Google AdWords and Trademarks: The Difficulties and the Confusion

Posted by Cyberbear on March 31, 2017 in Litigation, Trademark |

Posted By: Aidan L. Clark

Avoiding consumer confusion is the paramount goal of trademark law. Being able to identify a name or slogan—called a mark—with a certain product, service, or source of that product or service, can only benefit a well-running consumer market. As with many of our laws in the United States, they were drafted and codified in an analog-type time. Though, as we’ve moved into a digital-type era, issues and questions have arose about how to apply these laws to the new type of world in which we live. Trademark law is a prime illustrator of this struggle.

First, we should understand what consumer confusion is, as it relates to trademark law. So, what is consumer confusion? Picture this: A close and trusted friend recommends a locksmith to you. She says that Locks-R-Us is reasonably priced, offers fast and efficient service, and that their locksmiths are courteous. In other words, she could not have been more pleased with the quality of service she received from them. Encouraged by your friend’s 5-star review, you seek out Locks-R-Us for their locksmith services, the next time you need your locks changed. You find yourself looking for their phone number in the phone book. You find the number listed under Locks-R-Us, and you make an appointment for service. However, when they show up for the appointment, you find out that they are not the same Locks-R-Us that your friend raved about. And, in fact, they are sloppy, rude and inefficient. They were definitely not who you were looking for. This is consumer confusion.

If more than one locksmith was allowed to use the same name—in this case, Locks-R-Us—within the same area, then how could you tell them apart? How would you know which one was known for their quality of work, and which one was not? Herein lies the potential for consumer confusion, and it is the main reason for today’s trademark laws as we know them.

It is one thing to be confused when a company is listed under the same name in the phone book. But, what if you had gone online to search for Locks-R-Us? Let’s now take it one step further. Let us imagine a third locksmith company of a different name: we’ll call them “We-Do-Locks.” In this hypothetical situation, We-Do-Locks knows of the quality of work of the first Locks-R-Us, and how they have attracted a large customer base—a consumer base that has come to associate the name of Locks-R-Us with a certain level of quality. We-Do-Locks decides to do some online advertising to get more business and more traffic pushed to their website that offers their locksmith services. To advertise their website, they bid on, and buy, certain keywords that customers might plug into their favorite search engine to find a locksmith. For example, they might bid on the word “locksmith,” so that when you search for “locksmith,” their website shows up at the top of the results page. Furthermore, realizing that Locks-R-Us has a good customer base, We-Do-Locks decides to bid on the keyword “Locks-R-Us.” Now, when you search online to find the locksmith that your friend raved about, by their own name, you are presented with the services of We-Do-Locks at the top of your results page. Essentially, We-Do-Locks has pulled a bait and switch. Does this sound fair? I think not.

This example is illustrative of an array of court cases involving litigation and a service called Google AdWords. Referring to our example, Google AdWords is the online advertising service that allows companies or individuals to bid on, and purchase, certain keywords or search terms.

One such case involved a dispute between Tennessee-based liquor company Jack Daniels’ and competing liquor company Sazerac Brands LLC. Sazerac owned and produced a popular cinnamon whiskey that they dubbed the “Fireball,” which turned out to be one of the most lucrative and successful liquors on the market. Not to be outdone, the Jack Daniels’ brand released a cinnamon whiskey of their own, that they called the “Tennessee Fire.” Now, lest we forget how important and valuable a trademark can be: if you’re at a bar, wanting to order a cinnamon whiskey, potential quality of taste aside, which one would be more fun or catchy to say? “Give me a Fireball?” Or, “Give me a Tennessee Fire?” The real situation was obviously not that simple, but I would bet that Jack Daniels’ had a similar thought. Then top it off with the financial success of the Fireball, and you have a recipe for trademark trouble.

The dispute started when Jack Daniels’ allegedly used the term “Fireball” as one of its Google AdWords. A trademark infringement lawsuit was subsequently filed by Sazerac Brands for Jack Daniels’ use of their trademark in advertising. If the prime goal of trademark law is to prevent consumer confusion by protecting a company’s trademark, then can you blame them for being upset by Jack Daniels’ use? The case was eventually settled out of court, with Sazerac Brands filing a voluntary dismissal. However, it’s important to note that the system of Google AdWords does not seem to be friendly to trademark owners.

Google currently has a dispute policy in place for trademark owners to submit complaints about the use of their trademark in AdWords. However, there are examples of trademark infringement cases involving AdWords that have not been favorable to trademark owners. The question that remains has to do with how we will have to treat and interpret trademark law moving forward in the digital age. If one company should be barred from calling themselves by the same name to prevent confusion in the case of a phone book lookup, then why would we treat an online search any differently? One thing is clear, the framers of public policy of this era must find an answer to that question quickly if any clear standard is to be had.

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