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AdWords lawsuits in the USA

1. The Lanham Act

To prevail on a trademark infringement claim under § 32(1) of the Lanham Act, 15 U.S.C. § 1114(1)2, a plaintiff must establish that

  • (1) it has a valid mark that is entitled to protection under the Lanham Act; and that

  • (2) the defendant used the mark,

  • (3) in commerce,

  • (4) ‘in connection with the sale . . . or advertising of goods or services,’ 15 U.S.C. § 1114(1)(a),

  • (5), without the plaintiff's consent.”

The plaintiff must also show that the defendant's use of that mark “is likely to cause confusion . . . as to the affiliation, connection, or association of [the defendant] with [the plaintiff], or as to the origin, sponsorship, or approval of [the defendant's] goods, services, or commercial activities by [the plaintiff].” 15 U.S.C. § 1125(a)(1)(A).

2. "Use in Commerce"

Courts in the USA are split on the threshold question of whether the sale and purchase of another's trademark as a keyword constitutes a commercial use of the mark.

Courts in the Second Circuit have uniformly held that the use of a trademark in keywords, where the use is strictly internal and not communicated to the public, does not constitute a Lanham Act "use". See:

The district courts have adopted the reasoning of 1-800 Contacts Inc. v., 414 F.3d 400 (2d Cir. 2005) (10 ECLR 678, 7/13/05). The court had held that the use of a trademarked term to trigger browser pop-up advertising was not an actionable use of the mark in commerce: "A company's internal utilization of a trademark in a way that does no communicate it to the public is analogous to a individual's private thoughts about a trademark.  Such conduct simply does not violate the Lanham Act, which is concerned with the use of trademarks in connection with the sale of goods or services in a manner likely to lead to consumer confusion as to the source of such goods or services."

Merck & Co. v. Mediplan Health Consulting Inc., 431 F. Supp. 2d 425 (S.D.N.Y. 2006) (11 ECLR 375, 4/5/06): "In 1-800 Contacts, the Second Circuit emphasized that commercial use is not the equivalent of “use in commerce” for trademark purposes. It observed that, “while any number of activities may be ‘in commerce’ or create a likelihood of confusion, no such activity is actionable under the Lanham Act absent the ‘use’ of a trademark.” 414 F.3d at 412. Trademark use “ordinarily” involves placing a trademark on goods or services to indicate that the goods or services emanate from or are authorized by the owner of the mark. Id. at 408. Here, in the search engine context, defendants do not “place” the ZOCOR marks on goods, containers, displays, or associated documents, nor do they use the marks to indicate source or sponsorship. Rather, the marks are used only in the sense that a computer user’s search of the keyword “Zocor” will trigger the display of sponsored links to defendants' websites. This internal use of the keyword “Zocor” is not use of the mark in the trademark sense; rather, this use is more akin to the product placement marketing strategy employed in retail stores, where, for example, a drug store places its generic products alongside similar national brand products to capitalize on the latter's name recognition. See id. at 411. The sponsored link marketing strategy is the electronic equivalent of product placement in a retail store."


 The U.S. District Court for the Western District of Washington (located in the Ninth Circuit) held that the use of a mark in a clearly marked comparative ad context was "excepted from the reach of the statute"; Nautilus Group, Inc. v. Icon Health & Fitness, Inc., No. C-02-2420RSM, 2006 WL 3761367 (W.D. Wash. Dec. 21, 2006)


The U.S. District Court for the Eastern District of Kentucky denied a motion to dismiss without actually deciding whether the purchase of keywords was a trademark use, holding merely that the plaintiff's Lanham Act claim was "plausible". (T.D.I. Int'l Inc. v. Golf Preservations Inc., E.D. Ky., No. 07-313, 1/31/08)


In 2004 the Ninth Circuit held - without adressing the "use in commerce" question - that the use of trademarks to trigger the display of banner advertising creates initial interest confusion (Playboy Enter. Inc. v. Netscape Communications Corp. 354 F. 3d 1020 (9th Cir. 2004) (9 ECLR 55 1/21/04)

Following this decision, several district courts found "use in commerce"

These courts distinguished the adwords cases from three pop-up ad cases (the above mentioned Second Circuit decision 1-800 Contacts Inc. v., 414 F.3d 400 (2d Cir. 2005) (10 ECLR 678, 7/13/05), U-Haul Int'l Inc. v. Inc. 279 F. Supp. 2d 723 (E.D. Va 2003) (8 ECLR 837, 9/10/03) and Wells Fargo & Co v. Inc., 293 F. Supp.2d 734 (E.D. Mich. 2003) (8 ECLR 1101, 11/26/03)). In the pop-up software cases the advertisers were only allowed to bid on categories of terms, not specific marks ("Such conduct is qualitatively different from the pop-up advertising context, where the use of trademarks in internal computer coding is neither communicated to the public nor for sale to the highest bidder.")


