Google's Keyword Ad Sales may be "˜Use in Commerce'

On April 3, 2009, the US Court of Appeals for the Second Circuit (Court of Appeals) vacated the dismissal by the US District Court for the Northern District of New York of a trade-mark infringement action by Rescuecom Corp (Rescuecom), a computer service company, against Google Inc (Google). The key issue was whether Google's use of Rescuecom's trade-mark in its AdWords program and Keyword Suggestion Tool constituted a "use in commerce". In Google's AdWords program, advertisers can purchase terms or keywords such as "rescuecom". When entered as a search term, the keyword triggers the appearance of the advertiser's ad and link. Google's Keyword Suggestion Tool is a program that recommends keywords to advertisers to be purchased. Google claimed that its use of the keywords was only an internal use as part of its ad-placing algorithm. The case was dismissed in 2006 by a federal judge who accepted Google's argument that its use of Rescuecom's trade-mark was not an infringing "use in commerce." The Court of Appeals found that the District Court had misapplied the holding of a 2005 decision, 1-800 Contacts v. WhenU (see E-TIPS® "Pop-ups Pushed Down in US Litigation", Vol 2, No 15, January 8, 2004), and distinguished it from the present case:

"First, in contrast to 1-800, where we emphasized that the defendant made no use whatsoever of the plaintiff's trademark, here what Google is recommending and selling to its advertisers is Rescuecom's trademark. Second, in contrast with the facts of 1-800 where the defendant did not "use or display," much less sell, trademarks as search terms to its advertisers, here Google displays, offers, and sells Rescuecom's mark to Google's advertising customers when selling its advertising services. In addition, Google encourages the purchase of Rescuecom's mark through its Keyword Suggestion Tool."

The Court of Appeals held that Rescuecom adequately alleged Google's use of its mark was a "use in commerce" and remanded the case for further proceedings. In related news, Google has announced in a company blog that it is updating its trade-mark policy to allow some ads to use trade-marks in Adwords copy. To see Google's new trade-mark policy: http://tinyurl.com/raldqf For the full text of the decision reported as 562 F 3d 123 (2d Cir April 3, 2009), visit: http://tinyurl.com/r5semo For other comments on the decision, see: http://jolt.law.harvard.edu/digest/2nd-circuit-decisions/rescuecom-v-google Summary by: Clare McCurley