Google’s Adwords service allows advertisers to sponsor particular search terms. Whenever that term is searched the advertiser’s link will appear next to the search results. Any company can buy another company’s trademark protected term as a keyword or keyword phrase. Google’s online program “Keyword Suggestion Tool” actually suggests competitors keywords. So if you enter “trademark protected term” in the Google search box and hit “Search,” you would get listings from advertisers who paid for placement with this keyword. These paid results show up above the organic results and in the right column. Trademark owners are concerned about their brand awareness and insist that this behavior violates their trademarks. However, is this practice trademark infringement? To establish trademark infringement, a brand owner must show an alleged infringer uses its trademark without its consent in connection with advertising or selling goods or services in a manner that is likely to cause consumer confusion as to the source of the goods or the affiliation of the alleged infringer with the owner of the brand. Courts have struggled with two main issues:
1. Whether unauthorized use of a trademark as a keyword constitutes trademark “use in commerce.”
2. Whether such use creates a likelihood of confusion.
Sidebar: Rescuecom Corp. v. Google, Inc. 2009
A computer repair service named Rescuecom sued Google over recommending their trademarked name for keyword advertising. Companies like Nevium IP Management Solutions will be able to focus on this. The case was first heard by the U.S District Court of Northern District of New York in 2006. This court ruled in favor of Google and held that Google’s use of the Rescuecom trademark did not constitute a “use” under the Lanham Act. As a result Rescuecom’s claims of infringement did not apply. In 2009, The Second Circuit overturned this decision, ruling that Google’s actions did indeed constitute ‘commercial use’ and that Rescuecom’s claims could not be immediately dismissed. The Second Circuit stated that the purchase, sale and/or use of trademarked keywords is a ‘commercial transaction’ that trades on the value of a plaintiff’s trademark and constitutes “use in commerce.” In particular, where the triggered ad displays the plaintiff’s trademark, courts have found trademark “use.” March 2010 Rescuecom drops their lawsuit against Google when they get sued by Best Buy for doing exactly what they accuse Google of doing. They use the term “geek squad” in keyword advertising. Geek Squad is a trademarked name owned by Best Buy.
Are News Aggregators Legal?
A news aggregator is a website or software that takes information from multiple sources and displays it in a single place. This information is usually headlines, leads and photos. No case in the United States has yet definitively addressed the question of whether their activities are legal. The very foundation of blogging and social media is gathering interesting news and information from the Internet and presenting them in new ways. Many of the big news organizations, such as The Associate Press and News Corp, from which most of this news is gathered are beginning to complain and some are bringing lawsuits. News aggregators from Google News to The Huffington Post are free-riding, reselling and profiting from the information gathered by traditional media organizations at great cost.
“Nearly 61% of Americans got at least some of their news online in a typical day. This increased reliance on the Internet as a source of news has coincided with declining profits in the traditional media and the shuttering of newsrooms in communities across the country.” – Pew Internet and American Life Project
Sidebar: International News Service v. Associated Press 1918
The Associated Press sued INWS because they were repeatedly snatching AP’s hot wartime scoops off the wire rewriting the story and then publishing their own version of the breaking news as their own. AP got no recognition and they spent exceptional money and risk by sending trained reporters to a war zone. It wasn’t quite copyright infringement but their actions sufficiently offended the justices’ sense of fair play that they developed the Doctrine of Misappropriation to cover the immediate copying and distribution of “hot news” by commercial competitors of a news organization. If such “free riding” were allowed, the judges reasoned, the parasites would always be able to undersell their hosts, to the detriment of journalism in the long run. This granted a quasi-ownership of facts to news organizations and contradicted the Copyright law that states facts cannot be copyrighted.
Sidebar: National Basketball Association (NBA) v. Motorolla Inc. 1997
Motorolla and Stats, Inc. provided real time game scores and statistics from the televised games. The NBA sued for misappropriation under the “hot news doctrine.” The NBA won and prevented Motorolla from providing the service. The court formed a new test of what constitutes misappropriation:
1. Plaintiff generates or gathers information at cost
2. The information is time-sensitive
3. Use of the information constitutes free-riding on the plaintiff’s efforts
4. Defendant is in direct competition with a product or a service offered by the plaintiffs.
5. The ability of other parties to free-ride on the efforts of the plaintiff or others would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.