Trademark and Google AdWords

Google regularly allows competitors to purchase AdWords that include a competitor’s trademark.  Obviously, this can cause problems.  Is it allowed?

• Google has been sued frequently for trademark infringement because it allows advertisers to purchase trademarked names for use in AdWords by competitors.
• Google has never lost one of these cases.
• Google derives 97% of its revenue from advertising, annual revenue that was over $109 billion as of 2017.
• These conflicts illustrate a serious problem with how internet advertising is conducted.

Google has been sued many times for trademark infringement

In the last decade, Google has been sued many, many, many times by trademark owners over Google’s policy, which allows trademark owner’s rivals to buy their keywords and then use those words to advertise against them. For example: Coke could buy the keyword “Pepsi” in AdWords, and then anyone who searched for “Pepsi” would see an ad that said: “Buy Coke.” In these cases, the plaintiffs have argued that Google infringed their trademark.

Companies are spending less money on physical advertising and more on online advertising.  Because Google allows companies to purchase AdWords that include a competitor’s trademark they can redirect traffic meant for their competitor.

Google has never lost one of these cases and, in fact, they have expanded this policy

While a few of these cases have been settled by Google, none of them have caused the company to stop selling ads based on keywords containing trademarks.  And more importantly Google hasn’t lost any of these trademark cases in court. Quite the contrary, notwithstanding the probability of additional lawsuits, Google has expanded this policy of selling trademarked keywords, arguing that it better serve consumers by producing competitive ads.

As a consequence, there was previously an allegation that Google had violated the rights of luxury goods maker Louis Vuitton and two other firms through its AdWords service.  However, the European Court of Justice ruled that “Google has not infringed trademark law by allowing advertisers to purchase keywords corresponding to their competitors’ trademarks.”

Sale of trademarked names and paid ads are part of Google’s business model

Paid ads are the backbone of the Internet business model. While Google, the world’s largest search engine, does not detail sales from its paid ads, it makes 97 percent of its annual revenue of nearly $109 billion in 2017, from advertising.

Many believe that Google’s AdWord service undermines their trademark’s distinction

Name brand owners are concerned that Google’s AdWords service, in which advertisers bid to use keywords that are the companies’ proprietary brand names, undermines their trademark’s distinction.

Rosetta Stone argued that it confused consumers and assisted counterfeiters

Now, the language-learning software company Rosetta Stone, one of the companies that sued Google for trademark infringement and lost, appealed the case to the U.S. Court of Appeals for the 4th Circuit. The company filed suit against Google back in 2007 and lost in August 2010.

No appellate court has yet issued a major ruling on a lawsuit regarding trademarked keywords, in part because Google has beaten, or simply worn out, so many opponents over the years. AdWords is Google’s leading product, and a huge moneymaker for the company.

In its appeal, Rosetta Stone argued that the Virginia federal district court that found in Google’s favor got it wrong on numerous counts. The company said that the lower court should have been swayed by its evidence that AdWords confused searchers, and alleges that some of the advertisers paying for sponsored links keyed to its trademarks sold counterfeit Rosetta Stone products.

A number of large brand names files two separate briefs supporting Rosetta Stone, including Ford Motor Company, Blue Destiny Records, Viacom, Guru Denim, The Media Institute, Carfax, ConvaTec, Monster Cable, 1-800 Contacts and PetMed Express. While none of those companies has sued Google over trademark issues, the filing of the briefs supporting Rosetta Stone indicates that they also have objections to Google’s trademark policies.

These are just some of the reasons that trademark registration and a proper trademark search are so important.

Whether you want to file a trademark registration or you’re involved in a dispute over a trademark, you will want to consult with a trademark attorney who can protect your rights.

Contact an attorney with Veritas Business Law, LLC for a free consultation.