This story has been changed since it first appeared. Please
see ourEditor's note
below.
Car insurance firm GEICO sued both Google and Yahoo! subsidiary
Overture in May 2004 over the sale of its registered trade marks as
sponsored search terms in the keyword advertising services of both
search engines.
These services work by allowing advertisers to sponsor
particular search terms so that, for a fee, whenever that term is
searched the advertiser's link will appear next to the search
results.
Google’s AdWords underwent a policy change in April 2004. Until
then Google had respected requests from companies that asked it to
prevent their marks from being available for sponsorship.
Conversely, Google has always allowed trade mark holders to request
that their trade marks do not appear in the headings or text of
sponsored links. But the policy change – allowing a trade marked
term to trigger a third party's ad – sparked lawsuits against
Google, including the action filed by GEICO.
Overture settled in late November, but Google continued its
fight. In December, Judge Leonie Brinkema of the US District Court
of the Eastern District of Virginia, announced her decision. This
week, she issued a formal opinion explaining in more detail her
reasons for that decision, albeit parts of the case are still due
to continue to trial unless the parties reach a settlement.
The upshot: Google's sale of GEICO trade marks as keywords was
not unlawful. But GEICO established a likelihood of confusion with
regard to those sponsored links that use GEICO's trade marks in
their headings or text. So the sale of GEICO as a keyword was
lawful; but ads that included GEICO's marks in their text, however
triggered, were not. If the keyword GEICO triggered an ad without
GEICO's marks in its text, there would be no infringement.
GEICO had presented survey evidence of user confusion, based on
a study carried out by a university; but Judge Brinkema expressed
"serious doubts about the accuracy of the survey results'
reflection of actual users' experiences with and reactions to the
Sponsored Links."
She wrote that GEICO "has failed to establish a likelihood of
confusion stemming from Google's use of GEICO's trademark as a
keyword and has not produced sufficient evidence to proceed on the
question of whether the Sponsored Links that do not reference
GEICO's marks in their headings or text create a sufficient
likelihood of confusion to violate either the Lanham Act or
Virginia common law."
Had GEICO's survey methodology been better, the result may have
been different. And mindful of the importance of the issues before
her "to the ongoing evolution of internet business practices and to
the application of traditional trademark principles to this new
medium," Judge Brinkema was careful to emphasise that her ruling
"applies only to the specific facts of this case".
When the survey participants were shown a page bearing sponsored
ads for Nike alongside organic listings in response to a search for
GEICO, there was no confusion. Judge Brinkema said this "refutes
the allegation that the use of the trademark as a keyword, without
more, causes a likelihood of confusion."
Notwithstanding the flaws, she acknowledged that GEICO had
produced survey evidence "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."
She continued: "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."
Whether Google or its advertisers should be liable for the use
of GEICO's trade marks in the headings and text of Google's
sponsored links is a question that has still to be answered.
GEICO's General Counsel, Charles Davies, responded to the
written opinion, saying, "GEICO will continue to aggressively
enforce its trade mark rights against purchasers of its trade marks
on search engines and against search engines that sell GEICO's
trade marks to advertisers."
He continued: "We continue to believe that the sale of GEICO's
trade marks to its competitors is wrong and a violation of federal
and state law and look forward to litigating that issue in future
cases."
Google's Litigation Counsel, Michael Kwun, described the ruling
as "an extraordinary victory for Google." He explained to
SearchEngineWatch.com: "Google is extremely pleased with the
outcome in this case. The important issue for us in it – which is
the use of trademarks as keyword triggers – was decided decisively
in our favor."
Editor’s note, 29/08/2005: When
this story first appeared on OUT-LAW, it carried the headline
Google loses AdWords trade mark case in the US. This was
misleading: Google won in part and lost in part. The original text
of this story also contained inaccuracies because we were under the
impression that the August 2005 ruling was a different ruling to
that which was made in December 2004. It wasn’t. Rather, it put
into writing that December ruling and provided additional detail.
The reason for our error was that at the time we were unable to
obtain the written judgment. We misunderstood GEICO's
press release and relied on other inaccurate reports. As soon
as we realised we may have made a mistake, we purchased a copy of
the judgment and fixed our story today, 29/08/2005. We apologise to
the parties involved and to readers for this error.
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