The week’s post comes courtesy of my twin brother Joe, who is also a licensed attorney living in Columbus, Ohio. Like a good older brother (by 6 minutes), he’s always looking out for fascinating trademark topics on which I can bloviate to my heart’s content. Well, my bro has come through for me over the past couple of weeks by sending me two articles concerning Google’s practice of allowing advertisers to use trademarks owned by others as behind-the-scenes keywords to trigger their own advertisements for competing (or sometimes counterfeit) products in response to a user’s search query. Yes, I’m talking about those small ads which appear at the very top and on the right-hand side of a Google search results page. Those ads are the primary source of revenue for Google (billions of dollars per year worldwide) and is earned every time an ordinary person like you or me clicks on one of those ads. Although Google may only make a buck or two on each click, that quickly ads up when multiplied by the enormous number of individuals performing searches on Google everyday who are seeking to purchase products and services of all kinds.
The first article concerns a ruling by the European Court of Justice (Europe’s highest court) that Google’s practice does not, per se, violate trademark laws or infringe upon the trademark rights of brand owners, which basically validates Google’s paid search business model (insert big sigh of relief by Google here). According to the article, the court ruled that in cases where the advertisement could legitimately confuse consumers, trademark owners should invoke their rights against the infringing advertisers and not Google, unless Google failed to act on a complaint or actively manipulated keywords. Since I am not an expert in international trademark law by any stretch of the imagination, I do not know whether this decision has any bearing on Google and its operations in the United States whatsoever. Although my guess is that it does not, if someone who is smarter than me happens to be reading this, please feel free to post a comment.
The second article is regarding an ongoing dispute between Google and Rosetta Stone, Inc., which manufactures language-learning computer software under the fairly well-known ROSETTA STONE trademark. According to the article, Rosetta Stone claims Google sold to advertisers the right to use trademarks registered by Rosetta Stone as keywords for paid advertisements. The ads directed users to sites operated by Rosetta Stone’s competitors or counterfeiters of its software. A motion filed by Rosetta Stone asserts that “Google has confused consumers, diluted Rosetta Stone’s marks and diverted Rosetta Stone’s customers to competitors and counterfeiters, while reaping millions of dollars in advertising profits for itself.” Of course, Google’s position is that advertisers themselves are responsible for the content of their ads and that Google should not be held liable because it promptly removes infringing ads when informed about them and because there’s been no proof of confusion resulting from the ads.
Although reasonable minds can certainly differ on the issue, I believe the European Court of Justice came to the right decision, except that I do not think Google should be held liable for any infringement stemming from these paid advertisements unless Google was directly involved in the selection of the keywords or manipulated them in such a manner as would likely result in an infringement. I know it sounds like I own stock in Google, but my opinion is that Google is simply not in the best position to determine whether a claim of infringement by a trademark owner is valid or whether the use of a specific trademark as a keyword is an infringement, especially when the keyword happens to be an ordinary English language word. For instance, in many cases, Google may not be able to easily determine who has priority of use in a trademark. Or, maybe a highly descriptive trademark is at issue and the advertiser is arguably using the mark in its descriptive sense and not as a trademark. Perhaps the use of the trademark may be considered OK under the “fair use” doctrine. Maybe there are complex international trademark laws at play. There could be ownership, licensing, and breach of contract issues. Perhaps the overall facts on which a claim of infringement is based are in dispute. What if Google voluntarily removes an allegedly infringing ad after a complaint but a court later finds that such ad was not an infringement? Could Google then be held liable for the loss of revenues the advertiser suffered while its ad was suspended? The list goes on and on and on.
Regarding the dispute between Google and Rosetta Stone, I do not think it was Google that caused consumer confusion (if there, in fact, was any confusion), diluted Rosetta Stone’s trademarks (if there has, in fact, been any dilution), or diverted users to Rosetta Stone’s competitors or counterfeiters. Google is not the one that created the ads or selected the trademark as a keyword to trigger the ads. Google did not force users to click on these ads or to purchase competing or counterfeit products. On the contrary, Google has merely set up a system where advertisers can bid on any word or phrase consisting of trademarks, non-trademarks, foreign words, English language words, etc. and provides a platform on which these ads are displayed. This system has created an extremely robust and competitive marketplace that has allowed businesses (especially small businesses) to target a broader audience and gain exposure they could have never achieved otherwise. Sure, there are going to be advertisers who abuse the system. That doesn’t mean the system is broken or that the system operator is necessarily responsible.
The bottom line is that Google is not a court. It does not have all the relevant evidence in front of it and it often has heard only one side of the story. The fact of the matter is that Google is a very easy target in these types of cases because it is large, has deep pockets, is easy to find and serve (unlike some advertisers of counterfeit goods), and only one lawsuit need be filed instead of many separate lawsuits against many allegedly infringing advertisers from across the globe. Although my position is probably not shared by many brand owners and even other trademark attorneys, I personally continue to hope that courts throughout the U.S. refrain from shifting the burden of trademark enforcement to entities like Google and demand that individual advertisers themselves be held responsible for their own actions. Without question, the costs of brand protection should lie squarely with the brand owners since they are the one who reap the benefits of pursuing and stopping infringements.