Geico sues Google and Overture Options

[cre8pc]

Geico sues Google, Overture over trademarks

The insurer charged the two companies with infringing on its trademarks when they sold them as keywords to Geico's rivals, so that the protected terms could appear in sponsored search results. According to the suit, that practice causes consumer confusion, in violation of the Lanham Act, the primary federal law covering trademark registration and protection.  

\"This practice deliberately misleads consumers and allows Geico's competitors and these defendants to illegally exploit for their own commercial purposes Geico's investment of hundreds of millions of dollars in its brand,\" company spokeswoman Janice Minshall wrote in an e-mail.

The insurer is seeking damages and an injunction against Google's and Overture's use of its service marks in their advertising programs.

According to Geico's complaint, the insurer considered Google's policy change before pursuing legal action: \"Google's recent change in trademark policy constitutes a deliberate decision to use the registered trademarks of other companies, including Geico, for the financial benefit of Google and to the detriment of (others).\"

Google faces a number of lawsuits similar to Geico's. Louis Vuitton sued Google and its French subsidiary for similar alleged trademark infringement, and a French court ordered Google to cease the practice and pay a fine. In January, American Blind and Wallpaper Factory filed suit against Google in a New York federal court, alleging trademark infringement.

Seems like a lot of lawsuits for one brand new IPO about to birth.

Kim

[cline]

I hope Google and Overture prevail against this anti-consumerist lawsuit.

[bragadocchio]

Cline, I'm not certain that I understand your stance. A trademark infringement case is supposed to clear up consumer confusion.

In my opinion, a court is a perfectly good forum to determine whether or not there is actual harm to consumers from the actions of people and businesses.

Maybe you can explain further why you think it might harm consumers to have a judge decide whether or not there is trademark infringment going on.

I don't think just labeling this lawsuit an "anti-consumerist lawsuit" is enough.

One potential argument that someone might try to make would be that if Google was aware of ongoing trademark infringment through their service, and they allowed it to continue, they might be in some way responsible for harm to the trademark holder.

See: Keyword Sales Spawn Trademark Disputes

There's also quite a bit on trademark and trademark infringement at the Chilling Effect FAQ on the subject.

[cline]

bragadocchio said:

A trademark infringement case is supposed to clear up consumer confusion.

No, a trademark lawsuit is for the purposes of protecting the business interests of the trademark owner. Such interests may coincide with or oppose consumers' interests.

...explain further why you think it might harm consumers

Because it is an artifical constraint regarding the information that can be provided to consumers. To me it's no different from prohibiting grocery stores from providing consumers with coupons for products that compete with what the consumer has purchased.

[bragadocchio]

Why would a business bother being in business if they couldn't create a unique identity?

Why would they develop a brand if someone else could come along and use the very same package and product or service name?

Without trademarks, anyone could put forward brands that were developed and popularized by others who strived to earn good will by giving consumers respectible products and good customer service.

Without trademark protection, we would have only generic brands. There would be no economic incentive to develop a USP, because people would just steal it, and they would be able to get away with it.

My question asked what would be wrong with have a court and a judge decide. You didn't answer that question.


Your answer was pointed towards, what I think you see as a flaw, in not allowing people who advertise based upon keywords that might be trademarks.

I'll explain what I see as the harm in that.

An individual starts a business. He provides a service to the public, and people like the service. They tell friends. He starts to do well, and advertises. People start learning the name. Larger companies with much more money come up with a cheap knock-off service. They advertise using the small company's trademarked name as the keyword that triggers the ads.

The small business person can't compete with the larger company that is providing the el-cheapo service and showing up inthe paid part of the search results pages. The consumer ends up buying the crummy version, not necessarily knowing which version was which, but knowning which one cost less. The small business person goes out of business. The large company raises their rates because they no longer have competition.

The search engine encourages companies to bid upon their competitor's trademarked names. It provides more advertising opportunities for the search engine's clients, and the search engine makes a few bucks off the selling the trademark.

The consumer has difficulties telling if the paid results are from the same company that owns the trademark. The trademark owner asks the search engine to stop. The search engine has notice at that point that there is a trademark problem, so they can't claim a lack of knowledge. They continue to see the trademark, and continue to encourage people to buy other company's keywords.

[cline]

Why would a business bother being in business if they couldn't create a unique identity?

A unique identity is only useful in as much as it supports being in business successfully. A unique identity has no usefulness in and of itself, except for ego purposes.

Why would they develop a brand if someone else could come along and use the very same package and product or service name?

The case here is not about assuming a competitor's trade dress. Running an ad that is delivered when a competitor's name is searched on is not an impersonation of trade dress. I am certainly not against trademark protection.

My question asked what would be wrong with have a court and a judge decide. You didn't answer that question.

Because it's not an interesting question. It's a question about the role of courts in society, not a question about PPC advertising.

That's a nice-sounding heart-breaking story, but if a consumer who knows enough to ask for a product by name finds a product they like better due to advertising, it's a benefit to the consumer. Businesses exist to benefit consumers; consumers do not exist to benefit businesses.

This situation is no different from a consumer going into a store and asking the clerk for Brand X, and the clerk suggesting that they also consider Brand Y.

