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Update 63: May 29, 2009

1. USA: Suit over AdWords budget limits ends with settlement

A class action law suit against Google will only make lawyers rich and leave advertisers with advertising credit. Want proof? Google has settled a lawsuit filed by advertisers (CLRB Hanson Industries of  Minnesota and Howard Stern of New Jersey) who claimed they were charged for more ads through the AdWords system than they had agreed to pay. The lawsuit, filed in 2005 in Santa Clara Superior Court in California, sought damages, restitution, and injunctive relief to remedy Google’s practice of (1) charging its AdWords advertisers up to 120% of their per day daily budget on any given day (Plaintiffs’ “120% claims”); and (2) charging AdWords customers who paused their campaigns more than their per day Daily Budget times the number of days their campaigns were not paused during the billing period.

Under the terms of the proposed Settlement Agreement, Google has agreed to pay $20,000,000 in a combination of cash and AdWords Credits. Both plaintiffs will receive $20,000; Google agreed to pay their lawyers more than $5 million. Other affected advertisers will get AdWords credits. Google argued that it had only overcharged advertisers to make up for days when it under-delivered ads, but still chose to end the litigation with a settlement. A spokesman said: “Google believes the claims are without merit, but we are pleased to have the litigation behind us and to move forward with our business objectives.”

CLRB Hanson Industries v. Google, 5:05-cv-03649-JW (settlement papers filed March 26, 2009).

For more information see: Goldman, CLRB Hanson v. Google Preliminarily Settles for $20M, Technology & Marketing Law Blog

2. Second Circuit decision on "Use in Commerce"

In a long awaited decision, the Second Circuit reversed a lower court’s dismissal of a case brought by Rescuecom against Google. Rescuecom alleged trademark violation, because Google - through its Keyword Suggestion Tool - had recommended that a Rescuecom competitor use Rescuecom’s trademark as a keyword. The district court had dismissed the case, accepting Google’s argument that its use of Rescuecom’s trademark was internal and not an infringing “use in commerce.”

So far every single district court outside of the 2nd Circuit found that the purchasing of a competitor’s keyword to trigger ads at least constitutes "use in commerce". Every district court in the 2nd Circuit found otherwise, believing this opinion was compelled by the Second Circuits holding in 1-800 Contacts, Inc. v., Inc., 414 F.3d 400 (2d Cir.192005) (“1-800”). But the 2nd Circuit found these cases to be materially different. In 1-800, the search term that was alleged to trigger the pop-up ad was the plaintiff’s website address, not its mark. Also, the advertiser could not purchase keywords to trigger their ads. Instead they could only choose a category. Google on the contrary, had recommended its advertisers the Rescuecom trademark through its Keyword Suggestion Tool and sold it as a keyword.

 The case is now going back to the trial court. Rescuecom still has to prove that Google's use of the trademark in its AdWords program causes likelihood of confusion or mistake.

Also see:


3. Google allows companies to use a rival's trade mark as a keyword in 190 countries

Google has modified its AdWords trademark policy to allow bidding on trademarked terms in 190 new countries. The policy is in line with the same trademark policy that applies in the United States, Canada, United Kingdom and Ireland. As of June 4th, Google will no longer investigate complaints relating to the use of trademarks as keywords by AdWords advertisers. This means that in the affected regions (a full list can be found here), a company advertising on Google will be able to select trademarked terms as keywords, and a user searching with a trademarked keyword may see a greater number of relevant ads in the sponsored links section.

The countries that this trademark policy does not apply to are Australia, Cyprus, Hungary, New Zealand, South Korea, Austria, Czech Republic, Iceland, Norway, Spain, Bahamas, Denmark, Italy, Poland, Sweden, Belgium, Finland, Lithuania, Portugal, Switzerland, Brazil, France, Luxembourg, Romania, Taiwan, Bulgaria, Germany, Macau, Slovakia, China, Greece, Netherlands, and Slovenia.

Also see: Google further liberalizes its Adwords’s Trademark policy in 190 countries, Austrotrabant’s Blog


4. Google allows trademarks in text of US ads

Starting June 15, 2009, Google will allow advertisers to use trademarks in the ad text, even if they don't own that trademark or have explicit approval from the trademark owner. But it is necessary that they sell the brand. Comparative advertising will still not be permissible. The change will only apply in the U.S. See  the Google Blog and Outlaw.


5. New AdWord and Metatag decisions and cases in the USA and Germany


In short

  • Still no luck for the Boring's against Google Street View. Their motion for reconsideration has been denied (Boring v. Google Inc., 2009 WL 931181 (W.D. Pa. April 6, 2009)). See Goldman, Boring v. Google Reconsideration Motion Denied, Technology & Marketing Law Blog
  • According to a complaint filed March 17, 2009 with the Federal Trade Commission by the Electronic Privacy Information center Google has not implemented adequate privacy and network security protections for its cloud computer services like Google Docs or GMail (complaint)
  • The US Department of Justice has launched an inquiry into the deals that Google set up with authors and publishers with its Google Book Search and implications of antitrust. Meanwhile, the US court overseeing that settlement has extended the deadline for objections to the deal or for authors to opt out of it on behalf of their works by four months. The new deadline is September 4, 2009 and the Fairness Hearing is scheduled for October 7, 2009. See Google's book deal faces competition law complaint, Out-Law

New in Legal Resources

  • Hoofnagle, Chris Jay, Beyond Google and Evil: How Policy Makers, Journalists and Consumers Should Talk Differently About Google and Privacy (April 6, 2009). First Monday, Vol. 14, No. 4-6, April 2009. Available at SSRN:
  • Samuelson, Pamela, Legally Speaking: The Dead Souls of the Google Booksearch Settlement (April 16, 2009). Communications of the ACM, Vol. 52, July 2009. Available at SSRN:
  • Edwards, Eli, Stepping Up to the Plate: The Google-Doubleclick Merger and the Role of the Federal Trade Commission in Protecting Online Data Privacy (April 25, 2008). Available at SSRN:
  • Klett,  Alexander, AdWord-Werbung unter Verwendung fremder Kennzeichen - markenrechtsverletzend?, K&R 2009, 317-320
  • Ott, Stephan, Datenschutzrechtliche Zulässigkeit von Webtracking?, K&R 2009, 308-313
  • Ott, Stephan, Die Entwicklung des Suchmaschinen- und Hyperlink-Rechts im Jahr 2008, WRP 2009, 351-372
  • Meyer, Sebastian, Aktuelle Rechtsentwicklungen bei Suchmaschinen im Jahre 2008, K&R 2009, 217-225
  • Dietrich, Florian, Anmerkung zu OLG Stuttgart - Snippets, CR 2009, 188-189
  • Jotzo, Florian, Gilt deutsches Datenschutzrecht auch für Google, Facebook & Co. bei grenzüberschreitendem Datenverkehr?, MMR 2009, 232-237
  • Rath, Michael / Swane, Torben, Google Buchsuche - digitale Weltbibliothek und globale Buchhandlung, K&R 2009, 225-228
  • Viscounty, Perry / Barry, Jennifer / Olseon, Christopher, Trademark as Keyword: It's use, but is it confusing?, Electronic Commerce & Law Report 2009, 564-569





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Latest News - Update 62

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