Google Allows Trademark Bidding, Faces Class Action Lawsuit
By Anna Johnson on May 19th, 2009Last week Google announced that it will allow Google Adwords advertisers to bid on terms that are trademarked. At least one company, however, is none too pleased with Google’s decision. Firepond, a Texas software company, has filed a class-action suit against Google claiming trade mark infringement.
Firepond is suing Google for allowing consumers searching for ‘Firepond’ to click on the sponsored links of Firepond’s competitors. Doing so, argues Firepond, amounts to trade mark infringement.
Google, meanwhile, has just relaxed its trade mark policy so that U.S. advertisers will, in certain circumstances, be allowed to use trade mark terms in their ad text even where they don’t own the trade mark.
In such cases the ad must refer to the trademarked terms in ‘a descriptive or generic way’ and the advertiser must either be reselling, facilitating the sale of, or offering information about, the trademark holder’s products or components of those products.
Google has previously been sued by companies such as American Airlines and Geico over trade mark infringement. Google has settled such cases, and because the issue over whether allowing advertisers to bid on trade marks has never been finally resolved in court, it’s not clear what the law actually is…
Publicly, Google is taking the view that its policy is consistent with trade mark law and is similar to the policies of Microsoft and Yahoo.
But analysts reckon the new policy will be pay-day for Google. Advertisers bidding on trade marks will likely pay higher rates… including to bid on their own trade marks.
That being so, a cynic might be forgiven for thinking that Google has worked out that the additional revenues from allowing trade mark bidding outweigh the costs of settling a few cases, or even being found to have breached someone’s trade mark.
Meanwhile, Firepond may also have a battle on its hands. Not so much in bringing a trade mark infringement case against Google, but in bringing a class action case against Google.
Because trade mark infringements are usually very specific to one trade mark holder and one supposed infringer, it’s usually difficult to convince a court that a given plaintiff is representative of an entire class of trade mark owners…
Sources: Miguel Helft, “Rivals’ Ads on Google Leads to Suit,” The New York Times, May 14, 2009, Douglas Quenqua, “Google Relaxes Trademark Restrictions in Ads,” ClickZ, May 15, 2009
