Is bidding on a competitor's Google keywords a trademark violation? Ninth Circuit must answer

PHOENIX (CN) — The Ninth Circuit soon will decide whether a specific threshold of consumer confusion must be reached before a business bidding on its competitors’ keywords in Google search results constitutes trademark infringement.

Arizona injury law firm Lerner & Rowe accused its competitor Brown Engstrand & Shelly, doing business as Accident Law Group, of siphoning its customers illegally by bidding on Google keywords that match Lerner & Rowe’s trademarked name.

Before a three-judge Ninth Circuit panel Tuesday morning, Accident Law Group argued that customers aren’t likely to be confused by seeing ads for a competitor while searching for a specific law firm. (In most cases, if no confusion is created, there’s no trademark infringement.)

“That is free competition. That is a free market,” Accident Law Group attorney Maria Speth told the panel. “Anyone who uses Google knows they’re going to have choices.

From 2018 to May 2021, Accident Law Group bid on Google search terms including “Lerner Rowe,” “Lerner & Rowe,” and “Lerner and Rowe.” By bidding highest on a search term, a company can ensure its websites will come up first in the results.

Lerner & Rowe argues that this method deceives consumers into calling Accident Law Group, especially given the defendant’s “generic, chameleon-like” name.

Accident Law Group’s call logs between 2018 and May 2021 contain 236 instances in which a first-time caller mentioned Lerner & Rowe. In 30 instances, the caller believed they had dialed for Lerner & Rowe, and callers asked for Lerner & Rowe 89 times.

The law firm sued Accident Law Group in September 2021 — four months after Accident Law Group stopped bidding on Lerner & Rowe keywords — but a federal judge dismissed the case last year on summary judgment, finding that the 236 mentions out of 10,000 calls across three and a half years weren’t enough to establish a likelihood of confusion among consumers. Lerner & Rowe appealed soon after.

Appellant attorney Andrew Gaggin said the percentage of consumers who are confused was irrelevant, so long as there were at least some examples. “Even a few instances is enough to survive summary judgment,” he told the panel.

U.S. Circuit Judge Raymond Chen, a Barack Obama appointee, countered that a few instances is only enough when the court doesn’t have the full scope of who called and who was confused. In this case, both the numerator and the denominator are known.

“This isn’t like finding the tip of the iceberg,” Chen said. “We have the whole iceberg here.”

Still, Gaggin said the likelihood of confusion was a factual matter for a jury to decide at trial.

The judges seemed unconvinced. If a customer were looking for a specific law firm, Chen reasoned, “Wouldn’t that make it tougher for them to be fooled?”

Gaggin answered that when a consumer is looking for something specific, they expect it to be at the top of the results, so they’ll click without thinking twice. He complained that Google ads are deceptively similar to “organic results.”

“It seems like most people know that now,” Chen interjected. “That’s just part of the sophistication of the user.”

Speth, the Accident Law Group attorney, agreed with Chen.

“In that split second of time, they have choices,” she said. “They see Lerner & Rowe, and they see Accident Law Group. And some of them decided, ‘Oh, let me see what else is out there.’”

She argued that the call logs are hearsay anyway, and can’t be used to demonstrate a caller’s state of mind because callers weren’t directly asked if they were confused.

Speth added that Lerner & Rowe didn’t take any depositions nor declarations from consumers they claim were confused, even though the call logs provided the necessary contact information.

Accident Law Group also argued in its opening brief that keyword bidding didn’t constitute trademark infringement because the marks weren’t being used “in commerce.”

“They didn’t display it. They didn’t speak it. They didn’t use it in any way,” Speth told the panel Tuesday.

U.S. Circuit Judge Roopali Desai, a Joe Biden appointee, reminded the attorney that Ninth Circuit precedent sees using keywords in advertisement campaigns constitutes using them in commerce, even if they aren’t ever displayed. Speth agreed and asked Desai to overturn the court’s own precedent. Desai suggested the court would have to make that kind of decision en banc.

U.S. Circuit Judge Ana de Alba, a Joe Biden appointee, rounded out the panel.

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