Does Geico's trademark lawsuit against Google have merit? How will the case be argued? What's the likely outcome of the trial? A mock court of trademark experts weighs in with their verdict.
A special report from the Search Engine Strategies conference, August 2-5, 2004, San Jose, CA.
The Search Engine Strategies conference in San Jose featured a new kind of session that mixed courtroom and boxing metaphors. While the "Moot Court" included five lawyers and was entitled "Trademark Protection on Trial," the "Main Event" also sported images of "Trademark vs. Search" stenciled on boxing gloves and slogans like "Are you ready to Soo...gle?"
This public policy debate of the general issues that have arisen in cases like Geico v. Google/Overture and American Blind & Wallpaper Factory v. Google was designed to illuminate each side of the argument for lawyers and non-lawyers.
In one corner, making the case for trademark owners stood Scott B. Schwartz, Esq., a member of Cozen O'Connor of Philadelphia. In the other corner, making the case for the search engines was Deborah A. Wilcox, Esq., a partner of Baker & Hostetler of Cleveland.
The judges or "Bench" for this novel approach to debating special topics included Barry Felder, Esq., a partner of Brown Raysman Millstein Felder & Steiner and counsel for Playboy in Playboy v. Netscape; Eric Goldman, Esq., assistant professor of the Marquette University School of Law and former general counsel for Epinions.com; and Danny Sullivan, founder and editor of SearchEngineWatch.com and the only non-lawyer despite his honorary status as Chief Justice.
The moderator, or "Bailiff," was Jeffrey K. Rohrs, Esq., president of Optiem.
Rohrs explained the format, which encouraged argument but discouraged "butting, gouging, kicking or hitting below the belt." He introduced the participants, who were role-playing and being asked to fight the good fight even if their professional or personal opinions differed from the arguments they made.
Rohrs also gave a brief overview that started by defining a trademark. What is a trademark? It is a word, name, symbol, color, scent or sound used in commerce to distinguish goods or services. Some trademarks are federally registered, other trademarks or service marks are not. Both federal and state law provide trademarks protection.
Trademarks vary in strength and in the protection they are afforded. Stronger marks, which receive stronger protection, include fanciful or arbitrary marks like Google or Pepsi. Merely descriptive marks receive the least protection unless a secondary meaning is acquired, like General Motors, Bank One, and General Mills.
The basis of trademark law is to protect consumers from "confusion" as well as to protect businesses from "dilution" and unfair competition.
"Confusion" is found with a mark is "likely to cause confusion" among consumers as to the source of goods or services. "Dilution" is the weakening "of the distinctive quality of the mark" -- but is applicable only to "famous" marks. Unfair competition is a broad concept encompassing a wide range of "bad acts" including trademark infringement, false sponsorship, and bait and switch.
There are exceptions for "fair use." This includes: explanation ("We service Volkswagen cars"), affiliation ("A licensed Apple computer reseller"), comparison ("Tide bleach is better than Clorox"), and criticism (McDonald's food in "Supersize Me"). However, there is a specific prohibition on deception as to "sponsorship."
In addition, there is no blanket exception for online fair use. In other words, you don't have to play nice, but you do have to play by the rules.
With that, Schwartz opened with a wicked combination of specific facts, verbal arguments, and PowerPoint slides.
According to Schwartz, "The issue is... Trademark owners spend enormous amounts of money in establishing, promoting, and using their marks to create goodwill in them. Search engines are making enormous amounts of money in selling trademarks as search terms. This type of use would be unlawful in any other context."
Schwartz was part way through his presentation when "Justice" Goldman interrupted with a question about consumer confusion over who was sponsoring "sponsored listings." Schwarz answered, "It's clearly unclear." Hilarity ensured.
By the time Schwartz was able to resume his presentation, he was out of time. He had to quickly summarize the case for trademark owners:
- Selling trademarks as search terms negatively impacts trademark rights.
- Consumers are subject to confusion.
- Trademark owners are faced with a loss of goodwill and having to remedy confusion.
- Search engine are profiting from their infringements and facilitation of infringements.
- Solutions exist that alleviate these problems without detracting from the business of being a search engine.
Wilcox took immediate advantage of the confusion over confusion. "Where's the beef?" she asked, making fair use of the classic Wendy's commercial.
Then she made four arguments about why search engines are not infringing trademarks:
- There is no trademark use in paid search. Search engines are merely buying and selling advertising space on results pages.
- There is no likelihood of confusion. Searchers can easily distinguish paid advertisements from the organic search results.
- The searcher's objective is not known. Searchers may be looking for fair uses of the trademark -- comparison, comment, criticism, resale, etc.
- Google and Overture already have policies in place to protect trademark owners.
Wilcox illustrated her "no confusion" argument with screen shots showing searches on Google, Overture, and Yahoo for Dunkin' Donuts. Although, she almost tripped herself up when she claimed the differences between paid and organic listings were as obvious as the differences between "adult entertainment and pornography."
This gave Schwartz an opening. During his five-minute rebuttal, he won applause from the audience for his statement, "Search engines are literally nickel and diming the trademark owners to death!" Then, just as quickly, he lost them when he said fixing the problem might require search engines to put ads on a separate page in different fonts and colors.
In her rebuttal, Wilcox claimed, "There is no nickel and diming going on... at least none that is illegal." She concluded, "If McDonald's goes up on a corner, Wendy's can set up shop nearby to divert traffic. Distraction is not an actionable trademark infringement."
The judges stepped out of the room to deliberate, but it didn't take them long to return with a ruling -- of sorts.
Felder said, "At the end of the day, a balanced approach is the way to go." (I would interpret that as a split decision between the trademark owners vs. the search engines.)
Sullivan said, "I may dislike something, but it may not be illegal. Walking down an aisle, I may be distracted and buy something I wasn't looking for." (I would interpret that a vote for the search engines.)
Goldman said, "We should distinguish between our emotional response and the rule of law. The beef may be with the advertisers." (I would interpret that as another vote for the search engines.)
While it was "clearly unclear" how the judges had ruled, Rohrs asked the audience if anyone had changed their mind after hearing each side of the argument. No minds had been changed. Nevertheless, the new panel format may have emerged as a hidden winner.
Greg Jarboe is the president and co-founder of SEO-PR, a search engine promotion company that has been optimizing news releases for news search engines since March 2003.
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