3. Likelihood of Confusion

Even if there is a use in commerce, the use also must be likely to cause confusion. Likelihood of confusion requires that “‘an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question, or “are likely to believe that the mark’s owner sponsored, endorsed, or otherwise approved of the defendant’s use of the mark,” Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC, 221 F. Supp. 2d 410, 414 (S.D.N.Y. 2002) (citing Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 204-05 (2d Cir. 1979)).

No likelihood of confusion:

Likelihood of confusion:

  • International Profit Associates, Inc. v. Paisola, 461 F. Supp. 2d 273 (D.N.J. 2006); the court issued a temporary restraining order, because the links in the ad and the linked-to-web site included the trademarked terms

  • Edina Realty Inc. v., Civ. 04-4371, 2006, WL 737064 (D. Minn. March 20, 2006) (As evidence of confusion Edina Realty offered a handful of e-mails and phone calls received by MLSonline from consumers inquiring about Edina Realty: "It is unclear whether the phone calls and emails identified by plaintiff are evidence of actual consumer confusion caused by defendant’s use of plaintiff’s mark. A survey that could demonstrate actual confusion is unnecessary, however, because plaintiff need only show a likelihood of confusion. The Court determines that the phone calls and emails are sufficient to raise a genuine issue of material fact for the purposes of summary judgment.")

  • In a case, where competetor's trademark was displayed in the ad copy, a federal court found initial interest confusion as a matter of law, because the defendant offered no evidence to show a lack of initial interest confusion and could offer no explanation for why he chose plaintiff's trademark as an Adword. (Storus Corp. v. Aroa Marketing Inc., 2008 WL 449835 (N.D. Cal. Feb. 15, 2008))

No initial interest confusion:

Designer Skin, LLC v. S & L Vitamins, Inc., 2008 WL 2116646 (D. Ariz. May 20, 2008): S & L Vitamins had used Designer Skin’s trademarks in the metatags and source codes of its websites, and as search-engine keywords, to inform internet consumers who are searching for Designer Skin’s products that those products are for sale on S & L Vitamins’ websites. The United States District Court held that there was no initial interest confusion. It stressed the fact that S & L Vitamins’ use of Designer Skin’s trademarks accurately described the contents of its websites: "In contrast to the deceptive conduct that forms the basis of a finding of initial interest confusion, S & L Vitamins uses Designer Skin’s marks to truthfully inform internet searchers where they can find Designer Skin’s products. Rather than deceive customers into visiting their websites, this use truthfully informs customers of the contents of those sites. Indeed, in practical effect S & L Vitamins invites Designer Skin’s customers to purchase Designer Skin’s products. The fact that these customers will have the opportunity to purchase competing products when they arrive at S & L Vitamins’ sites is irrelevant. The customers searching for Designer Skin’s products find exactly what they are looking for when they arrive at these sites. S & L Vitamins is not deceiving consumers in any way. Thus, its use of the marks does not cause initial interest confusion."


4. Pending lawsuits:

American Airlines Inc. v. Google Inc., N.D. Tex., No 4:07cv487, 10/24/07): The U.S. District Court for the Northern District of Texas denied Google Inc.'s motion to dismiss plaintiffs ellegations. For more court documents click here! For more information please click here!American Airlines Inc. and Google Inc. have settled their Adwords related trademark-infringment lawsuit by the carrier against the search engine. Terms of the dismissal weren’t disclosed in the judge's dismissal order. See Goldman, Eric, American Airlines and Google Settle Keyword Advertising Lawsuit, Technology & Marketing Law Blog

American Airlines is suing Yahoo! over the use of its trade marks to trigger ads for competing airlines. For more information see: Goldman, Eric, American Airlines Sues Yahoo for Selling Keyword Advertising, Technology & Marketing Law Blog

New lawsuits in 2009:

