The Pay-Per Chase

So it seems that the long smoldering American fascination with Australian culture has flared up again. Not limited this time to obsession with quirky entertainment giants and bland rock style bands, this go-round has seen the frenzy extend to that most American of pastimes: the lawsuit. Following closely on the heels of an Australian consumer watchdog’s suit against Google, American Airlines has sued the Internet search leader for alleged actual and vicarious trademark infringement. At issue is Google’s wildly popular AdWords program. The Adwords program allows advertisers to bid on search terms and phrases that, when entered by Google users as search queries will trigger the display of the high bidders’ advertisements alongside Google’s “organic” search results.

American Airline’s complaint boils down to the assertion that Google actually and vicariously infringes on AA’s marks in two ways: 1) by allowing non-authorized parties, including competitors, to bid for AA’s marks as keywords, and 2) by allowing non-authorized parties, including competitors, to use AA’s marks in the advertisements displayed by the service.

AA claims a number of damages resulting from Google’s practices. Chief among these : 1) AA is forced to pay Google for the use of its own marks as keywords, 2) Google users searching for AA by using AA marks may be presented with ads for non-AA parties, and 3) Google users may be presented with ads for non-AA parties that include AA marks.

The question of whether infringement of AA’s marks results when unauthorized advertisements incorporating the marks are displayed with search results seems like the kind of thing that can be sorted out by applying lines of reasoning from past cases of a similar nature in the physical world. In other words, it bores me, so I’ll leave it alone. The far more interesting question is whether trademark infringement does, of in fact can exist in the context of bidding for advertisement triggering keywords that are or are confusingly similar to AA’s marks.

Trademark, of course, ostensibly exists as a means of protecting consumers against the dangers of counterfeit products — the purpose being to prevent a provider of low quality goods or services from passing off his wares as those of a known, high quality producer of the same. The use and reasonable scope of trademark is relatively clear when it comes to branding a product or method or place of business or what have you. Meaning that if I slap a mark on my widget indicating that I am its originator, it is pretty obvious what’s going on when another widget producer places my mark on the widgets he originates. Far less clear is the application of this scheme to the search context.

So what it comes down to is this: Is the use of a term to trigger a result in connection with an Internet search a “use in commerce” within the meaning of Trademark law? In the interest of evaluating on substance rather than form, lets try it out in the real world. Say I represent a mall food court joint called Impact Kings Wok…and say you’re a mall patron making a beeline for nearby Golden Dragon Hunan Garden. Suppose, then, I were to intercept you with a sample tray. I might say: “Hey, dude, I know you think Golden Dragon Hunan Garden has the best wontons in the entire food court, but I’m here to tell you that Impact Kings Wok makes a pretty dang good wonton–why not give us a shot?” Suppose, then, that you were convinced to deviate from your plan of chowing at Golden Dragon Hunan Garden and come check out the Impact Kings Wok. Trademark violation?

What if I took my diabolical schemes up a notch? What if I put an “Impact Kings Wok is better!” sticker next to the Golden Dragon Hunan Garden listing on the mall directory? What if I went to the nearby sign store and bought up all of the letters in Golden Dragon Hunan Garden? What if I went up to everyone in line for the Golden Dragon Hunan Garden and persueded them to bring their business to the Impact Kings Wok?

Have I violated Golden Dragon Hunan Garden’s rights in its name? Doubtful. I have not attempted to pass off my product as theirs. I have not tried to dilute the goodwill associated with their name. I have simply offered the consumer an alternative. See what I’m getting at?

So what happens when we bring form back into the equation? In short, it confuses things. This is because we have people actively buying and selling words that may, in some contexts, be the trademark protected property of a third party. Further, we have merchants using competitor’s trademarks to trigger their own advertisements. So: “use in commerce” within the meaning of trademark law? I vote no. Programs like AdWords have opened up new channels of communication in which a consumer’s signalled intent to purchase something can be met with offers from competing vendors. This is a far cry from the type of “passing off” that trademark is intended to prevent.

So persuasive is my reasoning that the District Court for the Northern Distric of New York stole my logic, hopped in its time machine, set the knobs and dials for 11 months ago, and applied it in the case of Rescuecom v. Google. I’m joking of course–the District Court for the Northern Distric of New York has long used a wormhole near Utica. Interestingly, they did a much better job of explaining the reasoning than I have here, so check it out. As a quick nod to procedure, I will note that the court’s decision was in the form of a grant of Google’s 12(b)(6) motion to dismiss. For those who understand the import of that, great. For the rest, no worries–it’s a law nerd thing. For everyone, it is important to note that that that court’s decision need not have any effect on the treatment of the American Airlines case.

Next up: what the outcome of this case could mean for AdWords users, the companies that love them, the companies that hate them, and the people who click on ads for offshore pharmacies…

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