Google Rebounds in AdWords Lawsuits

Suits over the use of trademarks in Google ads appeared to have the glimmer of a new gold mine for plaintiffs lawyers, but the luster may be fading.

A favorable ruling for Rescuecom Corp. in April in a long-running case against Google Inc. has fueled more suits, including would-be class actions, against the search giant for selling trademarked keywords that trigger ads alongside its search results.

But in the last two weeks, two AdWords lawsuits -- from Daniel Jurin and Ascentive LLC -- have folded. It highlights the difficulties of the suits, experts say: It's a hard case to make and it's expensive to litigate against Google.

"We're starting to see some of these lawsuits crack," said Eric Goldman, a Santa Clara University School of Law professor who follows the AdWords litigation closely on his Technology & Marketing blog. "My current hypothesis is that they never made sense in the first place -- the plaintiffs got all excited to go take down Google, but suing Google is a loser's bet because Google's going to fight to the death."

In these suits, advertisers accuse Google of selling trademarked keywords to anyone, including competitors. They claim that constitutes infringement because Google users could be confused by links to competitors' ads that appear alongside Google search results for the company's trademarked name.

Jurin sued Google in June in the Central District of California, claiming the company infringed on his StyroTrim trademark (it's a type of building material) by allowing competitors to "buy" the word -- meaning rival ads would appear when someone searched for Jurin's product. But on July 15, Jurin's lawyer, Scott Burroughs of L.A.'s Doniger Law Firm, filed a motion to withdraw because of "irreconcilable differences" over strategy and finances. Jurin dropped the case the next week.

Ascentive, a software company, had sued Google on June 25 in federal court in Pennsylvania. It accused Google of infringement and unfairly dropping it from the AdWords program. But on Thursday, Ascentive dismissed the case.

Jordan LaVine, a trademark lawyer with Flaster Greenberg in Philadelphia representing Ascentive, said his client and Google had resolved things, but there was no settlement.

"We came to an understanding and they agreed to reaccept our application for admission into the AdWords program," said LaVine (who does trademark work for Recorder parent company Incisive Media).

Google spokesman Andrew Pederson said that Ascentive didn't get paid for dropping the suit.

"We're pleased that Ascentive decided to voluntarily dismiss their claims against Google, which were meritless from the start," Pederson said in an e-mail. "There was also no money paid or value given to Ascentive by Google in order to resolve this dispute."

Google had suffered a setback in its AdWords case against Rescuecom when the 2nd U.S. Circuit Court of Appeals reversed a lower court's dismissal of the case. Google had persuaded the lower court to toss the case, arguing that its use of Rescuecom's trademark was internal and not a "use in commerce," which constitutes trademark infringement.

The 2nd Circuit's reversal inspired more AdWords suits, including two in Texas that aspire to be class actions. One, FPX v. Google, is being brought by a company owned by Audrey Spangenberg, the wife of famed "patent troll" Erich Spangenberg, The Prior Art Blog reported.

But professor Goldman said the trademark cases will prove more difficult than patent infringement cases for plaintiffs. Even with the Rescuecom ruling, plaintiffs still have to prove the other elements of trademark infringement, including confusion, in which the appearance of the ad next to the search term would lead consumers to believe the two products or companies were connected. This has yet to be proven in any of the cases, said Goldman, adding that there are now seven pending AdWords cases, following the two dismissals.

But there have been some apparent successes on the plaintiff side. American Airlines reached a confidential settlement in an AdWords trademark case against Google and felt good enough about it to go after Yahoo in a case that is still pending.

Google's Pederson said that Google's trademark policy is a fine one.

"We believe that our trademark policy properly balances advertisers' and users' interests, and we'll continue to vigorously defend it."