Stratton Faxon v. Google, Inc. (New Haven Superior Ct. complaint filed May 27, 2009). For more information see: Goldman, Eric, Another Lawsuit Over Google AdWords--Stratton Faxon v. Google, Technology & Marketing Law Blog
Soaring Helmet Corp. v. Bill Me Inc., 2:2009cv00789 (W.D. Wash
. complaint filed June 9, 2009). The Justia page. For more information see: Goldman, Eric, Google Sued Again for Trademark Infringement--Soaring Helmet v., Technology & Marketing Law Blog
Jurin v. Google, Inc., CV 09-03934 (C.D. Cal.
complaint filed June 2, 2009). For more information see: Goldman, Eric, Seventh Lawsuit Over Google AdWords--Jurin v. Google, Technology & Marketing Law Blog
Ascentive, LLC v. Google, Inc., 2:09-cv-02871-JS (E.D. Pa. complaint filed June 25, 2009). For more information see: Goldman, Eric, Sixth Lawsuit Filed Over Google AdWords, Plus an Assault on Google's Organic Search Results--Ascentive v. Google, Technology & Marketing Law Blog. Ascentive also claims that Google broke the law when, after a dispute, it refused to list its web site in the natural search listings any longer and did no longer allow Ascentive to participate in the AdWords program. Ascentive tried to persuade Google to revoke the decision, but did not succeed, not even in gaining the information why Google did this. Two emails from Google only stated: "Unfortunately, we will not be reversing our decision regarding the suspension of your account. Please respect our decision and as noted in our Terms and Conditions, Google reserves the right to terminate advertisements for any reason." and "As mentioned in our previous email, your Google AdWords account has been suspended due to multiple policy disapprovals. We are unable to revoke your account suspension, and we will not accept advertisements from you in the future. Please note that our support team is unable to help you with this issue, and we ask that you do not contact them about this matter."

Eric Goldman has the latest news on several Google AdWords cases in the USA. See: Google AdWords Litigation Updates--Google Adds One Lawsuit and Ends Another, Google AdWords Litigation Keeps Rolling In--Parts Geek v. US Auto Parts and Teeth Whitening System Brings "Sue the World" Lawsuit Against Ad Agency, Competitor and Search Engines--Dazzlesmile v. Azoogle.



5. Additional information on some cases

a. American Blind and Wallpaper Factory v. Google / AOL

American Blind and Wallpaper Factory filed suit against the search giant and its partners, AOL and Netscape, in the U.S. District Court for the Southern District of New York on January 27, 2004. American Blind argues that Google, by selling keyword-based advertising to competing retailers when Google users search on "American Blind" or "American Blinds" is violating the company's trademark. Moreover through its AdWords Keyword Suggestion Tool, Google actively and and deliberately encourages American Blind's competitors to purchase as keywords both the American Blind marks and virtually every conceivable, though indistinguishable iteration of those marks (e.g. an customer who is considering purchasing the keywords "American Blind" is encouraged also to purchase the keywords "american blinds", "american blinds and wallpapers" 

Early in 2005, the court upheld American Blind's rights to continue its case on claims of trademark infringtement, unfair competition, contributory trademark infringement and contributory dilution. The court did, however, grant Google's motion to throw out American Blinds' claims of "tortious interference with prospective business advantage" and enthasized that its ruling expresses no opinion as to whether American Blind ultimately will prevail on the other claims.

Legal Documents:

  • American Blind and Wallpaper Factory v. Google
    • Complaint (PDF - January 27, 2004)
    • Googles Motion to Dismiss (PDF - March 30, 2005)
  • Google v. American Blind and Wallpaper Factory
    • Complaint for Declaratory Judgment of non-infringement (PDF - November 26, 2003)
    • Letter to Google regarding AdWords trademark complaints (PDF - July 23, 2003)
    • Letter to Google's Trademark Counsel (PDF - July 11, 2003)


In 2007, U.S. District Court Judge Jeremy Fogel in San Jose, Calif., refused to completely dismiss the lawsuit. The ruling granted some claims while rejecting others in Google's motion for summary judgment. "The large number of businesses and users affected by Google's AdWords program indicates that a significant public interest exists in determining whether the AdWords program violates trademark law," Fogel wrote in his decision.

Google, Inc. v. American Blinds & Wallpaper Factory, Inc., C 03-5340 JF (N.D. Cal. April 18, 2007)

In September 2007, Google finally settled this long-running trademark infringement lawsuit with American Blind and Wallpaper Factory, which was scheduled to go to trial in the U.S. District Court for Northern California in November. Google agreed not to make any changes to its AdWords trademark policy that would adversely affect American Blind in exchange for the company’s dropping its claims. The settlement included no payment.

