Google AdWords and Trademarks as Search Terms

Google has been sued by a number of trademark holders on the grounds that competitors can establish an adwords account with Google and bid on trademarks as search terms that users of the search engine may use to search.  The consequence is that a high bidder on a trademark search term may see ads from AdWords paid for by competitors of the trademark holder.

Suit was brought to the EU.  A ruling is expected next year.  However, a senior judge on the EU Court reviewing the complaint, offering a non-binding assessment of the situation, stated that Google’s AdWords service probably falls within an “information society services” exemption for trademark infringement, so long as Google remains “neutral” about the information that it provides to search users.  (See the Article on Yahoo News here)

AdWords itself works by allowing advertisers to bid on particular keyword search terms.  A high bidder’s display ad will appear next to google search results, (sometimes at the top, but more often in the right hand column on the search results list).  For example, a google search for “Louis Vuitton” returns the official web site of the corporation as the first result in the left hand column of results.  However, advertisers selling knock-offs and fakes appear in the right hand column, taking users off to unapproved web sites offering products that compete (mostly on price) with the trademarked item searched for by the user.  Eluxuryin.com was one of the advertisers when I searched today; they appear to be offering “Louis Vuitton” products at 60-90% off the list price.  According to louisvuitton.com, LV offers their products for sale exclusively through their web site, and through eluxury.com.  (See the information here on the LV website, FAQ | Questions About Louis Vuitton)  Eluxuryin.com does not appear to be a legitimate LV reseller, and they are not the only advertiser that pops up on a search for the trademark “louis vuitton.”

Trademark law in the U.S. is governed by the Lanham Act, codified in 15 U.S.C. 1051 et seq.  Sections 1114 and 1125 are the typical basis for bringing a trademark infringement claim against an alleged infringer of one’s trademark.  Section 1114(1)(a) requires that an infringer use a registered mark in commerce in connection with the sale or advertising of a good that is likely to cause confusion on the part of the prospective buyer of the thing advertised.  Louis Vuitton has a registered word mark, (registration number 2904197), filed in 2003 and registered in late 2004 in the U.S. that it uses worldwide to indicate that LV is the maker of the thing to which the trade mark is affixed.  Another party offering for sale a bag identified as “Louis Vuitton” without permission of the LV is likely an infringer of LV’s trade mark.

The question is whether Google could also be a trademark infringer by selling ad placement services to the infringing advertiser.  Google does benefit from the auction of trademark terms available for advertising on its site.  To the best of my knowledge, Google does not take down advertisements that might be infringing or that would direct a search user away from the legitimate business web site of the trademark holder whose trademark is being used as a keyword.  On the other hand, Google does not write the infringing ads, either.  Arguably, Google is not selling goods with a false designation mark or causing the advertisements to be created by the actual infringer.  In this way, Google is similar to a newspaper that sells classified ad space to advertisers.  I don’t think that a newspaper would be liable for trademark infringement for running the ad of a third party that was infringing on another’s mark or might confuse customers about whose products were being advertised.  Does AdWords work that much differently to expose Google to heightened or joint liability with infringers?

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faithatlaw

Maryland technology attorney and college professor.

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