Google AdWords Contract Upheld Again, Causing a Venue Transfer in Flowbee v. Google
By Eric Goldman
Google has successfully transferred Flowbee v. Google from Texas to California by invoking the venue selection clause in its AdWords contract. The result is noteworthy for three reasons.
Second, the court said the scope of the venue selection clause covered Flowbee’s tort claim for trademark infringement. This was not a guaranteed conclusion. Clearly, the clause governs Flowbee’s AdWords purchases, but it does not automatically govern Flowbee’s beefs with other advertisers’ AdWords purchases under their independent contracts with Google. Compare Miller v. Facebook with Yahoo v. American Airlines. This court, bound by the Fifth Circuit ruling in the Yahoo case, nevertheless distinguished it because the Yahoo clause specified that business partners “submit” to exclusive jurisdiction, while the Google clause used the words “litigated exclusively.”
Third, Google surely is happy to have this case out of a lousy venue (Southern District of Texas) and into its home court. If only it could transfer the other AdWords cases too!
Having successfully transferred the case, Google then filed its answer and a counterclaim that Flowbee breached the mandatory venue clause by suing Google in Southern District of Texas. This is at least the second time Google has tried this type of contract breach claim (I blogged on the same tactic in the John Beck Amazing Profits case), so Google’s turn-the-tables move isn’t really news even though it prompted a TechCrunch post.
However, Google’s contract breach counterclaim highlights how Google got caught in flagrante delicto in its collections suit against myTriggers by bringing that suit in Ohio state court. In Flowbee, Google takes the position that bringing a suit in the wrong venue is an actionable contract breach. I’m not exactly sure how Google would respond if myTriggers countersued Google for breaching its AdWords contract by suing myTriggers in Ohio rather than California. I don’t think myTriggers could claim any damages from Google’s breach, nor do I expect myTriggers would complain about the breach because it’s probably thrilled to have trapped Google in an undesirable forum. However, Google is walking an arguably duplicitous line.
As TechCrunch post points out, Google’s answer contains some “whoops” references to Rosetta Stone instead of Flowbee. By inference, Google probably cloned-and-revised its Rosetta Stone answer for the Flowbee litigation. My tip for clean living: Whenever I clone-and-revise a document to use for a different party, the very first thing I do is a global search-and-replace to change party names.
The roster of pending AdWords cases (I most recently double-checked the status of these cases on February 20, 2010):