[cre8pc]

This situation is no different from a consumer going into a store and asking the clerk for Brand X, and the clerk suggesting that they also consider Brand Y.

If I paid a store to sell Brand X, but they recommended Brand Y to customers, I wouldn't be paying the store for very long.

If the store clerk holds up Brand X and Brand Y next to each other, and let's the customer decide without influence from the clerk, that seems fair. May the bathing suit that makes me look the skinniest win, I always say :shock:

I think many people equate search engines/directories as the equivilent of a store and assume they have certain rights.


Kim

[Respree]

A name or symbol secured by legal registration that identifies a manufacturer's or trader's product or service and distinguishes it from other products and services. Icons, company names, brand names, and packaging can all have trademark protection. Trademark owners have the right to prevent others from using the same, or a confusingly similar mark, but cannot prevent others from making or selling the same goods under a nonconfusing mark.

http://usinfo.state.gov/topical/econ/ipr/i...pr-glossary.htm

Not taking sides here, but I was looking at it from Google/Overture's perspective. If unsuccessful in their defense, it seems to me that this could have the potential for a devastating blow to advertising revenues, not to mention setting a potentially unwanted precedent.

Even if the intent from trademark holders is to allow for legitimate business partners to market products/brand (i.e. affiliated companies, authorized sales agents, retailers, etc.), companies like Google/Overture would be forced to not allow this type of advertising. It is complicated further by them not knowing what is and isn't a registered trademark. Of course, they could look it up, but considering the number of phrases that could fall into this category, I imagine that task would be near-impossible.

[Black_Knight]

Lets simplify matters immensely by simply bearing in mind Google's true feelings, rather than their desire to sell trademark infringements for money. Google don't allow bids for the trademark 'Google'. That's their real feelings. Other companies feelings don't count for as much, sadly.

[cline]

Black Knight, I think you're mistaken. I run Adwords ads on Google's tradmarks.

[Black_Knight]

Ever had a bid approved for their company name? I haven't.

[cline]

Maybe they don't like you. They like me. You can find me here.

[bragadocchio]

This situation is no different from a consumer going into a store and asking the clerk for Brand X, and the clerk suggesting that they also consider Brand Y.

I'm trying to see this, but I can't help but believe that the owner of Brand Y is paying the clerk a few bucks to show consumers Brand Y when people ask for Brand X, regardless of how good or bad Brand Y is. The benefit to the consumer is immaterial.

[cline]

In a typical retail situation the store gets paid to sell both Brand X and Brand Y. Leaving out non-business reasons (e.g., clerk personally dislikes Brand X), the clerk may suggest Brand Y for a variety of reasons:

* Higher price => greater total sale
* Higher profit margin
* Easier to sell, customers like it more when they see it, so clerk is more likely to make the sell
* Greater customer satisfaction => fewer returns and repairs

[bragadocchio]

That may be a typical retail situation, but what your argument by analogy is attempting to describe isn't a typical retail situation.

That's one of the problems with arguing using analogies. What do any of those reasons have to do with a search engine?

The only reason why the search engine is showing the ad based upon the trademark is that the advertiser is stuffing the search engine's pocket with money.

[cline]

When the courts decide this they're going to look for analogies within existing trademark law. There is no direct precedent for what's going on in PPC.

Yes, Brand Y is giving Google money. They're also giving money to the retailer.

Another analogy is when you go to the grocery store and when you check out you get a machine-generated coupon for a product that competes with one you just bought. The grocery store is getting paid to deliver this, based on what brands you buy.

Another analogy, if a magazine's sales department knows that an review of Brand X is running in an upcoming issue, can they capitalize on this by selling ad space to Brand X's competitors? Can they offer to put the ads next to the article?

[bragadocchio]

As analogies go, those seem a lot closer to the mark. Good ones.

I think that what happens in those examples are fine because there isn't confusion over which company is which.

But I'm still wondering if there is consumer confusion when someone searches for a company by its name or trademark, and it's competitor's site is the one that shows up prominently on a search result as a paid ad. I think there is.

[Black_Knight]

They like me.  You can find me here.

Cline, please tell me you're playing Devil's advocate and joking when you tell me that you can't tell the difference between using a trademark in a phrase, and just using the trademark.

There's a great deal of difference in allowing company X to say "We're similar to Brand Y" and allowing them to bid directly for "Brand Y". The legalities center around improper use and customer confusion. So do the ethics.

Someone searching for "Microsoft" is probably, surprise surprise, looking for Microsoft - not just any company that sells a Microsoft product or who thinks they are somewhat similar to Microsoft, or once sold a sandwich to someone who worked at Microsoft.

"similar to Microsoft" could be fair use and an acceptable bid.
"sells Microsoft" could be fair use and an acceptable bid.
"Microsoft products" could be fair use and an acceptable bid.
But just "Microsoft"? Not really - which is the same reaction you'll get when you try to bid for just "Google".

[cline]

The phrase vs. isolated-use issue doesn't matter. Besides, I was advertising on just "google adwords" but the CPCs got so high recently that it become uneconomical. But look at how many ads there are on "google adwords". That's Google's trademark.

[Black_Knight]

How many times will I have to say "just 'Google'", (clearly and specifically stated thrice now), before you'll be prepared to concede the point?