Monday, September 24, 2007

Google files motion to dismiss American Airlines trademark infringement lawsuit

Last Wednesday, September 17, 2007, Google filed a motion to dismiss the American Airlines (“AA”) Adwords trademark infringement lawsuit (previously blogged here) under Fed. R. Civ. Pro. 12(b)(6) for failure to state a claim upon which relief can be granted. A copy of the motion to dismiss filed with the U.S. District Court for Northern District of Texas can be found here (courtesy of

Trademark Use
As expected, Google’s primary argument is that Google and its advertisers are not using the marks as trademarks when used to trigger advertisements (i.e., Google’s Adwords programs) and are using the marks in permissible ways (accurately describing products or providing information) when the trademarks are used in ad text. Motion at 5-6.

Regarding the use of trademarks to trigger advertisements, Google argues that trademark law provides trademark holders with the ability to prevent others from using a mark (or confusingly similar mark) to identify the source or origin of the product. Motion at 6. In the case of Google and its “Sponsored Link” advertisers, however, neither are using AA’s trademarks to identify the source of the advertisers’ products or services. Google cites to Exxon Corp. v. Oxxford Clothes, Inc., 109 F.3d 1070, 1083 (5th Cir. 1997) in asserting that the use of a trademark or trade name occurs only when the label is used as an indicator of origin and/or quality of particular goods or services. Motion at 7. Google maintains that the use of the terms by Google and its advertisers is tantamount to contextual advertising – referencing or using a trademark as part of a consumer marketing strategy rather than as an indicator of the source or origin of goods and services.

Google also cites to the 1-800 Contacts case to support its position that the triggering of Internet ads is not trademark use under the Lanham Act. See Motion at 8: “The only federal appellate court that has considered the propriety of triggering Internet advertisements with terms similar to trademarks concluded that this activity is not trademark use under the Lanham Act. 1-800 Contacts, Inc. v., Inc., 414 F. 3d 400, 407 (2d Cir. 2005).” Google goes on to discuss the Second Circuit’s conclusion that the defendant in that case was not using the trademark as trademarks (i.e. using them to pass its products off as emanating from or authorized by 1-800 Contacts), but rather in the same way that a store uses rival trademarks when it is placing its own generic brand products next to trademarked brand products in order to induce customers looking for the brand name to try a similar, but cheaper alternative product. Google then cites to the numerous federal district court decisions that have held there is no trademark use when a “Sponsored Link” on Google’s search engine is triggered by a search of a trademarked term. Motion at 8-9. Google also cites to the numerous federal district court decisions that have held just the opposite. Google notes that none of the “Sponsored Link” ads contain AA’s trademarks in either its title or text – nothing indicates or implies that AA is the source of the ad (citing to a search hit for U.S. Airways Official Site, which was one of the ads submitted by AA as evidence of infringement).

Regarding the use of trademarks in the text of advertisements appearing from a regular Google search, Google argues that the two types of such ads that AA complains about – advertisements from independent sellers of AA’s services or merchandise and advertisements from websites that provide news and information about AA – both fit within the fair use of a trademark. Independent sellers are allowed to accurately describe what they sell, such as the case of, one of the advertisers complained about by AA, which sells American Airlines tickets. “Funjet is permitted to accurately promote the availability of American Airlines tickets on its website even if it also sells tickets on other carriers.” Motion at 11 (citing Scott Fetzer Co. v. House of Vacuums, Inc., 381 F. 3d 477 (5th Cir. 2004)). Furthermore, websites that provide news and information about AA are not prohibited by trademark law from using the trademarked names of the companies about which such websites are reporting and such use of a trademark is fair use. Motion at 11 (citing WCVB-TV v. Boston Atheletic Ass’n., 926 F.2d 42, 47 (1st Cir. 1991). In the case of one of the websites cited by AA, “” provides information on AA as well as links to other articles about AA.

Direct Trademark Infringement
Google argues that AA cannot state a claim for direct infringement because Google has not labeled its search engine or advertising services using AA’s trademarks. Motion at 12-13.

Contributory Trademark Infringement
Google asserts the following test for contributory trademark infringement: “a plaintiff must show that the defendant either intentionally induced another to infringe a mark or continue to produce or distribute a product knowing or having reasons to know the recipient is engaging in trademark infringement.” Motion at 13 (citing Inwood Labs., Inc. v. Ives Labs., Inc. 456 U.S. 844, 860 (1982)).

