Yahoo! is being sued for allegedly paying to trigger adverts when a dating site's name is typed into Google.
The owner of Lovecity.com accuses Yahoo!, which also runs a dating service, and three other companies, of infringing its trade marks.
Colorado-based JP Enterprises filed a suit against Internet search service Yahoo! for purchasing AdWord advertising on Google to draw consumers to Yahoo!-based services. JPEnterprises owns the lovecity online dating service, and claims that Yahoo! placed keywords in Google AdWords advertising in an effort to draw consumers to its own online dating services, according to the Denver Post.
HDVE LLC and Spark Networks were also named in the suit.
Advertising words in Google have stirred up recent controversy as companies use similar techniques to gain an edge on competitors. Courts have given mixed rulings so far in cases involving such brands as Geico, Zocor and Edina Realty.
Google offers a sponsored advertising feature called AdWords. By including appropriate keywords, an advertiser's link appears at the top of a search results page. Even though sponsored links are clearly marked, some users may not realize that they are not regular search results.
In the Yahoo! case, JP Enterprises says that Yahoo!, HDVE LLC, Spark Networks and Insight Direct USA are guilty of trade mark dilution and infringement. It claims that anyone typing "www.lovecity.com", "lovecity" or "lovecity.com" into the search engine is presented with adverts on the side of the page detailing the services of the named competing companies.
Defendants' wilful insertion of plaintiff's trademark into paid advertisements constitutes an effort to artificially inflate their profits by knowingly misleading consumers as to the source of the response to their search, said the lawsuit. "It has caused, and continues to cause, actual confusion, is tarnishing the goodwill of Plaintiff and is causing lost sales to Plaintiff."
It is not as if Yahoo! is not aware of the potential problem. Both Yahoo! and Google have been sued for trademark infringement for allowing companies to bid for keywords and appear against search results when someone types a rival's name into the query box.
In 2004, Google won a court case against insurance giant Geico, which has also claimed copyright infringement. Before Google's victory, Yahoo!'s search marketing arm, Overture had already settled.
The case will not be a simple one, since courts have conflicted in recent cases over how to deal with the use of other people's trade marks in advertising. The case will centre on what exactly constitutes commercial use of a trade mark.
It must be remembered that both under US and UK trade mark laws, a brand must be used in commerce to be deemed to infringe a trade mark registration, said Lee Curtis, a trade mark attorney at Pinsent Masons, the law firm behind OUT-LAW.COM. "Some commentators argue that the use of a brand invisibly in an adword is not use in commerce. However, in the US, courts have tended to view the use of brands in adwords as use in commerce."
In the US in two important cases, involving Geico and Edina Realty, the courts found that use of the words did constitute trade mark use because it did count as "use in commerce". Another recent US case disagreed, when the use of Merck's Zocor brand was deemed not a "use in commerce".
If the story is true, the allegations go against Yahoo's own guidelines. From the beginning of March this year, Yahoo! Search Marketing declared that it would no longer allow bidding on keywords containing competitor trademarks.
Also crucial will be the content of the advert itself. "Whether JP Enterprises succeeds in its suit will very much depend on whether the court finds that the use of its 'Lovecity' brand as part of the adwords concerned is indeed trade mark use, and whether the 'lovecity' brand is visible in the adverts triggered by the adword or on the websites which link to the adverts," said Curtis.
Google and Yahoo! are competitors in the Internet search engine market, and competition between the companies has been on the rise. Both have expanded beyond basic search features and offer news, email, and other free services to draw viewers to their sites. Purchasing advertising on a rival's Web site, however, was not exactly an expected move.
Both companies own other businesses geared towards enhancing their own services. Google, for example, recently purchased SketchUp, and now offers a free version of the software for personal use and creating Google Earth 3D images. Among its assets, Yahoo! owns online dating services.
Three other companies have also been sued by JPEnterprises. These include HDVE, which runs the dating site True.com, and Spark Networks, which manages AmericanSingles.com and JDate.com. The third company mentioned in the lawsuit is Insight Direct USA.
Yahoo! and HDVE LLC were not available for comment. Spark Networks is not commenting on the case.