Buying Another Company's Trademark As a Keyword in Your AdWords Campaign

Several prominent newspapers are covering the story of American Airlines lawsuit against Google over search words.

It's a fascinating case where American Airlines accuses Google of violating trademark laws with its practice of selling search terms such as "American Airlines" to other companies for advertising.

Here is what's going on. Do a Google search for "American Airlines" and check out the advertisers on the search results page. What's happening is that Google is letting companies purchase other company's trademarks as keywords for their AdWords program. Or, as American Airlines said, "This lawsuit involves...efforts by certain companies to free ride on American Airlines' brands through use of Google's technology."

Geico, a Warren Buffet company, also sued Google on this matter (do a Google search for Geico and you'll see an ad for Farmers Auto Insurance). Geico had complained that Google was letting rival insurance companies pay to have their ads displayed when a user searched for “Geico.” In this case, the judge left the door open for Geico to collect damages from Google for featuring ads that used Geico’s name in the text, rather than just using the trademark to trigger the ad. The two settled in 2005.

To me, Google's practice of allowing companies to buy other company's trademarks (e.g., product or company names) as keywords for their AdWords campaign is wrong, or at least dirty business. However, the courts have yet to agree with my opinion :-) And in the blog world, opinions are mixed.

While attending a party this weekend, I engaged in a lively debate on this subject with a former Fortune 500 CEO, who also disagreed with my opinion - but admitted it was a questionable business practice. He said that unless a company can prove this is an "unfair business practice" or "causing financial harm" to the trademark owner, then Google will continue to prevail. When I asked what other options American Airlines should consider, his response was that AA could pull all their advertising from Google and that if enough companies did this, then maybe Google would change their practices.

The bottom line is that this is all uncharted territory and the courts are going to have to ultimately sort this out - which is why I think it will eventually end up in the Supreme Court.

In the early days of the Internet, some unscrupulous people were buying up domain names of other company's trademarks and the courts quickly stopped this practice. And I believe it is also illegal to include other company's trademarks in your web site's META tags for SEO purposes. Whatever is decided in this Adwords case, I just hope it is resolved soon so we can all go about our Internet business without wondering what's right, wrong, etc.

Posted by Mark Willaman