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In its popular AdWords service, Google enables advertisers to bid on keywords to trigger the display of ads, with the ads being shown in Google search results and in many cases across the Internet on other websites affiliated with Google.

In Binder v. Disability Group, Inc. , case no. cv 07-2760-GHK (C.D. Cal.), plaintiffs Harry and Charles Binder owned several federal trademark registrations for the name of their law firm, Binder & Binder, which specializes in Social Security litigation. The plaintiffs performed extensive online marketing, advertising on Google and various other search engines to direct traffic to their website, and relied upon online advertising to generate a significant portion of their business.

Defendant Disability Group, Inc., a direct competitor of the plaintiffs, used “Binder & Binder” as a keyword for ads linking to their competing website, and also used the text “Binder & Binder” as a heading in their Google advertisements as opposed to displaying their own company name. Thus, users searching for Binder & Binder were presented with ads displaying the text “Binder & Binder” but that linked to the Disability Group website. To aggravate matters further, Disability Group’s ads were often being listed above links to the actual Binder & Binder website.

The U.S. District Court for the Central District of California found defendants Disability Group liable for trademark infringement, false advertising, and unfair competition, and provided treble damages in view of the willful nature of Disability Group’s conduct. In its analysis, the Court applied the followingfactors, focusing largely on the so-called “Internet Trilogy” of (1) the similarity of the marks, (2) the relatedness of the goods or services, and (3) the simultaneous use of the Web as a marketing channel. Since the marks used were identical, the services were both directed to Social Security litigation, and both firms performed significant online advertising, the court found that these factors overwhelmingly supported the plaintiffs.

While there remains some controversy regarding whether and how trademark law should address the use of AdWords, the courts appear nearly unanimous in condemning the use of a competitor’s mark as an AdWords keyword where the resulting ad also publishes the competitor’s mark in the text of the ad.