Google Gets Unwanted Ruling in AdWords Trademark Lawsuit–CYBERsitter v. Google

October 26, 2012 · by · in Derivative Liability, Licensing/Contracts, Search Engines, Trademark

By Eric Goldman

CYBERsitter LLC v. Google, Inc., 2012 WL 5873650 (C.D. Cal. Oct. 24, 2012)

This is one of three remaining trademark lawsuits against Google for AdWords. The other two pending suits are Rosetta Stone and Home Decor Center; Google just won the Jurin case. In this ruling, Google suffers a preliminary loss in the CYBERsitter case on a couple of key points. I still think Google will eventually win this case one way or another, but it’s still a bummer ruling for Google. It also is a signal that Google may have an uphill battle with this judge.

Venue Selection Clause

CYBERsitter had been an AdWords advertiser until 2010. Google invoked the venue selection clause in its AdWords agreement to pull the case from Los Angeles to the Silicon Valley. The court rejects Google’s request, saying that a trademark owner’s lawsuit against Google is outside the AdWords agreement’s scope, i.e., a trademark lawsuit has nothing to do with the basic ad network-advertiser relationship. While I see the court’s point, this ruling does conflict with the uncited Flowbee and Parts Geek decisions and possibly others, like the uncited TradeComet decision.

47 USC 230

Google tried to clean up some of CYBERsitter’s claims via 47 USC 230. Being generous to the judge, the opinion here is garbled. Here’s what I think happened:

* the state false advertising claim survived because Google might have “developed” the ad.

* the state law claims for “trademark infringement, contributory infringement, unfair competition, and unjust enrichment” are struck down “to the extent that Plaintiff’s state law claims attempt to hold Defendant liable for infringing content of the advertisements at issue” because CYBERsitter didn’t plead that Google made a “material contribution” to the ads. I don’t really understand how Google might have “developed” the ads for false advertising purposes but failed to make a “material contribution.” I don’t understand why the judge uses different vernacular for these claims, either.

* the state trademark claim nevertheless survives to the extent that it tries to treat Google as a direct infringer for selling trademarked keywords.

* the contributory infringement also survives for reasons I don’t understand, given that some of it appears to be based on the ad content, which the court had already said Section 230 preempted.

* the 17200 claim survives predicated on the trademark and false advertising claims.

I wonder how many of these rulings would survive on appeal. The court is right that Section 230 applies to third party content and not first party actions, but I’m not sure the court fully understood how to apply that distinction. At minimum, the judge seemed to bend over backwards to preserve the plaintiff’s claim. It also matters that Google sought a 12(b)(6) motion to dismiss, so all inferences had to be against Google. I’m keeping my fingers crossed that the judge will modulate his scrutiny of the plaintiff’s arguments at the summary judgment stage.