November 13, 2012
Another Google AdWords Advertiser Defeats Trademark Infringement Lawsuit--CollegeSource v. AcademyOne (Forbes Cross-Post)
By Eric Goldman
CollegeSource, Inc. v. AcademyOne, Inc., 2012 WL 5269213 (E.D. Pa. October 25, 2012)
Over the last dozen years, there have been countless trademark lawsuits over competitive keyword advertising (i.e., when a company buys its competitor's trademark to display keyword-triggered advertising). However, only a few of those cases--about a dozen, by my count--have reached a final outcome in a United States court, as opposed to out-of-court resolutions like a settlement. Of those, trademark owners rarely win, as demonstrated by a recent ruling.
The Recent Ruling
The lawsuit involves two competing web services that help college students research options for transferring to other colleges. CollegeSource sued AcademyOne for a long laundry list of perceived wrongs, including competitive keyword advertising.
CollegeSource owns the trademarks “CollegeSource” and “Career Guidance Foundation.” AcademyOne purchased the keywords “college,” “college source,” “career guidance,” and “career guidance foundation” in Google AdWords. Its ad copy displayed the titles “College Transfer Help” or “Find Transfer Information” and the domain name “collegetransfer.net,” but didn't include CollegeSource's trademarks. The court granted AcademyOne's summary judgment motion because, among other reasons:
* CollegeSource presented "sparse" evidence of actual consumer confusion given that AcademyOne got only 65 clicks on its ads in one month.
Trademark Owners Rarely Win AdWords Cases When Challenged. I've put together this census of final U.S. court resolutions in trademark lawsuits over competitive keyword advertising, excluding false advertising cases such as Tiffany v. eBay:
* plaintiff won summary judgment: Storus v. Aroa (2008).
* defendant won summary judgment: J.G. Wentworth v. Settlement Funding (2007); Designer Skin v. S&L Vitamins (2008); 1-800 Contacts v. Lens.com (2010); Montana Camo v. Cabela's (2011); Jurin v. Google (2012) (note: unlike the other cases, in Jurin the defendant was Google, not the advertiser). Now add CollegeSource v. AcademyOne to this list.
* defendant won at trial (all jury trials): Fair Isaac v. Experian (2009) (technically, the final win came in a post-trial ruling); College Network v. Moore (jury ruling in 2009; affirmed on appeal in 2010); Consumerinfo v. One Techs. (2011). Note the College Network case also involved rival publishers of education-related materials.
This census is surely incomplete, so please pass along additions or corrections. I excluded the GEICO v. Google case because the trial didn't fully resolve the case. I also excluded the Rosetta Stone v. Google district court ruling for Google because it was reversed on appeal.
I haven't tried to catalog the multitudinous foreign lawsuits over competitive keyword advertising. However, one case of special interest is Private Career Training Institutions Agency v. Vancouver Career College (Burnaby) Inc., a British Columbia case from 2011, where the court ruled at trial for the defendant. That case also involved marketing to college students. What a rough-and-tumble market that must be to spur so many competitive keyword advertising lawsuits.
Although the census dataset is small and each case has its own quirks, it's hard not to notice that the trademark owners' batting average (4 wins out of 13 final court resolutions) isn't great. Furthermore, I am aware of only three U.S. cases where a jury opined on competitive keyword advertising, and all three juries favored the defense. This is consistent with a recent empirical study that consumers aren't confused by competitive keyword advertising.
The Economic Irrationality of Suing Over Competitive Keyword Advertising.
Irrespective of their legal merits, competitive keyword advertising lawsuits often involve trivial amounts of clicks and revenues. For example, in the CollegeSource case, the advertiser got a whopping total of 65 clicks in one month. With such de minimis activity, the incremental expenses CollegeSource expended litigating the trademark issue could not possibly be justified by the economic impact of AcademyOne's keyword ads.
Other examples where the trademark owner surely was wasting its money by suing over competitive keyword ads (previously noted in this post):
* Storus v. Aroa: the defendant advertiser got 1,374 clicks over 11 months. Based on the low cost of the goods at issue, I estimate each click was worth about $1--making the lawsuit's value less than $1,400.
* King v. ZymoGenetics: the defendant advertiser got 84 clicks.
* Sellify v. Amazon: the defendant got 1,000 impressions and 61 clicks.
* 800-JR Cigar v. GoTo.com: the search engine defendant generated $345 in revenue (not profit, just revenue) from the litigated terms.
* 1-800 Contacts v. Lens.com: Lens.com made $20 of profit from competitive keyword ads. 1-800 Contacts unsuccessfully tried to hold Lens.com responsible for affiliate ad buys which generated about 1,800 clicks, which under the most favorable computations were worth about $40,000. 1-800 Contacts spent no less than $650k (and was willing to spend $1.1M) on its lawyers in this case.
* InternetShopsInc.com v. Six C, the defendant got 1,319 impressions, 35 clicks and zero sales.
Between the long odds in court, the low/trivial financial stakes at issue and the improbability that consumers are being misled, there are several good reasons for trademark owners not to bring lawsuits over competitive keyword advertising.
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