A dispute between Google and Edible IP, LLC, the makers of “Edible Arrangements” demonstrates again that Google’s keyword advertising program does not violate the rights of trademark owners.
Edible’s efforts to stop Google from using its name recently resulted in the Georgia Supreme Court affirming a grant of a motion to dismiss in favor of Google.
Google’s keyword advertising program is relatively simple. Google sells search terms to the highest bidders. Google then arranges for the keywords to trigger advertisements to appear on the search page when Google users search for the keyword term. Because Google sells the search terms to the highest bidder, anyone – even competitors – can acquire the keyword. So, for example, law firm X could purchase “Graydon” such that every time a Google user searched for “Graydon,” law firm X’s ad would show up on the results page.
Edible did not take kindly to Google’s sale of “Edible Arrangements” and it filed a lawsuit, contending that Google’s keyword program violated Georgia’s theft law. In Edible’s view, Google’s sale of the name “stole” Edible’s trademark and the goodwill associated with it.
There were two issues for Edible to overcome. The first question was whether the trademark and goodwill constituted “property.” Google argued that amorphous concepts such as “trademark” and “goodwill” were not among the type of property contemplated by the theft statute.
On that point, the Supreme Court disagreed. It noted that the statute referred to “tangible and intangible” property. And it looked to previous Georgia case law which recognized that goodwill is a type of intangible property interest.
Edible successfully argued that it was the only entity permitted to use the name “Edible Arrangements” in the sale of fresh cut fruit baskets, and thus the intangible rights were valid property interests.
The court was not so agreeable with Edible on the other point – whether Google deprived Edible of the use of its property. The Court looked to Georgia and federal trademark law and noted that trademark owners have only limited protection of trademarks and trade names. Traditionally, courts have prohibited only uses that confuse consumers. In its view, the keyword advertising did not deceive consumers – it merely displayed advertisements. Edible didn’t help its case on this point by conceding in its complaint that it was not seeking any relief for consumer confusion.
Presumably, even if consumers who search for “Edible Arrangements” go to a competitor’s site based on a keyword ad, those consumers know they have not landed at Edible Arrangements. And Google does not apparently take steps to foster any such brand confusion. For that reason, in the court’s view, “trademark law recognizes a distinction between the illegitimate misappropriation of a business’s goodwill and legitimate comparative advertising and, therefore, permits the use of trade names as long as referencing other brand names does not confuse consumers and is not deceptive.” Because the use of the keyword was not deceptive, Edible was not deprived of its use, and the court granted the motion to dismiss.
Keyword advertising has been with us for longer than we probably realize. And it appears it is here to stay, even if it leaves a bad taste for some.
Jack Greiner is a partner at the Graydon law firm in Cincinnati. He represents Enquirer Media in First Amendment and media issues.