Be Careful with Your AdWords!

April 01, 2011, 06:05 PM

Google offers a service called AdWords which permits advertisers to pay to place advertisements that appear when certain internet searches are run. Companies bid on and purchase AdWords such that their advertisements appear when those words are used in searches. The problem arises when a company chooses to purchase AdWords which contain trademarks of their competitors. A recent decision by a California federal district court in Binder v. Disability Group, Inc., Case No. CV 07-2760-GHK, highlights the types of claims and damages which a trademark owner can recover when a competitor uses its trademarks as AdWords. After defendants used the Binder and Binder mark as Adwords, plaintiffs brought claims against defendants for trademark infringement, false representation under the Lanham Act, and unfair competition under California common law. The services provided by plaintiffs and defendants were identical. After a three day bench trial, the federal district court held that defendants infringed plaintiffs registered trademarks and were liable to plaintiffs for false advertising and unfair competition. The court determined that defendants conduct was willful because one of the defendants personally knew that the registered trademarks were being used as AdWords, and he directed and caused it to be done. Based on this willful conduct, the court enhanced the damages award to $292,235.20 and awarded reasonable attorneys fees and costs to plaintiffs. This decision serves as a reminder to companies to be careful when selecting AdWords through Google. —Kristan B. Burch