November 08, 2005
Keyword Lawsuit Between Office Depot and Staples
By Eric Goldman
The WSJ picked up this story a few weeks ago, but I finally got my hands on the court documents so that I could see what was actually being litigated. (I also have electronic copies of the motion for PI and the response; I can email those to you if you want).
The story appears to be a sad and unfortunately all-too-familiar tale of competitive zeal and overreaction. Office Depot owns a separate company, Viking Office Products, that principally caters to business customers. On September 12, Office Depot announced that it was going to eliminate the standalone Viking brand in the US and consolidate the brand (and some operations) on the Office Depot brand. Staples seized on this brand retirement announcement to try to convince Viking's customers to switch to Staples' competitive brand, Quill.
Staples bought the keyword "viking" at Google and made various announcements at its website about the brand retirement and the ability of Viking's customers to migrate to Quill. Office Depot characterizes these announcements as misrepresentations that were designed to confuse Viking's customers into thinking that Quill had acquired Viking. Staples characterizes these announcements as lawful comparative advertising/fair use statements, and Staples said it purchased the Viking keyword because it sells some Viking-branded products. On that front, I did a search today and found 1 product, a "Viking 16MB Flash 5.0V Disk."
Whatever the case, Office Depot isn't alleging infringement based solely on the keyword purchase alone; rather, it appears that the problem is the combination of the keyword purchase plus the various statements on Staples' website. Furthermore, this isn't the first lawsuit between competitors over a keyword purchase as some have suggested; I haven't found too many examples that have resulted in some type of reported opinion, but I have found a few.
In response to the lawsuit, Staples has gone on the offensive, claiming that Office Depot bought the keywords "staples" and "Staples TV ad." I thought the purchase of the keyword "staples" was laugh-out-loud funny--of course an office supply retailer will buy a keyword that's the noun for one of the office products they sell! But the purchase of the keyword "staples tv ad" is more damning (and also odd--I wonder how many people search for that?).
From my perspective, this dispute looks like an all-too-typical pissing contest that gives trademark law a bad name. Office Depot may have overreacted to Staples' efforts (although they claim that Staples ignored 2 C&Ds, so they may have sought a non-judicial resolution before suing). Office Depot also may have engaged in competitive keyword purchases that would undercut its moral authority to complain about Staples' keyword purchases. And even if Staples hewed the line in their characterizations of the Office Depot-Viking brand merger, they may have gone close to the line (if not over). In situations like this, there is only one logical outcome--settle, quickly, before the legal fees vastly exceed the value of any resolution.
UPDATE: If you haven't already seen it, I've written a much lengthier review of keyword legal issues here.
UPDATE 2: This case appears to have settled Nov. 17, 2005.