Google Inc. v. American Blinds & Wallpaper Factory Inc., 5:03-cv-05340-JF (N.D. Cal. settled August 31, 2007)


b. Google v. Geico

The complaint, filed by plaintiff Government Employees Insurance Co. (Geico) against defendant search engine companies Google Inc. and Overture Services Inc. on May 4, 2004 alleges that defendants by selling  the famed "Geico" mark as adword so that the protected term can appear in sponsored search results, are infringing on the complainent's trademark. According to the suit, that practice causes consumer confusion in violation of the Lanham Act, the primary federal law covering trademark registration and protection.  Geico has asked for a permanent injunction, attorneys' fees and damages. Geico is seeking nearly nine million dollars in lost profits.

And something for fans of conspiracy theories: Geico is not only the largest direct marketer of auto insurances in the United States, which makes it the most high-profile American company to have filed a complaint against Google over their adwords, but also a subsidiary of Berkshire Hathaway, the investment company owned by Warren Buffett. Buffett is rumored to be a good friend of Bill Gates. The start of the search engine war against Google?

  • September 3, 2004: Roberts, Paul: Google May Face Another Lawsuit, PCWorld:
    "A federal judge in Virginia has ruled that a trademark infringement suit filed by the Government Employees Insurance Co. (GEICO) against Internet search giants Google and Overture Services can proceed."
  • May 19, 2004: Olsen, Stefanie, Geico sues Google, Overture over trademarks, ZDNet
    "Auto insurance company Geico has sued Google and Overture Services for allegedly violating its trademarks in search-related advertisements, in the latest legal salvo against the Internet companies."

In December 2004 Google Inc. won a significant legal victory  when a federal judge ruled that the search engine's advertising policy does not violate trademark laws. The ruling was the first in American courts to address whether Google can sell ads linked to trademarked search terms. According to the judge, "as a matter of law it is not trademark infringement to use trademarks as keywords to trigger advertising,"  This outcome had not been expected as in late August, the judge had denied Google and Overture's motion to dismiss six charges brought by Geico and on Nov. 19 had denied Google's motion for summary judgment. Overture (Yahoo!) had settled out of court with insurance company Geico earlier in December 2004. Terms of the agreement were not disclosed.

The judge still had  to rule on another claim by Geico, that Google is liable for trademark infringement when it lets marketers buy ads that use trademarked names in the ad copy.


Governement Employees Ins. Co. v. Google Inc., E.D.Va, No 1:04cv507 (LMB/TCB), bench ruling, December 15, 2004


A written opinion released 8 August by the US District Court for the Eastern District of Virginia reiterated and expanded on a verbal opinion from last December in the Google v. GEICO lawsuit.  The Court found that GEICO failed to produce sufficient evidence to establish that advertisements that do not reference GEICO’s trademarks in their text or headings violate the Lanham Act, even though Google’s advertising program enables those ads to appear when a user searches on GEICO’s trademarks. The Court also held that the use of GEICO’s trademarks in the heading or text of advertisements that appear when a user searches on “GEICO” does violate the Lanham Act, leaving as the only remaining issues in the case whether Google is liable for such violations and, if so, the measure of damages.  The two parties were directed to try and reach a settlement during the next 30 days. And so they did, but the terms of settlement remain confidential.

GEICO's press release

  • August 18, 2005: Google: AdWords-Richtlinien sind legal, Golem:
    "Der Suchmaschinen-Betreiber Google widerspricht Berichten, man habe im Streit um die Nutzung von Marken in Googles AdWords-Programm mit GEICO eine herbe Niederlage hinnehmen müssen, durch die das Geschäft mit Keyword-Werbung gefährdet sei."
  • August 17, 2005: Mills, Elinor, Geico decision rocks Google, ZDNet:
    "The ongoing row over one of the Internet behemoth's major income sources has taken a turn in insurance firm Geico's favour."
  • August 8, 2005: GEICO v. Google Opinion (Finally) Issued, Technology and Marketing Law Blog
  • September 9, 2005: Google and GEICO settle AdWords dispute, The Register:
    "Google and car insurance firm GEICO have settled a trade mark dispute over the search engine's sale of sponsored search terms "Geico" and "Geico Direct"."


c. Google v. Rescuecom Corp.

The full text of the complaint can be found at It alleges that Google has improperly infringed upon and diluted Rescuecom Corporation’s name and trademark “Rescuecom” by selling the trademark “Rescuecom” to Rescuecom Corporation’s competitors as a keyword so that when an Internet User searches for “Rescuecom” on defendant Google’s Internet search engine, the competitor’s advertisement hyperlink will appear on the first page of the search results. Resuecom also believes that Google's  online program “Keyword Suggestion Tool” has suggested to one or more of Rescuecom Corporation’s competitors that they should use the Rescuecom trademark as a Keyword for their advertising.

