R.I.P. Geico versus Google

Now that the dust has settled (and so has Google), what should the search advertising industry make of the results of that case? Has it settled everything regarding Google's right to sell branded keywords to the highest bidder? Has it settled anything?

First, let's review what Geico versus Google was all about. The insurance company that has both Warren Buffet and a dancing gecko going for it sued Google for having allowed competing insurers to buy the Geico mark as a keyword. The claim was based on the Lanham Act, a part of the Trademark Code. Geico asserted that its trademark rights were being violated both by the sale of the marks but also by the use of those marks in the competitor's ads.

In December 2004, the court held that Google was within its rights to sell trademarked names as keywords but that the issue of liability for damages from the use of the Geico mark in the competitor's ads could go to jury trial. In a written opinion released in August, the court reiterated and expanded on its December decision that Geico failed to produce sufficient evidence to establish that advertisements that do not reference Geico's trademarks in their text or headings violate the Lanham Act, even though Google's advertising program enables those ads to appear when a user searches on Geico's trademarks. The Court also held that the use of Geico's trademarks in the heading or text of advertisements that appear when a user searches "Geico" does violate the Lanham Act, leaving as the only remaining issues in the case whether Google is liable for such violations and, if so, the amount of damages. The Judge gave the parties 30 days to settle. Geico and Google came to an undisclosed settlement on the thirtieth day.

Google had earlier adopted policies regarding marks appearing in competitor's ads that complied with the Court's ruling and indicated that no changes were to be made in the policy of selling trademarked keywords.

So where are we now? Has this case settled anything?

The reason the spotlight was on the Geico case is that it took place within a Federal Court District (Eastern Virginia) that is known informally as the "rocket docket" for the speed with which cases are resolved. Because of this, the Geico case was simply the first suit against Google on this issue to get to court. But there are other cases that will soon get to court and raise again the issue of Google's advertising policies regarding trademarks.

American Blind has sued Google in two Federal Districts (Northern California and Southern New York). Both cases are wending a slower path to trial than they would have on the "rocket docket."

In the Northern California case, American Blinds is suing Google on much the same issues as did Geico: does Google's sale of trademarked words violate the Lanham Act provisions of the Trademark Law? The Northern District is famously more liberal than many of its brethren and may well reach a different conclusion than the Eastern Virginia Court did in the Geico case. What happens then? Well, one of the major duties of the Supreme Court is to resolve differing decisions by the federal District Courts. We don't yet know John Roberts' opinion on the issue, but we probably will.

In the Southern New York case, American Blind and Wallpaper Factory have sued Google along with its search partners AOL and Netscape. There, the plaintiffs have claimed that Google -- by selling keyword-based advertising to competing retailers when Google users search on "American Blind" or "American Blinds" -- is violating the company's trademark. Moreover, that through its AdWords Keyword Suggestion Tool, Google actively and deliberately encourages American Blind's competitors to purchase as keywords both the American Blind marks and virtually every conceivable, though indistinguishable, iteration of those marks (e.g. a customer who is considering purchasing the keywords "American Blind" is encouraged also to purchase the keywords "american blinds", "american blinds and wallpapers," et cetera).

Another company that has a pending suit against Google on the same issues is AXA Group which is, like Geico, a giant insurance firm.

Earlier this year, the court upheld American Blind's rights to continue its case on claims of trademark infringement, unfair competition, contributory trademark infringement and contributory dilution. The court did, however, grant Google's motion to throw out American Blinds' claims of "tortious interference with prospective business advantage" and stated that its ruling expresses no opinion as to whether American Blind ultimately will prevail on the other claims.

In addition, JTH Tax versus Google was filed in the "rocket docket" this year. This case claims damages flowing from Google's alleged failure to comply with its own trademark infringement policy. In February 2005, the plaintiff learned that its trademark "Liberty Tax Service" appeared in the title of the online Google AdWords ad that directed users to another website called "Free Advice Center.com," which is a website unrelated to Liberty Tax Service. JTH Tax claims that Google did not respond to the demand to remove the link despite Google's trademark infringement policy, which states that ads containing third party trademarks will be taken down.

With all this pending litigation, we can't expect the issue to be definitively settled any time soon.  And, of course, the French Courts have already weighed in with a ruling that Google's ad policies regarding trademarks violated French Law in the Louis Vuitton versus Google case

One thing is sure:  This issue will provide income for the legal profession for years to come.

In the meantime, in light of the Geico ruling, what, if anything, should SEM specialists and media planners do differently?

The answer: practically nothing. 

Do be sure that client search ads don't include third party trademarks. That certainly is one key takeaway. While lawsuits so far have only named Google as a Defendant, no agency would want to be responsible for having a client be sued as a party to yet another Google lawsuit. And good search practice needs to include policing competitor's ads to be sure they don't infringe your clients' marks. Don't rely on Google to enforce this. Agencies must do it on behalf of clients.

But nothing about the Geico rulings changes the fact that buying competitors trademarked keywords remains a best practice for SEM. Indeed, anecdotal evidence indicates it may well be the most successful of all search tactics.

However, the wise Search marketer will prepare for the day when a Federal District Court may rule against Google and backup strategies will be needed.

Bob Heyman is Chief Search Officer at Mediasmith, where he helps clients with Paid Search, Organic Search Optimization (SEO) and Search Consulting on topics including Branded Search, keyword selection, best practices as well as trademark and legal issues.  He is credited with having pioneered the agency side of Search Engine Marketing as a co-founder of early full service web agency Cybernautics which was acquired by USWeb in 1997.  He is the co-author of Net Result.2 (New Riders) and The Auction App (McGraw Hill).   His clients have included IBM, NEC, Ask Jeeves, Netscape, Intel SGI, Avon, Bristol Myers Squibb, REI, Time Warner, Sony, Macromedia and ABC.  An Attorney, in a prior life as an Entertainment Lawyer he represented such stars as Maria Muldaur and Jefferson Starship.