American Airlines Sues Google Over Keyword Ads

American Airlines v. Google, 4:07-cv-00487 (N.D. Tex. complaint filed Aug. 16, 2007) [Warning: 4.4MB file]

“American Airlines does not bring this lawsuit lightly.” (para. 6)

Well, this is interesting. It’s not unusual for a trademark owner to sue Google for keyword-triggered ads–been there, done that. However, the fact that American Airlines pulled the trigger catches my attention. Many trademark owners who have sued Google had relatively obscure brands. Rescuecom? JTH Tax? Check-n-Go? Even American Blinds is hardly a household name. In contrast, American Airlines is an extremely well-known trademark owner with a big portfolio of trademarks. Further, American Airlines apparently decided it was worth going to war over this issue–and is prepared to pay the big bucks to litigate this case accordingly. If this lawsuit runs its course, I expect this to be a hard-fought and expensive lawsuit.

This complaint pleads the usual claims for this type of action, including direct, contributory and vicarious trademark infringement (I don’t know why the vicarious claim was made; it’s deficiently pleaded); a false advertising claim that the “sponsored link” language communicates a false impression of actual sponsorship; dilution; various “soft” state claims (unfair competition; misappropriation and others); and tortious interference with contract because Google allegedly knew that American’s distributors weren’t supposed to buy American’s trademarks as keywords.

A few observations about the complaint:

* I’m pretty sure that at least a few of American’s examples involve broad matching on the word “airlines,” which may not be actionable.

* I thought there were a number of “whatever” arguments (ex: Google doesn’t allow keyword advertising on its own trademark), but let me focus on one in particular. American Airlines complains a number of times that the advertisements triggered by its trademarks lead to sites that sell both American Airlines tickets and those of its competitors. So what? Any retailer can advertise that it sells X even though, in its store, it displays X next to competitive offerings.

* Lead counsel for this lawsuit is Terence Ross of Gibson Dunn DC. He’s no stranger to keyword lawsuits. Earlier this decade, he brought several plaintiff-side lawsuits against adware companies–including significant losses on the “trademark use in commerce” issue for his clients Wells Fargo and 1-800 Contacts. Lawsuits against Google certainly haven’t gotten easier since the 2d Circuit 1-800 Contacts ruling, but maybe Ross has figured out how to get a different result this time. Certainly bringing the lawsuit in a court outside the 2d Circuit makes sense.

We’ll have to wait-and-see how this lawsuit plays out, but my working theory is that this was not a good lawsuit for American Airlines to bring. I’ve noted many times before that lawsuits over consumer “diversion” often cost more than the lost profits from the allegedly diverted consumers. In this case, I wonder how many consumers pick an American Airlines competitor instead of American Airlines solely due to keyword advertising. After all, American Airlines has a loyalty program that inhibits brand switching of its most loyal customers, and very good comparison sites like Orbitz encourage comparison shopping if that’s what consumers want. Given those factors, I wonder how much keyword advertising contributes to bona fide “diversion.” Plus, this could be a very costly lawsuit. I also wonder if American Airlines itself has ever bought third party trademarks as keywords–plenty of keyword plaintiffs have engaged in such duplicity, and I’d be surprised if American Airlines has run a completely clean shop. Finally, it’s not in Google’s nature to retaliate this way, but I wonder what would happen if Google decided to cut off keyword advertising for American Airlines?

UPDATE: American Airlines has issued a press release saying, basically, “we don’t have a problem with Google’s business model, except the part we don’t like.”

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