Until April 2004 Google had responded to complaints by Rescuecom Corporation of trademark violations by removing the Sponsored Link which used the Rescuecom trademark as a Keyword. After April 2004, Google changed its policy and thereafter refused to remove or otherwise disable the links.

In 2006 a New York District Court dismissed the lawsuit. See: The ruling (16-page / 1.7MB PDF)

Rescuecom is appealing to the Second Circuit, Rescuecom v. Google, 06-4881-CV (2nd Circuit appellant brief filed January 12, 2007).

Rescuecom v. Google, 06-4881-CV (2nd Circuit appellee brief filed February 12, 2007)



d. JTH Tax v. Google

Another Adwords lawsuit was filed against Google by JTH Tax on April 4th. In February 2005 the plaintiff learned that an use of its trademark "Liberty Tax Service" appeared in the title of the online Google Ad Words ad that directs users to another website called "Free Advice", which is a website unrelated to Liberty Tax Service. Google did not respond to the demand to remove the link. Google's trademark infringement policy says that ads containing third party trademarks will be taken down. Why Google didn't react in this case, remains unclear.

The lawsuit was brought before the United States District Court Eastern District of Virginia Norfolk Devision. The complaint can be found at:

The lawsuit was voluntarily dismissed by the plaintiff shortly after filing.


e. Office Depot v. Staples

Office Depot has filed suit against rival office supply giant Staples in a U.S. District Court in West Palm Beach, FL, for improperly purchasing online search engine ads that redirected potential customers to the Staples Web site. The suit charges Staples with trademark infringement, unfair competition, false advertising, and deceptive trade practices.

This case appears to have settled Nov. 17, 2005


f. CNG v. Google

CNG Financial Corp., which owns more than 1,300 Check 'n Go stores in 35 US states, has filed a lawsuit against Google Inc. in the U.S. District Court in Cincinnati. The payday loans provider wants an order preventing Google from selling ads linked to the Check 'n Go name.

A Google search for "Check 'n Go" provides 27 "Sponsored Links" that direct users to websites of Check 'n Go competitors. "Because of the fame of the Check 'n Go mark, these companies are willing to pay Google handsomely to have links to their Web sites appear in response to a search of that mark," the lawsuit says.

  • February 9, 2006: Google sued for selling Check 'n Go keyword, The Register:
    "The company behind US cash-advance firm Check 'n Go has sued Google for selling its trademarks as keywords in search advertising, according to the Cincinnati Enquirer."

STIPULATION of Dismissal with Prejudice by Plaintiff CNG Financial Corporation and Defendant Google Inc. (Hunter, Barry) Modified docket text on 9/7/2007 (scot1, ).

Click here for more court documents!


g. JP Enterprises Inc. v. Yahoo! Inc. et al, D.Colo., No. 1:06-cv-01046, 6/6/06

JP Enterprises -which runs the online dating service has sued Yahoo and three other companies for allegedly paying to have their ads come up when its name is typed into the Google search page. The lawsuit, filed in federal district court in Colorado accuses Yahoo and the other companies of bidding to appear on Google's results pages when users query on "lovecity" and the related terms "" and "www.lovecity." JP Enterprises claims that Yahoo and the other companies are violating the JP Enterprises trademark by using it to trigger ads for their own dating sites, and seeks punitive damages because, the suit alleges, the sponsored ads appearing through the AdWords system caused confusion with consumers, hurt the "lovecity" brand and cost sales.



h. American Airlines Inc. v. Google Inc.

American Airlines has become the most high-profile company so far to sue Google over keyword advertising.

By bringing a lawsuit against Google, filed in U.S. District Court for the Northern District of Texas, Fort Worth Division, the company wants to stop competitors from using trademarks to trigger their own advertising on Google.

"Without authorization or approval from American Airlines, Google has sold to third parties the 'right' to use the trademarks and service marks of American Airlines or words, phrases, or terms confusingly similar to those marks as 'keyword' triggers that cause paid advertisements, which google calls 'Sponsored Links' to appear alongside the 'natural results," the lawsuit said.

  • American Airlines v. Google, 4:07-cv-00487 (N.D. Tex. complaint filed Aug. 16, 2007)

On October 24, 2007, the court has denied Google's motion to dismiss American Airlines' lawsuit.


i) Hamzik v. Zale Corp./Delaware, 2007 WL 1174863 (NDNY April 19, 2007)

A federal judge has ruled that the rights of trademark holders may be violated when their terms are used by others as part of the actual ad copy. So the case survived defendant's motion to dismiss.


j) Edina Realty Inc. v.

