Virginia federal court to hear keying case against Google and Overture

The US District Court for the Eastern District of Virginia has denied Google Inc's and Overture Services Inc's motion to dismiss Government Employees Insurance Co's (GEICO) claim that their practice of selling trademarks as keywords that trigger ads in search engine result pages ('keying') amounts to trademark infringement (Civil action 1:04CV507, 2004 WL 1977700 (ED Va August 25 2004)). The court ruled that keying constitutes trademark use within the meaning of the Lanham Act and, thus, the defendants may be liable for trademark infringement.

The court's memorandum opinion notes that the essential relevant inquiry is the question of whether the defendants' actions (ie, selling GEICO's trademark to competitors to use in keying), as alleged by GEICO in the complaint, constitute trademark use (ie, use of a mark in commerce in connection with the sale, offering for sale, distribution, or advertising of goods or services) sufficient to satisfy a threshold requirement for Lanham Act liability, as interpreted by the US Court of Appeals for the Fourth Circuit in People for the Ethical Treatment of Animals v Doughney.

Google and Overture moved for dismissal on the basis that their practice was similar to using a trademark in pop-up ads or post-domain name URLs [uniform resource locators], which several courts have found to be not infringing (see Important U-Haul pop-up decision should help clarify legal landscape, WhenU pops up with another victory and Trademark rights do not extend to post-domain URLs).

The GEICO court rejected these analogies, noting that other courts had reached opposite conclusions. Citing the Ninth Circuit's decision in Playboy Enterprises Inc v Netscape Communications Corporation (see Keying has potential to infringe and dilute marks, rules Ninth Circuit) and other cases as "better reasoned", the GEICO court held that the search engines' use of a trademark to sell advertising and then link that advertising to results of searches does constitute trademark use. Accordingly, the court concluded that Google and Overture may be liable for direct, contributory and/or vicarious trademark infringement, as well as unfair competition and dilution under the Lanham Act, and unfair competition under Virginia state law. Two state law claims, for tortious interference with prospective advantage and statutory civil business conspiracy, were dismissed as GEICO failed to plead them with sufficient specificity.

Whether the sale of trademarks as keywords violates US trademark law remains unclear, as no cases on this topic have made their way through the courts to final adjudication. However, a trend towards liability may be developing (see Are the courts set to lock the door on keyword advertising?). Elsewhere, in October 2003 a French court ordered Google to pay a fine of €75,000 and to cease allowing advertisers to link keyword advertising to trademarks (see Google's sponsored links infringe trademarks). Google has appealed that decision. It is facing similar lawsuits in Germany and Italy.

Other pending US lawsuits involving search engines and their keyword advertising practices include: Google Inc v American Blind and Wallpaper Factory Inc (ND Cal November 26 2003); American Blind and Wallpaper Factory Inc v Google Inc (Case 04-cv-00642 (SDNY January 27 2004)); Novak v Overture Services Inc (Case 2:02CV05164 (EDNY October 10 2002)) and 800-JR-Cigar Inc v Overture Services Inc (D NJ October 2 2000).

Sheldon H Klein, Arent Fox PLLC, Washington DC