Court: Use Of Trademark In AdWords Copy Is An Infringement

Eric Goldman commented on a case between one advertiser using another advertiser’s trademark in Google AdWords. The court has made a decision (PDF), ruling for the plaintiff, Storus, who sued Aroa for using their trademark in the AdWords title text. Eric Goldman said this is one of the first times we have seen the plaintiff win in a case between advertisers over trademarks in search ads.

Storus has a trademark on the phrase “smart money clips.” Aroa, Storus’s competitor, used “Smart Money Clips” in the title of their Google AdWords ad, argued that the word “smart” was a laudatory phrase. The court felt otherwise and upheld the trademark for Storus and ruled in favor of the plaintiff.

The motion is GRANTED and Storus shall have judgment in its favor as against Aroa on the issue of trademark infringement, specifically, that Aroa’s use of Storus’ mark in connection with Google AdWords is infringing.

What is incredibly interesting to me, outside of the legal ramifications of this case, is the business decision that went into this lawsuit. Goldman estimates that Storus could have spent $1,374 to “divert” the clicks to their own site but instead spent a lot more money going to court to sue Aroa over this claim. In fact, Goldman estimates that the keywords probably cost 1% of what the case cost.

It is also important to note that the practice of using a competitor’s trademark in ad copy is already prohibited by most US based search ad companies, including Google. In this case, no lawsuit was required to kill the ads. Also see Paid Search Ads & Trademarks: A Review Of Court Cases, Legal Disputes & Policies for a review of past cases.