Google hit with new lawsuit over ad keywords

Firepond is reviving the legal tussle over whether Google should be allowed to sell ad keywords that are trademarks of a company to its competitors.

Tom Krazit Former Staff writer, CNET News
Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.
Tom Krazit
3 min read
Should companies be allowed to serve ads based on keywords that are trademarks of competitors? Firepond

About a month after an appeals court revived a trademark lawsuit over Google's keyword sales, another suit has surfaced in Texas.

Ars Technica spotted Firepond's lawsuit, filed Monday in Texas, against Google over whether Google should be allowed to sell keywords bearing a company's trademark to its competitors. A similar suit involving PC support company Rescuecom was brought back to life in April by an appeals court after initially being dismissed in 2006.

The issue is whether Coke, for example, should be allowed to buy keywords such as Pepsi and place ads for Coke products on searches for Pepsi. Rescuecom and Firepond argue that their respective keywords are an extension of the trademark they have acquired on their brands, and that Google should not be encouraging competitors to violate that trademark by using it to promote their own products. Firepond makes sales management software.

Google is willing to remove a trademark from one of its ads if it's in the text of the ad (Pepsi sucks! Try Coke!), but "we will not disable keywords in response to a trademark complaint," the company says in an FAQ about its trademark policies for AdWords. Its reasoning?

"Accordingly, our trademark policy not to monitor the use of trademarks in the U.S., Canada, the UK, and Ireland aims to provide users with choices relevant to their keywords. At the same time, we investigate trademark violations in ad text both as a courtesy to the trademark owner and to ensure that ads are clear to users." A Google representative declined to comment on the Firepond lawsuit itself, saying the company was still reviewing the complaint.

AdWords is the engine that has made many a Googler rich. The system allows anyone to bid on a given keyword and win placement on the top or right side of a search results page based on a combination of factors such as the size of the maximum bid for that keyword as well as the quality of the ad.

Part of the reason that this system generates the revenue it does is because the results are highly visible; much to the chagrin of a company outbid or outclassed by a competitor for a keyword pertinent to their business. In 2006, Rescuecom tried to make the further argument that not only is this aggravating, it's misleading to consumers who think they are going to learn more about Rescuecom's services when they search for Rescuecom, only to learn about the competition instead if they click on an ad generated by that search. The company will get the chance to make that argument again in the coming months after its suit in New York State was revived by a judge.

For now, the practice continues in the U.S., U.K., Canada, and Ireland. But Google has a very different policy in most of the European Union, reaffirming its intention to uphold complaints of the use of trademarks in keywords in prominent EU countries such as France and Germany when it announced an expansion of its trademark policy earlier this month.