September 10, 2008
DMV.org Hit With SEO-Degrading Injunction--TrafficSchool.com v. eDriver
By Eric Goldman
TrafficSchool.com, Inc. v. eDriver, Inc., 2008 WL 4000805 (C.D. Cal. June 4, 2008). Permanent injunction entered Aug. 28, 2008.
[Note: I missed this case when it first came out. I recently learned about the case from Rebecca, and it's such an interesting case that it's worth blogging about at this comparatively late date. Also, just today the defendants signaled their intent to appeal, so the case is still very much alive and active.]
This case involves websites referring consumers to traffic schools and driver's education courses, a business that appears to be both lucrative and cutthroat. The plaintiffs allege that the operators of DMV.org, a referral site, engage in false advertising. The gist of the plaintiff's argument is that DMV.org falsely implies an affiliation with government DMVs, and therefore consumers believe that linked-to vendors are being recommended by a government agency. Naturally, the implicit government imprimatur on a traffic school or driver's ed course should significantly bolster consumer demand, so the plaintiffs feel disadvantaged in the marketplace. Oddly, both parties agreed that the plaintiffs' websites had better conversion than DMV.org.
70-80% of DMV.org's traffic comes from search engines due to favorable search engine indexing (in 2006, the site was the #2 organic Google link for "DMV") and aggressive search engine advertising. Consumers who reached DMV.org were shown text and graphics designed to enhance the site's credibility/authority and perhaps exacerbate visitors' perceptions that a government agency operated the site, although there was a small footer disclaimer. After the lawsuit, DMV.org was redesigned to reduce the possibility of consumer confusion about any government affiliation, but the court recounts anecdotes that consumers were confused both before and after the redesign. As a result, the court finds that the plaintiffs established a prima facie case of 43(a) false advertising.
However, the court determines that the plaintiffs have "unclean hands" because they too had registered and used various domain names containing "DMV" and had explored advertising on DMV.org. Due to their unclean hands, the court denies the plaintiffs any damages or attorney's fees.
The court does grant an injunction requiring DMV.org to display a mandatory "acknowledgement page" (we might call it an interstitial or landing page) telling consumers that the site is unrelated to any government agency and requiring them to affirmatively click through. See the page here. My hypothesis is that such an acknowledgement page wrecks DMV.org's search engine indexing by preventing the robots from seeing the page content (unless DMV.org uses grey hat/black hat techniques to present a different page to search engine robots). In partial support of that argument, when I searched today for "DMV" at Google, the site was 4th in the organic results--still excellent for such a popular term, but down from their #2 ranking in 2006. (Their continued good placement may be due to their PR7--which has been juiced by links from state government agencies that mistakenly thought it was an official site). Thus, an injunction requiring a mandatory acknowledgment page effectively will dramatically reduce the traffic--and the value--of an SEO-driven site. The defendants have also made post-injunction filings saying that a lot of visitors are backing away due to the acknowledgement page. Accordingly, the defendants are claiming that the injunction could be fatal to their business.
This suggests a possible lesson to learn from this case. The defendants had a great domain name (DMV.org) that they managed to build nicely, but they may have too aggressive about stoking consumer expectations about their affiliation with the government. The consequence of that aggressiveness is a potentially business-ending injunction, rendering the domain name nearly worthless. If the defendants hadn't played so close to the line, perhaps they would have lost some revenue but might have been able to maintain the domain name's value in the long run.
Today, the defendants filed a variety of motions indicating that they plan to appeal the ruling and asking the court to stay the injunction during the appeal. If the defendants can get the traffic-killing injunction lifted on appeal, I suspect they will consider it a win even if they have to write a check for damages.
Rebecca has more on the case.
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