Competitors Violate Federal Trademark

Inside Rescuecom Corp. v. Google, Inc.: Does Google’s Use of Trademarks to Trigger Advertisements from Competitors Violate Federal Trademark Laws?

The point of the spear in digital media law may be turning from copyright to trademark. As website operators take advantage of recent court decisions, such as Perfect 10, to provide access to third party content with less fear of a copyright suit, content providers as looking to other intellectual property laws to protect their work. The Rescuecom v Google (Fn1) case is an example of such an attack regarding Google’s use of third party trademarks as keywords in internet searches.

Rescuecom filed suit over Google’s use of Rescuecom’s trademark in Google’s search engine. At the time of suit was filed (Fn2), when a Google user entered an entity’s name or trademark, Google provided two types of results. First, it provided a list of links to websites, listed in the order Google’s algorithm’s deemed to be of descending relevance to the user’s search term. (The search results were generally found in a column on the left side of a user’s screen). Search results would typically begin by providing a link to a site owned by the trademark holder, followed by a list of other links that Google’s algorithm’s also deemed relevant to the search term. Second, Google would also provide content-based advertising. These are the “Sponsored Links”, which in my experience show up in a narrower column on the right side of a user’s screen.

Google used a couple of programs to offer these “context-based” links to advertisers: AdWords and Keyword Suggestion Tool. AdWords permitted an advertiser to purchase keywords. The advertiser’s ad would appear in the “Sponsored Links” section on a user screen whenever the purchased keyword was entered as a search term. The advertisers would then pay Google based on the number of times its ad was clicked by users.

Google’s Keyword Suggestion Tool would provide hints to advertisers wishing to purchase keywords as to other useful words that they could purchase. If an advertiser X, a furnace repair company, purchased the keyword “furnace repair”, the tool might also suggest that it purchase the term “Y” — the brand name and trademark of a competing furnace repair company. This would permit advertiser’s X’s ad to appear on Google’s website whenever a user searched for company’s Y’s brand name and trademark.

Rescuecom claimed that through the use of these tools, its competitors’ ads would appear when users were searching for “Rescuecom” on Google. It alleged that as a result, users were deceived and diverted from Rescuecom to these other competing firms. Rescuecom sued, claiming that this practice violated the Lanham Act (federal trademark law).

Based on older 2nd Circuit precedent, the District Court dismissed the suit on Google’s 12(b)(6) motion. (Fn3) However, on April 3, 2009, over a year after it heard the case, the 2nd Circuit reversed.