New York District Court Approves Google’s Sale of “Keywords”
In an opinion released late last week, the U.S. District Court for the Northern District of New York granted Google’s motion to dismiss a complaint filed by Rescuecom, alleging that Google’s sale of Rescuecom as a “keyword” to Rescuecom’s competitors constituted trademark infringement. Rescuecom is a franchise that offers computer repair, consulting and related services. Google admittedly sold Rescuecom’s name as a keyword to competitors, allowing those competitors’ “sponsored links” to appear above Rescuecom’s own link in a Google search for the term “Rescuecom.” The court followed two similar decisions of the U.S. District Court for the Southern District of New York holding that the sale of a trademark as a keyword does not constitute “use” of that mark, which is a prerequisite for trademark infringement. The opposite conclusion has been reached by federal district courts in Virginia, Minnesota, Georgia, California and New Jersey.
The court distinguished cases finding infringement from typing a company’s name into a URL or Web site address, when the result is to reach someone other than the expected company. In this case, the court noted that typing Rescuecom’s name into Google’s search engine reveals both sponsored and non-sponsored links, including a link to Rescuecom itself. The court also distinguished the “metatag” cases, holding that use of a company’s name or mark as a metatag in another company’s Web site constitutes infringement.
Those cases were distinguished on the basis that here, the Rescuecom mark is not displayed (i.e., “used”) in any of the sponsored links.
The court analogized the sale of keywords to “product placement” in retail stores, which is done “precisely to capitalize on . . . competitors’ name recognition.” According to the court, in the absence of allegations that Google has used Rescuecom’s mark on any “goods, displays, containers, or advertisements, or . . . in any way that indicates source or origin,” Google has not “used” Rescuecom’s mark in any actionable manner, even though it has sold the mark as a keyword to others.
It remains to be seen how any appeals court will rule on the sale of keywords and whether a split in the federal circuits will result.
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