December 20, 2004, 12:00 AM

Google trademark ruling could lead to more aggressive search marketing

When a federal judge ruled that Google’s policy of letting competitors bid on each other’s trademarks does not cause confusion among consumers, the court backed a trend that could lead to more aggressive search engine marketing, experts say.


A ruling last week by a federal judge that Google Inc.’s policy of letting competitors bid on each other’s trademarks does not cause confusion among consumers follows a trend of similar court rulings and may lead to more aggressive search engine marketing, experts say.

“For search marketers sitting on the fence about whether they should bid on competitors’ trademarks, this ruling may make them feel more comfortable about doing that,” says Kevin Lee, CEO of search engine marketing firm LLC.

The ruling, by Judge Leonie Brinkema in U.S. District Court in Alexandria, VA, dismissed a claim by Geico insurance company, owned by Berkshire Hathaway, that Google’s policy of letting Geico’s competitors bid on and use the trademarked terms “Geico” and “Geico Direct” as search keywords could confuse consumers who searched on either of those terms to get information about Geico’s insurance products but then clicked on a link with a Geico brand keyword to a site offering a competitor’s products.

Lou Ederer, an attorney specializing in trademark law at New York-based law firm Torys LLP, said the Virginia ruling follows a trend set by most earlier court rulings related to trademark infringement in Internet marketing. “The courts have generally ruled against trademark infringement because they found no one is really confused,” he says. “Trademark law is designed to prevent confusion, and as long as judges establish that there’s no confusion, they’re supposed to rule in favor of consumer choice.”

Google says it was encouraged by the Virginia ruling, calling it a win for consumers. “This is a clear signal to other litigants that our keyword policy is lawful,” David Drummon, vice president and general counsel of Google, said in a statement. “This is a victory for consumers.” Geico has said it will continue seeking recourse in the courts.

The trademark issue in search marketing is far from settled, experts say. The Virginia court, for instance, has not yet addressed a related Geico complaint regarding Google’s policy of letting customers include competitors’ trademarks in the text of their search ads. Google has said it will remove such ads when trademark holders file complaints and is continuing to look into ways to address that issue.

If trademark cases continue to trend toward favoring consumer choice over trademark protection in web marketing, Ederer says trademark holders may turn more toward charges based on laws on unfair competition and fair trade, including local and state laws.

In the meantime, the legal trend to support the open use of trademarks in search keywords is likely to force more marketers to do the same, Lee says. “It gives consumers more choice, but it creates more of a challenge for brand holders to control their message and forces them to participate more in marketing,” he says. “Things are going to get more competitive.”


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