The U.S. District Court for the District of Minnesota held that the use of a rival real estate broker's trademark as a keyword term, as well as in the text of sponsored links, is not a fair use of the mark where there are other opinions for describing the market the defendant serves.

Without lengthy analysis, the court found that the defendant's purchase of search terms like “Edina Realty,” “Edina Reality,” “,” “EdinaRealty,” “,” “” and “”  on both Google and Yahoo did constitute use of the plaintiff's mark in commerce. The court held that although defendant's use was not "conventional," the purchase of terms comprising the marks, in order to generate sponsored link advertisements, satisfied the definition of use in commerce as provided in 15 U.S.C. §1127.

The court briefly evaluated the standard likelihood of confusion factors and found enough dispute about several factors to require a trial. Edina Realty proffered as evidence of actual confusion several e-mails received by MLSonline from consumers inquiring about Edina Realty.

MLSonline also sought dismissal of the trademark infringement claims advanced against it on the ground that its use was a permitted nominative fair use: 

The Court holds that defendant's use of the Edina Realty mark does not constitute nominative fair use as a matter of law.  Defendant uses the mark as an Internet search term, in its Sponsored Link advertisements, and in hidden text and hidden links on its website.  None of these uses requires the Edina Realty mark.  In its advertisements and hidden links and hidden text, defendant could easily describe the contents of its website by stating that it includes all real estate listings in the Twin Cities.  Similarly, defendant could rely on other search terms, such as Twin Cities real estate, to generate its advertisement.  In addition, defendant's use of the Edina Realty mark in its advertisement does not reflect the true relationship between plaintiff and defendant.  Defendant's advertisement that has appeared on Yahoo, for example, places the Edina Realty mark in the headline, which is underlined and in bold font.  The name of defendant's company is listed in much smaller font at the bottom of the ad.  Defendant could have done more to prevent an improper inference regarding the relationship.

In May 2006, the case settled. Lawyers representing Edina Realty and confirmed that a deal has been reached but said its terms were confidential.

Also see: Goldman, Eric, Competitor's Keyword Ad Purchase May Be Trademark Infringement--Edina Realty v. TheMLSonline, Technology & Marketing Law Blog

Edina Realty Inc. v., Decision of March 20, 2006, U.S. District Court for the District of Minnesota


k) 800-JR Cigar Inc. v.

In 800-JR Cigar, Inc. v., Inc.,et al., the US District Court of New Jersey issued an opinion on whether the use of a trademark as a "keyword" constitutes trademark infringement by a search engine. The plaintiff,  JR Cigar,  is a prominent seller of cigars at discount prices and the owner of six federal trademarks that utilize the formative “JR” or “JR Cigar.” The defendant, GoTo is a pay-for-priority Internet search engine (a search engines that solicits bids from advertisers for key words or phrases to be used as search terms, giving priority results on searches for those terms to the highest-paying advertiser)   formed in 1997 (now Overture). Between April 1999 and June 2001, GoTo earned revenue of about $345 from paid listings for “jr cigar” and related search terms.

The court adopted the reasoning of Government Employees Insurance Co. v. Google Inc., 330 F. Supp. 2d 700, 73 USPQ2d 1212 (E.D. Va. 2004) and held, among other things, that such sales by a search engine constitute a "use" of the trademark "in commerce" within the meaning of federal trademark statutes. According to the court GoTo made use of JR's trademark in three ways:

• GoTo traded on the value of the marks when it accepted payment by competitors of JR desiring to pay for prominence in search results.

• GoTo injected itself into the marketplace by placing the advertisers before the natural search results list, acting as a conduit to steer potential customers away from JR to JR's competitors.

• GoTo's "Search Term Suggestion Tool" identified which of JR's marks were effective search terms, and then marketed them to JR's competitors.

The court concluded, however, that there are disputed issues of fact that preclude a summary judgment ruling on the issue of direct trademark infringement, in particular the likelihood of confusion resulting from the sale of trademark terms as keyword search terms.

