Trademark Owners Take On Internet Search Engines

By Liza Porteus for Intellectual Property Watch
NEW YORK – Popular search engines like Google are proving to be formidable foes to trademark holders trying to maintain a strong grip on their property in keyword advertising on the Internet, experts said on 10 September.

There are numerous search engines people can use to look up information online, but Google is not only the most popular, it is also involved in a litany of lawsuits involving online ads and trademarks. So far, Google has prevailed in US courts, but has lost similar trademark cases in France.

Currently, one can visit Google, plug in words into the search engine, like “Kenneth Cole,” and the search engine uses algorithms to trigger results. On the left-hand side appear what are called “organic search results,” like kennethcole.com, triggered by normal search programs used by Google. On the right-hand side are “sponsored links” – such as that for Shoes.com/KennethCole, a site calling itself a “designer store site” – which appear when advertisers pay the search engine money to include them in the search results. These can be links from authorised distributors, resellers or competitors of the legitimate trademark owner.

Theodore Davis of Kilpatrick Stockton in Atlanta, Georgia, explained to those attending the annual conference of the Intellectual Property Owners Association in New York on 10 September that the rankings of the right-hand side ad links usually correlate with how much money the advertiser paid the search engine.

Trademark owners who object to their marks being used as keyword triggers are concerned about search engines that allow those non-organic results, saying they confuse the user, he said, arguing that there is no clear decision on how to regulate the use of trademarks in this way.

“There are some decisions that provide some guidelines that are not definitive and there are other questions that are not resolved,” said Charles Ossola, a senior partner in the IP and trademarks practice at Arnold and Porter in Washington, DC.

Ossola served as lead counsel for insurance company Geico in its litigation against Google, which was filed in the Eastern District of Virginia in 2004. Geico argued that the use of its trademark in title or text of sponsored listings to the right of Google search results pages confused customers. Google maintained that its policy prohibits advertisers from using someone else’s trademark in their ad text when the trademark owner objects. The court found that Geico failed to prove consumers were confused by Google’s use of Geico’s trademark as a keyword.

Another case that centred around the confusion issue – formally known as “initial interest confusion,” defined as customer confusion that creates initial interest in a competitor’s product – was Playboy Entertainment, Inc. v. Netscape and Excite. The Ninth Circuit Court of Appeals ruled in 2004 that Playboy’s trademark and dilution claims were legitimate when keyed banner ads for adult products used Playboy’s trademark.

Ossola said issues like initial interest confusion raised in that case are still “wide open.” He said the next case that will be closely watched regarding trademark dilution and confusion is American Airlines v. Google.

This lawsuit, filed by American Airlines in August in federal district court in Texas, alleges that: “Without authorisation or approval from American Airlines, Google has sold to third parties the ‘right’ to use the trademark and service marks of American Airlines … or words, phrases, or terms confusingly similar to those marks, as ‘keyword’ triggers that cause paid advertisements, which Google calls ‘sponsored links,” to appear above or alongside the ‘natural results.’

In previous cases, Ossola said, the defence has argued there is no dilution because the search engines are merely presenting consumers with choices, and they argue that the non-organic search engine results are protected under fair use statutes. Ossola said there is likely to be an appellate court decision in the Second Circuit very soon on the issue.

“I think there’s going to be some pressure, if there isn’t already … on Google and other search engines to be considerate” in their search engine operations, Ossola said. “Google’s been able to handle that so far and we’ll see what happens in the courts.”

On Monday, 10 September, Google was accused by the Australian Competition and Consumer Commission (ACCC) of failing to distinguish between paid advertisement and organic results. The ACCC claims Google is misleading people who did not know the ranking of its search results was influenced by payments from advertisers, and accused it of misleading conduct over sponsored hyperlinks embedded in the results page, Australian Associated Press reported. Google says the case has no merit. The case was adjourned until 4 October.

The ACCC says this is the first action of its type globally. Other Google litigation in countries like the United States, France and Belgium has generally related to trademark use. But the ACCC said it is the first regulatory body to seek legal clarification of Google’s conduct from a trade practices perspective.

“I think the situation is a lot of division, even within the nation’s jurisdictions like Germany and France – you see different divisions in courts,” said Charles Gielen, who focuses on patent and trademark litigation as partner for NautaDutilh, in Amsterdam, The Netherlands, and serves as an adviser to the Dutch government on trademark and design law.

Peter Becker of Microsoft, based in Redmond, Washington, acknowledged that “Microsoft is Johnny-come-lately to this” issue, since the company has only been in the search-engine business for about six years.

But since Microsoft has been ranked the second most valuable brand, valued at $58 billion, the company has a vested interest in protecting its marks, even though searches are not its primary source of revenue.

“We are a trademark owner to whom trademarks are exceedingly important,” Becker said. “We’ve got a lot riding on trademark and trademark enforcement, probably to a greater extent than any of the other search engines. …We place a much higher value on IP protection than we do on maximising revenue through the search engine.”

Becker said he thinks it would be useful if the Lanham Act, the 1946 law that contains federal statutes of US trademark law and which prohibits trademark infringement, trademark dilution and false advertising, among other things, was amended to clarify things such as what constitutes “use.”

Liza Porteus may be reached at info@ip-watch.ch.