The new action, filed Thursday by Van Nuys, Calif.-based real estate investment guru John Beck, is even broader than the first because Beck seeks to represent trademark owners nationwide. The previous lawsuit, filed Monday by the company Firepond, is only on behalf of Texas trademark holders.
Other than that distinction, however, the allegations are very similar. Beck complains that Google infringes on his trademark by allowing rivals to use his name to trigger search ads. He alleges that the practice harms him by confusing Web users, diverting traffic that would otherwise go to his sites, and allowing rivals to benefit from his goodwill.
Beck's official sites sell instructional materials that promise to teach people how to turn a profit by buying cheap real estate. Friday afternoon, a Google search on Beck's company name, John Beck's Amazing Profits, turned up several sponsored ads for sites operated by rivals.
Beck's lawyer -- Scott Kline, with the law firm Andrews Kurth in Dallas (which also represents Firepond) -- says Beck contacted him after learning of the case filed on Monday. Beck, like Firepond, brought the case in federal court in the eastern district of Texas.
While both Beck and Firepond seek to represent a class of trademark owners, some lawyers say a court isn't likely to allow either case to be certified as a class-action. Courts generally don't allow class actions in situations where the outcome depends on individualized facts. Trademark cases often hinge on whether consumers are confused -- a determination that's likely to turn on the ad copy, the marks themselves, and other case-by-case factors.
Coincidentally, Beck's lawsuit was filed the same day that the search giant liberalized its U.S. policy to allow marketers to include trademarks in the ad copy itself -- a move that in itself could spur yet more litigation.
Previously, Google generally banned trademarks in the text that accompanies pay-per-click links. The company, which announced the change on the Inside AdWords blog, says the new policy will result in more useful, less generic ads. "Under our old policy, a site that sells several brands of athletic shoes may not have been able to highlight the actual brands that they sell in their ad text," Google states. "However, under our new policy, that advertiser can create specific ads for each of the brands that they sell."
That change seems likely to fuel trademark owners' complaints, at least in the short term. "Because there is such tension right now between trademark owners and Google, it probably is going to further anger those trademark owners who already have taken issue with Google's AdWords," says false advertising and trademark law expert Norman Simon, a partner with Kramer Levin Naftalis & Frankel.
Kline, for one, is critical of the shift. "We are not pleased with the new Google policy which further fails to recognize and value the rights of registered trademark owners," he says.
But Simon and other lawyers say that the use of a trademarked term in ad copy should not in itself make the company more or less likely to be found liable for infringement. The question is whether people are confused by ads, which will turn on the facts. "The context is always critical," says Simon. In some cases, including a company name or other trademark in an ad could worsen confusion, but in others it might clarify matters, he adds.
Eric Goldman agrees. "It could make Google more vulnerable, in the sense that it will leave open more ways for trademark owners to complain," he says. "On the other hand, this might ultimately reduce Google's liability."