Nike has sued Eastern Mountain Sports (EMS), a New Hampshire outdoor-sporting-goods store, for bidding on Nike’s trademarked term “Dri-FIT” in Google’s ad system. When a user searches for Dri-FIT on Google, EMS is one of the first paid ads featured.
When the user clicks on the EMS ad, she is taken back to EMS’s Web site, which features other brands that use wicking technology since EMS doesn’t sell Nike brand clothes.
Google allows bidding on competitors’ trademarks, although there’s debate on whether that constitutes trademark infringement. The Nike debate is just one of the most recent in a hash of similar complaints. American Airlines sued Google for trademark infringement because Google allowed competitors to advertise against its trademarked terms. Google settled, but no clear policy or rule came from the lawsuit.
What’s a brand for, then?
My take is that Google is allowing trademark infringement by allowing others to use trademarked terms that were trademarked by Nike. According to Merriam-Webster Online, a trademark is “a device (as a word) pointing distinctly to the origin or ownership of merchandise to which it is applied and legally reserved to the exclusive use of the owner as maker or seller.” To me, Google is explicitly breaking the law by letting others use Dri-FIT. A recent search of Dri-FIT didn’t show EMS (I’m guessing because of the lawsuit), but others including Golfsmith, NexTag.com, Amazon.com and Shopzilla all showed up, meaning they all paid for the Dri-FIT trademarked term too. So, instead of Google only getting paid once by Nike for their own term, Google got paid at least four other times for the same term. Doesn’t that seem selfish? By letting competitors bid on and use other companies’ trademarked terms, Google gets paid a lot more than they would if they didn’t allow it. Hmmm. Doesn’t take a genius to figure out what their motivation is!
If these other companies want to all bid on a generic term, like “wicking clothing” or “wicking material,” no one would say “boo.” Although Nike uses those terms to describe its Dri-FIT material, Nike didn’t trademark those terms like it did Dri-FIT. In Merriam-Webster’s definition, Nike didn’t legally reserve those terms, so it’d be okay. What’s the point of branding and trademarking if anyone is allowed to use your trademark?
Google’s side
Google’s position on all of this is that by letting competitors bid on branded keywords, it’s giving consumers more variety in their search results. (Yahoo and Microsoft don’t generally let marketers bid on their competitors’ trademarked terms.) So, Google is saying that it’s just keeping customers happy and doing what’s best for the customer, rather than what’s best for the retailer.
My side
I don’t think Google would like “googling” or the verb “to google” to be associated with Yahoo or any other search engine. I think they’re going to settle or lose this lawsuit and rightfully so. I think they’re guilty of trademark infringement. What do you think?
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