Paid Search Ads & Trademarks: A Review Of Court Cases, Legal Disputes & Policies

Over the years, we’ve seen a number of lawsuits filed against search engines or between companies regarding ads that are linked to trademark terms. Below, a rundown on some of the more notable cases.

Before the recap, a little background. To those not familiar with trademark law, the cases can seem like guaranteed victories for the trademark holders. Surely no one has the right to run an ad linked to the word "apple" but Apple itself, correct? However, trademark holders do not have complete control over how their "words" are used.

Indeed, these cases aren’t technically about ads linked to trademarks but ads linked to words that might also be trademarks. The word is only a trademark if used in a trademark sense, in a way that the trademark owner has protected rights. And to discover if those rights are violated in search advertising, these cases deal with tricky questions such as:

  • Is the word also a generic term?
     
  • Is the person buying the ad trying to convince you they are Apple or instead fairly describing a product that requires the use of the word Apple?
     
  • Is the ad coming up in response to a broad match bid? That’s where you might buy the word "computer," and your ad then appears for any search containing it, including "apple computer" or "windows computer."
     
  • Is the ad a comparison of one product to another? Does the country where the ad appears allow such comparative advertising?

US Cases Against Search Engines

Within the United States, search engines have mostly found favor with the US courts. Companies keep trying on the cases, however, in part it seems because settlements have stopped more of the cases from building up definitive case law.

STATUS UNKNOWN
Estee Lauder Versus Excite
Jan. 1999 to ???
This charged that Excite violated trademark law by letting iBeauty/Fragrance Counter banner ads show up on searches related to Estée Lauder and Origins trademarks. Excite lost a similar case in Germany in March 2000. Estée Lauder settled with iBeauty, which was also sued, in August 2002. I haven’t been able to track down whatever happened with the Excite case. Perhaps it died as part of Excite going bankrupt.

SETTLEMENT
Playboy Versus Excite & Netscape
Feb. 1999 to Jan. 2004

At issue were banner ads showing up linked to searches for "playboy." Playboy lost in an preliminary injunction ruling later that year, then that decision was reversed on appeal. The case was then settled in January 2004. Note: I was an expert witness in the case on behalf of Excite & Netscape.

ABANDONED?
Mark Nutritionals Versus AltaVista, Overture & Others
Feb. 2002 to ???

Mark Nutritionals, which made the Body Solutions weight loss product, moved the focus of disputes from banner ads being linked to trademarks to search listings themselves. Again, I haven’t been able to track down what happened in the case, but it probably was abandoned when the FTC closed Mark Nutritionals in October 2003.

SETTLEMENT
American Blinds Versus Google
Jan. 2004 to Sept. 2007
This case involved American Blinds competitors buying ads linked to terms like "american blinds." It was settled in September 2007 without Google having to change its policies or pay a settlement fee.

COURT VICTORY & SETTLEMENT
Geico Versus Google (& Overture)
May 2004-Aug. 2005

This case involved Geico rivals buying its name linked to search ads. After a trial case, Google won in December 2004 the right to link ads linked to trademarks. The remaining issue was whether those terms could be used in ad copy — and Google by that point had changed its policies in the US to prevent this. By the next year, the case was entirely resolved in August 2005 through a private settlement. Geico then started going after its competitors directly. I’m not sure what happened with the case against Overture — likely it was settled along the way.

COURT VICTORY
Rescuecom Versus Google
Sept. 2004 to Sept. 2005

The case involved Rescuecom’s name being sold to others to trigger search ads on Google. Google won the following year.

IN LITIGATION
Check ‘N Go Versus Google
January 2006 to ongoing

Filed in January 2006 (and see here), same old thing — a lawsuit over Check ‘n Go’s name being linked to ads from competitors.

IN LITIGATION
American Airlines Versus Google
August 2007 to ongoing
American Airlines, undeterred by the Geico case (and before the American Blinds case was settled), filed suit against Google over ads linked to its name and other terms.

French Cases Against Search Engines

Outside the United States, France is probably the county that has seen the most notable and widely reported case. There, ruling have consistently gone against search engines.

COURT LOSS
Luteciel & Viaticum Versus Google
Dec. 2002 to March 2005
Filed in December 2002 against Google France, two travel agencies won in October 2003 a fine against Google over allowing ads linked to generic terms "travel market" and "airflight market," for which they owned rights. Google also lost an appeal in March 2005 and had to pay $100,000 in damages plus legal costs.

