Internet advertising

Internet advertising is big business — on the order of $8 billion annually. Competition among businesses is at an all-time high, so it should be no surprise that your competitor may be using your name to gain a competitive business advantage.

If it is happening to you, what can you do about it? Or, if you are using your competitor’s name, is it legal?

There are currently two closely watched Internet advertising cases, both involving the Internet search engine Google and its AdWord advertising program. Both are pseudo trademark infringement cases and have similar fact patterns.

Google Inc. is the Internet’s leading search engine. Users input keywords into Google’s search engine to seek information about virtually any topic. Using a computer program, the site displays the results by listing Web sites that correspond to the user’s query. The user then chooses the Web site that best meets the criteria.

In the first litigation, Government Employees Insurance Co. (GEICO) v. Google Inc., GEICO filed suit in Virginia against Google, challenging Google’s AdWords advertising program. Google sells advertisements that are triggered by searches using trademarks and company names. The problem with that, according to GEICO, is that whenever GEICO’s trademark is typed into Google’s search engine, GEICO’s competition appears in the “Sponsored Links” area on the resulting Web page.

GEICO argues that Google’s AdWords advertising program violates federal laws.

The Virginia district court agreed and disagreed. In a bench ruling, a federal judge ruled that Google’s advertising policy does not violate any federal trademark laws. However, the judge did find that when the Sponsored Link search results page displays the GEICO name, that could be a violation of federal law. The case is proceeding on that cause of action.

For the time being, at least this Virginia court felt that buying competitors’ names from Google is not a violation of federal law, provided that the resultant search link does not have the competitor’s mark listed therein.

In the second closely watched Internet advertising case, Google filed suit against American Blind in Google Inc. v. American Blind & Wallpaper Factory Inc. American Blind is the owner of several trademarks that it uses in connection with its business. It complains about the same Sponsored Link advertising. American Blind’s argument is that when its competitors show up in the search results page via American Blind’s trademarks, users who were seeking American Blind were then diverted to the Sponsored Link section and, ultimately, to its competitor’s Web site.

Thus, argues American Blind, Google is allowing competitors to trade off of the goodwill established by American Blind.

Google moved to dismiss the trademark infringement and unfair competition claims early in the proceedings. The court denied Google’s motion since the case was in its infancy, and the case is going forward with the trademark infringement and unfair competition counts.

The outcomes of these two cases will be carefully scrutinized by those who use Internet advertising and those whose names are being used against them in competition. If your company has not purchased its AdWords from Google, one defensive strategy is to purchase them before your competitor does.

If your company is aggressive in its advertising, you may want to consider purchasing your competitors’ names and compete — until and unless these two cases tell us otherwise.

John M. Skeriotis is a partner at Brouse McDowell. Reach him at (330) 535-5711 or [email protected].