American Airlines: A weak case and a tight pocket

American Airlines: A weak case and a tight pocket

American Airlines (AA) dropped the trademark lawsuit against Google in July 2008. Google maintains it did not violate trademark law. Still, the conditions of the settlement remain undisclosed.

The Texas Business and Commerce Code (the case was filed in Texas) defines a trademark as a “word, name, symbol, device, slogan, or any combination” of the aforementioned. One example of a trademark violation would be Air Canada using ‘WestJet’ as a key word to bring up its own online advertisements. Google could claim that instead of the trademark itself it just sold key words that have many other combinations then AA’s trademark. For instance, the advertiser could have a list of keywords containing in no specific order ‘American’, ‘Canadian’, and ‘airlines’ for a travel agency having a list of North American airlines. If someone entered American Airlines then an advertisement for the travel agency could also be triggered.

A second issue is that the defendant was not the direct infringer, but rather a potential contributory infringer. Hence, what level of knowledge does a defendant (service provider like Google) have to possess in order to be responsible for contributory trademark infringement?

In Tiffany (NJ) INC. and Tiffany and Company v. eBay, Inc. (Tiffany) the main issue turned on eBay’s level of knowledge in regards to a particular trademark infringement. This situation is similar to Google’s predicament, where the search engine was serving as a medium for the potential trademark infringement. In Tiffany the court decided eBay could not be held liable for contributory trademark infringement on its website because it only possessed general knowledge on infringing events (even though it had received specific complaints from Tiffany’s).

Any reasonable court could have held that making Google enforce trademarks for every keyword that it sold would be unreasonable due to the amount of content. Furthermore, a seller on eBay used a specific trademark to misrepresent their fraudulent product. It would have been possible for eBay to police this infringing action because it was linked to a specific infringing keyword. Yet, the court held eBay was not responsible for such general knowledge. An advertiser who bought keywords from Google does not necessarily have an infringing trademark, but rather a list of key words. This list has many other combinations then an arrangement which would infringe the AA trademark. Therefore, Google’s knowledge of the situation is even more general and unclear compared to eBay in Tiffany. Based on this analysis, would it be good policy to hold Google liable for trademark infringement?

 Legal costs were also an issue in AA’s decision to drop the case. Trademarks are associated with a company’s product. Not being able to defend trademarks on the Internet could mean significant financial losses for many businesses. It does not help when other interested parties sit on the sidelines expecting one company to fork over all the cash needed to clarify a common issue in trademark law.