Legal News

Bad Results for Google in Recent 2nd Circuit Ruling Over Keywords

By Ashby Jones

Anyone with more than a passing interest in trademark law or the internal workings of Google (we’d imagine the latter might outnumber the former) will likely be interested in a Second Circuit ruling that came down on Friday.

In an opinion penned by Judge Pierre Leval, a three-judge panel ruled that Google must face a trademark infringement lawsuit for selling keywords that trigger ads. Click here for the Recorder story.

The panel reversed a lower court’s dismissal of a case brought by a computer-repair company called Rescuecom. Google had recommended that a Rescuecom competitor use Rescuecom’s trademark as a keyword that would bring a link to the competitor’s Web site. Rescuecom objected to Google’s use of the Rescuecom trademark for these purposes and sued, alleging trademark violation.

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.” The dismissal was hailed as a big victory for Google and other search engines, for which keyword advertising is a lucrative business.

But on Friday, the Second Circuit reversed, holding that “Google’s recommendation and sale of Rescuecom’s mark to its advertising customers are not internal uses,” sending the case back to the trial court.

Lawyers for both parties were not reached on Friday.

Trademark experts had been eagerly awaiting the decision, partly because the state of the law on the use of keywords has been a bit jumbled.

“Every single district court outside of the 2nd Circuit found that the purchasing of a competitor’s keyword to trigger ads at least met the threshold question of stating a claim,” said Ian Ballon, an Internet lawyer at Greenberg Traurig, to the Recorder. “This is a significant effort at harmonizing the law.”

This said, the Second Circuit decision doesn’t offer that many answers about the legality of keyword advertising. Rescuecom and others will still have to prove their trademarks were infringed in the end.

“Just because a trademark is used and just because a claim can be stated doesn’t mean that there’s confusion,” said Ballon. “This harmonizes the threshold question, but there’s still a whole case that has to be proven.”

Full post as published by Law Blog - WSJ.com on April 06, 2009 (boomark / email).