FPX filed a class-action suit against Google in federal court in Texas, saying that Google had infringed on its trademark and challenging Google’s policies on behalf of all trademark owners in the state. Legal experts said it was the first class-action suit against Google over the issue.
The issue?
This month, [Google] expanded to more than 190 new countries its policy of allowing anyone to buy someone else’s trademark as a trigger for an ad. And ... it announced that it would allow limited use of trademarks in the text of some search ads, even if the trademark owner objects.
While some of the issues in the FPX lawsuit have to do with the class action nature of the suit, another suit, brought by an individual company, has bounced back and forth:
The [2004] suit alleges that Google and Rescuecom competitors buying the ads profit without authorization from the Rescuecom trademark, and that the practice can also confuse potential customers and franchisees, resulting in lost business.
In its defense, Google argued that the selling "Rescuecom" as a keyword to competitors that triggers their ads along with search results isn't a trademark infringement under the Lanham Act. Among other things, Google argued in its motion to dismiss that neither Google nor its advertisers use Rescuecom's name to identify the source of their products.
The U.S. District Court for the Northern District of New York dismissed the case in 2006. But, after a Rescuecom appeal, a three-judge panel of the U.S. Court of Appeals for the Second Circuit sent the case back (pdf) to the lower court....
Richard C. Balough explains the issues involved:
The Second Circuit reversed a trial court’s dismissal of a case brought by Rescuecom Corp. The appellate court said the trial court misinterpreted the appellate court’s earlier decision in 1-800 Contracts, Inc. v. WhenU.com, Inc. where the court found there was no Lanham Act violation because the plaintiff in the earlier case did not allege that a trademark was being used in commerce....
In distinguishing its earlier opinion from the instant case, the court said: “First, in contrast to 1-800, where we emphasized that the defendant made no use whatsoever of the plaintiff’s trademark, here what Google is recommending and selling to its advertisers is Rescuecom’s trademark. Second, in contrast with the facts of 1-800 where the defendant did not ‘use or display,’ much less sell, trademarks as search terms to its advertisers, here Google displays, offers, and sells Rescuecom’s mark to Google’s advertising customers when selling its advertising services. In addition, Google encourages the purchase of Rescuecom’s mark through its Keyword Suggestion Tool. Google’s utilization of Rescuecom’s mark fits literally within terms specified by 15 U.S.C. § 1127.”
AOL describes the purpose of the Lanham Act, and states the following:
Rights to use a trademark are defined by the class(es) for which the trademark is used. Therefore, it is possible for different parties to use the same trademark in different classes. The Lanham Act defines the scope of a trademark, the process by which a federal registration can be obtained from the Patent and Trademark Office for a trademark, and penalties for trademark infringement.
(An aside: the AOL page states: "**This site is designed to work best with Microsoft Internet Explorer 5 or Netscape 4.0 or higher. Other browsers may produce varied results.**")
Regarding the Lanham Act's provision against unauthorized use in commerce, this has been through the courts before:
Consider, for example, last October's decision by the U.S. District Court for the District of New Jersey in Buying for the Home, LLC v. Humble Abode.[2] The parties in this case were competitors in the business of online furniture retailing, with the plaintiff operating totalbedroom.com and the defendant operating humbleabode.com. The plaintiff alleged violations of Section 43(a) of the Lanham Act,[3] claiming the defendant had misappropriated its trademark "TOTAL BEDROOM" by causing an ad and a link for the defendant's Web site to appear on the Google search engine when the search phrase "total bedroom" was entered by a user....
[T]he court found that the plaintiff had satisfied the "use" requirement of the Lanham Act.
First, it stated, the alleged purchase of the keyword was a commercial transaction that occurred "in commerce," trading on the value of the plaintiff's mark. Second, the court continued, the defendant's alleged use was both "in commerce" and "in connection with any goods or services" in that the plaintiff's mark was allegedly used to trigger commercial advertising that included a link to the defendant's furniture retailing site.
Therefore, the court ruled, not only was the alleged use of the plaintiff's mark tied to the promotion of the defendant's goods and retail services, but the mark was used to provide a computer user with direct access (i.e., a link) to the defendant's site through which the user could make furniture purchases. The court found that these allegations "clearly" satisfied the act's use requirement.
But not all of these cases have gone this way. There is at least one case which reached the same conclusion as the initial Rescuecom conclusion:
[I]n Site Pro-1, Inc. v. Better Metal, LLC,[12] the court held that the use of a plaintiff's trademark as a metatag and the purchase of plaintiff's trademark for a Yahoo! search algorithm were not "uses" within the meaning of the Lanham Act and granted defendant's motion to dismiss plaintiff's claims of trademark infringement, unfair competition and dilution under the Lanham Act, and common law unfair competition.
In so holding, the court observed that "courts in other circuits have generally sustained such claims," but recognized that "courts in this [c]ircuit . . . have largely rejected such claims." Persuaded by the reasoning in Merck & Co. and Rescuecom, as well as by the underlying rationale of 1-800 Contacts, the court determined that "[t]he key question is whether the defendant placed plaintiff's trademark on any goods, displays, containers, or advertisements, or used plaintiff's trademark in any way that indicates source or origin." Because the complaint contained no such allegation, the court held that Lanham Act "use" was not alleged.
Well, after the New York Times article came out I tried this search myself, typing the word "FirePond" (re the FPX case) into Google to see what would display.
I don't know what to say...