With respect to the first part, Google argues that AA has not plead any facts showing that Google has intentionally induced any advertisers to do anything, much less infringe AA’s trademarks (noting that AA’s pleadings of legal conclusions without pleadings facts cannot sustain a complaint, citing Bell Atlantic Corp. v. Twombly, ___ U.S. ___, 127 S. Ct. 1955, 1964-65 (May 21, 2007)). AA’s complaint references the use of loopholes by Google’s advertisers, which only supports the argument that Google does not control its advertisers or the text they write any more than a newspaper publisher or billboard owner can control their advertisers (such as when one car company places an ad next to a competitor’s ad or a fast food restaurant places its billboard near a competing fast food chain). As for whether Google makes suggestions to advertisers regarding the use of brand name keywords, AA has not specifically alleged that Google made such suggestions to any advertiser that used AA’s trademarks as a keyword.

With respect to the second part, liability arises only if a service provider has actual knowledge of infringement using a service under its direct control. Motion at 16 (citing Lockheed Martin v. Network Solutions, Inc., 194 F.3d 980 (9th Cir. 1999)). Google argues that the rationale which led the Ninth Circuit to conclude that Network Solutions had no affirmative duty to police the internet in search of potentially infringing domain name registrations applies equally to its situation regarding its advertisers.

Vicarious Trademark Infringement
Google asserts that vicarious liability can be based only on a special relationship (principal-agent, employer-employee) such that the defendant and infringer have an apparent or actual partnership, have authority to bind one another in transactions with third parties, or exercise joint ownership or control over the infringing product. Motion at 15-16. Google argues that AA has not alleged facts demonstrating any partnership between Google and any merchant using AA’s trademarks (including authority to bind), nor any joint control or ownership of any product or service which AA claims infringes on AA’s trademarks.

Remaining Causes of Action
The remainder of Google’s motion focuses on AA’s state law claims and AA’s claim for false representation under the Lanham Act. Google argues that the Communications Decency Act of 1996 (“CDA”), 47 U.S.C. §230, immunizes a website such as Google (“interactive computer services”) from state law claims and non-intellectual property federal claims regarding content on the website that is provided by third parties. 47 U.S.C. §230(c)(1) states: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” One exception is for intellectual property causes of action (47 U.S.C. §230(e)(2)), which has been construed by at least one federal appellate court as meaning federal intellectual property causes of action, and not state law intellectual property claims. Motion at 21-22 (citing Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102, 1118-19 (9th Cir. 2007). Furthermore, Google argues that the Lanham Act false representation claim is not an intellectual property claim by virtue of the fact that the U.S. Supreme Court, in considering whether a bank’s lawsuit for false misrepresentation against the State of Florida was barred by sovereign immunity, held that a false misrepresentation did not implicate a property right to exclude others. Motion at 23 (citing College Sav. Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999)). Because Google is an “interactive computer service” and the content is “provided by another information content provider” (and AA does not allege otherwise in its complaint), the CDA immunity applies to Google. Therefore, AA’s state causes of action (including intellectual property causes of action) and the Lanham Act false misrepresentation claim must be dismissed.

Regarding AA’s claim for money had and receive, Google argues that such a claim must be based on AA receiving money intended for Google’s use and that recovery cannot be had where AA has not alleged any facts showing its ownership over such money or any privity between the parties in relation to the money sought to be recovered. Motion at 23-24.

Regarding AA’s claim for misappropriation under Texas law, Google also argues that AA has not alleged any facts showing that Google and AA are competitors in order to show that Google has misappropriated AA’s name for the commercial purposes of running an airline. Motion at 24-25.
Finally, with respect to AA’s claim for unfair competition under Texas law, Google also argues that AA has not alleged that Google makes any products or sells any service which Google is passing off as a product or service of AA. Motion at 25.

[Comment: As with the other federal district court cases, this case will all come down to whether the sale of trademark terms constitutes “use in commerce” for the purposes of the Lanham Act. Will this District Court judge follow the line of federal cases holding that such use is not “use in commerce” -- Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 425 F.Supp.2d 402, 408 (S.D.N.Y.2006); 1-800 Contacts v. When, Inc., 414 F.3d 400 (2d Cir. 2005); Rescuecom Corp. v. Google, Inc., 456 F.Supp.2d 393 (N.D.N.Y.2006)? Or will this Court reject those Second Circuit based decisions and follow the decisions from other Circuits finding such use to be “use in commerce” -- 800-JR Cigar, Inc. v., Inc., 437 F.Supp.2d 273 (D.N.J.2006); Buying for the Home, LLC v. Humble Abode, LLC, 459 F.Supp.2d 310 (D.N.J.2006); Edina Realty, Inc. v. TheMLSOnline.Com, 2006 WL 737064 (D.Minn.2006)? It is anybody’s guess at this point.]

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