Monday, March 22, 2010

Google's Sponsored Links Not False Ads or Designations of Origin

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

Google's publishing of “sponsored links” in response to an online search for a building materials seller's “Styrotrim” trademark could not constitute false advertising or false designations of origin, affiliation, connection, or association of a competitor with the seller in violation of the Lanham Act, the federal district court in Sacramento has ruled.

Ad Words Program

The seller challenged the use of “Styrotrim” as a suggested keyword in Google's AdWords program, through which advertisers bid for placement of sponsored links in keyword search results.

The seller contended that Google's placement of competitors above the seller’s business on results pages confused consumers into believing that competitors' products were preferable to the seller’s and, in essence, was a form of “bait and switch” advertising.

Lack of Direct Competition

Although Google might provide advertising support for others in the seller’s industry, Google did not directly sell, produce, or otherwise compete in the building materials market. Without a showing of direct competition, the seller failed to state a claim for false advertising under the Lanham Act, according to the court.

Even if a “sponsored link” might confuse a consumer, with several different sponsored links appearing on a page it was hardly likely that a consumer might believe each one was the true producer or origin of the Styrotrim product. As such, the seller failed to properly plead a false designation of origin.

Communications Decency Act Immunity

Under the Communications Decency Act, Google was an interactive computer service immune from common law claims including fraud. The seller argued that Google was exposed to liability as an “information content provider” because, through its keyword suggestion tool, Google in fact did participate in the content of advertisements.

Keyword suggestion, however, was a “neutral tool” that did nothing more than provide options that advertisers could adopt or reject, in the court's view.

The opinion in Jurin v. Google Inc. appears at CCH Advertising Law Guide ¶63,777.

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