A court victory in the GEICO case brings relief, but maybe not for long.
Despite a key win in court yesterday against auto insurance giant GEICO, Google's trademark-related legal battles are not yet over, and individual advertisers can still be held accountable for trademark violations in search engine ads.
Federal judge Leonie Brinkema ruled Wednesday in an oral decision that Google's policy to allow ads to be triggered by trademarked keywords can continue. She continued the case indefinitely to put the decision in writing, urging the two sides to settle their disagreement on the remaining issues of the case, which involve Google advertisers using trademarks within the text of their ads.
Since yesterday's decision is only based on the facts of this case, other pending cases, including one by American Blind & Wallpaper Factory, will not be affected by this ruling.
"Judges in other cases are absolutely not bound by this ruling. This is not binding precedent on anything other than this case," said Martin Schwimmer, a noted trademark attorney.
In fact, since the judge had ruled on two other occasions to allow GEICO to pursue trademark infringement and other claims against Google for its practices, the only thing that yesterday's ruling reflects is that the judge felt GEICO failed to present enough evidence of confusion involving GEICO's brand name, said David A. Rammelt, an attorney representing American Blinds in its case.
"I don't think yesterday's ruling has much precedential value beyond the specific facts of that case," Rammelt said. "The judge did not make any sort of sweeping declaration that Google's AdWords program is legal or that Google may sell other companies' trademarks for Google's own profit."
This leaves the door open for GEICO to pursue lawsuits against other search engines or individual advertisers, and for other trademark owners to sue Google.
"GEICO will continue to aggressively enforce its trademark rights against purchasers of its trademark on search engines and against search engines that continue to sell its trademarks," said Charles Davies, GEICO general counsel. "We continue to believe that the sale of GEICO's trademarks to its competitors is wrong and a violation of federal and state law and look forward to litigating that issue in future cases."
GEICO had argued that allowing competitor's sponsored links to appear next to search results when a user typed in "GEICO" or "GEICO Direct" was confusing to consumers, and infringed upon GEICO's trademarks, but the judge disagreed. "There is no evidence that that activity alone causes confusion," Brinkema said yesterday.
The judge's decision only addressed the direct infringement issues -- things Google did -- not the indirect issues concerning what Google allowed third parties to do, according to Schwimmer. He said the chances of Google being held accountable for the actions of advertisers was slim, based on legal precedents.
"Publishers will be held liable under the somewhat unusual circumstances that they don't take action after they are placed on notice," Schwimmer said. "It's always conceivable that someone can be held contributarily liable for something an advertiser does, but it would have to be pretty extreme that someone like Google was held liable, given they have a well developed and active policing program."
Google's trademark policy leaves individual trademark disputes to be worked out between the trademark holder and individual advertisers. It will "perform a limited investigation of reasonable complaints," the policy states. Overture, which settled its portion of the GEICO suit two weeks ago, has a similar trademark policy.
The potential for litigation, as well as other potential negative impacts, leads many search engine marketers to advise clients against purchasing trademarked keywords or using them within their ads, said Melissa Burgess, director of business development at SEM firm Impaqt.
"We highly advise our clients not to buy a competitor's keyword. It's not something that is in the best interest of our clients," she said. "We do encourage them to purchase their own trademarks as search terms to protect them."
A company owning its own trademarks helps ensure that it, and not its competitors or affiliates, gets the traffic from searchers who are farther along the buying cycle, when they tend to narrow their searches with specific brand names, or model names and numbers, Burgess said.
She notes that a PPC search campaign should include broad keywords, such as "laptop," more specific keywords like "Sony laptop," and finally precise keywords like "Sony VAIO 500." This would help deliver buyers who are in various stages of research and buying readiness, she said.
"This helps you get the branding impact, and helps you down through the purchase cycle when someone knows the exact make and model they're interested in," Burgess said. "You go broad to get visibility and brand awareness, but you're going to get higher conversions from the specific terms."
Though Burgess' opinion is shared by many search engine marketers, a recent study by comScore and Overture finds that most people don't even get to the point of searching by manufacturer or product name. The report also revealed that broad search terms that do not include a manufacturer name account for 70 percent of total search volume, and 60 percent of all conversions. Trademark searches, meanwhile, accounted for 20 percent of all online searches.
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Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.
Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.
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