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Google Inc. was handed an important victory in Virginia recently when a federal judge ruled that the search engine’s advertising practices do not violate federal law. But the legal fight isn’t over yet. Trademark attorneys are watching a similar action— Google v. American Blind and Wallpaper Factory Inc., No. 03-5340-JF (EAI)—in the Northern District of California. A ruling is expected soon. Google’s lawyers are hopeful that the Virginia victory bodes well for a similar outcome in the California case, but plaintiffs’ lawyers there are far from throwing in the towel. The cases contest Google’s practice of charging competitors a fee to have their advertisements appear whenever a trademarked name is searched. “If anything, I would think that the district court decision in [the Virginia case] both rejecting Google’s attempt to dismiss, as well as Google’s attempt to secure summary judgement, should be more in favor in our case,” said David A. Rammelt, a partner in the Chicago office of New York-based Kelley Drye & Warren. He is representing American Blind and Wallpaper Factory Inc., the plaintiff in the California case. The lawsuit by American Blind was the first of several cases that have been filed against Google. The Virginia court’s decision in GEICO v. Google, No. 1:04CV507 (E.D. Va.), is the first of them to be decided. “Basically we were granted summary judgement as a matter of law on Google’s use of keywords,” said Google’s lead counsel, Michael H. Page of San Francisco’s Keker & Van Nest. “The judge found no infringement if the trademark term is used as a trigger in a selection method,” Page added. The trigger A Google search for “GEICO insurance,” will return “sponsored links” that provide competitive insurance rates. Google allows competitors to bid on trademarks that, when searched, will trigger their advertisements. “Everyone is making money off this but us,” said GEICO senior counsel Jonathan Shafner, who added that the insurance company and others spend a lot of money to create their brands. “A lot of people were hoping we would be successful.” U.S. District Judge Leonie Brinkema had allowed GEICO to advance claims under the federal Lanham Act and unfair competition under Virginia state law. But the judge dismissed those claims in a bench trial in December, finding that GEICO had not shown that using a trademark as a search term to trigger competitive ads amounts to infringement. The judge did not find enough evidence of consumer confusion. Brinkema did, however, reserve the question of whether GEICO has a claim when competitors use the trademark within the text of their advertisements. Shafner said GEICO is awaiting the judge’s written opinion to determine how to proceed. He is not convinced that Google won the issue as a matter of law. “What [the judge] said was that we didn’t prove our case,” Shafner asserted. “If it was a matter of law then all those other cases would be moot.” Rammelt is confident that American Blind has grounds to state a cause of action and a different set of facts to present a stronger case. Five or 10 cents per search Some intellectual property lawyers see a credible legal argument. “I’m not aware of any other context where you can sell someone else’s trademark,” said Scott Schwartz, an intellectual property lawyer at Philadelphia’s Cozen O’Connor, who recently spoke on the issue at a Search Engines Strategy Conference in San Jose, Calif. Schwartz added that the Federal Trade Commission has not done enough to protect the rights of trademark owners. Google allows competitors to bid on which trademarks trigger their ads, which, in some instances, might only amount to five or 10 cents per search, Schwartz noted. But that adds up. The company reports that 98% of its profits, estimated at $3 billion this year, comes from targeted advertising. “Search engines are literally nickel and diming to death the good will of these trademarks,” Schwartz said.

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