COURT LOSS
Louis Vuitton Versus Google
Aug. 2003 to June 2006
This case pitted fashion clothier Louis Vuitton against Google over ads involving Vuitton’s name. A French court ruled against Google in February 2005, ordering a $250,000 payout. Google lost again on appeal in June 2006, with damages raised to around $350,000.

COURT LOSS
Le Meridien Versus Google
Oct. 2004 to Dec. 2004

Filed on October 25, a French court ruled against Google on December 16, preventing it from linking ads to the name of hotel chain Le Meridien, if those ads were about the hotel industry.

Other Cases & Laws Against Search Engines

Aside from cases in the United States and France, here are some other suits and laws involving search engines and trademark-linked ads:

Matim Li Versus Google
April 2006
Complaint by Israeli fashion chain Matim Li that Google allowed ads to appear linked to its name.

Utah Keyword Search Law
April 2007
Utah passed a rule preventing ads from being linked to trademarks — against its own general counsels recommendation, then regretted the move and has yet to actually implement it.

Australia Competition & Consumer Commission Versus Google
July 2007
An Australian governmental body views competitive ads as misleading consumers and so is taking action against Google.

Cases Between Companies

Cases against the search engines have largely failed to stop trademark-linked ads, so companies are now also going against other companies that buy these ads. Note that there are probably many more cases than listed below. Not all come to widespread attention.

IN LITIGATION
Edina Reality Versus TheMLSonline.com
March 2006 to ongoing
Filed in March 2006, this case pits competitors against each other over ads, rather than a company versus a search engine.

SETTLEMENT
JP Enterprises Versus Yahoo
June 2006 to around Dec. 2006

Yahoo was sued (and here) by online dating site owner JP Enterprises over ads it placed on Google that used the name of an online JP’s site lovecity.com. The case was apparently settled by the end of the year.

COURT RULES OK
JG Wentworth Versus Settlement Funding
April 2006 to January 2007
Wentworth sued Settlement Funding over ads showing up for its name, though the ads themselves didn’t make use of Wentworth’s name. The court ruled in favor of Settlement Funding, finding no foul.

Rhino Sports Versus Conner Sport Court
Late 2006 to ongoing
Another case with one company showing up in response to another company’s name, with broad matching one of the issues involved. Plus, companies not party to the case are also getting involved due to a subpoena against Google for keyword purchase histories.

Search Engine Trademark Policies

Google initially allowed some trademark holders to ask for their terms to be banned from ad linking, with eBay being a classic example of asking in June 2003 for a ban on "ebay" despite the company running thousands of ads that triggered off trademarks of others. In April 2004, dropped this policy and let anyone buy any term. However, it later (I believe) made two key changes, which remain in place now:

  • US & Canada: Ads can be linked to any word, but words that are also trademarks can NOT be used in ad copy if Google receives an objection from a trademark holder.
     
  • Outside US & Canada: Words that are also trademarks can NOT be used in either ad copy or to trigger an ad, though Google only reviews for compliance if there’s a trademark holder complaints. Ads showing up for trademark terms through broad matching are not covered by the triggering policy.

Yahoo allows the use of trademarks in ad copy or as a trigger as long you can prove you are one of two types of sites:

  • Reseller Site: A site can show that it sells the product or service related to the trademark.
     
  • Informational Site: A site can show it provides information about a product or service but doesn’t compete with a trademark holder. (What happens if you are a protest site, say someone buying McDonald’s and opposed to them, is unclear).

FYI, the requirement for informational sites came out of Yahoo wanting to ban companies from bidding on trademarks of their competitors back in 2004, after an embarrassing situation where it engineered a large branded keyword buy for Pontiac with TV tie-in only to have Mazda ride in on the publicity

Microsoft’s guidelines don’t allow trademarks to be used as triggers or in ad copy by competitors but does allow it for affiliates and resellers. However, Microsoft recently updated its policy to say it won’t maintain lists of approved resellers or affiliates of brand owners.

Related Topics: Channel: SEM | Legal: Trademarks | Search Ads: General

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About The Author: is a Founding Editor of Search Engine Land. He’s a widely cited authority on search engines and search marketing issues who has covered the space since 1996. Danny also serves as Chief Content Officer for Third Door Media, which publishes Search Engine Land and produces the SMX: Search Marketing Expo conference series. He has a personal blog called Daggle (and keeps his disclosures page there). He can be found on Facebook, Google + and microblogs on Twitter as @dannysullivan.

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