Google has announced that it will be amending its AdWords Trademark Policy in June. In a move that will likely not please trademark owners, Google will be changing its AdWords Trademark Policy on how it follows up on complaints regarding trademark use in keywords. Google will also allow trademark terms in ad text in the U.S. These changes come on the heels of recent adverse legal rulings and lawsuit filings against Google regarding its sale of trademarks as keywords in advertising.
Beginning June 4, 2009, Google will no longer restrict trademark use in keywords in an additional 190 countries, conforming to its current policy for the United States, Canada, United Kingdom and Ireland. Keywords that were previously restricted as a result of a trademark investigation will begin triggering ads in the affected regions. While the expansion of this policy covers a significant number of countries, it will still not apply to most of the European Community nor to Australia, New Zealand, or China. With the changes, Google will no longer investigate complaints relating to the use of trademarks as keywords by AdWords advertisers. The result will be that users in these additional countries will see ads in the sponsored links section containing advertising triggered by the trademarks purchased as keywords. A company may purchase a competitor's trademark as a keyword, and a user searching for that keyword will see a greater number of ads, including those of the trademark holder's competitor. Google will continue to perform investigations related to ad text, but will no longer restrict keywords based on a trademark complaint and investigation.
Google also will be making changes to its AdWords policy in the United States, with the effects beginning on June 15, 2009. These changes will only affect ads targeting the U.S. If an ad doesn't comply with Google's trademark policy in other countries, the ad may not be eligible to appear in those other countries. The significant change in policy is that Google will now allow, under certain criteria, the use of trademarks in ad's text, even if the advertiser does not own that trademark and has no explicit approval from the trademark owner to use it. These changes only pertain to sponsored advertising and will not impact natural search results. Ad texts containing trademarks will be allowed if the website: facilitates the sale of goods or services, or sells components, replacement parts or compatible products corresponding to the trademark; contains information about the goods or services corresponding to the trademark; or, when the term is used in a descriptive or generic way and not in reference to the trademark owner. The policy will not pertain to ads containing competitive or critical information about the goods and services corresponding to a trademark.
Allowing additional trademark use in AdWords and text would appear to fly in the face of recent court rulings and lawsuits involving Google. In Google's AdWords program, advertisers bid on and purchase keywords, which may include trademarks of third parties. When an internet user enters a search term using Google's search engine, the resulting hits include regular or "natural" search results based on relevance, along with "Sponsored Links" results triggered by the particular keywords in the search query. These "Sponsored Links" are paid, contextual advertising that is auctioned for sale through Google's AdWords, with the highest bidder usually having its Sponsored Link listed first.
In the recently anticipated decision in Rescuecom Corp. v. Google Inc., 562 F.3d 123 (2nd Cir.2009), the U.S. Court of Appeals for the Second Circuit determined that Google's sale of trademarks in its AdWords program was considered a "use in commerce" which could subject Google to trademark infringement liability. In that case, Google had sold the RESCUECOM trademark to third parties, including Rescuecom's competitors, through its AdWords program and "Keyword Suggestion Tool". The Court found that Google had recommended, encouraged and sold the Plaintiff's trademark, and therefore made use of the mark. The Court determined that this use was more than just internal use, and was, in fact a use in commerce. However, the Court remanded the matter back to the district court for further proceedings to determine whether Google's use of Rescuecom's trademark caused a likelihood of confusion or mistake, or dilution. The pending outcome leaves trademark owners, keyword purchasers and keyword sellers in the dark as to trademark infringement liability regarding use of the trademarks as keywords. In the meantime, trademark owners are also concerned about possibly having to pay more money to Google so that their ads appear ahead of competitors' ads.
The issue of use of a third-party trademark in Google AdWords advertising has also been hotly debated and contested in the European Community. Preliminary rulings regarding whether Google's AdWords advertising constitutes relevant use of a trademark sufficient for infringement have been inconclusive. These preliminary rulings from the Austrian Supreme Court and the highest French civil court have been sent to the European Court of Justice for determination of whether the use of a third-party trademark as a keyword is infringing. Similarly, three decisions from the German Federal Supreme Court have reached differing results based on differing facts. The German Federal Supreme Court has also sought referral to the European Court of Justice for further determination. These decisions are not expected until the summer of 2010, thereby leaving uncertainty regarding liability for use of trademarks as keywords in Europe.
In a further outcry of some trademark owners disturbed by Google's AdWords policies, two class action lawsuits were recently filed against Google in Federal Court in Texas. While both were filed by the same law firm, the suits are for the protection of two different classes. In the initial lawsuit filed, FPX, LLC v. Google, Inc., the Plaintiff, Firepond, alleges that Google's AdWords policy infringes the trademarks of all Texas trademark owners. The second lawsuit, brought by ‘John Beck Amazing Profits, LLC', is on behalf of all U.S. trademark holders. Whether the Federal Court determines that the trademark issues and parties can sufficiently be joined to be certified as a class action remains to be seen. If a class is certified in these cases, of greater concern to trademark holders may be whether Google decides to settle the cases thereby binding all trademark owners who have not opted out of the class, and eliminating their right to sue.
What is clear from the above matters involving Google's AdWords policy is that uncertainty still exists in the United States and around the world in viewing trademark infringement liability for use of a third-party trademark in one's keyword advertising on Google's websites. It would be prudent for trademark owners and advertisers to keep a close eye on future decisions and developments involving Google's AdWords trademark policies and keyword sales.
Vol. 53, June 2010