by Greg Beck
If you search for "American Airlines" on Google, the first result, as you'd expect, is the official American Airlines website. On the right side of Google's search results page, however, are several "Sponsored Links" to various websites that advertise cheap airfares. This contextual advertising shows up because the cheap ticket sites paid Google for the privilege of appearing beside the results of searches for American Airlines. The owners of the websites presumably think that people searching for American Airlines would also be interested in buying cheap tickets from their sites.
Companies like American Airlines, however, are not always happy when their competition shows up in search results alongside their official websites. Yesterday, American Airlines filed suit against Google in what is likely to be a climactic legal battle on the contextual advertising issue. The airline argues that by providing paid links to the websites of competitors when users search for "American Airlines," Google is taking a "free ride on the reputation and goodwill" of its trademark. Other companies have made similar claims, with mixed results in the courts.
In Rescuecom v. Google, Public Citizen argued as amicus curiae in the Second Circuit that contextual advertising provides consumers with a valuable service by helping them identify low-cost alternatives. Contextual ads put these alternatives where consumers are likely to find them, beside a trademarked product. This practice is essentially no different than the common retail practice of placing low-cost generics on a shelf next to brand-name products. Arguably, these generics are taking a "free ride" on the good names of the trademarked products, but that's not the kind of free riding that trademark law is supposed to prevent. Trademark law is designed to protect consumers from confusion, not to protect companies from legitimate competition by lower-priced alternatives.
The American Airlines complaint is available here, via the Technology & Marketing Law Blog (warning: large file).
You couldn't sue a hot dog stand for setting up shop outside a McDonalds!
Posted by: Travel Guy | Saturday, December 22, 2007 at 01:06 AM