Is Using Another Firm’s Brand Unjust?

by Jimmy Bewley | April 30, 2013

At cj Conference 2012, we discussed the practice of buying a competitor’s firm name through a paid search program like Google’s AdWords, Yahoo, MSN/Bing, etc… Is this a smart and/or fair marketing tactic?  We think not, on both counts. That’s why we believe applying for and receiving federal trademark registration for our client’s firm names is so important. The authority that comes with registration is the first line of defense in potentially preventing a competitor from sponging off a firm’s good will and enriching themselves through paid search opportunities. That’s the competitor, but what about the PPC vendor involved?

First, it’s important to remember that up to this point, paid search programs (for simplicity purposes, we’ll concentrate on the 800 pound gorilla in the industry, Google AdWords) have not been held accountable for any infringement issues with selling a firm’s trademarked name. Several have tried, but Google has escaped unscathed every time someone has based their claim on trademark law and pursued them in federal court. That’s not the case for those who purchase trademarked names as evidence by the Binder & Binder case. The firm who purchased the Binder trademark, through Google AdWords, lost the argument they did not infringe in a public way because their use was simply a behind the scenes transaction with Google. Their actions ultimately cost them several hundreds of thousands of dollars by way of a verdict for trademark infringement.

From all indications, actively pursuing an infringement claim against competitors who purchase trademarked firm names is a viable cause of action. But, what about Google and holding them accountable? Recently, our trademark counsel, along with others and with assistance from Vanderbilt Law School, proposed a different approach regarding the pursuit of Google. They contend Google is making money off the distinctiveness of brands, whether the brand is used as a trademark or not. The owner of the brand has invested time, money and effort to maintain this distinctiveness while Google continues to sell those assets on the open market. Google profits by using these brands without any authorization from the owners, nor is there any form of revenue sharing with the owners.

Bottom line, Google’s deliberate, unauthorized practice of profiting off another’s brand/trademark violates the principles of unjust enrichment law. Right now, it’s just a theory. Needless to say, it might be difficult to find a willing plaintiff to lead the charge. No doubt that plaintiff will run the risk of being shunned by Google regarding search queries. So, we’ll see whether actual steps will be taken to test the theory or whether it was just another good idea that went nowhere. Still, I consider this “new thinking”  progress toward holding Google accountable for their actions. If you would like to read the entire whitepaper on the subject (WARNING — it’s long!), click HERE. Enjoy!