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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...

Government Employees Insurance Company v. Google, Inc.

Civ. Action No. 1:04cv507 (E.D., Va., December 15, 2004)

In a bench ruling, Court holds that the display by search engine giant Google of third party advertisements denominated "sponsored links", which ads are triggered by the entry of a trademark as a search term, does not run afoul of the Lanham Act provided the "sponsored links" do not contain the searched-for trademark.  However, the display of "sponsored links" which do contain the searched-for trademark are likely to confuse consumers and thus was held to run afoul of the Lanham Act.

The Court did not resolve the issue of Google's potential liability for the display of such third party ads, noting that Google had a policy prohibiting its advertisers from displaying "sponsored links" containing trademarks of third parties when such marks are used as the triggering search term.  It should also be noted that the Court's finding that consumers would not be confused by "sponsored links" that did not contain a trademark was based, in large part, on its rejection of survey evidence presented by the mark holder.  The Court rejected this evidence, despite its showing of consumer confusion, because the consumers were simultaneously shown both ads that did and did not contain the trademarked term.

Plaintiff Government Employees Insurance Company ("Geico") is the owner of the federal trademarks "Geico" and "Geico Direct" which it uses to market its insurance products.   Plaintiff alleged that defendant Google operates an Internet search engine on which it sells advertising linked to search terms.  When a consumer performs a search for such a term, she sees a search result page that not only contains information about web sites responsive to her request based on neutral criteria, but which also contains information about the web sites of the paid advertisers as well.  These latter listings are denoted "sponsored links," and appear to the right of the main search results.  Some of these "sponsored links" contain the consumer's 'searched for' term; others do not.  Displaying another's trademarked search terms in such "sponsored links" violated Goggle's trademark policy.  However, given the presence of Geico's trademarks in a number of such "sponsored links," there was a question as to how vigorously that policy was enforced.

Plaintiff alleged that Google agreed, for a fee, to display such "sponsored links" when plaintiff's trademarks were entered as a search term.  By so doing, the Complaint alleged, Google was guilty of trademark infringement and dilution in violation of the Lanham Act, as a contributory and/or vicarious infringer.  The Complaint also asserted claims on unfair competition, tortuous interference with prospective economic advantage and statutory civil business conspiracy under Virginia common law.

The case went to trial in December, 2004 before Judge Leonie Brinkema.  At the close of plaintiff's case, Google moved to dismiss plaintiff's Lanham Act claims.  In a bench ruling, the Court granted in part, and denied in part, Google's motion.  As to those "sponsored links" which contained Geico's trademark, the Court found that plaintiff had submitted sufficient survey evidence through its expert to establish a likelihood of consumer confusion.  Indeed, because Google conceded it would not offer any contrary evidence, the Court held that the display by a search engine of sponsored links containing another's trademark, when such trademark is entered as a search term, ran afoul of the Lanham Act.  Said the Court:

[T]he evidence before this Court does establish that those sponsored sites that contain "GEICO" either in the title or in the text are likely to confuse for purposes of the Lanham Act requirements  . . .

*          *          *

What we found …is that this particular group of sponsored sites does violate the Lanham Act.

The Court did not resolve the issue as to whether Google was liable, as a contributory or vicarious infringer, for such activity.  As noted above, such activity ran afoul of Google's trademark policy.  Said the Court:

There's been no finding that Google is liable at this point …  if there is a second phase of this trial [t]he … issues that would remain … are No. 1 whether or not Google is liable for any Lanham Act violation based upon those sponsored sites and 2 if Google were liable then what damages would be appropriate.

The Court did grant so much of Google's motion which sought the dismissal of those Lanham Act claims that were based on its display of "sponsored links" that did not contain Geico's trademarks.  As to those claims, the Court held that plaintiff had failed to submit adequate evidence that consumers searching for "Geico" would be confused by the display of sponsored links that did not contain that mark.  Said the Court:

Having heard the plaintiff's case, the Court is satisfied that the plaintiff has not established that the mere use of its trademark by Google as a search word or keyword or even using it in their AdWord program standing alone violates the Lanham Act because that activity in and of itself, there's no evidence that that activity standing alone causes confusion.

The Court also finds that there was insufficient evidence presented in the plaintiff's case to let this case go forward on the question of whether Google violated the Lanham Act after it barred - or after it began to bar the use of the GEICO mark from either the titles or the text of the sponsored ads that appear as a result of use of the AdWord program.  And the reason I find insufficient evidence of that … is that, frankly, Dr. Ford either wasn't asked or chose not to actually query that particular issue because the survey focused on ether ads that had "GEICO" in the title - I mean, the page that people were looking at had five sponsored ads, the first four of which had "GEICO" either in the title and/or in the text.   The fifth one did not, but it was on a page that had the four previous sponsored links.

As can be seen from the Court's decision, this ruling was premised largely on the Court's criticism of the survey evidence presented by plaintiff.  While that evidence showed that consumers were confused as to the source of "sponsored links" that appeared in response to a query for "Geico" that did not contain the word "GEICO" the Court rejected that evidence because the survey showed such a "sponsored link" on a search result page that also showed the consumer four other "sponsored links," each of which did contain the Geico trademark.

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