November 2007
Google Ads Strategy to Crash and Burn?
Google are facing a potentially expensive court ruling against one of its key advertising strategies. Google allow advertisers to “buy” keywords so that when a user of Google searches for that term then a link to the advertisers website is displayed by Google as a sponsored link.
Now American Airlines have been given the green light by a Texan court to challenge that practice when the keywords are a trade mark. American Airlines’ complaint is that when a user searches for American Airlines, Google display adverts from competitors to whom Google has sold the keywords “American Airlines”. American Airlines argue that this is an abuse of its trade mark. Google argue that allowing competitors to advertise a similar service alongside the branded product is akin to a pharmacy suggesting a generic medicine when a customer asks for the brand they know.
If American Airlines are successful then it could mean a big hit to the income of the internet giant. Google have faced challenges to this practice before and have come out on top, either in court or through a settlement. However, American Airlines is probably the largest company and the most well known brand that Google have come up against.
A further and worrying aspect of the argument presented by American Airlines is its objection to Google selling the keywords not only to direct competitors, but also to retailers who offer both American Airlines flights and flights from its competitors. If Google were restricted from acting in this way then it could give big companies an extra tool as leverage over distribution channels as well as advertising.
Briffa’s comment
This is a case under U.S. law and so may not have an immediate impact here. However, as it would affect the internet it might well have repercussions for British or European companies too. If a major company like American Airlines were successful in the U.S. then they, or large UK brands, may well be likely to look into challenging the same practice here.
In the UK a similar case would turn on what amounts to a “use” of the trade mark and whether that use was in the course of trade. In normal parlance the “sale” of a trademark, even if it is not intended for displaying to the public in any way may well be a use and must be in the course of trade, but the approach of the courts remains to be seen.
For more information contact peter@briffa.com