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Google Forced to Defend Claim that Adwords Suggestion Tool Violates Lanham Act

March 7, 2011

On February 15, 2011, the U.S. District Court for the Eastern District of California (Jurin v. Google Inc., E.D. Cal., No. 09-3065, 2/15/11). ruled that Google, Inc. must defend an unfair competition lawsuit alleging that its suggestion of a plaintiff's trademark as an advertising keyword, and linking of those keywords to sponsored ads, misdirected customers who searched for the plaintiff's website.  In so ruling, the court rejected Google's contention that a claim for false designation of origin under the Lanham Act, at 15 U.S.C. §1125(a)(1)(A), can only be brought against the producer of the goods that allegedly caused confusion with a plaintiff's own goods.

The court considered Cairns v. Franklin Mint Co., 24 F. Supp.2d 1013 (C.D. Cal. 1998), for support.  Cairns noted that the text of Section 1125(a)(1)(A) is general in nature, referring to parties who may be involved as “any person” or “another person.”  That indefinite language, plus the legislative history of the statute, did not support the narrow reading that Google sought.  The court did not address whether Google and the plaintiff are direct competitors with respect to the keyword itself—a factor required to support its related false advertising claim—because the unfair competition claim stood as a whole on false association grounds.

To pursue a claim for false association under the Lanham Act, the holder of a valid trademark must show that a defendant's illicit use of that mark in commerce caused consumers to become confused, mistaken, misled, or deceived as to the producer of the goods offered for sale, Waits v. Frito-Lay Inc., 978 F.2d 1093 (9th Cir. 1992).  A false association claim does not require parties to be direct competitors, the court noted.  The plaintiff, who owns the “Styrotrim” mark, complained that Google's suggestion of its mark as an AdWords keyword to its competitors, and presentation of competitors' ads in response to a search for the mark, could confuse consumers as to the source of goods offered at the competitors' websites.  Google argued that the claim should be dismissed because it does not produce the goods offered on those websites.  The court was not convinced.  The cases Google cited, Facenda v. N.F.L. Films Inc., 542 F.3d 1007 (3d Cir. 2008), and Cairns, did not support its narrow reading of the statute, the court held.  Facenda merely stated the standard as it applied in that case, which did involve direct competitors, the court found.  Cairns considered who could sue for false association, not who could be sued.  “In fact, [Cairns went] on to state that the statutory language [ ] ‘another person' was purposefully selected with the intent that it be applied broadly, and that these words indicate[d] Congressional intent to make §1125(a)(1)(A) an expansive provision[,]” the court said.  The Lanham Act's legislative history, including 1988 amendments, supported that conclusion. “Given the very broad and general language of §1125(a) and the legislative history encouraging courts to interpret innovatively, Defendant has very little, if any, support for a narrow construction of the statute.”

Given this ruling, it is clear that Lanham Act false designation of origin claims may be brought against any party that uses a mark in commerce, not merely the producer of goods offered for sale.

Richard B. Newman, Internet Lawyer and Business Litigation Attorney - Hinch Newman LLP