Suit: Google Expected Trademark Infringement Claims

Suit: Google Expected Trademark Infringement Claims
Rhett Pardon
CINCINNATI, Ohio — Google has been hit by another infringement claim over infringing trademarks by selling them as keyword search links to competitors of the businesses that own the marks.

The case, filed in U.S. District Court in Cincinnati, pits CNG Financial Corp. versus the search engine giant and mirrors a previously resolved case involving insurer Geico.

But CNG’s claim reveals a little-known fact about Google — the search engine is in the business of infringing trademarks, as so noted in its IPO prospectus.

“In order to provide users with more useful ads, we have recently revised our trademark policy in the U.S. and Canada,” Google’s initial offering prospectus says. “Under our new policy, we no longer disable ads due to selection by our advertisers of [other parties’] trademarks as keyword triggers for the ads.

“[A]s a result of this change in policy, we may be subject to more trademark infringement lawsuits. Defending these lawsuits could take time and resources. Adverse results in these lawsuits may result in, or even compel, a change in this practice which could results in a loss of revenue for us, which could harm our business.”

CNG says in the suit that Google changed policy “to enhance the value of its initial public stock offering and in order to increase advertising revenue, which account for nearly all of Google’s total earning.”

CNG, which wants use of its trademark in Google ad programs enjoined and is seeking compensatory and punitive damages, said that Google is unjustly enriching itself by selling its registered trademark, “Check ’N Go,” to competitors, whose names appears as “sponsored links” to a Google search of the trademarked term.

Attorneys for both sides did not return calls to XBiz.

The CNG case is similar to a suit resolved in 2004 involving Geico Corp. A federal court rejected a claim by auto insurance giant Geico, which argued that Google shouldn't be allowed to sell ads to rival insurance companies that appear whenever Geico’s name is typed into the Google search box.

Another suit involving visual images from adult company Perfect 10 Magazine and sister site Perfect10.com has yet to be resolved.

Company owner Norman Zada is seeking to enjoin Google from copying, displaying and distributing Perfect 10 images through its search service.

Zada alleges that as many as 96 percent of Google search results on Perfect 10 model names are diverted to infringing Google AdSense partners and not the Perfect10.com website. Zada also alleges that Google has converted his Perfect 10 content into hundreds of millions of dollars in advertising revenue.

“This is far beyond some sort of innocent and impartial search function,” Zada told XBiz in October, adding that Google’s principal argument against infringement claims is that it provides users with a search function and is therefore excused from liability.

“They are a commercial operation misappropriating content for the purpose of driving traffic to their websites,” he said. “Google's extraordinary gain in market cap from nothing a few years ago to close to $80 billion, is more due to the massive misappropriation of intellectual property than anything else.”