs but we sell neither"). I don't believe these are burning issues within the trademark owner community, and I am not aware of any cases that suggest Google has liability in these three situations. A case involving the display of a competitors' mark in the text of an AdWords ad, Government Employees Insurance Company v. Google Inc., No. 04-507 (E.D. Va. Aug. 8, 2005), did suggest that Google might have trademark liability:
Despite the many flaws in its design, the survey’s results were sufficient to establish a likelihood of confusion regarding those Sponsored Links in which the trademark GEICO appears either in the heading or text of the ad. Based on this finding, Google may be liable for trademark infringement for the time period before it began blocking such usage or for such ads that have slipped or continue to slip through Google’s system for blocking the appearance of GEICO’s mark in Sponsored Links. For, despite the flaws in the survey, the extremely high percentages of respondents who experienced some degree of confusion when viewing such ads provides sufficient evidence to survive defendant’s Motion for Judgment. Further, having been advised by defendant that it has no evidence to introduce on this last issue, the Court finds that plaintiff has established a likelihood of confusion, and therefore a violation of the Lanham Act, solely with regard to those Sponsored Links that use GEICO’s trademarks in their headings or text.
Aware of the importance of these issues to the ongoing evolution of Internet business practices and to the application of traditional trademark principles to this new medium, the Court emphasizes that its ruling applies only to the specific facts of this case, which include the unique business model employed by plaintiff and the specific design of defendant’s advertising program and search results pages. In addition, the Court has not addressed several remaining legal issues, including whether Google itself is liable for the Lanham Act violations resulting from advertisers’ use of GEICO’s trademarks in the headings and text of their Sponsored Links, as accomplished through Google’s Adwords program. That significant issue remains to be resolved, either through an agreement by the parties or in a continuation of the trial. Also unresolved is the timeframe during which violations occurred and the measure of damages or other relief to which plaintiff may be entitled if Google were to be found liable.
The case subsequently settled before any determination could be made on the merits of GEICO's trademark claims. Anyhow, the court's tentative and careful language here is hardly a condemnation of the use of trademarks in AdWords copy.
Setting aside the issue of Google's liability, here are recent three cases that held the use of a competitor's trademark in an advertisement can be a fair use. Granted, winning on fair use an expensive way to go.
Mary Kay Inc. v. Weber, No. 08-776 (N.D. Tex. Feb. 20, 2009)
Tiffany (NJ) Inc. v. eBay Inc., No. 04-4607 (S.D.N.Y. July 14, 2008)
Designer Skin LLC v. S & L Vitamins Inc., No. 05-3699 (D. Ariz. May 20, 2008)
It will be interesting to read what trademark experts think about Google's move. Will trademark owners find this new policy provocative or somehow an infringement of their rights? If you've got a thought or have written something already, let me know.
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