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Google Inc., which operates the popular Internet search engine, won an important legal victory in Virginia recently when a federal judge ruled that the California company’s advertising practices do not violate federal law. But the legal fight is not over yet. Trademark attorneys are awaiting a ruling in a similar action — Google v. American Blind and Wallpaper Factory — that is pending in the Northern District of California. The two cases both contest Google’s practice of charging various competing companies 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 judgment, should be more in favor in our case,” says David Rammelt, a partner in the Chicago office of New York-based Kelley Drye & Warren. Rammelt represents 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 is the first of them to be decided. “Basically we were granted summary judgment as a matter of law on Google’s use of keywords,” says Michael Page, a partner at San Francisco’s Keker & Van Nest who serves as Google’s lead counsel. “The judge found no infringement if the trademark term is used as a trigger in a selection method.” A Google search for “Geico insurance” will return “sponsored links” that will take Internet users to sites for insurance companies that compete with Geico. Google allows business competitors to bid on trademarks that, when searched, will trigger their advertisements. “Everyone is making money off this but us,” says Jonathan Shafner, a senior counsel at Geico. Noting that other companies spend a lot of money to create and further their own brands, Shafner adds that “a lot of people were hoping we would be successful.” U.S. District Judge Leonie Brinkema had previously allowed Geico to advance claims under the federal Lanham Act and allegations of 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. Brinkema did not find enough evidence of consumer confusion. The judge, however, reserved the question of whether Geico has a claim when competitors use the trademark within the text of their own advertisements. Shafner says he is not convinced that Google has won the dispute as a matter of law. “What [the judge] said was that we didn’t prove our case,” says the lawyer. “If it was a matter of law then all those other cases would be moot.” In the pending California action, 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. Some intellectual property lawyers say there’s a credible legal argument to be made against Google. “I’m not aware of any other context where you can sell someone else’s trademark,” says Scott Schwartz, an IP lawyer at Philadelphia’s Cozen O’Connor who recently spoke on the issue at a Search Engines Strategy Conference in San Jose. Schwartz says he thinks the Federal Trade Commission has not done enough to protect the rights of trademark owners. Google’s system of bidding on ad-triggering trademarks sometimes amounts only to five or ten cents per search, says Schwartz. But all of that certainly adds up. Google has reported that 98 percent of its profits, estimated at $3 billion this year, comes from targeted advertising. Says Schwartz, “Search engines are literally nickel and diming to death the good will of these trademarks.” Dee McAree is a reporter for The National Law Journal.

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