For a detailed look at the decision, read:


Older Press Coverage of the lawsuits in the USA

  • June 17, 2005: Dickinson, Casey, Rescuecom files trademark suit against Google, Business Journal:
    Rescuecom, a computer-repair franchising company based in Syracuse, has filed suit against Google, Inc. to stop the search-engine giant from selling the company’s name as a Google keyword."
  • April 6, 2004: McCullagh, Declan, Judge won't toss out Google, Overture suit:
    "A federal judge in New York has rejected requests from Google and Overture Services to throw out a lawsuit that claims the two search companies unlawfully sold advertising based on a pet store owner's registered trademark."
  • January 30, 2004: Klage gg. Google,
    "Die American Blind and Wallpaper Factory macht ihre schon im letzten Jahr angekündigte Drohung wahr und klagt gegen Google."
  • January 28, 2004: Olsen, Stefanie, Google faces trademark lawsuit over keyword ads, CNet:
    "A lawsuit filed this week has intensified an ongoing dispute over whether Google's policy of selling ads related to search terms is legal or involves trademark infringement."
  • December 5, 2003: Kuchinskas, Susan: Google Asks Judge to Lay Down Trademark Law,
    "Today, Google asked a U.S. district court to rule on whether some of the keywords it sells to advertisers infringe on the trademarks of American Blind and Wallpaper Factory."
  • December 5, 2003: Google Adwords in den USA auf dem juristischen Prüfstand, Heise:
    "Der Suchmaschinenbetreiber Google will vor Gericht klären lassen, unter welchen Bedingungen mit Suchbegriffen verknüpfte bezahlte Werbung mit dem US-Markenrecht kollidiert."
  • December 4, 2003: Olsen, Stefanie, Google wants ruling on search trademark law, CNet:
    "Aiming to pre-empt mounting complaints of trademark violations, search company Google has asked a court to rule on whether its keyword-advertising policy is legal."
  • November 5, 2003: Sullivan, Danny, Google Faces Fight Over Ads & Trademarks In France, Search Engine Watch:
    "Days after Google was fined by a French court for selling ads linked to the terms "travel market" and "airflight market," news emerged that Louis Vuitton launched its own trademark-related action against Google."
  • October 16, 2003: McCullagh, Declan, Google France fined for trademark violation, ZDNet:
    "A French court has ruled against Google France in an intellectual property dispute, saying the company must pay a fine for allowing advertisers to tie their text notices to trademarked search terms."
  • April 4, 2003: Steiner, Ina, Amazon to Put Google Ad Words & Search on Its Site , Auctionbytes:
    " and Google have announced a multi-year agreement that will make Google's search technology and targeted sponsored links available on"


Google Inc. v. American Blind and Wallpaper Factory Inc., No. 03-05340 (N.D. Cal. March 30, 2005) (10 ECLR 361, 4/6/05) on Likelihood of Confusion:


b. Evidence of Confusion
(1) GEICO’s Survey Results

GEICO introduced an expert survey that it claimed revealed a strong likelihood of confusion caused by Google’s Adwords program and the Sponsored Links that the program places alongside the organic results of searches on the GEICO trademark.9 The survey was designed and evaluated by a professor of marketing at American University’s Kogod School of Business, who attempted to measure initial interest confusion experienced by potential customers10 by asking them to enter “GEICO” into the Google  search engine and then view a results page that showed five Sponsored Links alongside the organic listings.11 The survey also tested a “control group,” the members of which also searched on “GEICO” but then saw a results page on which the Sponsored Links had been changed from advertisements for car insurance quotes, most of which mentioned GEICO, to advertisements regarding NIKE athletic apparel. After asking both groups a series of questions designed to measure the likelihood of confusion, the professor compared the degree of confusion demonstrated by those who viewed the insurance-related Sponsored Links to that demonstrated by the control group.12

According to the survey results, 67.6% of test group respondents expected that they would reach GEICO’s Web site if they clicked on the Sponsored Links, and 69.5.% thought that the Sponsored Links were either links to GEICO’s site or affiliated with GEICO in some way.13 In addition, 20.1% of test group respondents said that to purchase GEICO insurance they would click first on one of the Sponsored Links.14 From these results, the professor concluded that a substantial percentage of potential GEICO customers perceived the Sponsored Links as being
associated with GEICO and therefore were confused about whether they could get GEICO information or rate quotes from those links.

