Damages from Competitive Keyword Advertising Are “Vanishingly Small”
Apparently, Defendants bid on 14,057 keywords with their AdWords accounts. The evidence shows that 14 (or 0.1%) included the word “bandago.” Of those 14 AdWords, only three generated any clicks at all. Each of those three keywords generated exactly one click. In other words, Defendants’ bids on infringing keywords from November 2008 to April 2009 resulted in a total of three visits to Defendants’ website. Even assuming all three visits were from different users, that each would have rented from Bandago absent the advertisements, and that each of those users proceeded to rent vans from Defendants instead, Digby’s actual damages attributable to the infringing AdWords must have been vanishingly small.
How do you think the judge reacted when he realized these stakes? I imagine he thought to himself, “REALLY????”
Yet, this is hardly the first time we’ve seen a federal case made out of something as trivial as 3 clicks (to be clear, the keyword ads were an ancillary issue in this particular litigation). Here’s a roster of some other dubious keyword advertising lawsuits:
- 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.
As I’ve said repeatedly, suing over competitive keyword advertising is almost certainly a bad business decision.
Case citation: Digby Adler Group LLC v. Image Rent a Car, Inc., 2015 WL 525906 (N.D. Cal. Feb. 6, 2015)
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