Siding with Google, a federal judge in Corpus Christi, Texas has transferred a trademark infringement lawsuit by an AdWords marketer to Google's hometown of northern California.
U.S. District Court Judge Janis Graham Jack ruled that the marketer, Flowbee -- which manufactures home haircutting systems -- must litigate any matters against Google in California because the AdWords contract provided that any claims related to Google's ad programs would be tried in that state.
Flowbee alleged in its original complaint that Google infringed the Flowbee trademark by allowing other companies to use its name to trigger search ads -- a practice that Flowbee asserts confuses consumers. Google sought to dismiss the case or, alternatively, transfer it to California on the grounds that Flowbee -- which also purchased search ads on Google -- had agreed in its AdWords contract to litigate matters there.
Flowbee countered that the contractual term requiring litigation in California didn't apply because the lawsuit did not stem from a dispute about its own pay-per-click ads, but from other companies' use of AdWords.
But Jack ruled that Flowbee's AdWords contract covered all ad-related matters involving Google -- including disputes about the use of Flowbee's name to trigger search ads.
Friday, Google went on the offensive against Flowbee and argued that the marketer breached its AdWords contract by suing in Texas. In papers filed in the Northern District of California, Google said it suffered damages "because it was forced to litigate the issue of improper venue and incurred attorneys' fees and costs related to that action." Google now is seeking to recover those attorneys' fees and other costs.
Flowbee was one of around 10 companies to sue Google last year for allegedly infringing trademark on AdWords by allowing companies to use rivals' names to trigger pay-per-click ads. Some of those cases have been resolved, but more than half a dozen persist.
Courts have not yet definitively ruled on whether using a brand name to trigger a search ads infringes trademark. The one case to go to trial, a lawsuit by insurance company Geico against Google, resulted in a victory for Google. In that case, U.S. District Court Judge Leonie Brinkema in Alexandria ruled in 2004 that Geico had not proven that consumers were confused when they typed "Geico" into a search box and were served with ads for other insurance companies.
Since then, Google and Yahoo have settled lawsuits about the issue brought by American Airlines in federal district court in Texas.
Before Yahoo resolved the lawsuit by American, the Web company unsuccessfully argued that the case should be transferred to California. American, like Flowbee, was itself a search marketer, and the contract with Yahoo provided that disputes would be heard in California. But both the district court and the 5th Circuit Court of Appeals rejected the argument in that case, ruling that the trademark dispute wasn't related to the search marketing contract between Yahoo and the airlines.