(2) Survey Weaknesses
The Court found that defendant’s cross examination of the professor revealed a number of weaknesses in GEICO’s survey evidence. First, the control did not successfully demonstrate the source of the test group’s confusion. As the survey expert admitted, an effective control should have removed from the page viewed by the test group the allegedly infringing elements for which GEICO wanted to measure confusion, such as the Sponsored
Links mentioning GEICO, while keeping the other elements as constant as possible. This would have allowed the evaluator to subtract any degree of confusion expressed by the control group from that expressed by the test group, with the resulting difference representing the confusion attributable to the eliminated elements–-similar to the manner in which medical researchers subtract out the “placebo effect” of a drug or procedure under examination. However, the survey’s control, which replaced the insurance-related Sponsored Links that appeared when respondents searched on “GEICO” with Sponsored links related to NIKE athletic apparel, did not function as an accurate measure of the confusion caused by non-infringing elements of the screen shot. As a threshold matter, the control retained the use of “GEICO” as a keyword, which itself was alleged to be a source of confusion. Further, instead of removing only the references to GEICO in the Sponsored Links, which would have measured whether the use of the trademarked keyword to place relevant Sponsored Links or the appearance of the mark in the ads was responsible for respondents’ confusion, the survey removed all references to car insurance and replaced them with clearly unrelated NIKE ads. Thus, the control did not reveal which aspects of the insurance-related Sponsored Links caused respondents’ confusion–-the use of GEICO’s mark in the ads or the ads’ mere reference to insurance.15 By not examining this  more subtle distinction, the survey did not produce evidence that the use of “GEICO” as a keyword, without more, causes respondents to be confused by the appearance of the Sponsored Links.
Second, the survey design introduced “demand effects” and “order effects” that could have tainted respondents’ answers that  appeared to indicate confusion. A demand effect results when th interviewer’s questions or other elements of the survey design influence participants’ responses by suggesting what the “correct” answers might be or by implying associations that might not otherwise occur to participants. An order effect results when a participant’s answer to one question affects his answers to subsequent questions. For obvious reasons, both effects can significantly bias the survey results. In this instance, as noted above, the interviewers repeatedly questioned respondents about their behavior and assumptions with regard to GEICO and obtaining GEICO quotes. Responses to subsequent questions, such as whether the participant thought the Sponsored Links were affiliated with any company, easily could have been influenced by the earlier questions about GEICO, making the participant more likely to assume that “GEICO” was the right answer or what the interviewer wanted to hear. This demand effect, along with the order effect, also undercut the assessment of confusion regarding the one insurance-related Sponsored Link shown to the test group that did not mention GEICO’s mark in its heading or text. Of the five Sponsored Links listed, only the last one did not refer to GEICO in its heading or text. By the time respondents considered this ad, they had already seen the four others that did contain the GEICO mark, calling into question whether they would have expressed similar confusion if faced only with insurance-related ads that appeared next to the organic results for “GEICO” but did not mention the mark itself.
Third, discrepancies between the Web page selected to be shown to the survey particpants and the actual pages users are likely to see when searching on “GEICO” further weakened the reliability of the results. As discussed above, the page chosen included more Sponsored Links than the average Google results page. In addition, and possibly more important to an accurate assessment of users’ confusion, the overall appearance of the outdated screen shot shown to survey participants differed markedly from the Google results page that a user would encounter in running a real search. Most notable, in the survey shot, the Sponsored Links were closer on the page to the organic listings
than on Google’s actual search results pages.16 In the Court’s view, the proximity of the Sponsored Links in the survey page increased confusion regarding the difference between the two lists of links and was suggestive of affiliations between the organic listings and the Sponsored Links. Especially when considered along with the other weaknesses in the survey, these differences give the Court serious doubts about the accuracy of the survey results’ reflection of actual users’ experiences with and reactions to the Sponsored Links.

c. Conclusions from Evidence of Confusion
Based on the above analysis, the Court finds that plaintiff has failed to establish a likelihood of confusion stemming from Google’s use of GEICO’s trademark as a keyword and has not produced sufficient evidence to proceed on the question of whether the Sponsored Links that do not reference GEICO’s marks in their headings or text create a sufficient likelihood of confusion to violate either the Lanham Act or Virginia common law. Despite the many flaws in its design, the survey’s results were sufficient to establish a likelihood of confusion regarding those Sponsored Links in which the trademark GEICO appears either in the heading or text of the ad. Based on this finding, Google may be liable for trademark infringement for the time period before it began blocking such usage or for such ads that have slipped or continue to slip through Google’s system for blocking the appearance of GEICO’s mark in Sponsored Links. For, despite the flaws in the survey, the extremely high percentages of respondents who experienced some degree of confusion when viewing such ads provides sufficient evidence to survive defendant’s Motion for Judgment. Further, having been advised by defendant that it has no evidence to introduce on this last issue, the Court finds that plaintiff has established a likelihood of confusion, and therefore a violation of the Lanham Act, solely with regard to those Sponsored Links that use GEICO’s trademarks in their headings or text.


6. Update 2009





Lawsuits in France

Lawsuits in the USA

Lawsuits in Germany

Lawsuits in the Netherlands

Lawsuits in the U.K.

Lawsuits in Australia


Search Engine Law Overview



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