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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Google Inc. v. American Blind & Window Factory, Inc.

Case No. 03-5340 JF (RS) (N.D. Cal., April 18, 2007)

Use Of Trademark In Keyword Advertising Constitutes A Use In Commerce

District Court holds that Google’s use of defendant American Blind & Window Factory’s (“ABWF”) trademarks to trigger the display of competitors’ ads as part of Google’s “Ad Words” program is a use of those marks in commerce within the meaning the Lanham Act.  These competitors’ ads are displayed by Google as ‘sponsored links’ and do not contain defendant’s trademarks.  The Court accordingly allows ABWF to proceed with trademark infringement claims arising from such use of its marks, finding that ABWF had presented sufficient evidence of consumer confusion to survive Google’s motion for summary judgment.  This evidence included the results of a survey that reported that 29% of consumers believed that such “sponsored links” were affiliated with the company that owned the trademark the consumer used to initiate his search.  The Court held as a result that whether consumers were in fact confused by “sponsored links” that do not contain defendant’s mark was an issue of fact requiring resolution at trial.

The Court did dismiss so much of defendant’s claims that were premised on its “American Blind” and “American Blinds” marks, which the Court held were descriptive.  Because ABWF did not submit sufficient evidence to establish that these (then) common law marks had developed sufficient secondary meaning to be entitled to protection from Google’s conduct at the time Google began its allegedly infringing activity, the Court dismissed so much of ABWF’s claims as were grounded on the alleged use of its American Blind and American Blinds marks.

Finally, the Court dismissed ABWF’s Federal and California dilution claims, finding that ABWF had failed to submit sufficient evidence that its marks were “famous,” a prerequisite to such dilution claims.  It should be noted that the court designated its decision as “not for citation.”

Google Uses American Blind’s Mark As Keywords To Trigger Display Of Third Party Ads

This suit involves another challenge to the efforts by search engines to display ads on their search result pages triggered by the search terms entered by users of those sites.  Here, the Court is asked to determine the propriety of Google’s Ad Words program.  As part of this “key word” program, Google sells ads triggered by a user’s search for American Blind’s trademarks, including the marks “American Blind Factory” “American Blind & Window Factory” and “Decoratetoday.”  The resulting ads, displayed as “Sponsored Links,” do not contain American Blind’s marks.  They do, however, promote the products of its competitors.  Under its Ad Words program, Google will demand that its advertisers remove trademarks they do not own from the ads they run.  However, it will not, in response to a complaint by the trademark owner, remove that owner’s marks from its Ad Words program, or prevent them from being used as key words.

Google commenced this action, seeking a declaratory judgment that its Ad Words program did not infringe defendant’s marks.  Defendant counterclaimed, asserting, among other things, that Google’s activities infringed and diluted its trademarks.

Use In Commerce Under Lanham Act 

Google moved for summary judgment, dismissing ABWF’s trademark infringement claims.  An essential element of such a claim is the use by the alleged infringer of the mark holder’s mark in commerce.  Google argued that its use of defendant’s marks as triggers in its Ad Words program for the display of “sponsored links” does not constitute the requisite use of that mark in commerce within the meaning of the Lanham Act, and thus cannot constitute trademark infringement in violation thereof.  In support of its argument, Google noted that it did not place defendant’s marks on, and thus was not itself misleading consumers as to the source of, any goods or services.  Google also argued that the same was true of the “sponsored links” that appeared on its site, which did not use defendant’s mark, instead informing users accurately of their source.

This issue has been the source of significant litigation throughout the country.  A number of courts have held that the sale by a search engine of key word advertisements triggered by the display of another’s trademarks constitutes a use in commerce of the mark holder’s mark, subject to the strictures of the Lanham Act.  These courts include:

GEICO v. Google, Inc,, 300 F. Supp. 2d 700 (E.D.Va. 2004)
800-JR Cigar Inc. v., Inc., 473 F.Supp.2d 273 (D.N.J. 2006)
Buying for the Home LLC v. Humble Abode LLC, 459 F.Supp.2d 310 (D.N.J. 2006)
Edina Realty Inc. v., 2006 WL 737064 (D. Minn. 2006)
J.G.Wentworth SSC v. Settlement Funding LLC, 2007 WL 30115 (E.D.Pa.  2007)

Other courts have taken an opposite view, holding that “the sale of key words for sponsored links does not constitute use for the purpose of the Lanham Act.”  These include:

Merck & Co. v. Mediplan Health Consulting Inc., 425 F.Supp.2d 402 (S.D.N.Y. 2006)
Rescuecom Corp. v. Google, Inc., 456 F.Supp.2d 393 (N.D.N.Y. 2006)
Following GEICO and the other decisions cited above, the Court held “that the sale of trademarked terms in the AdWords program is a use in commerce for the purposes of the Lanham Act” and hence subject to the strictures of the Lanham Act.
Finding adequate evidence of the possibility of consumer confusion sufficient to withstand Google’s motion for summary judgment, the court denied Google’s motion, and allowed ABWF to proceed to trial on its trademark infringement claim.  This evidence included a survey that reported that 29% of respondents falsely believed that “sponsored links” were affiliated with the entity who’s mark they had used as a search term.  The Court held as a result that the question of whether consumers were likely to be confused by “sponsored links” that do not contain defendant’s mark was an issue of fact requiring resolution at trial.
No Lanham Act Protection For American Blind’s Mark

The Court did dismiss so much of defendant’s claims which were based on its “American Blind” and “American Blinds” marks.  These marks had not been registered at the time Google commenced their use in its AdWords program.  As a result, they could only serve to support an infringement claim if defendant had developed common law trademark rights therein at the time Google commenced its challenged use.  The Court held these marks descriptive.  Accordingly, to establish the requisite trademark rights therein, defendant was required to show that the marks had developed secondary meaning by the time of Google’s challenged use.  As defendant failed to submit sufficient evidence to meet that burden, the Court granted so much of Google’s motion that sought dismissal of claims premised on its use of these marks.

Dilution Claims Fail 

Finally, the Court dismissed the dilution claims defendant advanced under both the Lanham Act and California law.  To obtain the protection of these dilution statutes, the mark holder must establish that his mark is “famous” 15 U.S.C. 1125(c ) or a “highly distinctive well known mark[]” in the case of California’s dilution statute.  The Court held that ABWF failed to produce sufficient evidence that its marks were famous or highly distinctive, and accordingly dismissed its trademark dilution claims.

It should be noted that the Court designated its 21 page decision as “not for citation.”

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