Trademark Keyword Suit against Google Dismissed

A federal judge late Thursday dismissed a suit brought by a company that claimed Google was violating the law by selling its trademarked name as a keyword used to deliver competitors’ pay-per-click ads in search results.

Rescuecom, a Syracuse NY-based computer repair and consulting business, filed the trademark infringement suit against Google in September 2004, claiming that the search engine was infringing its copyright by permitting advertisers to bid on “Rescuecom” as a keyword. The company argued that doing so took advantage of the goodwill it had built in its name and prevented Internet searchers from finding its Web site easily.

But Judge Norman Mordue of the U.S. District Court for the northern district of New York ruled that the keyword terms that cause ads to be served on search results pages are not visible to the public but operate in the background to aid ad delivery and therefore can’t be considered use of trademarks on “goods, containers, displays or advertisements.”

“We welcome Chief Judge Mordue’s decision to dismiss the case, which again confirms our long-held belief that our trademark policy is lawful,” Google senior litigation counsel Michael Kwun said in a statement.

Google is alone among the three largest search engines in permitting paid-search advertisers to bid on and place ads against trademarked terms. Yahoo modified its editorial guidelines in March to rule out bidding on keywords containing competitor trademarks. None of the engines permit the use of trademark terms in sponsored search ad copy.

Rescuecom may appeal the federal ruling, company CEO David Milman said in a statement, calling the court’s decision “a dangerous precedent… that allows a behemoth to pit smaller competitors against one another, while it takes in the additional revenue.”

Google faces a number of legal complaints about the use of trademarks in its PPC ad sales, including a dispute with the parent company of payday loan company Check ‘N’ Go and a longstanding suit brought by American Blind and Wallpaper Factory. While the Rescuecom decision is not binding on suits in courts in other districts, the clarity of the ruling could influence future decisions in other courts, said Eric Goldman, who teaches intellectual property law at the Santa Clara University School of Law.

With the Rescuecom decision, “search engines got the ruling they wanted,” Goldman wrote in a post on his technology and marketing law blog. “It’s the first ruling expressly saying that search engines aren’t liable for selling keyword advertising. Best of all, the court granted Google’s motion to dismiss — meaning that the case got knocked out at the earliest possible stage, without discovery or a trial on the facts. This is perhaps the best outcome Google could have hoped for from this case.”