September 29, 2006 4:08 PM PDT

Judge sides with Google in dispute over keywords

A federal court on Thursday dismissed a lawsuit against Google over its practice of allowing companies to buy search-related ads that are displayed when people type in the name of a competitor.

In early 2005, computer repair company Rescuecom sued Google in U.S. District Court for the Northern District of New York, alleging that Google was violating trademark by selling ads to Rescuecom's competitors that show up next to search results when someone types in "Rescuecom."

Rescuecom argued that Google was violating trademark by attempting to "free-ride" on the goodwill associated with Rescuecom's name, preventing Internet searchers from reaching Rescuecom's Web site, altering the search results and using the trademark internally. The court rejected those arguments, saying the facts do not establish trademark use as a matter of law.

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

Rescuecom may appeal the ruling, said David Milman, founder and chief executive of the company. "A dangerous precedent has been set that allows a behemoth to pit smaller competitors against one another, while it rakes in the additional revenue," he said. "The immense power enjoyed by Google will be compounded by this ugly tactic as advertisers clamor to reach critical online audiences. Rescuecom will not be the last company hurt by this scheme."

The case "could be a watershed" in that it finds that selling keyword advertising is not a trademark use in commerce, said Eric Goldman, who teaches Internet and intellectual property law at Santa Clara University School of Law. "It's the first ruling expressly saying that search engines aren't liable for selling keyword advertising," he wrote in his blog.

Google hasn't been so lucky in French courts ruling on this matter. Google lost a trademark lawsuit filed by designer Louis Vuitton in June, and a similar lawsuit last year filed by Le Meridien Hotels and Resorts.

Similar lawsuits have been filed against Google by the parent company of Check 'n Go and American Blind and Wallpaper Factory. Google settled a similar case a year ago brought by auto insurance provider Geico.

See more CNET content tagged:
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"this ugly tactic"???
What ugly tactic?
Google has no "tactic" of deliberately having advertisers use competitors' trademarks. Google just let's advertisers provide search strings, that's all. It has no mechanism set to favout trademarks of competitors.
A trademark owner is required to actively seek trademark infrigement. The law doesn't require others - including Google - to do this. If providing a competitor's trademark as a serach string in keyword based advertising is infringing on the trademark holder's rights then the correct party to sue is the one that provided the search string, so the trademark holder should act against the advertiser and not against Google. It is not that difficult for a trademark owner to actively seek such infringers: they just have to search for their trademark, and then look for compertitors ads (and then follow them ("to see where they lead" - the side effect would be that the advertiser pays something to Google).
Posted by hadaso (468 comments )
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Re: "this ugly tactic"???
hmm... I won't be suprised if the sales people (or account mnagers) for Google and other search engines were actively encouraging companies to buy keywords that include trademarks of competitors.

As well, Google and other search engines are profiting directly from the trademark of others by displaying keyword ads based on trademarked keywords.

I personally think that Google should only be allowed to sell keywords that are in major dictionaries unless the buyer provies it is the trademark ownder of the keyword.
Posted by shawnlin (75 comments )
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narrow minded
it is narrowmindedness of the company. they are not confident of their product or service that they are afraid that they may go to other results displayed....
Posted by thisisananth (1 comment )
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